Departmtent Stores National Bank v. Voss

Filing 9

ORDER of Remand granting 7 Motion to Remand to State Court. ORDERED that the Clerk of Court is directed to REMAND this action to the Jefferson County Court from which the case was removed, by Judge Wiley Y. Daniel on 2/21/13.(sgrim)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Senior Judge Wiley Y. Daniel
Civil Action No. 13-cv-00249-WYD-CBS
DEPARTMENT STORES NATIONAL BANK,
Plaintiff,
v.
BEVERLY J. VOSS,
Defendant.

BEVERLY J. VOSS,
Counter-Plaintiff,
v.
SILVERMAN/BORENSTEIN, PLLC;
IRVIN BORENSTEIN, ESQUIRE;
DAVID SILVERMAN, ESQUIRE; and
ANNE-MARIE VOS, ESQUIRE,
Counter-Defendants.

ORDER OF REMAND

I.

INTRODUCTION AND BACKGROUND
THIS MATTER is before the Court on the Plaintiff’s and Counter-Defendants’

Motion to Remand (ECF No. 7), filed February 19, 2013. By way of background, on
January 7, 2013 Plaintiff Department Stores brought a breach of contract (collection)
lawsuit for an unpaid credit card against Defendant in the Jefferson County Court
seeking damages in the amount of $8,203.67. Counter-Defendants are the attorneys

for Plaintiff Department Stores. Plaintiff Department Stores is a South Dakota company
and its principal place of business is in South Dakota. Defendant is a Colorado
resident.
On January 31, 2013, the pro se Defendant filed a Notice of Removal pursuant to
28 U.S.C. § 1446(a). (ECF No. 1). In seeking removal, Defendant asserts a third-party
complaint against the Counter-Defendants for alleged violations of the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et. seq.
After carefully reviewing the pleadings, I find that this case must be remanded
based on the failure of Defendant to show that this Court has jurisdiction over Plaintiff’s
breach of contract claim. No federal question exists pursuant to 28 U.S.C. § 1331
whereby this Court has original jurisdiction. Alternatively, there is no diversity
jurisdiction pursuant to 28 U.S.C. § 1332.
II.

RELEVANT LAW
"The jurisdiction of the federal courts is limited by Article III of the Constitution

and by statutes passed by Congress." Hansen v. Harper Excavating, Inc., 641 F.3d
1216, 1220 (10th Cir. 2011). "A case that is filed in state court may be removed from
state to federal court at the election of the defendant, but only if it is one ‘of which the
district courts of the United States have original jurisdiction,' which is to say if federal
subject-matter jurisdiction would exist over the claim." Id. (quoting 28 U.S.C. §
1441(a)). In general, original jurisdiction is lacking unless there is diversity of
citizenship or “a federal question is presented on the face of the plaintiff's properly
pleaded complaint.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987).
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Removal is appropriate only in limited circumstances. As the United States
Supreme Court recognized, “[i]t is well settled that the removal statutes are to be
construed strictly against removal with any doubt resolved in favor of remand.
Shamrock Oil Corp. v. Sheets, 313 U.S. 100, 108–09 (1941). In the Tenth Circuit
“[t]here is a presumption against removal jurisdiction.” Laughlin v. Kmart Corp., 50 F.3d
871, 873 (10th Cir. 1995). All doubts are resolved in favor of remand. See Fajen v.
Foundation Reserve Ins. Co., 683 F.2d 331, 331 (10th Cir. 1982). Furthermore, the
defendant has the burden of establishing that the jurisdictional prerequisites of
28 U.S.C. § 1332 have been satisfied. Martin v. Franklin Capital Corp., 251 F.3d 1284,
1290 (10th Cir. 2001); Holladay v. Kone, Inc., 606 F. Supp. 2d 1296, 1298 (D. Colo.
2009).
A.

Federal Question Jurisdiction

Here, while the Defendant appears to use the Notice of Removal to file a thirdparty complaint against the Counter-Defendants, the Notice of Removal does not set
forth any grounds upon which this Court may exercise jurisdiction. Although
Defendant’s third-party complaint against the Counter-Defendants alleges violations of
the FDCPA, Defendant has failed to establish removal jurisdiction over the Plaintiff’s
breach of contract (collections) claim against her.1 See Topeka Housing Auth. v.
Johnson, 404 F.3d 1245, 1247 (10th Cir. 2005) (holding that “a case may not be
removed to federal court solely because of a defense or counterclaim arising under

1

I note that had Plaintiff asserted the FDCPA claims in an independent complaint
against the counter-defendants, this would likely constitute a federal question providing the
Court with original jurisdiction.

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federal law) (citing Holmes Group, Inc., v. Vornado Air Circulation Sys., Inc., 535 U.S.
826, 830-31 & n. 2, 122 S.Ct. 1889, 153 L.Ed.2d 13 (2002) (neither a federal defense
nor counterclaim can “serve as the basis for ‘arising under’ jurisdiction”); see also 14B
Wright, Miller & Cooper, supra, § 3722, at 407-14); see Lewis v. Windsor Door Co., 926
F.2d 729, 733 (8th Cir. 1991) (holding that third-party claims are ancillary to the
underlying lawsuit and do not constitute separate or independent claims that permit
removal of an otherwise non-removable case).
B.

Diversity Jurisdiction

Turning to my analysis of whether diversity jurisdiction exists, while the Plaintiff
and Defendant are residents of different states, I nonetheless find that the amount in
controversy requirement is not satisfied. The amount in controversy is ordinarily
determined by the allegations of the complaint, or, where they are not dispositive, by the
allegations in the notice of removal. Martin v. Franklin Capital Corp., 251 F.3d 1284,
1290 (10th Cir. 2001); Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995). If the
jurisdictional amount is not shown by the allegations of the complaint, “[t]he burden is on
the party requesting removal to set forth, in the notice of removal itself, the ‘underlying
facts supporting [the] assertion that the amount in controversy exceeds [$75,000].’”
Laughlin, 50 F.3d at 873 (quotation omitted). In other words, the amount in controversy
must be affirmatively established on the face of either the petition or notice of removal.
Id. The removal statute is construed narrowly. Martin, 251 F.3d at 1289.

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In McPhail v. Deere & Co., 529 F.3d 947 (10th Cir. 2008)2, the Tenth Circuit
outlined several methods that a removing defendant may use to satisfy its burden of
proving jurisdictional facts by a preponderance of evidence. However, a plaintiff “cannot
avoid removal merely by declining to allege the jurisdictional amount,” but in the
absence of an explicit demand for more than the jurisdictional amount, defendant must
show how much is in controversy through other means. Id. at 955. In other words, “the
defendant must affirmatively establish jurisdiction by proving jurisdictional facts that
made it possible that $75,000 was in play.” Id. A defendant may accomplish this
through interrogatories obtained in state court prior to the removal, or affidavits or other
evidence submitted to the federal court. Id. at 956.
Here, in examining the underlying Complaint, I find that the allegations fail to
show that the amount in controversy exceeds $75,000, as required to establish diversity
jurisdiction. 28 U.S.C. § 1332(a)(1). The Complaint describes the amount in
controversy to be $8,203.67, which falls far below the jurisdictional prerequisite of §
1332. Thus, I turn to the notice of removal, which mentions nothing about the amount in
controversy.

Therefore, I find that Defendant has failed to meet her burden of

affirmatively establishing the amount in controversy on the face of either the petition or

2

Unlike the instant action, McPhail was a wrongful death case. Although plaintiff
refused to stipulate that the amount in controversy exceeded $75,000, the complaint
alleged that the decedent suffered severe and permanent injuries prior to death, and
sought actual and punitive damages. Id. at 955-56. Further, plaintiff’s counsel indicated
in communications with opposing counsel that the amount in controversy “very well may
be” in excess of $75,000. Id. at 957. The Tenth Circuit held that the allegations in the
complaint coupled with the background information regarding discussions between
counsel were sufficient to prove facts necessary to establish that the amount in
controversy exceeded $75,000. Id.
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the notice of removal.
III.

CONCLUSION
Guided by the strong presumption against removal of civil actions to federal court

based on diversity jurisdiction and the fact that it appears that the Court lacks subject
matter jurisdiction over this action, I find that this matter must be remanded to the state
court. See 28 U.S.C. § 1447(c). Accordingly, it is
ORDERED that the Clerk of Court is directed to REMAND this action to the
Jefferson County Court from which the case was removed.
Dated: February 21, 2013
BY THE COURT:

s/ Wiley Y. Daniel
Wiley Y. Daniel
Senior United States District Judge

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