Lee v. Cash Central of Alabama LLC et al
MEMORANDUM OPINION AND ORDER OF REMAND- The pltf's motion to remand (Doc 9 ) is GRANTED, and this matter is REMANDED to the Circuit Court of Shelby County, Alabama for further proceedings. Signed by Magistrate Judge Staci G Cornelius on 1/9/19. (MRR, )
2019 Jan-09 PM 03:02
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
DAVID A. LEE,
CASH CENTRAL OF ALABAMA,
LLC, et al.,
Case No.: 2:18-cv-00833-SGC
MEMORANDUM OPINION AND ORDER OF REMAND1
Presently pending is the motion to remand filed by the plaintiff, David A.
Lee.2 (Doc. 9). The defendants, Cash Central of Alabama, LLC, Community
Choice Financial Inc., and Direct Financial Solutions, LLC, have opposed the
motion, which is now ripe for adjudication. (Doc. 17; see Doc. 18). For the
reasons explained below, the motion is due to be granted, and this matter is due to
be remanded to state court.
On February 16, 2018, Lee filed the initial complaint in this matter in Shelby
County Circuit Court, asserting claims under Alabama common law and naming as
The parties have unanimously consented to magistrate judge jurisdiction pursuant to 28 U.S.C.
§ 636(c). (Doc. 20).
Mr. Lee, who is an attorney, is representing himself in this matter, with the assistance of cocounsel.
defendants Cash Central, Community Choice Financial, and numerous fictitious
parties. (Doc. 1-1 at 9-17). Lee's complaint asserts an unknown party stole his
identity, obtained loans from the defendants, and subsequently defaulted.
claims arise from the allegation the defendants reported to credit rating agencies
that he defaulted on the fraudulent loans. (Id.). On February 19, 2018, Lee filed
an amended complaint adding additional state law claims. (Id. at 33-35). On
February 23, 2018, Lee filed a second amended complaint adding Direct Financial
Solutions as a defendant. (Id. at 98-99). On February 26, 2018, Lee filed a third
amended complaint correctly identifying Community Choice Financial. (Id. at
The defendants were formally served with process on March 15 and 16,
2018, after which they filed a timely motion to dismiss. (Doc. 1-2 at 108, 114,
117, 121-32). After a hearing, the state court denied the motion to dismiss on May
16, 2018. (Doc. 1-3 at 46). That same day, Lee filed a fourth amended complaint
asserting additional claims. (Id. 52-57). Accordingly, the operative complaint
asserts claims against the above-captioned defendants and fictitious parties for
negligence, wantonness, misrepresentation, declaratory relief, reckless training and
supervision, invasion of privacy, negligent and wanton approval of a fraudulent
loan application, negligent and reckless training, supervision, and monitoring of
the loan approval process, malice, and willfulness. (See id.). No iteration of the
complaint specified the amount of damages Lee sought.
Rather, Lee alleged the
defendants' conduct caused him to have a lower credit score, difficulty refinancing
his primary residence, delays in financing a lake house, a higher interest rate on a
mortgage loan on his primary residence, and mental anguish. (E.g. Doc. 1-1 at 12).
On May 21, 2018, counsel for the defendants received a letter from Lee,
dated May 17, 2018. (Doc. 1-4; see Doc. 1 at 11). The letter, in which Lee opined
on the strength of his case and the difficulties the defendants would face in
litigating the claims, invited the defendants to consider early resolution of the case.
(Doc. 1-4). The letter did not include a specific settlement demand but did state
Lee would not accept a low-ball offer. (Id. at 2). On May 31, 2018, the defendants
removed to this court based on federal diversity jurisdiction. (Doc. 1). As to the
amount in controversy, the defendants rely entirely on Lee's May 17, 2018 letter to
establish the jurisdictional threshold. (Id. at 11-12).
A state court action may be removed if "the district courts of the United
States have original jurisdiction." 28 U.S.C. § 1441(a). Pursuant to 28 U.S.C. §
1332(a), the federal district courts shall have original jurisdiction of all civil
actions between citizens of different states where the amount in controversy
exceeds $75,000. The requirement of complete diversity of citizenship appears to
be satisfied here; Lee is an Alabama citizen (See Doc. 1 at 9), and the named
defendants are citizens of Ohio.3 While the operative complaint asserts claims
against fictitious parties, the citizenship of these parties is disregarded when
determining the existence of complete diversity. 28 U.S.C. § 1441(b).
The issue in this case is whether Lee's May 17, 2018 letter is sufficient to
show the amount in controversy exceeds the jurisdictional threshold. Where a
plaintiff's complaint does not include an ad damnum clause, the removing
defendants must prove—by a preponderance of the evidence—the amount in
controversy exceeds $75,000. Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353,
1357 (11th Cir.1996), abrogated on other grounds, Cohen v. Office Depot, 204
F.3d 1069 (11th Cir. 2000). The defendants concede the initial pleadings in this
case do not satisfy the amount in controversy requirement under 28 U.S.C. §
1332(a). (See Doc. 1 at 14-15). However, a notice of removal may be filed within
thirty days after receipt by the defendant of "an amended pleading, order, or other
paper from which it may first be ascertained that the case is one which has become
removable." 28 U.S.C. § 1446(b)(3). Here, the defendants contend Lee's May 17,
2018 letter constitutes "other paper" showing the amount in controversy exceeds
$75,000. (Doc. 1 at 11-12).
Specifically, the notice of removal states Community Choice Financial is incorporated and has
its principal place of business in Ohio and is thus, an Ohio citizen. (Doc. 1 at 9). Direct
Financial Solutions is an LLC, the sole member of which is Community Choice Financial. (Id.
at 9-10). Cash Central is an LLC, the sole member of which is Direct Financial Solutions. (Id.
at 10). Accordingly, both Direct Financial Solutions and Cash Central are citizens of Ohio for
purposes of federal diversity jurisdiction. E.g. Rolling Greens MHP, LP v. Comcast SCH
Holdings, LLC, 374 F.3d 1020, 1022 (11th Cir. 2004).
The defendants rely on several statements in the letter to support removal:
(1) the lawsuit "could result in a multi-million dollar verdict in Shelby County;" (2)
settlement would not be cheap; and (3) the cost of settlement would increase as
litigation progressed. (Doc. 1 at 11, 15-16). As the defendants would have it, the
letter revealed Lee's belief that the amount in controversy is "several million
dollars." (Id. at 16).
In order for "other paper" to establish removability, the paper "must contain
an unambiguous statement that clearly establishes federal jurisdiction." Lowery v.
Ala. Power Co., 483 F.3d 1184, 1213 n.63 (11th Cir. 2007); see also Griffith v.
Wal-Mart Stores E., L.P., 884 F. Supp. 2d 1218, 1224 (N.D. Ala. 2012).
Settlement demands or offers can be evidence that the amount in controversy
exceeds $75,000. See Seckel v. Travelers Home & Marine Ins. Co., No. 12-4163KOB, 2013 WL 360421, at *1–2 (N.D. Ala. Jan. 29, 2013). "While [a] settlement
offer, by itself, may not be determinative, it counts for something." Burns v.
Windsor Ins. Co., 31 F.3d 1092, 1097 (11th Cir.1994). However, the weight given
to a settlement offer "depends on the circumstances." Taylor v. Piggly Wiggly of
Bay Minette, Ala., No. 12-0320, 2012 WL 3555576, at *1-2 (S.D. Ala. Aug. 16,
2012). Indeed, courts within this circuit have found removing defendants failed to
establish the amount in controversy even where plaintiffs have specifically asserted
settlement demands exceeding $75,000. Brooks v. Sears, Roebuck & Co., No. 185
554, 2018 WL 3761045, at *2–4 (M.D. Fla. July 2, 2018), report and
recommendation adopted, 2018 WL 3545421 (M.D. Fla. July 24, 2018) (finding
amount in controversy not satisfied, notwithstanding the plaintiff's post-suit
settlement demand of $135,000); Jackson v. Select Portfolio Serv., Inc., 651 F.
Supp. 2d 1279, 1281 (S.D. Ala. 2009) ($155,000 settlement demand, without
information to support the figure, was insufficient to support removal).
Courts determining the weight due settlement demands have focused on
whether the demand reflects a reasonable assessment of the value of the plaintiff's
claim or mere puffing and posturing. "[S]ettlement offers that provide 'specific
information to support the plaintiff's claim for damages' suggest the plaintiff is
'offering a reasonable assessment of the value of his claim' and are entitled to more
weight." Taylor, 2012 WL 3555576, at *1–2 (quoting Golden Apple Mgmt. Co. v.
Geac Comput., Inc., 990 F. Supp. 1364, 1368 (M.D. Ala. 1998) (alterations
incorporated) (settlement demand of $225,000 was persuasive because it was
accompanied by "specific information about hard, past damages" that plaintiff's
medical expenses were $70,000); Hardesty v. State Farm Mut. Auto. Ins. Co., No.
09-735-, 2009 WL 1423957, at *2–3 (M.D. Fla. May 18, 2009) (settlement
demand of $100,000 policy limits satisfied jurisdictional threshold where it was
accompanied by assessment of plaintiff's damages showing $8,425.00 in past
medical expenses, $107,370.00 in future medical expenses, as well as $75,000.00
for bodily injury, pain and suffering, disability, physical impairment, mental
anguish, inconvenience, and loss of enjoyment of life).
Conversely, settlement demands amounting to mere puffing or posturing do
not reflect a reasonable assessment of the value of the case and thus, fail to satisfy
the defendant's burden. Seckel, 2013 WL 360421, at *1–2 (letter from plaintiff
stating "I have no doubt I can win a 6 figure judgment" constituted "puffing and
posturing" which did not establish the amount in controversy); Brooks, 2018 WL
3761045, at *2–4 ($135,000 settlement demand did not satisfy amount in
controversy where defendant did not present any information regarding the nature
or severity of plaintiff's injuries); Jackson, 651 F. Supp. 2d at 1281 (unsupported
$155,000 settlement demand insufficient to support removal); see also Clarke v.
Home Depot, Inc., No. 07-80097, 2007 WL 9701763, at *1 (S.D. Fla. Mar. 12,
2007) (letter from plaintiff's counsel acknowledging the exact amount of damages
had not been evaluated but stating "preliminary estimates" revealed damages
would exceed $75,000 insufficient to show amount in controversy exceeded
Here, Lee's May 17, 2018 letter does not make a specific settlement demand.
Accordingly, the letter does not constitute Lee's unambiguous assessment of the
value of his case. Perhaps more importantly, the letter is devoid of specific
information regarding the extent of Lee's alleged damages. See, e.g., Brooks, 2018
WL 3761045, at *2–4; Taylor, 2012 WL 3555576, at *1–2.
In support of removal the defendants rely on several statements in the May
17, 2018 letter, each of which is examined in turn. First, the letter notes the case
could make new Alabama law that would ultimately cost the defendants and other
similar defendants "hundreds of millions of dollars." (Doc. 1-4 at 1). While this
statement speculates on the potential downstream effects an adverse judgment
could impose on the defendants' business, it says nothing of the amount in
controversy in this case—the value of Lee's claims. Next, the defendants rely on
Lee's opinion that "this is a very serious case for the defendants that could result in
a multi-million dollar verdict in Shelby County." (Doc. 1-4 at 1). However, this
statement is similar to those in other cases, which courts sitting within Alabama
have found to constitute the sort of "puffing and posturing" which is insufficient to
establish the amount in controversy.
E.g. Seckel, 2013 WL 360421, at *1
(plaintiff's statement "I have no doubt I can win a 6 figure judgment" was
Finally, the defendants rely on Lee's statements that: (1) the
defendants could not "throw [him] a bone" to settle the case; (2) the cost of
settlement would increase as litigation progressed; and (3) Lee was "very serious
about this case," which would "be a very expensive case for them to defend."
(Doc. 1-4 at 2-3). Like the other statements upon which the defendants' rely, these
statements offer no information regarding the nature or severity of Lee's damages
or the amount in controversy. See Brooks, 2018 WL 3761045, at *2–*4.
For the foregoing reasons, Lee's May 17, 2018 letter does not "contain an
unambiguous statement that clearly establishes federal jurisdiction." Lowery, 483
F.3d at 1213 n.63; see also Griffith, 884 F. Supp. 2d at 1224. Accordingly, the
defendants have failed to carry their burden of showing—by a preponderance of
the evidence—the amount in controversy exceeds $75,000. Tapscott, 77 F.3d at
1357. Given the presumption in favor of remand where federal jurisdiction is not
absolutely clear, the motion to remand is due to be granted. See Russell Corp. v.
Am. Home Assur. Co., 264 F.3d 1040, 1050 (11th Cir. 2001).
For all of the foregoing reasons, the plaintiff's motion to remand (Doc. 9) is
GRANTED, and this matter is REMANDED to the Circuit Court of Shelby
County, Alabama for further proceedings.
DONE and ORDERED this 9th day of January, 2019.
STACI G. CORNELIUS
U.S. MAGISTRATE JUDGE
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