Thomas et al v. Brown et al

Filing 40

ORDER denying 30 Motion to Stay; denying 31 Motion to Remand. Response to 27 Motion to Dismiss due 12/9/11. Signed by Judge James I. Cohn on 11/29/2011. (prd)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 11-62261-CIV-COHN/SELTZER
ROBERT THOMAS, FREDERICK LAUFER,
and BRYAN KAUFMAN,
Plaintiffs,
v.
TROY R. BROWN, GARY S. DESBERG,
JERRY A. GORSKI, EDMUND G. KAUNTZ,
WILLIAM M. MILLS, PAUL J. SINGERMAN,
MICHAEL R. STAVNICKY, RONALD J. TEPLITZKY
individually, and SINGERMAN, MILLS, DESBERG
& KAUNTZ CO. L.P.A., a foreign limited professional
association doing business within Florida,
Defendants.
__________________________________________/
ORDER DENYING MOTIONS TO REMAND AND STAY
THIS CAUSE is before the Court upon Plaintiffs’ Motion to Remand to State
Court [DE 31], Defendants’ Memorandum in Opposition [DE 34], Plaintiffs’ Reply [DE
38], Plaintiffs’ Motion to Stay [DE 30], Defendants’ Memorandum in Opposition [DE 37],
and Plaintiffs’ Reply [DE 39]. The Court has carefully considered the motions and is
otherwise fully advised in the premises.
Plaintiffs, three individual citizens of Florida, filed this action against various
attorneys, who reside in Ohio, for breaching their duty to Plaintiffs and committing
various torts, resulting in deprivation of Plaintiffs’ portion of funds wired to an account
controlled by Plaintiffs’ business partner, who was represented by Defendants in a
related action.

I. BACKGROUND
According to the complaint filed in state court [DE 1-2], Plaintiffs Robert Thomas,
Frederick Laufer, and Bryan Kaufman (“Plaintiffs”) are minority shareholders of Apex
Radiology Inc. (“Apex”), holding 11%, 17%, and 21%, respectively, of Apex. In 2007,
Apex entered into an Asset Purchase Agreement to sell all of its assets to Franklin &
Seidelmann, LLC (“F&S”). The shareholders of Apex elected Wade Rome, a 45%
Apex owner at the time, to be their representatives in dealing with F&S. After making
the initial payment and two quarterly payments, F&S stopped further payments to Apex.
In 2008, Rome hired the Defendants in this action to represent Apex in an action
against F&S in federal court in Ohio.1 That action was then stayed while the parties
arbitrated the claims. In late 2009, the arbitration panel ruled in favor of Apex, resulting
in a wire transfer of over $1.5 million being sent to a bank account controlled by Wade
Rome. Plaintiffs allege that they never received any of that money, and have filed suit
in Florida state court to recover that money from Rome and his wife. While the Apex
action against F&S was still pending, Defendants began representing Rome in an
employment action he filed against F&S in Ohio, in which Plaintiffs have been
subpoenaed to be witnesses, thus presenting a conflict of interest with their former
counsel.
In this action, Plaintiffs contend that Defendants breached their duty to Plaintiffs,
as counsel for Apex shareholders, by entrusting the arbitration award funds solely to

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The parties dispute whether the “Client” of the Defendants was Wade Rome,
Apex, Apex’s shareholders, or some combination thereof. The Court makes no
determination at this time as to whom Defendants represented.
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Rome. See Counts I and II. Plaintiffs also allege that Defendants have breached Ohio
Rules of Professional Conduct by not obtaining waivers of conflict from Plaintiffs (Count
III). Plaintiffs allege negligence, gross negligence, and conspiracy by Defendants in
their failure to transfer funds from the arbitration award to Plaintiffs. Counts IV, V, VI,
and VII. Plaintiffs also seek a declaratory judgment that Defendants represented them,
and that Defendants’ current and future representation of the Romes is a conflict of
interest. Counts VIII and IX. Plaintiffs seek an award of actual damages in addition to
declaratory relief.
Defendants timely removed this action from state court on the grounds of
diversity jurisdiction. After first moving for a hearing on a motion to disqualify
Defendants’ counsel that was filed in state court, Plaintiffs moved for remand.

II. DISCUSSION
A. Standard for Remand/Removal
Federal diversity jurisdiction exists when the suit is between citizens of different
states and the amount in controversy exceeds $75,000, exclusive of interest and costs.
28 U.S.C. § 1332. There is no dispute that complete diversity exists in this case.
Rather, Plaintiff seeks remand on the grounds that Defendants failed to strictly follow
the procedural requirements for removal, failed to meet their burden to show that the
amount in controversy requirement has been satisfied, and that this Court should
exercise its discretion to remand because of the pending state court action involving
Plaintiffs and Rome.

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The party seeking to litigate in federal court bears the burden of establishing
jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).
Where a plaintiff has not pled a specific amount of damages, the removing defendant
must establish the amount in controversy by a preponderance of the evidence.
Williams v. Best Buy Co., 269 F.3d 1316, 1319 (11th Cir. 2001). The Eleventh Circuit
has explained that a defendant may allege removability that is apparent from the face of
the complaint, in which case the district court must evaluate whether the complaint itself
satisfies the defendant’s jurisdictional burden. Roe v. Michelin North America, Inc., 613
F.3d 1058, 1061-62 (11th Cir. 2010). A district court must make “‘reasonable
deductions, reasonable inferences, or other reasonable extrapolations’ from the
pleading to determine whether it is facially apparent that a case is removable.” Id.,
quoting Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744 (11th Cir. 2010).
B. Procedural Requirements Have Been Met
Plaintiffs argue that Defendants failed to include the state court civil cover sheet
in the materials attached to the notice of removal in violation of 28 U.S.C. § 1446(a).
However, as Defendants point out, a removing party need only include “a copy of all
process, pleadings, and orders served upon such defendant.” 28 U.S.C. § 1446(a).
Defendants contend that they were never served with the civil cover sheet, that a civil
cover sheet is not part of “all process, pleadings and orders,” and even if it was, the
Defendants cured this non-jurisdictional defect within 30 days. Under Cook v.
Randolph County, Ga., 573 F.3d 1143, 1150 (11th Cir. 2009), this Court concludes that
even if such a procedural defect occurred (which more than likely did not occur based
upon the record before the Court), such defect does not warrant remand as it is not
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jurisdictional.
C. Amount in Controversy Has Been Met
Plaintiffs next argue that because the primary relief it is seeking is Defendants’
disqualification in the Ohio action (or an injunction to enforce such action), the value of
this injunctive relief to Plaintiffs is less than $75,000. A court must look to the
“monetary value of the object of the litigation that would flow to the plaintiffs if the
injunction were granted.” Leonard v. Enterprise Rent a Car, 279 F.3d 967, 973 (11th
Cir. 2002). However, in addition to the declaratory/injunctive relief, Plaintiffs are also
seeking monetary damages in their Complaint.
Defendants contend that Plaintiffs’ complaint provides a basis to conclude that
the amount in controversy is over $75,000 per Plaintiff. The Complaint alleges that an
award in favor of Apex of $1,696,330.34 was sent by wire transfer directly to Wade
Rome instead of being distributed to all Apex shareholders, including Plaintiffs.
Complaint, ¶¶ 53-73 [DE 1-2]. The percentage shares held by Plaintiffs of Apex would
result in over $75,000 being paid out to each Plaintiff. Several of the claims in this
action seek damages accruing from Defendants’ alleged role in the failure of the money
being paid to Plaintiffs. Complaint, ¶¶ 131, 175, 182, 194, 201 and “Wherefore” clause
on page 34. Under the Eleventh Circuit standard described above, this Court makes
the reasonable deduction, inference, or extrapolation, based upon the specific
allegations in the Complaint, that it is facially apparent that the amount in controversy is
over the jurisdictional limit.

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D. No “Discretionary” Remand
Plaintiffs argue that even if this Court determines that diversity jurisdiction is
present in this action, it has the “discretion” to remand the action based upon a related,
pending state court action wherein Plaintiffs have sued Wade Rome to recover the funds
at issue in this action. Plaintiffs contend that because of the pressing issue of service of
subpoenas in the Ohio action (wherein their former Apex counsel – Defendants – seek
to depose Plaintiffs in the Rome action against F&S), they filed this new action rather
than seeking to amend its related state court complaint to add the Defendants to that
action. Plaintiffs rely upon a 1983 district court case from Arkansas for their argument
that the Court should exercise its discretion to remand. Midwestern Distribution, Inc. v.
Paris Motor Freight Lines, Inc., 563 F.Supp. 489 (E.D. Ark. 1983). However, in that
decision, the defendant was a citizen of the forum state, and therefore was precluded
from removal by 28 U.S.C. § 1441(b). 563 F.Supp. at 491. The court’s additional
discussion of the waiver doctrine and other factors are therefore dicta.
To the extent this Court has any discretion under the binding precedent of the
United States Court of Appeals for the Eleventh Circuit to remand an action that has
properly asserted diversity jurisdiction, the Court concludes that the motion to remand in
this case should be denied.2

2

The Court need not reach the Defendants’ waiver argument.
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III. CONCLUSION
Accordingly, it is hereby ORDERED AND ADJUDGED as follows:
1.

Plaintiffs’ Motion to Remand to State Court [DE 31] is hereby DENIED;

2.

Plaintiffs’ Motion to Stay [DE 30] is hereby DENIED as moot;

3.

Plaintiffs shall file their response to Defendants’ Motion to Dismiss for Lack of
Personal Jurisdiction by Dec. 9, 2011.
DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County,

Florida, this 29th day of November, 2011.

Copies furnished to counsel of record on CM/ECF

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