Cadence Bank NA v. Allianz Life Insurancy Company of North America

Filing 18

MEMORANDUM OPINION. Signed by Magistrate Judge John E Ott on 11/27/2017. (KAM)

FILED
2017 Nov-27 PM 03:39
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
CADENCE BANK, N.A.,
Plaintiff,
v.
ALLIANZ LIFE INSURANCE
COMPANY OF NORTH AMERICA,
Defendant.

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Case No. 2:17-cv-01799-JEO

MEMORANDUM OPINION
This case is before the Court on the Plaintiff’s motion to remand the case to
the Circuit Court of Jefferson County, Alabama. (Doc. 8). The motion includes a
request for an award of attorney’s fees and costs incurred as a result of the
removal. The Defendant has filed a response in opposition to the motion to
remand (doc. 14) and the Plaintiff has replied (doc.17). For the reasons that
follow, the Court will grant the Plaintiff’s motion to remand but deny its request
for fees and costs.
PROCEDURAL HISTORY
Plaintiff Cadence Bank, N.A. (“Cadence”) filed this action in the Circuit
Court of Jefferson County, Alabama. (Doc. 1-1, Complaint). The action arises
from a security interest held by Cadence in an annuity issued by defendant Allianz
Life Insurance Company of North America (“Allianz”). The annuity was pledged

as security for a loan made by Cadence to a third-party. In its complaint, Cadence
alleges that Allianz allowed withdrawals from the annuity without Cadence’s
knowledge or consent and in violation of Cadence’s security interest.

Cadence

alleges that, when the third-party subsequently defaulted on the loan, the remaining
value of the annuity was insufficient to pay off the entire amount due, and that a
deficiency of $41,348.92 remained on the loan as a result of the unauthorized
withdrawals permitted by Allianz. Cadence has asserted claims against Allianz for
breach of the annuity contract (Count One), conversion of funds from the annuity
(Count Two), and negligence (Count Three). All three counts demand judgment
against Allianz “in the amount of $41,348.92, plus applicable prejudgment interest
and costs” as well as “such further and different relief as the Court may deem just
and appropriate.” (Complaint, Counts One, Two & Three).
Allianz timely removed the case to this Court. (Doc. 1, Notice of Removal).
In its notice of removal, Allianz asserts that the Court has diversity jurisdiction
over the case pursuant to 28 U.S.C. § 1332(a).

Alliance avers that there is

complete diversity of citizenship between the parties and that the amount in
controversy exceeds $75,000.00, exclusive of interest and costs, notwithstanding
Cadence’s demand for only $41,348.92 in damages in each count of its complaint.
Allianz contends that the actual amount in controversy is the difference between
the value of the annuity before Allianz allegedly allowed the unauthorized
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withdrawals ($345,515.59) and its value afterwards ($213,000.00), or $132,515.59.
(Notice of Removal, ¶ 8).
Following removal, Cadence filed the instant motion to remand. (Doc. 8).
Although Cadence does not dispute that there is complete diversity of citizenship
between the parties, it argues that Allianz has not established the minimum amount
in controversy for purposes of diversity jurisdiction. Cadence insists that the
amount in controversy is $41,348.92, an amount that is far less than the
jurisdictional threshold of $75,000.00. (Doc. 8, ¶ 2).
DISCUSSION
A.

Legal Standard
“A removing defendant bears the burden of proving proper federal

jurisdiction.” Leonard v. Enterprise Rent A Car, 279 F.3d 967, 972 (11th Cir.
2002). Because federal courts are courts of limited jurisdiction, the removing
defendant’s burden is a heavy one:
While a defendant does have a right, given by statute, to remove in
certain situations, plaintiff is still the master of his own claim.
Defendant’s right to remove and plaintiff’s right to choose his forum
are not on equal footing; for example, unlike the rules applied when
plaintiff has filed suit in federal court with a claim that, on its face,
satisfies the jurisdictional amount, removal statutes are construed
narrowly; where plaintiff and defendant clash about jurisdiction,
uncertainties are resolved in favor of remand.
Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994) (internal citations
omitted).
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Where, as here, a complaint filed in state court expressly pleads an amount
in controversy that is less than the jurisdictional minimum set by 42 U.S.C. §
1332(a), “the sum demanded in good faith in the initial pleading shall be deemed to
be the amount in controversy.” 28 U.S.C. § 1446(c)(2).

To overcome this

presumption, the removing party must establish “by the preponderance of the
evidence” that the amount in controversy actually exceeds $75,000.00. 28 U.S.C. §
1446(c)(2)(B). Where a plaintiff disputes a defendant’s allegation that the amount
in controversy exceeds $75,000.00, “[t]he Court must find that it is ‘more likely
than not’ that the plaintiff could recover more than $75,000 from the defendant[ ]
in order for jurisdiction to exist under Section 1332.” Bennett v. Williams, No.
7:17-cv-00602-LSC, 2017 WL 3781187, *1 (N.D. Ala. Aug. 31, 2017) (quoting
Roe v. Michelin N. Am., Inc., 613 F.3d 1058, 1061 (11th Cir. 2010). Moreover, if a
plaintiff “does not desire to try his case in the federal court he may resort to the
expedient of suing for less than the jurisdictional amount, and though he would be
justly entitled to more, the defendant cannot remove.” St. Paul Mercury Indem. Co.
v. Red Cab Co., 303 U.S. 283, 294 (1938).
B.

Analysis
In its opposition to Cadence’s motion to remand, Allianz correctly notes that

“Alabama practice permits a plaintiff to recover damages in excess of the amount it
demands in its complaint.” (Doc. 14 at 3) (citing ALA. R. CIV. P. 54(c)). Allianz
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then argues that “the preponderance of the evidence shows that the amount in
controversy [in this case] exceeds the specifically pled amount of $41,348.92.” (Id.
at 4). Allianz advances three arguments for why the amount in controversy is
greater than $41,348.92 and exceeds the $75,000.00 jurisdictional threshold. The
Court rejects all three arguments.
Allianz first argues that the Court “need not look further than Cadence’s
intentional tort claim for conversion and request for an award of damages in
addition to the $41,348.92 that the Court deems ‘just and proper’ to find sufficient
evidence that the amount in controversy exceeds $75,000.” (Doc. 14 at 4). Allianz
notes that conversion is “an intentional tort that allows for the recovery of punitive
damages” and argues that, if proven, “punitive damages are those additional
damages that Cadence seeks that are ‘just and appropriate.’” (Id. at 5). Allianz’s
argument fails for at least two reasons.

First, Cadence has not requested

“additional damages” that are just and appropriate; it has requested “such further
and different relief” as may be deemed just and appropriate. Allianz has offered no
evidence that the “further and different relief” requested by Cadence is an award of
punitive damages. Second, punitive damages are available for a tort claim under
Alabama law only where a plaintiff proves by clear and convincing evidence that
the defendant “consciously or deliberately engaged in oppression, fraud,
wantonness, or malice with regard to the plaintiff.” ALA. CODE § 6-11-20(a).
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Cadence’s complaint does not allege that Allianz consciously engaged in any
oppression, fraud, wantonness, or malice with regard to Cadence, and there is no
demand for punitive damages anywhere in the complaint. Allianz has not shown
by a preponderance of the evidence that it is more likely than not that Cadence
could recover more than $75,000.00 from Allianz in compensatory and punitive
damages, given that the complaint does not even seek an award of punitive
damages, much less provide any clue as to what the likely amount of punitive
damages might be.
Allianz next argues that “Cadence [has] refused to expressly disclaim
entitlement to more than the amount it has pled” and that such refusal
“demonstrates that its specifically pled damages of less than the jurisdictional
amount are nothing more than a thinly veiled attempt to avoid removal.” (Doc. 14
at 7). In its reply brief, Cadence points out that it has, in fact, stipulated that “the
amount it is seeking to recover is $41,348.92, exclusive of interest and costs.”
(Doc. 17 at 13; Doc. 17-1). In any event, a plaintiff’s refusal to stipulate to
damages is insufficient to show that the amount in controversy exceeds the
jurisdictional amount. See Williams v. Best Buy Co., 269 F.3d 1316, 1320 (11th
Cir. 2001) (“There are several reasons why a plaintiff would not so stipulate, and a
refusal to stipulate standing alone does not satisfy Best Buy’s burden of proof on
the jurisdictional issue.”); Cox v. Auto Owners Ins. Co., No. 2:17cv490-CSC, 2017
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WL 4453334, *3 (M.D. Ala. Oct. 5, 2017) (“The mere fact that Cox has declined
to stipulate to less than $75,000.00 in damages is insufficient for the court to
conclude that it is more likely than not that his damages exceed that amount.”).
Allianz’s final argument is confusing and difficult to follow. As best as the
Court can discern, Allianz appears to argue that the amount in controversy is not
the amount of the deficiency owed on the underlying loan and being sought by
Cadence in its complaint ($41,348.92), but rather the total amount of the allegedly
unauthorized withdrawals from the annuity allowed by Allianz ($132,515.59),
even though Cadence is not seeking to recover that amount from Allianz and has
not been damaged in that amount. (Doc. 14 at 7-9). As aptly put by Cadence in its
reply brief, “Allianz argues that the amount in controversy must incorporate a
demand that is not made for an amount that is not recoverable.” (Doc. 17 at 6).
That argument is illogical on its face.
Based on the above, the Court finds that Allianz has not met its burden of
establishing by a preponderance of the evidence that Cadence’s claims more likely
than not exceed the jurisdictional threshold of $75,000.00. Accordingly, the Court
lacks diversity jurisdiction over the case, which is due to be remanded to the
Circuit Court of Jefferson County, Alabama.

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C.

Attorney’s Fees and Costs
In its motion to remand, Cadence argues that an award of attorney’s fees and

costs is warranted because Allianz’s removal of this action “was not supported by
the facts and governing law.” (Doc. 8, ¶ 39). An order remanding a removed case
to state court “may require the payment of just costs and any actual expenses,
including attorney fees, incurred as a result of removal.” 28 U.S.C. § 1447(c). The
Supreme Court has held that “the standard for awarding fees should turn on the
reasonableness of the removal. Absent unusual circumstances, courts may award
fees under § 1447(c) only where the removing party lacked an objectively
reasonable basis for seeking removal.” Martin v. Franklin Capital Corp., 546 U.S.
132, 141 (2005). Here, although the Court has determined that the case is due to
be remanded, the Court is otherwise satisfied that Allianz had an objectively
reasonable basis for removing the case. Cadence’s request for attorney’s fees and
costs will be denied.
CONCLUSION
For the foregoing reasons, Cadence’s motion to remand (doc. 8) will be
GRANTED except to the extent that Cadence has requested an award of attorney’s
fees and costs. A separate order remanding the case to the Circuit Court of
Jefferson County, Alabama, will be entered.

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DONE this 27th day of November, 2017.
_________________________________

JOHN E. OTT
Chief United States Magistrate Judge

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