Sullivan One LLC v. Silver Cinemas Acquisition Corp

Filing 24

ORDER denying 16 Motion to Remand to State Court by Judge Christine M. Arguello on 2/7/14.(dkals, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 13-cv-01998-CMA-CBS
SULLIVAN ONE, LLC,
Plaintiff,
v.
SILVER CINEMAS ACUISITION CORP.
d/b/a OLD TOWNE THEATER/LANDMARK THEATERS,
Defendant.

ORDER DENYING PLAINTIFF’S MOTION TO REMAND

This matter is before the Court on Plaintiff’s Motion to Remand (Doc. # 16).
Plaintiff argues that this case should be remanded to state court because Defendant
failed to establish the amount in controversy as required for diversity jurisdiction under
28 U.S.C. § 1332. For the following reasons, the Court denies Plaintiff’s motion.
I. BACKGROUND
Plaintiff, the owner of real property in Arvada, Colorado, alleges that Defendant,
the tenant of that same property, breached the Ground Lease between Plaintiff and
Defendant. The contract was dated April 19, 1996, and is in effect until April 2016.
ThePlaintiff alleges that Defendant, as of January 2013, has unlawfully offset its rent
payments in violation of the terms and provisions of the Ground Lease. (Doc. # 4.)
Plaintiff filed a complaint in state court on July 2, 2013. Defendant filed its Notice
of Removal on July 26, 2013. (Doc. # 1.) Plaintiff filed its Motion for Remand on

September 25, 2013, asserting that the case was improperly removed because the
amount in controversy was less than $75,000, failing to satisfy the requirements of
28 U.S.C. § 1332. (Doc. # 16).
II. ANALYSIS
A.

STANDARD OF REVIEW
A defendant may remove a state civil action to federal court if the federal district

court has subject matter jurisdiction. 28 U.S.C. § 1441. A federal court has subject
matter jurisdiction over cases in which there is complete diversity of citizenship and the
amount in controversy exceeds $75,000. 28 U.S.C. § 1332. The burden of proving that
removal is proper falls on the party asserting diversity jurisdiction. Montoya v. Chao,
296 F.3d 952, 955 (10th Cir. 2002). Removal statutes are construed strictly and any
doubts about the correctness of removal are resolved in favor of remand. Fajen v.
Found. Reserve Ins. Co., Inc., 683 F.2d 331, 333 (10th Cir.1982) (citing Shamrock Oil
& Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941)).
To successfully remove a case to federal court, “[a] defendant must affirmatively
establish jurisdiction by proving jurisdictional facts that made it possible that $ 75,000
was in play.” McPhail v. Deere & Co., 529 F. 3d 947, 955 (10th Cir. 2008). Further, the
preponderance of the evidence standard applies to jurisdictional facts, not jurisdiction
itself. In other words, "what the proponent of jurisdiction must 'prove' is contested factual
assertions . . . [as j]urisdiction itself is a legal conclusion, a consequence of facts rather
than a provable 'fact.'" Id.

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A defendant may rely on any estimates of alleged damages from a plaintiff’s
complaint to prove jurisdictional facts. Id. When the allegations in the complaint are not
dispositive, the allegations in the notice of removal are considered. Laughlin v. Kmart
Corp., 50 F.3d 871, 873 (10th Cir. 1995). Other documentation can also be the basis of
determining the amount in controversy, including any documents that demonstrate the
plaintiff’s estimation of the value of its claim. McPhail, 539 F.3d at 956. In a breach of
contract dispute, the contract itself can be used to support establishing an amount in
controversy over $75,000. Id. The plaintiff’s estimation of the amount in controversy is
not binding; courts can also look to the defendant’s estimation of the value of the claim
in the Notice of Removal. See Frederick, 683 F.3d at 1248.
Finally, when a challenge to subject matter jurisdiction is “premised upon
diversity of citizenship [it is to be measured] against the state of facts that existed at the
time of filing[.]” Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567, 571 (2004).
Ongoing damages demanded in the plaintiff’s complaint are part of the state of the facts
at the time of filing of the complaint. See Carrillo v. MCS Indus. Inc., No. 12–0573 2012
WL 5378300, at *16 (D.N.M. Oct. 15, 2012) (finding that both past and future wages
requested as damages can be considered when determining if the amount in
controversy is met in a breach of implied employment contract action).
B.

APPLICATION

This case involves two claims: one for declaratory judgment of the
responsibilities of the parties and one for breach of contract and damages. This Court’s

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jurisdiction over both claims is determined by the jurisdictional amount in controversy
requirement under 28 U.S.C. § 1332.
This dispute between the parties on this motion centers on how much of the
amount of allegedly underpaid rent can be considered in determining the amount in
controversy for purposes of 28 U.S.C. § 1332. As an initial matter, the parties agree
that the amount of rent allegedly underpaid per month is eight percent of the required
rent or about $6,300. (Doc. # 16; Doc. # 20). Plaintiff further alleges that the amount
includes only Defendant’s allegedly underpaid rent from January 2013 to the date of
the filing of the Complaint on July 2, 2013. (Doc. # 16). If this is the proper calculation,
then the amount in controversy is below the requisite $75,000 needed for purposes of
§ 1332.
In contrast, Defendant alleges that the amount in controversy is at least
$247,938.24, a calculation that includes, among other things, the amount of underpaid
rent from January 2013 to the end of the lease in April 2016. (Doc. # 20). The
discrepancy between the parties’ calculations results from a disagreement as to the
number of months to be counted as underpaid for purposes of determining the amount
in controversy.
If Plaintiff had drafted its complaint to request damages only as of the date of the
complaint’s filing, this would be a tougher call. However, on the face of the complaint,
the Plaintiff prays for relief that would recover not only past due underpayments for all
months that the Defendant underpaid but also for future underpayments: “including the

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months of January [2013] to and including the date of trial in this matter.” (Doc. # 4,
at 3.)
As of December 2013, the amount in controversy exceeded $75,000 (i.e.,
$6,300.07 (underpayment per month) multiplied by 12 months (January-December
2013), equals $75,600.84). Thus, the amount-in-controversy requirement of § 1332
is established on the face of the complaint. 1
III. CONCLUSION
For the reasons stated above, it is ORDERED that the Plaintiff’s Motion to
Remand to State Court is DENIED.
DATED: February 7, 2014
BY THE COURT:

_______________________________
CHRISTINE M. ARGUELLO
United States District Judge

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The certainty with which this Court arrives at a sum that exceeds $75,000 distinguishes this
case from all the authorities relied upon by Plaintiff. See Symes v. Harris, 472 F. 3d 754, 759
(10th Cir. 2006) (declining jurisdiction based “upon the state of things at the time of the action
brought” but not foreclosing the accrual of future damages from a controversy existing at the
time the action was brought); Tafoya v. Am. Family Mut. Ins. Co., No. 08–01656 2009 WL
211661, *2 (D. Colo. Jan. 28, 2009) (declining to find § 1332 jurisdiction where the total
attorney’s fees were required to reach the $75,000 minimum, but the case had not sufficiently
progressed for any calculation of fees to be more than speculative); Amazon, Inc. v.
Cannondale Corp., No. 99-00571 2006 WL 650682, at * 9 (D. Colo. Mar. 10, 2006) (same as
Symes); Smith v. Tele-Town Hall, LLC, 798 F. Supp. 2d 748, 752 (E.D. Va. 2011) (finding no
jurisdiction where “plaintiff’s good faith demand at the time of filing” governed determination of
the jurisdictional amount, not a later modification); Dent v. Cingular Wireless, LLC, No. 07-0552
2007 WL 1797653, at *6 (D.N.J. June 20, 2007) (declining to exercise jurisdiction where future
damages were speculative because the defendant had “proffered no evidence from which this
court can infer the probable amount of plaintiff’s alleged lost income and benefits”). Finally,
Defendant advances a number of other arguments for why the amount in controversy exceeds
this amount. Yet this Court need not address these arguments here, as the amount in
controversy is satisfied by a more narrow consideration outlined above.
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