Beasley v. Gumprecht

Filing 15

MEMORANDUM OPINION AND ORDER: Pursuant to the foregoing Memorandum Opinion, the Court grants the Motion to Remand (Doc. 7 ) and this action is REMANDED to the Circuit Court of Barbour County, Alabama. The Clerk of the Court is DIRECTED to take appropriate steps to effectuate the remand. Signed by Honorable Judge Terry F. Moorer on 12/22/2017. (kh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION
REBECCA BEASLEY,

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Plaintiff,
v.
BLAKE GUMPRECHT,
Defendant.

CASE NO. 2:17-cv-563-TFM
[wo]

MEMORANDUM OPINION AND ORDER
This action is assigned to the undersigned magistrate judge to conduct all proceedings
and order entry of judgment by consent of all the parties (Docs. 12-13, filed 11/6/17) and 28
U.S.C. § 636(c). Pending before the Court is Plaintiff’s Motion to Remand (Doc. 7, filed
9/20/17). The motion has been fully briefed and is ripe for review. Having considered the
motion, response, and relevant law, the Court finds the motion to remand is due to be
GRANTED.
I.

FACTS AND PROCEDURAL HISTORY

Plaintiff Rebecca Beasley (“Beasley” or “Plaintiff”) filed this a complaint in Barbour
County, Alabama Circuit Court on July 17, 2017. See Doc. 1, Exhibit 4, Complaint. Plaintiff’s
lawsuit alleges counts of Breach of Contract, Conversion, and Libel and/or Slander against
Defendant Blake Gumprecht (“Gumprecht” or “Defendant”). Id. The Complaint does not
provide for a specific amount of damages sought, but requests “both compensatory and punitive
damages as the Court may deem just and appropriate, along with her costs in this action.” Id. at
p. 4.
On August 22, 2017, Defendant filed a Notice of Removal in this court based on an

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assertion of diversity jurisdiction. See Doc. 1, generally. Defendant states in his Notice of
Removal that the case is properly removable under 28 U.S.C. §1441 because the United States
District Court has original jurisdiction over this case under 28 U.S.C. §1332.
Specifically, Defendant asserts diversity jurisdiction exists in this case because the
amount in controversy exceeds the $75,000 jurisdictional threshold and complete diversity of
citizenship exists among the parties. Plaintiff is a citizen of Alabama and Defendant is a citizen
of North Dakota.
Plaintiff timely filed her motion to remand on September 20, 2017. See Doc. 7. In the
motion to remand, Plaintiff asserts the amount in controversy does not meet the jurisdictional
threshold. Concurrent with the motion to remand, Plaintiff also filed a Stipulation of Amount in
Controversy wherein she stated she does not seek any amount in excess of $74,999.00 exclusive
of interest and costs. See Doc. 6. Plaintiff further asserts that Defendant’s counterclaims cannot
be used to establish the amount in controversy exceeds $75,000.00.
Defendant timely responded to the motion to remand on October 12, 2017. See Doc. 11.
In the response, Defendant argues that the amount being negotiated was between $70,000 and
$120,000. Defendant bases this number on the email exchange between Plaintiff’s counsel and
Defendant which included the counterclaims. See Doc. 1, Exhibit 2. Further, Defendant states
he “alleges a complete loss of his business investment of [$70,000.00] plus incidental and
consequential damages, as well as punitive damages for his count of Promissory Fraud.” See
Doc. 11 at p. 2. Defendant also attaches to the response to remand three exhibits: (1) an asset
sale agreement, (2) Building Sale Agreement, and (3) Barbour Tax Assessment. See Doc. 11,
Exhibits A-C. Per Exhibit C, the Barbour County Tax Assessment attached values the property
and building at $49,100.00. In Exhibit A, the sales price for the assets listed in the section are

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$50,000.00.

In the Exhibit B, the sales price of the property was for $20,000.00.

Next

Defendant argues the Court must consider the unspecified damages amount also includes a
punitive damage claim. Finally, Defendant argues that the stipulation of amount in controversy
has no effect on this Court’s jurisdiction and is solely an attempt to manipulate the forum.
The motion is fully brief and ripe for review of whether this Court has diversity
jurisdiction.
II. STANDARD OF REVIEW
Federal courts have a strict duty to exercise jurisdiction conferred on them by Congress.
Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716, 116 S. Ct. 1712, 1720, 135 L.Ed.2d 1
(1996). However, federal courts are courts of limited jurisdiction and possess only that power
authorized by Constitution and statute. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 377, 114 S. Ct. 1673, 1675, 128 L.Ed.2d 391 (1994); Burns v. Windsor Insurance Co., 31
F.3d 1092, 1095 (1994). Defendant, as the party removing this action, have the burden of
establishing federal jurisdiction. See Leonard v. Enterprise Rent a Car, 279 F.3d 967, 972 (11th
Cir. 2002) (citing Williams v. Best Buy Co., 269 F.3d 1316, 1318 (11th Cir. 2001)). Further, the
federal removal statutes must be construed narrowly and doubts about removal must be resolved
in favor of remand. Allen v. Christenberry, 327 F.3d 1290, 1293 (11th Cir. 2003) (citing Diaz v.
Sheppard, 85 F.3d 1502, 1505 (11th Cir. 1996)); Burns, 31 F.3d at 1095 (citations omitted).
III. DISCUSSION AND ANALYSIS
Since this lawsuit began in state court, the court’s jurisdiction depends on the propriety of
removal. Diversity jurisdiction exists where there is diversity of citizenship and the amount in
controversy exceeds $ 75,000, exclusive of interest and costs. 28 U.S.C. § 1332. Section
1446(b) then answers the question of when an action is removable, setting forth the

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preconditions for removal in two types of cases: (1) those removable on the basis of an initial
pleading; and (2) those that later become removable on the basis of “a copy of an amended
pleading, motion, order or other paper.” The notice of removal must “be filed within thirty days
after the receipt by the defendant … of a copy of the initial pleading setting forth the claim for
relief upon which such action or proceeding is based.” 28 U.S.C. § 1446(b).
“A party removing a case to federal court based on diversity of citizenship bears the
burden of establishing the citizenship of the parties.” Rolling Greens MHP, L.P. v. Comcast
SCH Holdings L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004). Therefore, removal jurisdiction
based upon diversity requires: (1) a complete diversity of citizenship between the plaintiff(s) and
the defendant(s) and (2) satisfaction of the amount in controversy requirement. Further, “[f]or
purposes of removal under this chapter, the citizenship of defendants sued under fictitious names
shall be disregarded.” 28 U.S.C. § 1441(c). Therefore, the complete diversity of citizenship
exists and is not disputed. Thus, the Court looks to the amount in controversy.
“[I]n the removal context, when damages are unspecified, the removing party bears the
burden of establishing the jurisdictional amount by a preponderance of the evidence.” Lowery,
483 F.3d at 1208-09 (quoting Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1356-57 (11th
Cir. 1996) (adopting the “preponderance of the evidence” standard after examining the various
burdens of proof in different factual contexts)). The Eleventh Circuit has held that “[in]n some
cases, [the amount in controversy] burden requires the removing defendant to provide additional
evidence demonstrating that removal is proper.” Roe v. Michelin N. Am., Inc., 613 F.3d 1058,
1061 (11th Cir. 2010) (citing Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744 (11th Cir. 2010)).
“The substantive jurisdictional requirements of removal do not limit the types of evidence that
may be used to satisfy the preponderance of the evidence standard. Defendants may introduce

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their own affidavits, declarations, or other documentation--provided of course that removal is
procedurally proper.” Pretka, 608 F.3d at 755.
Finally, in the context of removal, the amount in controversy is determined solely by
referring to the plaintiff’s complaint and without regard to any subsequently filed counterclaims.
First Guar. Bank & Trust Co. v. Reeves, 86 F. Supp. 2d 1147, 1154 (M.D. Fla. 2000);
Conference Am. Inc. v. Q.E.D. Int’l, Inc., 50 F. Supp. 2d 1239, 1242 (M.D. Ala. 1999) (citations
omitted).

As such, the Court here will not consider Defendant’s counterclaims, but only

Plaintiff’s original complaint since that is the document upon which removal was made.
Defendant’s notice of removal does not provide specifics in the body of the pleading as to
the basis for the amount being in excess of $75,000. However, attached to the notice is email
correspondence between Plaintiff’s counsel and Defendant (prior to his representation). In the
email, Plaintiff’s counsel states:
Mrs. Beasley would like her personal property returned to her. She is also entitled
to damages for defamation. As you may know, this could include punitive
damages because of your failure to retract the defamatory statements once
requested. Are you interested in turning the building and newspaper back over to
Mrs. Beasley instead of a monetary settlement?
See Doc. 1, Exhibit 2, at p. 3-4. Thus, between the complaint and the email correspondence, no
specific monetary demand was made by Plaintiff. In response to the email, Defendant specified
his monetary damages and beyond. Id. at p. 1-3. However, Defendant’s demands are not the
issue here. In the case at hand, the original complaint controls the removal process. Defendant
cites to “Plaintiff’s several demands for equitable and punitive relief” and also notes that “the
‘Stipulation of Amount in Controversy’ filed by the Plaintiff cannot divest the Court of
jurisdiction once it has attached.” See Doc. 11 at p. 4. The Court will address both arguments.
As previously noted, Defendant provides three exhibits in support of his argument: (1) an

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asset sale agreement, (2) building sale agreement, and (3) Barbour Tax Assessment. See Doc.
11, Exhibits A-C. Per Exhibit C, the Barbour County Tax Assessment values the property and
building at $49,100.00. In Exhibits A-B, the sales price for the assets listed in the section are
$50,000.00 and the sales price of the property was for $20,000.00.

By Defendant’s own

statements in his email responses, the business failed which would necessarily reduce its value.
Therefore, when considering Plaintiff’s offer to accept “the building and the newspaper back” in
lieu of a monetary offer, the valued amount of Plaintiff’s offer would not be $70,000 ($50,000 +
$20,000) which was the original sales price for both the business and the property. Rather, the
amount is still some unidentified number less than $70,000.00. Even considering the contractual
total amount Defendant attempts to use to support the assertion that the “amount in controversy”
is over $75,000.00, Defendant still fails in establishing by a preponderance of the evidence that
the amount in controversy is over $75,000.00. Even if the Court used the original contract sales
price as the defining number, Plaintiff offered to accept the building and newspaper as a
settlement for all her claims (to include the punitive damages claim) instead of a monetary
settlement offer. Therefore, this would establish the amount in controversy has a ceiling of
$70,000 when only considering Plaintiff’s claims and excluding Defendant’s counterclaims.
Moreover, the stipulation of the amount in controversy merely clarifies that point as explained
below.
Subsequent events which may reduce the damages recoverable below the amount in
controversy requirement do not deprive the court of jurisdiction. See Leonard v. Enterprise Rent
a Car, 279 F.3d 967, 972 (11th Cir. 2002) (“we note that for purposes of this challenge ... the
critical time is the date of removal .... If jurisdiction was proper at that date, subsequent events,
even the loss of the required amount in controversy, will not operate to divest the court of

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jurisdiction.”); Poole v. American-Amicable Life Ins. Co. of Texas, 218 F.3d 1287, 1291 (11th
Cir. 2000), overruled in part on other grounds in Alvarez v. Uniroyal Tire Co., 508 F.3d 639,
641 (11th Cir. 2007) (“events occurring after removal which may reduce the damages
recoverable below the amount in controversy requirement do not oust the district court’s
jurisdiction.”).
However, this does not mean that post-removal facts may never be considered when
evaluating jurisdiction. “Rather the law is clear that post-removal developments are properly
weighed where they shed light on the amount in controversy at the time of removal.” Land
Clearing Co., LLC v. Navistar, Inc., Civ. Act. No. 11-0645-WS, 2012 U.S. Dist. LEXIS 8603,
2012 WL 206171, *3 (S.D. Ala. Jan. 24, 2012) (Steele, J.) (citing Pretka, 608 F.3d at 772-73;
Sierminski v. Transouth Financial Corp., 216 F.3d 945, 949 (11th Cir. 2000)). “[W]hat is
prohibited are post-removal changes in the amount in controversy, not post-removal
clarifications of the amount that was in controversy at the moment of removal.” Jackson v. Select
Portfolio Servicing, Inc., 651 F. Supp.2d 1279, 1282 (S.D. Ala. 2009). Further, Plaintiff is “the
master of the complaint and is free to avoid federal jurisdiction, by structuring [the] case to fall
short of a requirement of federal jurisdiction. [Courts] permit this so long as the method of
avoidance is not fraudulent.” Scimone v. Carnival Corp., 720 F.3d 876, 882 (11th Cir. 2013)
(internal citations and quotations omitted).
Defendant is accurate in the assertion that a stipulation of the amount in controversy
cannot deprive the court of jurisdiction where it originally existed. However, that is not the
situation in the case at hand. Considering that the original contract for the business and building
totaled $70,000 and Plaintiff offered to accept them back as settlement, the Stipulation of
Amount in Controversy does not attempt to alter facts, but rather merely clarify and reiterate the

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fact that the amount sought is less than $75,000.00.

Thus, the Court never had diversity

jurisdiction.
Defendant argues that Plaintiff has not shown “to a legal certainty” that she could not
recover more than the amount she purports to stipulate to.” See Doc. 11 at p. 6. However, the
burden here does not rest with Plaintiff, but rather with Defendant to establish that removal was
appropriate. The Court declines to inappropriately shift the burden to Plaintiff and determines
Defendant has failed to establish by a preponderance of the evidence that the amount in
controversy satisfied the jurisdictional threshold.
Finally, Defendant seeks costs in the event the case is remanded. See Doc. 11 at p. 5.
Defendant relies upon reasoning discussed in Brooks v. Pre-Paid Legal Servs., 153 F. Supp. 2d
1299 (M.D. Ala. 2001). However, the facts in that case are distinguishable from the one at hand.
In that case, the Plaintiffs initially sought “$74,500 and unspecified punitive damages” and after
removal filed an affidavit stating they never intended to seek over $74,500. Id. at 1300. The
Court also expressed concerns regarding litigants who seek “to limit their damages and return to
state court only after litigation has taken an unfavorable turn.” Id. at 1302. While perhaps the
complaint could have specified an amount less than $75,000, there is no requirement that a
Plaintiff do so. Further, the Brooks plaintiffs sought $74,500 plus punitive damages. This is a
much clearer path to crossing the jurisdictional threshold. In the case at hand, Defendant
primarily relied upon the crossclaims to establish jurisdiction. Therefore, no costs for the
removal and remand shall be taxed against the Plaintiff at this time.
IV. CONCLUSION
Pursuant to the foregoing Memorandum Opinion, the Court grants the Motion to Remand
(Doc. 7) and this action is REMANDED to the Circuit Court of Barbour County, Alabama. The

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Clerk of the Court is DIRECTED to take appropriate steps to effectuate the remand.
DONE this 22nd day of December, 2017.
/s/Terry F. Moorer
TERRY F. MOORER
UNITED STATES MAGISTRATE JUDGE

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