Rhone v. Central Loan & Reporting et al
MEMORANDUM OPINION. Signed by Judge Sharon Lovelace Blackburn on 3/23/14. (ASL)
2014 Mar-24 AM 10:56
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
CENLAR AGENCY, INC. ,
CASE NO. 7:13-CV-01368-SLB
Plaintiff Marilyn Rhone has moved to remand this case to the Tuscaloosa Circuit
Court because defendant, Cenlar Agency, Inc., failed to timely file its Notice of Removal
and because prior to removal, defendant litigated the case on the merits in state court. (Doc.
4.)1 Upon review of the record, the argument of counsel, and the relevant law, the court is
of the opinion that plaintiff’s Motion to Remand is due to be denied.
I. PROCEDURAL HISTORY
This case was removed from the circuit court of Tuscaloosa County on July 23, 2013
on the basis of federal diversity jurisdiction. (Doc. 1.)2 Plaintiff filed her complaint on
November 26, 2012 in state court alleging conversion of insurance proceeds. (Doc. 1-1 at 712.) The original complaint contained one count for conversion of $24,122.28 in insurance
funds “which caused more damage and for . . . rent payments in the amount of $1,800
Reference to a document number, [“Doc. ___”], refers to the number assigned to each
document as it is filed in the court’s record.
The fact that diversity jurisdiction exists is not contested by the plaintiff.
incurred by the delay in disbursing plaintiffs funds.” (Doc. 1-1 at 11.) Defendant foreclosed
on the subject property and purchased it at auction on February 28, 2013. (Doc. 1-1 at 67.)
Defendant filed an answer in state circuit court on March 5, 2013. (Doc. 1-1 at 28-31.)
On April 16, 2013 defendant filed a motion for summary judgment, (doc 1-1 at 3345); oral argument was heard in state court and the motion for summary judgment was denied
on June 4, 2013, (doc 4 at 4). On June 5, 2013, at defendant’s request, plaintiff emailed
defendant a copy of its proposed Second Amended Complaint. (Doc 1-3 at 5.) Plaintiff
requested that defendant state whether defendant would oppose the Motion to Amend. (Doc.
4-1 at 3.) This amended complaint included new claims of unjust enrichment, wrongful
foreclosure, and estoppel, and also requested punitive and mental anguish damages and a
preliminary injunction. (Doc. 1-2 at 53-68.) On June 14, plaintiff emailed defendant a
settlement demand that was based on the proposed Second Amended Complaint. (Doc. 4-1
at 3.) On June 25, 2013, defendant notified plaintiff that it would oppose the Motion to
Amend. (Id.) On June 27, plaintiff filed a Motion for Leave to file a Second Amended
Complaint. (Doc 1-2 at 51-52.) A hearing was set for July 15, (doc. 4-1 at 3), but on July 11
defendant withdrew its opposition, (doc. 1-2 at 71).
The circuit court granted plaintiff’s Motion to Amend on July 12. (Doc. 1-2 at 76.) On
July 23, 2013, the defendant filed a Notice of Removal to the United States District Court for
the Northern District of Alabama. (Doc 1.) Defendant cited the plaintiff’s Second Amended
Complaint and the settlement demand based thereon to support its contention that the amount
in controversy requirement was satisfied. (Doc. 1 at 5-7.)
Plaintiff contends that defendant’s Notice of Removal was untimely and that
defendant waived its right to remove when it argued a summary judgment motion in state
circuit court. Plaintiff also requests attorney fees for opposing the allegedly improper
removal. The court will address these claims in turn.
A. Timely Removal
Plaintiff contends that defendant’s Notice of Removal is time barred under 28 U.S.C.
§ 1446(b)(3) which states that when a civil action is not removable upon the initial pleading,
“a notice of removal may be filed within 30 days after receipt by the defendant, through
service or otherwise, of a copy of an amended pleading, motion, order, or other paper from
which it may first be ascertained that the case is one which is or has become removable.
Plaintiff claims that defendant should have been aware of the removable nature of the
case, and therefore the 30 day window should have began to run, on either June 5, 2013,
when the plaintiff emailed defendant a proposed copy of the Second Amended Complaint,
or June 14, 2013, when plaintiff emailed defendant a detailed settlement demand exceeding
$75,000. (Doc. 4-1 at 2-3). Plaintiff argues that either of these documents satisfy the “other
paper” section of § 1446(b)(3).
The court disagrees. Here the state court did not approve the filing of the Second
Amended Complaint until July 12, 2013. (Doc. 1-2 at 76.) In Holloway v. Morrow the
court held that “the 30-day removal period prescribed by § 1446(b) commences running
as soon as a defendant is able to ascertain intelligently that the action is removable.”
Holloway v. Morrow, 2008 WL 401305 (S.D. Ala 2008). Defendant here could not
ascertain that the case was removable until the state court granted plaintiff’s motion to
file the Second Amended Complaint, which increased the amount in controversy above
the threshold required by § 1332(a). Defendant then filed its Notice of Removal on July
23, well within the 30 day window required under § 1446(b)(3). (Doc. 1.)
To hold otherwise would create a difficult situation for defendants and would go
against precedent requiring documents supporting removal to “unambiguously establish
federal jurisdiction.” Exum v. State Farm Fire and Cas. Co., 821 F.Supp.2d 1285, 1291
(M.D. Ala., 2011). The receipt by the defendant of a proposed and unfiled amended
complaint and a settlement demand based off that complaint cannot be said to
“unambiguously establish” the amount in controversy required for removal. The proposed
complaint might never be filed or the court could deny leave to amend. However, the
amendment of a complaint in court records is exactly the kind of “unambiguous” event that
removal could be based on.
The June 14, 2013 settlement demand also did not start the 30 day window for
removal. Until the court granted leave to plaintiff to file her amended complaint, the
proposed settlement was based on claims not yet in front of the court. There is no reason to
expect defendant to have considered the settlement offer as part of the amount in controversy
until the claims it was based on were actually part of the litigation. The demand letter, based
on claims not yet filed, can be compared to a pre-suit demand letter, which has been held to
not constitute “other paper” for the purposes § 1446(b)(3). See Saberton v. Sears Roebuck
and Co., 392 F.Supp.2d 1358, 1360 (M.D. Fla. 2005) (“Defendant’s pre-suit demand letter
will not be considered as “other paper” for the purpose of satisfying the amount in
controversy requirement.”); Depina v. Iron Mountain Information Mgmt, Inc., 2005 WL
1319231 (M.D. Fla. 2005) (Declining to expand “other paper” to include pre-suit settlement
demand letter). Therefore the settlement demand could not affect defendant’s understanding
of the amount in controversy until the amended complaint was filed on July 12, 2013.
Plaintiff’s argument that defendant’s Notice of Removal was untimely fails because
defendant filed the Notice within 30 days of July 12, 2013, the date when the action first
B. Waiver of Right to Remove
Plaintiff also argues that defendant waived its right to remove by arguing a motion for
summary judgment in state court on June 4, 2013. In Franklin v. City of Homewood the court
stated that “[A]lthough waiver of the right is possible, the defendant’s intent (to waive) must
be clear and unequivocal.” Franklin v. City of Homewood, 2007 WL 1804411 (N.D. Ala.
2007)(internal quotations omitted). Clearly, there could be no “clear and unequivocal” waiver
of the right to remove if that right was not available to defendant. One cannot give away what
one does not have. The right had not arisen at the time of the motion for summary judgment
because the Second Amended Complaint had not been filed and the amount in controversy
requirement was not satisfied. In other words, the right to remove could not have been
waived because it did not then exist. Defendant’s Notice of Removal on July 23, 2013 was
not rendered improper due to previous waiver of the right to remove.
C. Attorney Fees
Attorney fees are not appropriate in this case. They are only appropriate pursuant to
28 U.S.C.A. § 1447(c) when the removing party lacked an “objectively reasonable basis” for
removal. Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). Other courts have
awarded attorney’s fees in remand cases where the defects have been egregious: where the
defendant was up against the forum defendant rule, Wolf v. Kennelly, 574 F.3d 406, 411 (7th
Cir. 2009), or where defendant removed pursuant to federal question jurisdiction because the
plaintiff’s complaint merely mentioned the word “overtime” and “federal,” Devine v. Prison
Health Servs., Inc., 212 Fed. App’x 890, 891 (11th Cir. 2006). In this case, it was objectively
reasonable for defendant to think that the Notice of Removal was timely filed and that its
right to remove had not been waived. Indeed, as set forth above, the court finds that removal
was proper. Therefore, plaintiff’s request for attorney fees will be denied.
For the above stated reasons, plaintiff’s Motion for Remand and Attorneys fees will
be denied. An Order in accordance with this Memorandum Opinion will be entered.
DONE, this 23rd day of March, 2014.
SHARON LOVELACE BLACKBURN
UNITED STATES DISTRICT JUDGE
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