Wells Fargo Bank National Association v. Sims Bait Manufacturing Company Inc et al
MEMORANDUM OPINION. Signed by Chief Judge Sharon Lovelace Blackburn on 7/30/2013. (KAM, )
2013 Jul-31 AM 09:07
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
WELLS FARGO BANK, National
SIMS BAIT MANUFACTURING
COMPANY, INC., and STEPHEN G.
CASE NO. 2:13-cv-542-SLB
This case is presently pending before the court on defendants’ Motion to Dismiss.
(Doc. 7).1 Upon consideration of the Motion, the relevant law, and the arguments of the
parties, the court is of the opinion that defendant’s Motion is due to be denied.
I. STANDARD OF REVIEW
Parties invoking federal jurisdiction “bear the burden of establishing its
existence.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 104 (1998). Challenges
to subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) take two forms: “[f]acial
attacks” and “[f]actual attacks.” Lawrence v. Dunbar, 919 F.2d 1525, 1528-29 (11th Cir.
1990) (per curiam). Facial attacks “require  the court merely to look and see if [the]
plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations
Reference to a document number, (“Doc. ___”), refers to the number assigned each
document as it is filed in the court’s record.
in his complaint are taken as true for the purposes of the motion.” Id. at 1529 (alteration
in original) (quoting Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir.
1980)). Factual attacks, alternatively, challenge “the existence of subject matter
jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such
as testimony and affidavits, are considered.” Id. Given that defendants’ Motion to
Dismiss challenges diversity jurisdiction based upon facts outside of the pleadings, (see
doc. 7-1), the standard for a factual attack applies.
While facial attacks require that the court take the allegations in a plaintiff’s
complaint as true, see Lawrence, 919 F.2d at 1529, with factual attacks, “no presumptive
truthfulness attaches to plaintiff’s allegations, and the existence of disputed material facts
will not preclude the trial court from evaluating for itself the merits of jurisdictional
claims.” United States v. Spitzer, 245 F. App’x 908, 910 (11th Cir. 2007) (quoting
Lawrence, 919 F.2d at 1529). Moreover, on a factual attack, “the trial court is free to
weigh the evidence and satisfy itself as to the existence of its power to hear the case.”
Morrison v. Amway Corp., 323 F.3d 920, 925 (11th Cir. 2003) (quoting Lawrence, 919
F.2d at 1529).
II. FACTS AND PROCEDURAL HISTORY
This case arises out of the alleged failure of Sims Bait Manufacturing Company,
Inc. and Stephen G. Sims’s (collectively “defendants”), alleged failure to repay a
$100,000 loan made to Sims Bait Manufacturing Company (and guaranteed by Stephen
Sims) on March 17, 2009, by plaintiff, Wells Fargo Bank, National Association
(“plaintiff”). (Doc. 1 ¶¶ 2-3, 6-7, 11-12.) Plaintiff filed its Complaint on March 21,
2013, (id. at 1), and has alleged two causes of action—breach of note and breach of the
guaranty agreement, (id. at 4-5). Plaintiff further alleges that the court has diversity
jurisdiction under 28 U.S.C. § 1332 because there is diversity between the parties and the
amount in controversy exceeds $75,000.00. (Id. ¶ 4.) Specifically, plaintiff states that
Sims Bail Manufacturing Company owed $88,887.87 on the debt as of March 11, 2013.
(Id. ¶ 13.)
On May 3, 2013, defendants filed a Motion to Dismiss, (doc. 7), stating that they
had made a payment of $15,500.00 to plaintiff “on or about May 1, 2013,” (id. ¶ 4). They
provide documentation of this payment as an exhibit, (see doc. 7-1), and state that the
payment brings the overall debt of $88,887.87 down to $73,363.64, (doc. 7 ¶ 4).
Accordingly, defendants claim that plaintiffs no longer meet the $75,000 requirement of
28 U.S.C. § 1332. (Id. ¶ 5).
While defendants argue that their payment divests the court of jurisdiction, (see
doc. 7 ¶ 5), plaintiff responds that because defendant made this payment after the filing of
the Complaint, the payment has no effect on the court’s jurisdiction, (doc. 8 ¶¶ 2-5).
Specifically, plaintiff points the court to “the basic rule that jurisdiction is determined at
the time of filing . . . .” (Id. ¶ 3 (citing Commercial Credit Corp. v. Lane, 466 F. Supp.
1326, 1329-30 (M.D. Fla. 1979)).) The court agrees with plaintiff.
Because, as plaintiff has argued, it is a basic rule that diversity jurisdiction is
determined at the time of filing, the issue does not warrant much further discussion.2
Despite the fact that defendants have presented evidence demonstrating their payment to
plaintiff on May 1, 2013, (see doc. 7-1), this does not change the fact that the Complaint
was filed over a month prior to the payment, (see doc. 1). Accordingly, plaintiff
sufficiently alleged that there was diversity jurisdiction as of the time of filing, when
defendants allegedly owed $88,887.87. (See id. ¶ 13.) Thus, the court has jurisdiction
over this action, and defendants’ Motion to Dismiss is due to be denied.
Even aside from the numerous cases cited by plaintiff, see, e.g., Commercial Credit
Corp. v. Lane, 466 F. Supp. 1326, 1329-30 (M.D. Fla. 1979) (discussing the general rule that
“the amount in controversy for federal diversity jurisdiction purposes is determined as of the time
the action is commenced” and stating that a payment reducing the amount owed after the
commencement of the suit “cannot divest this Court of subject matter jurisdiction”), the court
notes that there is an abundance of authority recognizing this rule, see, e.g., 14AA Arthur R.
Miller, Federal Practice and Procedure § 3702.4 (4th ed.) (“Under an easily stated, well-settled
principle, reflected in numerous cases, as illustrated by the citations in the notes below, drawn
from throughout the federal judicial system, the existence or nonexistence of the amount in
controversy required for subject matter jurisdiction purposes is determined on the basis of the
facts and circumstances as of the time that an action is commenced in a federal court . . . . There
also is a related principle supported by numerous cases concluding that once the case is lodged in
the federal system, subsequent events in the litigation, whether beyond the [party’s] control or
the result of his or her volition . . . cannot destroy the district court’s subject matter jurisdiction
once it has been acquired either by commencement in a federal court or by way of removal. For
example, if the plaintiff brings suit in a state court, demanding a sum of money in excess of the
jurisdictional amount, and the defendant properly removes the action to a federal court, any
subsequent reduction by the plaintiff of the amount claimed or stipulation to that effect will not
divest the federal court of subject matter jurisdiction and cause the case to be remanded to state
court according to a plethora of decisions . . . . Moreover, even if part of the plaintiff’s claim is
dismissed, for example, on a motion for summary judgment, thereby reducing the plaintiff’s
remaining claim below the requisite amount in controversy, the district court retains jurisdiction
to adjudicate the balance of the claim.” (emphasis added)).
For the foregoing reasons, defendant’s Motion to Dismiss will be denied. An Order
in accordance with this Memorandum Opinion will be entered contemporaneously with this
DONE, this 30th day of July, 2013.
SHARON LOVELACE BLACKBURN
CHIEF UNITED STATES DISTRICT JUDGE
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