Free v. Baker et al

Filing 20

MEMORANDUM OPINION AND ORDER is DENIED and that Defendant R&L Transportation, LLC, is DISMISSED as a party to this case. Signed by Honorable William Keith Watkins on 6/19/2009. (cb, )

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION B IL L Y FREE, P la in tif f , v. J A M E S BAKER, et al., D e f e n d a n ts. ) ) ) ) ) ) ) ) )

CASE NO. 2:09-CV-26-WKW [WO]

M E M O R A N D U M OPINION AND ORDER B e f o r e the court is a Motion to Remand (Doc. # 8), filed by Plaintiff Billy Free (" F re e " ). Defendants James Baker, R+L Carriers Shared Services, LLC, and Greenwood M o to r Lines ("Defendants") submitted an Opposition to Motion to Remand. (Doc. # 13.) For the reasons set forth below, the court finds that the Motion to Remand is due to be d e n ie d . I . FACTS AND PROCEDURAL HISTORY O n or about December 8, 2008, Mr. Free filed this lawsuit in the Circuit Court of M o n tg o m e ry County, Alabama, against Defendants. The complaint relates to a motor vehicle c o l l is io n that occurred in April 2007 between a tractor-trailer operated by Mr. Free and a tra c to r- t ra ile r alleged to be under the ownership or control of Defendants. The four-count c o m p la in t sounds in negligence and wantonness. It asserts in Count One that Mr. Free " in c u rre d medical expenses, suffered back surgery, suffered physical and mental pain, [and] lo s t income/jobs because of his inability to work and will continue to suffer in the future."

(Compl. 3.) These allegations are incorporated into the remaining three counts, each of w h ic h requests both unspecified compensatory and punitive damages for Mr. Free's injuries. (Compl. 4-5.) Defendants removed the case on January 9, 2009, basing federal jurisdiction upon 2 8 U.S.C. §§ 1332 and 1441(a) & (b). (Notice Removal ¶¶ 15 & 16 (Doc. # 1).) Defendants a s s e rt that a detailed demand letter received by Defendants from Mr. Free requesting $ 6 5 0 ,0 0 0 in settlement funds satisfies the amount in controversy requirement. The demand le tte r is attached as an exhibit to the Notice of Removal. Defendants also assert that the citizenship of R&L Transportation, LLC, the only n o n -d iv e rse defendant, should not be considered for diversity purposes because it was f ra u d u le n tly joined. (Notice Removal ¶ 26.) In his Motion to Remand, Mr. Free does not a d d re s s whether R&L Transportation, LLC, is a fraudulently-joined defendant, but instead f o c u s e s on the amount in controversy. Mr. Free contends that the amount in controversy is n o t met, stating that the complaint invokes only the jurisdictional minimum for circuit courts in Alabama (which is an amount exceeding $10,000), but is otherwise silent as to the amount in controversy. (Mot. Remand ¶ 2 (Doc. # 8).) He also asserts that, "even though

D e f e n d a n ts suggest that [his] pre-suit settlement correspondence demands $650,000, [his] k n o w n out of pocket damages . . . are actually less than $45,000." (Mot. Remand ¶ 3.) Mr. F re e attaches affidavits supporting this contention.

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II. STANDARD OF REVIEW F e d e ra l courts have a strict duty to exercise the jurisdiction conferred on them by C o n g re s s . Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). However, "[f]ederal c o u r t s are courts of limited jurisdiction." Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (1 1 th Cir. 1994). Thus, with respect to cases removed to this court pursuant to 28 U.S.C. § 1441, the law of the Eleventh Circuit favors remand where federal jurisdiction is not a b s o lu te ly clear. "[R]emoval statutes are construed narrowly; where plaintiff and defendant c la s h about jurisdiction, uncertainties are resolved in favor of remand." Id. I I I . DISCUSSION A. A m o u n t in Controversy

In his Motion to Remand, Mr. Free challenges the propriety of the removal on the g ro u n d that the jurisdictional amount in controversy requirement is not met. (Mot. Remand ¶ 9.) Federal district courts may exercise diversity jurisdiction over cases involving citizens o f different states where the amount in controversy, exclusive of interest and costs, exceeds $ 7 5 ,0 0 0 . 28 U.S.C. §§ 1332(a)-1332(b). The issue at this stage is the propriety of the removal. A defendant may base removal ju ris d ic tio n either (1) on "an initial pleading" or (2) at a later time, on "`an amended p le a d in g , motion, order or other paper.'" Lowery v. Ala. Power Co., 483 F.3d 1184, 1212 (1 1 th Cir. 2007) (citing 28 U.S.C. § 1446(b)), cert. denied, 128 S. Ct. 2877 (2008). In the

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second scenario, the amended pleading, motion or other paper must have been "received" by th e defendant from the plaintiff. Id. at 1213 n.63. In Lowery, the court expressly noted that a demand letter establishing an amount in controversy exceeding $75,000 constitutes an " o th e r paper" upon which removal may be based. Id. at 1212 n.62; see also Bankhead v. Am. S u z u k i Motor Corp., 529 F. Supp. 2d 1329, 1333 (M.D. Ala. 2008) (A settlement letter can q u a lif y as "`other paper,' which under . . . § 1446(b) can serve as a basis for removal" and, w h e n part of the removing documents, can be "admissible evidence of the amount in c o n tro v e rsy at the time of removal." (citing Lowery, 483 F.3d at 1212 n.62)). If a plaintiff's challenge to a diversity-based removal is timely, the court is limited to re v ie w in g the documents presented at the time of removal. Lowery, 483 F.3d at 1213-14 (c itin g 28 U.S.C. § 1447(c)). Moreover, when the complaint alleges unspecified damages, th e removing defendant must establish the amount in controversy by a preponderance of the e v id e n c e , id. at 1208, but may not conduct post-removal discovery to do so. Therefore, the c o u rt is strictly tied to the notice of removal and its accompanying documents when e x a m in in g its jurisdiction. "[N]either the defendants nor the court may speculate in an a t t e m p t to make up for the notice's failings," id. at 1214-15, and unless the jurisdictional a m o u n t "is either stated clearly on the face of the [removal] documents before the court, or re a d ily deducible from them," id. at 1211, the case must be remanded. H e re , Defendants removed this action on the basis of a pre-suit settlement demand le tte r received from Mr. Free. For purposes of ascertaining the amount in controversy,

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consideration of the pre-suit demand letter is permitted by Lowery. See 483 F.3d at 1212 n .6 2 . The issue is whether the demand letter written by Mr. Free's attorney establishes by a preponderance of the evidence that the amount sought in the complaint, although u n s p e c if ie d , is greater than $75,000. In the demand letter, Mr. Free seeks to recover the a m o u n t he has paid in medical bills, valued at "over $69,000," as well as lost wages, which h e has valued at $27,642.16 per year. (Notice Removal, Ex. B.) The demand letter states th a t Mr. Free will "settle this claim for $650,000." (Notice Removal, Ex. B.) This demand le tte r clearly establishes that $650,000 is at issue, and, notably, Mr. Free has not disputed the v a l i d ity of the amount of damages contained in the demand letter. ju ris d ic tio n a l amount, therefore, is met. In his Motion to Remand, however, Mr. Free argues that, although his "pre-suit s e ttle m e n t correspondence demands $650,000, the known out of pocket damages of Mr. Free a re actually less than $45,000," pointing to attached affidavits as support for this contention. (Mot. Remand ¶ 3.) Courts have considered post-removal affidavits that clarify the amount in controversy at the time of removal where the complaint is silent as to damages. See Hardy v . Jim Walter Homes, Inc., No. 06-0687-WS-B, 2007 WL 1889896, at *3 n. 6 (S.D. Ala. June 2 8 , 2007) (collecting cases). In the first affidavit, Doug Kitchens, the risk manager for Mr. F re e 's employer, states that Mr. Free has been paid a total of $44,899.23, consisting of w o rk e rs ' compensation benefits and medical bills, as a result of the accident at issue. (Mot. R e m a n d , Ex. A.) In the second affidavit, Mr. Free states that his medical bills have been paid The minimum

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in full by his employer and that the amount of out-of-pocket expenses "that [he] can quantify a t this time" is limited to the $44,899.23 subrogation claim paid by his employer. (Mot. R e m a n d , Ex. B.) Mr. Free claims that, because $44,899.23 is less than the jurisdictional m in im u m , see 28 U.S.C. § 1332(a), the amount in controversy is not met. What neither of th e s e affidavits claims, however, is that the amount in controversy was $75,000 or less at th e time of removal.1 r a tio n a le . B. F r a u d u le n t Joinder The affidavits, therefore, cannot be considered under Hardy's

In the Notice of Removal, Defendants assert that there is complete diversity of parties w ith the exception of Defendant R&L Transportation, LLC, which they contend is f r a u d u l e n tly joined. (Notice Removal ¶ 5.) Fraudulent joinder is an exception to the re q u ire m e n t of complete diversity. Where a defendant shows that "there is no possibility the p la in tif f can establish a cause of action against the resident defendant," the plaintiff is said to have fraudulently joined the non-diverse defendant. Henderson v. Washington Nat. Ins. C o ., 454 F.3d 1278, 1281 (11th Cir. 2006) (citing Crowe v. Coleman, 113 F.3d 1536, 1538 (1 1 th Cir. 1997)). In such a situation, the federal court must dismiss the non-diverse d e f e n d a n t. See Florence v. Crescent Resources, LLC, 484 F.3d 1293, 1297 (11th Cir. 2007). Although when assessing fraudulent joinder courts may consider, in addition to the plaintiff's p le a d in g s, affidavits and deposition transcripts submitted by either party, Legg v. Wyeth, 428
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The affidavits submitted address only the medical costs and lost wages, but say nothing of the compensatory and punitive damages sought in the complaint.

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F.3d 1317, 1322 (11th Cir. 2005), "the jurisdictional inquiry must not subsume substantive d e te rm in a tio n ," Crowe, 113 F.3d at 1538 (internal quotation marks and citation omitted). In his complaint, Mr. Free asserts that R&L Transportation, LLC, has its principal p la c e of business in Jefferson County, Alabama (Compl. ¶ 5), but presents no information re g a r d i n g the citizenship of the members of the LLC. See Rolling Greens, MHP, L.P. v. C o m c a s t SCH Holdings L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004) (holding that, for p u rp o s e s of assessing diversity of citizenship, "a limited liability company is a citizen of any s ta te of which a member of the company is a citizen"). Defendants contend that, regardless o f R&L Transportation, LLC's citizenship, it "has no connection or affiliation with any of th e other defendants, any company related to these other defendants, or the facts and tra n s a c tio n s upon which the Complaint is based" (Notice Removal ¶ 5), and this contention is supported by an attached affidavit (Notice Removal ¶¶ 7 & 8, Ex. C). Hence, Defendants c o n te n d that there is no possibility that Mr. Free can establish a cause of action against R&L T ra n s p o rta tio n , LLC. Mr. Free does not address Defendants' assertions that this defendant w a s fraudulently joined. Defendants' evidence stands unrebutted, and the court finds that th e evidence establishes that R&L Transportation, LLC, was fraudulently joined.2 It, th e re f o re , is due to be dismissed. Accordingly, there is complete diversity.

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Thus, it is unnecessary to resolve R&L Transportation, LLC's citizenship

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IV. CONCLUSION F o r the foregoing reasons, it is ORDERED that Mr. Free's Motion to Remand (D o c . # 8) is DENIED and that Defendant R&L Transportation, LLC, is DISMISSED as a party to this case. D O N E this 19th day of June, 2009. /s/ W. Keith Watkins UNITED STATES DISTRICT JUDGE

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