Tiffany Cudjoe v. Gold Star Mortgage Financial Group

Filing 23

(IN CHAMBERS) COURT ORDER by Judge Percy Anderson remanding case to SUPERIOR COURT OF CALIFORNIA, COUNTY OF LOS ANGELES, Case number EC065600. Please refer to the Court's order for specifics. (Made JS-6. Case Terminated.) (cr)

JS-6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-8231 PA (SKx)

Title

Tiffany Cudjoe v. Gold Star Mortgage Financial Group Corp.

Present: The
Honorable

Date

December 13, 2016

PERCY ANDERSON, UNITED STATES DISTRICT JUDGE

Stephen Montes Kerr
Deputy Clerk

Not Reported
Court Reporter / Recorder

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

None

None

Proceedings:

IN CHAMBERS — COURT ORDER

Before the Court is a Motion to Remand filed by plaintiff Tiffany Cudjoe (“Plaintiff”)
(Docket No. 17) and a Motion to Change Venue filed by defendant Gold Star Mortgage
Financial Group Corporation (“Defendant”) (Docket No. 18). Pursuant to Rule 78 of the Federal
Rules of Civil Procedure and Local Rule 7-15, the Court finds that these matters are appropriate
for decision without oral argument. The hearing calendared for December 19, 2016 is vacated,
and the matters taken off calendar.
Plaintiff commenced this action in Los Angeles Superior Court on September 28, 2016.
In her Complaint, Plaintiff alleges that she began working for Defendant on October 31, 2015,
and continued working as a mortgage underwriter until she was terminated on June 14, 2016.
Plaintiff claims that she was “not timely paid wages earned and her wage statements did not
accurately reflect the inclusive dates of the pay period, gross wages eared, net wages earned,
total hours worked, and all wage rates.” (Compl. ¶ 10.) Plaintiff also alleges that she was
required to take a “working lunch,” eat at her desk, and remain on the premises for lunch.
(Compl. ¶ 13.) In support of her allegations, the Complaint alleges:
The wage statement corresponding with the check issued 1/29/2016
provides an example of the failures to timely pay that are reflected
on the face of the wage statements; it reflects a pay period of
12/31/15-1/13/16 and indicates wages were not paid for that period
until sixteen (16) days after the close of the pay period. The time
records reveal that Cudjoe was not timely paid wages throughout her
employment. By way of specific example, Cudjoe’s time records
reveal that she worked 88.75 hours . . . (80 regular hours and 8.75
OT hours) between April 16-30, 2016. Her wage statement
purporting to be for that same period indicates she worked 96.75
hours (80 regular hours and 16.75 OT hours). That number actually
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JS-6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-8231 PA (SKx)

Title

Tiffany Cudjoe v. Gold Star Mortgage Financial Group Corp.

Date

December 13, 2016

corresponds with the time record information for April 1-15; Cudjoe
was not paid for 88.75 hours until the 5/13/2016 wage statement
(purporting to be for 5/1/2016-5/15/2016). As a general practice,
Defendants did not pay wages to Cudjoe or other current and former
employees within California within the time periods outlined under
[California] Labor Code section 204.
(Compl. ¶ 11.) Plaintiff asserts seven claims brought pursuant to various provisions of the
California Labor Code for: (1) failure to timely pay wages; (2) failure to provide meal breaks;
(3) failure to pay meal break premium wages; (4) failure to pay overtime wages; (5) failure to
pay wages upon termination; (6) failure to furnish accurate wage statements; and (7) failure to
maintain accurate wage statements. The Complaint seeks recovery for Plaintiff’s individual
claims and pursuant to California’s Private Attorney General Act (“PAGA”), Cal. Lab. Code §
2699(a) for the benefit of Defendant’s other current and former employees working in
California.
Defendant filed a Notice of Removal on November 4, 2016, alleging that it was served
with the Complaint on October 5, 2016, and that the Court possesses diversity jurisdiction over
the action. In support of its jurisdictional allegations, Defendant asserted that Plaintiff sent to
Defendant an email on September 2, 2016 containing a settlement demand of $400,000. (See
Notice of Removal ¶ 9.) The Notice of Removal specifically alleges: “Given Plaintiff’s demand
of $400,000, the amount in controversy is well above the $75,000 threshold for diversity
jurisdiction.” (Notice of Removal ¶ 10.)
Federal courts are courts of limited jurisdiction, having subject matter jurisdiction only
over matters authorized by the Constitution and Congress. See, e.g., Kokkonen v. Guardian Life
Ins. Co., 511 U.S. 375, 377, 114 S. Ct. 1673, 1675, 128 L. Ed. 2d 391 (1994). A suit filed in
state court may be removed to federal court if the federal court would have had original
jurisdiction over the suit. 28 U.S.C. § 1441(a). A removed action must be remanded to state
court if the federal court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c). “The burden of
establishing federal jurisdiction is on the party seeking removal, and the removal statute is
strictly construed against removal jurisdiction.” Prize Frize, Inc. v. Matrix (U.S.) Inc., 167 F.3d
1261, 1265 (9th Cir. 1999). “Federal jurisdiction must be rejected if there is any doubt as to the
right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).
In attempting to invoke this Court’s diversity jurisdiction, Defendant must prove that
there is complete diversity of citizenship between the parties and that the amount in controversy
exceeds $75,000. 28 U.S.C. § 1332. To establish citizenship for diversity purposes, a natural
person must be a citizen of the United States and be domiciled in a particular state. Kantor v.
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JS-6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-8231 PA (SKx)

Title

Tiffany Cudjoe v. Gold Star Mortgage Financial Group Corp.

Date

December 13, 2016

Wellesley Galleries, Ltd., 704 F.2d 1088, 1090 (9th Cir. 1983). Persons are domiciled in the
places they reside with the intent to remain or to which they intend to return. See Kanter v.
Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). For the purposes of diversity
jurisdiction, a corporation is a citizen of any state where it is incorporated and of the state where
it has its principal place of business. 28 U.S.C. § 1332(c); see also Indus. Tectonics, Inc. v. Aero
Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990).
In her Motion to Remand, Plaintiff contends that Defendant failed to meet its burden to
establish that the amount in controversy exceeds the jurisdictional minimum. When an action
has been removed and the amount in controversy is in doubt, there is a “strong presumption” that
the plaintiff has not claimed an amount sufficient to confer jurisdiction. Gaus, 980 F.2d 564,
566 (9th Cir. 1992) (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288–90,
58 S. Ct. 586, 590–91, 82 L. Ed. 845 (1938)). “When not facially evident from the complaint
that more than $75,000 is in controversy, the removing party must prove, by a preponderance of
the evidence, that the amount in controversy meets the jurisdictional threshold.” Matheson v.
Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). “Conclusory allegations as
to the amount in controversy are insufficient.” Id. at 1090-91. “Under this burden, the
defendant must provide evidence establishing that it is ‘more likely than not’ that the amount in
controversy exceeds [$75,000].” Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th
Cir. 1996).
When determining the amount in controversy, the Court must assume that the allegations
in the complaint are true and that a jury will return a verdict in plaintiff’s favor on all of the
claims in the complaint. Kenneth Rothschild Trust v. Morgan Stanley Dean Witter, 199 F. Supp.
2d 993, 1001 (C.D. Cal. 2002). “The ultimate inquiry is what amount is put ‘in controversy’ by
the plaintiff’s complaint, not what a defendant will actually owe.” Korn v. Polo Ralph Lauren
Corp., 536 F. Supp. 2d 1199, 1205 (E.D. Cal. 2008); see also Rippee v. Boston Mkt. Corp., 408
F. Supp. 2d 982, 986 (S.D. Cal. 2005). “[T]he amount-in-controversy inquiry in the removal
context is not confined to the face of the complaint.” Valdez v. Allstate Ins. Co., 372 F.3d 1115,
1117 (9th Cir. 2004). The contents of the notice of removal and supplemental evidence provided
after the removal petition has been filed may be considered to determine whether the defendant
has adequately shown that the amount in controversy has been met. See Abrego Abrego v. The
Dow Chemical Co., 443 F.3d 676, 690 (9th Cir. 2006); Cohn v. Petsmart, Inc., 281 F. 3d 837,
840, 840 n.1 (9th Cir. 2002). A court may also “consider any ‘summary-judgment-type evidence
relevant to the amount in controversy at the time of removal.’” Valdez, 372 F.3d at 1117
(quoting Matheson, 319 F.3d at 1090).
According to Plaintiff’s Motion to Remand, Plaintiff’s $400,000 settlement demand
sought to resolve both Plaintiff’s individual claims and the PAGA claim. Contrary to the
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JS-6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-8231 PA (SKx)

Title

Tiffany Cudjoe v. Gold Star Mortgage Financial Group Corp.

Date

December 13, 2016

allegations in the Notice of Removal, which suggested that Plaintiff sought more than the
jurisdictional minimum, the settlement demand in fact valued Plaintiff’s individual claim at
“nearly $15,000.” Specifically, the settlement demand stated:
Goldstar’s liability to Ms. Cudjoe alone is nearly $15,000, without
determining the amount of wages she may have been denied. The
potential exposure under PAGA for [California Labor Code sections]
204, 226, and 558 (meal period) violations is $660,000. This is
substantial liability and each of the claims further subjects
[Defendant] to attorneys’ fees. I have discussed the issues with my
client and she has authorized me to extend an initial demand of
$400,000 in exchange for a full release and waiver of claims.
(Baysinger Decl. Ex. B.) The Ninth Circuit has concluded that the PAGA penalties recoverable
on behalf of an employer’s California employees cannot be aggregated to meet the jurisdictional
threshold for diversity jurisdiction. See Urbino v. Orkin Services of Cal., Inc., 726 F.3d 1118,
1122 (9th Cir. 2013).
In its Opposition, Defendant for the first time attempts to quantify the value of Plaintiff’s
individual claims without reliance solely on the settlement demand. In support of its efforts to
quantify Plaintiff’s individual damages, Defendant did not include any “summary-judgment type
evidence.” Valdez, 372 F.3d at 1117. According to Defendant, Plaintiff’s individual claim for
unpaid overtime puts at least $79,916.76 at issue. Defendant’s calculation of this amount relies
on the Complaint’s paragraph 53, which alleges:
At all times throughout Cudjoe’s employment with Defendants,
Defendants failed to pay her for overtime hours worked beyond eight
(8) in a workday or forty (40) in a workweek. Espinoza and the
other current and former hourly non-exempt employees regularly
worked in excess of eight hours per day, in excess of 40 hours per
workweek, in excess of 6 days per workweek, and/or in excess of 12
hours per day.
(Compl. ¶ 53.) Specifically, Defendant asserts in its Opposition that, based on the allegations in
her Complaint, Plaintiff “worked as much as 12 hours a day, seven days a week, for 31 weeks”
at an hourly wage of $39.06. (Opp’n 7:2-3.) Defendant calculates the amount of Plaintiff’s
unpaid overtime claim as follows:

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JS-6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-8231 PA (SKx)

Title

Tiffany Cudjoe v. Gold Star Mortgage Financial Group Corp.

Date

December 13, 2016

(12 hours per work day) X (7 days worked per work week) = 84
hours per week worked; 84 - (40 hours at Plaintiff’s regular rate) =
44 hours of overtime per week; 44 X 31 = 1,364 alleged overtime
hours. Plaintiff’s overtime rate is at least $58.59: $36.06 X 1.5 =
58.59. 1,364 overtime hours X 58.59 = $79,916.76 alleged overtime
compensation due.
(Opp’n at 7 n.6.) This calculation assumes that the Complaint’s allegation of “regularly” means
that Plaintiff worked 4 hours of overtime each day and worked 7 days each week she was
employed by Defendant. These assumptions, that Plaintiff worked 44 hours of overtime each
week, are inconsistent with the specific allegations contained in paragraph 11 of the Complaint,
in which Plaintiff states that she worked 8.75 hours of overtime from December 31, 2015
through January 13, 2016, and 16.75 hours of overtime from April 16, 2016 through April 30,
2016.1/ Nor does Defendant provide any reason for assuming that “regularly” means 4 hours
each day and 7 days each week. This failure to provide any basis for Defendant’s assumptions
to support the amount of Plaintiff’s overtime claim is particularly problematic when the
allegation upon which Defendant relies references “Espinoza,” an employee other than Plaintiff,
and uses the conjunction “and/or,” which does not necessarily imply that an employee worked
more than 12 hours each day. Particularly in light of Plaintiff’s settlement demand that valued
her individual claim at “nearly $15,000,” the Court concludes that Defendant’s unsupported
assumptions about the value of Plaintiff’s overtime claim fail to satisfy Defendant’s burden to
establish that the amount in controversy exceeds the jurisdictional minimum.
Defendant’s Opposition also contends that Plaintiff’s claims for unpaid meal periods
places at least $7,330.88 in controversy, that her claim for failure to pay wages due upon
termination is valued at $6,250, that her claims for failure to furnish and maintain wage
statements places $3,300 in controversy, and the value of the claim for failure to timely pay
wages is at least $3,100. Although Plaintiff disputes Defendant’s calculations of these amounts,
even if Defendant’s assumptions concerning these claims are accurate, the value of these claims
is approximately $19,980. Even if the Court were to assume that Plaintiff’s unpaid overtime
claim has a value equal to the combined value of Plaintiff’s other claims, such an amount in
controversy would still not satisfy the requirements for diversity jurisdiction.
Defendant attempts to satisfy the amount in controversy by adding the attorneys’ fees that
Plaintiff might recover to the value of her individual claims. Decisions from within the Ninth

1/

The settlement demand also states that Plaintiff worked just 0.25 hours of overtime from
November 16, 2015 through November 30, 2016.
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JS-6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-8231 PA (SKx)

Title

Tiffany Cudjoe v. Gold Star Mortgage Financial Group Corp.

Date

December 13, 2016

Circuit recognize a split of authority as to whether anticipated attorneys’ fees are to be
considered for purposes of determining the amount in controversy. See Reames v. AB Car
Rental Servs., 899 F. Supp. 2d 1012, 1020 (D. Or. 2012) (“It appears that a nascent consensus
may be emerging among the district courts of the Ninth Circuit that the split between the
Conrad/Faulkner and the Simmons/Brady lines of cases may best be resolved by adoption of the
Conrad/Faulkner reasoning that attorney fees anticipated but unaccrued at the time of removal
are not properly in controversy for jurisdictional purposes.”); Kidner v. P.F. Chang’s China
Bistro, Inc., No. EDCV 15–287 JGB (KKx), 2015 WL 2453523, at *5-*6 (C.D. Cal. May 21,
2015) (adopting reasoning in Reames); Gomez v. CarMax Auto Superstores California, LLC,
No. 2:14–cv–09019 CAS (PLAx), 2015 WL 1967078, at *2 (C.D. Cal. Apr. 30, 2015) (same).
The Court therefore concludes that Defendant’s reliance on anticipated attorneys’ fees does not
satisfy its burden to show that the amount in controversy exceeds the jurisdictional minimum.
Moreover, because Defendant offers no evidence of Plaintiff’s pre-removal attorneys’ fees, the
Court has no basis to find that the amount in controversy exceeds $75,000.
For the foregoing reasons, the Court finds Defendant failed to meet its burden of
demonstrating that the amount in controversy attributable to Plaintiff’s individual claims in this
case exceeds $75,000, and the PAGA penalties for the remaining employees cannot be
aggregated to satisfy the jurisdictional minimum. As a result, Defendant has failed to establish
that the Court may properly exercise diversity jurisdiction over this matter. See 28 U.S.C. §
1332. Accordingly, Plaintiff’s Motion to Remand is granted and this action is remanded to the
Los Angeles Superior Court, Case No. EC065600, for lack of subject matter jurisdiction
pursuant to 28 U.S.C. § 1447(c). The Court declines to award fees to Plaintiff caused by
Defendant’s filing of the Notice of Removal in this instance because the filing of the Notice of
Removal was not objectively unreasonable. See Martin v. Franklin Capital Corp., 546 U.S. 132,
141, 126 S. Ct. 704, 711, 163 L. Ed. 2d 547 (2005) (“Absent unusual circumstances, courts may
award attorney’s fees under § 1447(c) only where the removing party lacked an objectively
reasonable basis for seeking removal. Conversely, when an objectively reasonable basis exists,
fees should be denied.”). The Court denies Defendant’s Motion to Change Venue as moot.
IT IS SO ORDERED.

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