Perkins et al v. Merion Realty Services, LLC et al (Joint Assign)(MAG+)
MEMORANDUM OPINION AND ORDER: It is ORDERED as follows: 1. Plaintiff's 4 Motion to Remand is GRANTED as further set out in the opinion and order. 2. This case is REMANDED to the Circuit Court of Montgomery County, Alabama. The Clerk of the Court is DIRECTED to take appropriate steps to effectuate the remand. Signed by Chief Judge William Keith Watkins on 3/6/2015. (Attachments: # 1 Civil Appeals Checklist) Copy mailed to Clerk, Circuit Court of Montgomery County, AL.(dmn, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
KEVIN PERKINS, et al.,
MERION REALTY SERVICES,
LLC, et al.,
CASE NO. 2:14-CV-1171-WKW
MEMORANDUM OPINION AND ORDER
Before the court is Plaintiffs’ motion to remand. (Doc. # 4.) Defendants filed
a response in opposition. (Doc. # 7.) For the reasons that follow, the motion to
remand is due to be granted.
I. STANDARD OF REVIEW
Federal courts have a strict duty to exercise the jurisdiction conferred on them
by Congress. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). At the
same time, “[f]ederal courts are courts of limited jurisdiction.” Burns v. Windsor
Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Hence, in actions removed from state
court to federal court, federal courts must strictly construe removal statutes, resolve
all doubts in favor of remand, and place the burden of establishing federal
jurisdiction on the defendant. Miedema v. Maytag Corp., 450 F.3d 1322, 1328–30
(11th Cir. 2006).
Plaintiff Kevin Perkins, along with eleven other adults and thirteen children,
filed this action in the Circuit Court of Montgomery County, Alabama. The
complaint, sounding exclusively in state law, alleged claims of (1) breach of
contract, (2) trespass, (3) conversion, and (4) civil conspiracy against Merion Realty
Services, LLC; Merion Realty Management, LLC; Robert M. Dominy; Melissa
Daughtery; and Sean Stanford (collectively, “Defendants”). Defendants removed
the action, asserting diversity jurisdiction pursuant to 28 U.S.C. § 1332. Plaintiffs
filed a motion to remand, contending that Defendants failed to show by a
preponderance of the evidence that the amount in controversy exceeds $75,000 as
required for a federal court to exercise diversity jurisdiction.1
Plaintiffs’ complaint alleges that the practices and conditions of the Three
Fountains Apartment complex, and its successor, the Green Meadow Apartment
complex, violated Defendants’ contractual obligations to provide habitable
Specifically, they contend that Defendants (1) refused to repair
plumbing leaks permitting lower floor apartments to be flooded with waste water,
(2) failed to inspect or repair electrical wiring resulting in shocks, smoking, and
It is uncontested that the parties are diverse.
sparking from electrical outlets, and (3) failed to maintain or repair apartment units.
The complaint also alleges that Plaintiffs’ right to the enjoyment of the apartment
units was abridged when Defendants or their agents changed the locks on units,
effectively evicting tenants without judicial authority, and removed the personal
property of leaseholders without permission or authority. Importantly, Plaintiffs do
not specify the damages or compensation sought to make them whole. Rather,
Plaintiffs demand judgment against Defendants, separately and severally, “for all
compensatory and exemplary damages recoverable under Alabama law, plus costs
and attorney fees.” (Doc. # 1-1, at 15.)
When “a plaintiff makes ‘an unspecified demand for damages in state court,
a removing defendant must prove by a preponderance of the evidence that the
amount in controversy more likely than not exceeds the . . . jurisdictional
requirement.’” Roe v. Michelin N. Am., Inc., 613 F.3d 1058, 1061 (11th Cir. 2010)
(quoting Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1357 (11th Cir. 1996)).
To meet its burden, the removing defendant may present additional evidence to
establish that the amount in controversy exceeds $75,000. Id. (“In some cases, [the
removing defendant’s] burden requires [it] to provide additional evidence
demonstrating that removal is proper.” (footnote and citation omitted)). Here,
Defendants offer three pieces of evidence in support of their contention that the
amount in controversy exceeds the jurisdictional requirement: (1) a pre-mediation
settlement letter and a pro tanto settlement produced in related state causes of action;
(2) Plaintiffs’ complaint; and (3) Plaintiffs’ claim for punitive damages.
The Pre-Mediation Settlement Letter and Pro Tanto Settlement
A settlement demand letter will not alone establish that the amount in
controversy exceeds $75,000, but “it counts for something.” Burns v. Windsor Ins.
Co., 31 F.3d 1092, 1097 (11th Cir. 1994). Because “[s]ettlement offers commonly
reflect puffing and posturing,” they generally are “entitled to little weight in
measuring the preponderance of the evidence.”
Jackson v. Select Portfolio
Servicing, Inc., 651 F. Supp. 2d 1279, 1281 (S.D. Ala. 2009) (citing Hall v. CSX
Transp., Inc., No. 3:06–CV–37–WKW, 2006 WL 3313682, at *3 n.5 (M.D. Ala.
Nov. 14, 2006)). A settlement offer will only be entitled to additional weight when
it provides enough specific information to support the plaintiff’s claim for damages
to indicate that the offer is a reasonable assessment of the value of the plaintiff’s
claim. See Standridge v. Wal–Mart Stores, Inc., 945 F. Supp. 252, 256–57 (N.D.
Ga. 1996) (citing Golden Apple Mgmt. Co. v. Geac Computers, Inc., 990 F. Supp.
1368 (M.D. Ala. 1998)).
The relevant portion of the settlement letter upon which Defendants seek to
rely provides as follows:
We have taken into account the Defendants’ concerns and, in the spirit
of cooperation, we will modify our settlement demand. There are 12
children who were one-year-old or younger when they began living in
the apartments. We are prepared to recommend settlement of those
minors’ claims for $5000.00 each subject to approval by the guardian
ad litem and the court. The plaintiff will unilaterally reduce their
demand to $190,000.00 per plaintiff, a reduction of $35,000.00 per
plaintiff from the initial demand, which in light of Alabama case law
and results in other mass injury cases is quite modest–especially under
the facts of these cases.
We are currently evaluating approximately 30 additional claims
(including 10 minors) against these defendants and plan to either
resolve these claims or litigate them in a separate [fourth] suit.
(Doc. # 1, at 7.) Defendants argue that the letter establishes that Plaintiffs value the
claim of each adult at $190,000.00.
This letter, however, was not drafted with specific regard to Plaintiffs’ claims
against these Defendants. Rather, the letter was mailed prior to the mediation of
three state court causes of action that are related to the present lawsuit. While the
three state actions arose out of the same factual allegations presented in this case and
included all the parties present in the instant litigation,2 the state lawsuits were
brought on behalf of 145 claimants against a total of 13 defendants with a specific
mind toward beginning a week-long mediation. Because the pre-mediation letter’s
cursory valuations necessarily took into account plaintiffs and defendants whose
interests are not present in the instant litigation, it is entitled to little weight.
Additionally, the pre-mediation settlement letter does not contain facts from
which an assessment of damages could be reasonably inferred. Indeed, the letter
Counsel for Plaintiffs in this action also represented the plaintiffs in the three state cases.
expressly observes that the exercise is a speculative one.3 Because the settlement
letter in this case does not reflect a reasonable estimate of the actual value of
Plaintiffs’ claims, it does not support Defendants’ argument that the amount in
controversy in this case exceeds $75,000. Cf. Benandi v. Mediacom Se., LLC, No.
11-498, 2011 WL 5077403, at *3 (S.D. Ala. Sept. 30, 2011) (where plaintiff
counsel’s letter demanded $92,000 and described in detail plaintiff’s injuries, the
costs incurred to date and anticipated, and specifically described the figure as “a
conservative estimate,” it was not a speculative lump sum demand and was properly
considered in denying motion to remand); McKeel v. Hodum Trucking, LLC, No.
12-079, 2012 U.S. Dist. LEXIS 93781, at *10–13 (S.D. Ala. June 18, 2012)
(plaintiff’s demand letter seeking $232,653.58 could be considered in determining
whether the actual amount in controversy exceeded $75,000 where the damages
were broken down into identified, specific costs for past and future damages).
Ultimately, the letter fails to provide particularized information and a
reasonable assessment of value and, instead, is indicative of posturing and abstract
assessments. See Jackson, 651 F. Supp. 2d at 1281; see also Diaz v. Big Lots Stores,
Inc., No. 5:10cv319, 2010 WL 6793850, at *2 (M.D. Fla. Nov. 5, 2010) (“The
evidentiary value of a settlement offer in establishing the amount in controversy
Defendants ignore a relevant paragraph of the October 3 letter in which Plaintiffs’ counsel
cites to the Alabama Pattern Jury Instructions on mental anguish, which instructs Alabama juries
that there is no “legal rule or yardstick” for such damages. Counsel then specifically observes that
“In the absence of a legal rule or yardstick then, setting the amount of plaintiffs’ claims is purely
subjective regardless of whether that is done at mediation or trial.” (Doc. # 1-6, Ex. E) (emphasis
depends on the circumstances of the offer.”). Accordingly, the pre-mediation letter
does not establish by a preponderance of the evidence that Plaintiffs’ claims exceed
the jurisdictional amount.
For similar reasons, the pro tanto settlement is also of little help to Defendants.
As grounds for removal, Defendants highlighted that the state court mediation
concluded in a confidential pro tanto settlement between the claimants and a portion
of the state court defendants.
While not disclosing the settlement amount,
Defendants assert that the pro rata amount of the settlement each state court plaintiff
received, when “multiplied by the 25 Plaintiffs in th[is]case[ ], produces an amount
in excess of the jurisdictional minimum.” (Doc. # 1.) In addition to the settlement
amount incorporating party interests not present in the instant litigation, Defendants
appear to misapply relevant judicial principles.
It is well settled that a claim by multiple plaintiffs normally cannot be
aggregated to reach the jurisdictional threshold. Kirkland v. Midland Mortg. Co.,
243 F.3d 1277, 1280 (11th Cir. 2001) (“Generally, if no single plaintiff can satisfy
the jurisdictional amount, then there is no diversity jurisdiction.”). Only if one
plaintiff’s claims meet the jurisdictional minimum, will the court have diversity
jurisdiction over the claims and be able to exercise supplemental jurisdiction over
the claims of additional diverse plaintiffs. Exxon Mobil Corp. v. Allapattah Servs.,
Inc., 545 U.S. 546, 659 (2005). In light of this non-aggregation principle, the pro
tanto settlement fails to prove by a preponderance of the evidence that any one
Plaintiff’s claims meet the jurisdictional requirement.
Defendants also contend that “removability, based on the amount in
controversy, is apparent from the four corners of the complaint . . . .” (Doc. # 7, at
4.) This is so, Defendants contend, because the court can make an independent
valuation of the allegations of the complaint. They explain that this valuation may
be made without regard to Plaintiffs’ assessment of the damages to be recovered and
is accomplished using “reasonable deductions, reasonable inferences or other
reasonable extrapolations.” (Doc. # 7, at 4.) The authority for such judicial divining
is said to be Roe v. Michelin North American, Inc., 613 F.3d 1058 (11th Cir. 2010).
According to Defendants, Plaintiffs have made “serious and specific
allegations against these Defendants” which enables the court to use “experience and
common sense” to correctly determine the true amount in controversy. (Doc. # 7, at
5.) Defendants’ reading of Roe is exuberant. Although Roe recognizes that “judicial
experience and common sense” may support “reasonable inferences” drawn “from
the pleadings” to determine whether “the case stated in [the] complaint meets federal
jurisdictional requirements,” nothing in Roe permits the court to indulge in
speculation or fill empty gaps in a plaintiff’s factual averments with unfounded
assumptions about what the evidence may show. 613 F.3d at 1061.
“Judicial experience and common sense” are useless for making “reasonable”
deductions, inferences, and extrapolations when the complaint is devoid of any
averments from which to deduce, infer, or extrapolate. A reasonable inference “is
not a suspicion or a guess. It is a reasoned, logical decision to conclude that a
disputed fact exists on the basis of another fact that is known to exist.” Arrington v.
State Farm Ins. Co., No. 2:14-cv-209-CSC, 2014 WL 2961104, at *6 (M.D. Ala.
July 1, 2014) (quoting Siewe v. Gonzales, 480 F.3d 160, 168 (2d Cir. 2007)).
“[W]ithout facts or specific allegations, the amount in controversy” can be
determined “only through speculation – and that is impermissible.” Pretka v. Kolter
City Plaza II, Inc., 608 F.3d 744, 753–54 (11th Cir. 2010) (citing Lowery v. Ala.
Power Co., 483 F.3d 1184, 1209 (11th Cir. 2007)).
Moreover, it is axiomatic that on a motion to remand all questions or doubts
as to subject matter jurisdiction are to be resolved in favor of returning the matter to
state court, see Burns, 31 F.3d at 1095; thus, to the extent that competing inferences
may be drawn from the specific factual allegations of the complaint, the court must
indulge those inferences most favorable to remand. See Kokkonen, 511 U.S. at 377
(“It is to be presumed that a cause lies outside [the court's] limited jurisdiction);
Pretka, 608 F.3d at 753–54 (“[W]ithout facts or specific allegations, the amount in
controversy could be ‘divined [only] by looking at the stars’ – only through
speculation – and that is impermissible.”).
While Plaintiffs note that they do allege compensatory damages in the context
of emotional distress, the court in Benton v. State Farm & Casualty Co., No. 2:14CV-77, 2014 WL 2002851 (M.D. Ala. May 15, 2014), highlighted that specific
allegations of harm contained in a complaint says nothing about the value of the
claims no matter the seriousness of the general assertion. 2014 WL 2002 851, at *3
(“In the court’s ‘judicial experience,’ ‘physical and mental distress’ and ‘emotional
anguish’ vary widely depending on the circumstances, and similar circumstances
may affect different plaintiffs in different ways.”).
Simply contending that
Defendants’ acts or omissions caused mental harm says nothing about the value of
those claims. Accordingly, the complaint does not “on its face” support removing
the action from the state court.
Lastly, Defendants contend that the court should weigh the “serious” nature
of the allegations in the complaint in favor of assessing the damages for mental
distress in excess of $75,000.00. Defendants are correct that a plaintiff prevailing
on a tort claim is authorized under Alabama law to recover additional damages
beyond the compensatory amount of the underlying policy claim, including for
emotional distress and punitive damages. See Dempsey v. Auto Owners Ins. Co.,
717 F.2d 556, 561–62 (11th Cir. 1983). And it is appropriate for the court to consider
the value of those categories of damages in light of the state-law standards governing
their award and review. See Bell v. Preferred Life Assur. Soc. of Montgomery, Ala.,
320 U.S. 238, 240–43 (1943); Roe, 613 F.3d at 1065–66; Broughton v. Fla. Int’l
Underwriters, Inc., 139 F.3d 861, 863–64 (11th Cir. 1998); Ryan v. State Farm Mut.
Auto. Ins. Co., 934 F.2d 276, 277 (11th Cir. 1991); Holley Equip. Co. v. Credit
Alliance Corp., 821 F.2d 1531, 1535 (11th Cir. 1987). However, Defendants are not
called on to show that Plaintiffs may be awarded more than the jurisdictional
requirement; they must show that it is more likely than not that at least $75,000 is
truly in controversy. See Arnold v. Guideone Specialty Mut. Ins. Co., 142 F. Supp.
2d 1319, 1321 (N.D. Ala. 2001) (“The more recent cases, both federal and state,
require courts to look realistically at claims for punitive damage based on fraud
and/or bad faith, especially if the punitive damages, as claimed or awarded, are badly
out of proportion to the actual damages claimed or awarded.”).
Here, there is no basis from which an economic assessment may properly be
said to begin. Plaintiffs alleged that Defendants’ conduct caused them distress and
for that they should receive compensation and that Defendants should be punished,
nothing more. Neither the “value” of the claim nor the amount of the punishment
can be determined in any principled manner. The court is not authorized to engage
in speculation in the absence of a factual starting point, which is clearly absent here.
Based on the foregoing analysis, it is ORDERED as follows:
Plaintiffs’ Motion to Remand (Doc. # 4) is GRANTED.
This case is REMANDED to the Circuit Court of Montgomery County,
The Clerk of the Court is DIRECTED to take appropriate steps to effectuate
DONE this 6th day of March, 2015.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?