Young v. Schutz

Filing 16

Enter MEMORANDUM Opinion and Order Signed by the Honorable Elaine E. Bucklo on 8/18/2014. Mailed notice (jdh)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

AARON YOUNG,

)
)
)
)
)
) Case 14 CV 02832
)
)
)
)
)
)
)
)

Plaintiff,

v.

Klarice Schutz,
Defendant.

MEMORANDUM OPINION AND ORDER

Defendant Klarice Schutz’s motion to dismiss for lack of
subject matter jurisdiction is denied for the reasons stated
below.
I.
Defendant Klarice Schutz is an Illinois resident and the
daughter of Bernard Schutz, founder of Prestige Art, Inc.
(“Prestige”), an art gallery in Skokie, Illinois.

On or about

November 2, 2002, Plaintiff Aaron Young, a Maryland citizen,
purchased from Prestige various pieces of valuable art (“Subject
Art Works”).

The purchase price of the Subject Art Works was

$58,700; however, Young and Bernard Schutz agreed that Young
would pay only $50,000 in exchange for allowing Bernard Schutz to
1

maintain possession of the Subject Art Works until both Bernard
and his wife passed away.
In 2013, after both Bernard Schutz and his wife died,
Defendant Klarice Schutz took possession of the Subject Art Works
and attempted to sell them through an auction house.

Young filed

a two-count complaint against Klarice Schutz for conversion and
replevin.

Young claims that the Subject Art Works are currently

worth no less than $150,000.
Klarice Schutz has moved to dismiss both counts under Fed.
R. Civ. P. 12(b)(1), arguing that Young has failed to meet the
jurisdictional requirement that the amount in controversy must
exceed $75,000.

In resolving the motion to dismiss, I must

accept all well-pled allegations in the complaint as true and
draw all reasonable inferences in Young’s favor.

Int’l Airport

Centers, LLC v. Citrin, 440 F.3d 418, 419 (7th Cir. 2006).
II.
“Under 28 U.S.C. § 1332, federal courts have jurisdiction
over civil suits between citizens of different states ‘where the
matter in controversy exceeds the sum or value of $75,000,
exclusive of interest and costs.’” LM Ins. Corp. v. Spaulding
Enterprises Inc., 533 F.3d 542 (7th Cir. 2008).

The Seventh

Circuit has explained the proper standard that courts should
apply when the amount of controversy is contested:

2

[A] proponent of federal jurisdiction must, if material
factual allegations are contested, prove those
jurisdictional facts by a preponderance of the
evidence. Once the facts have been established,
uncertainty about whether the plaintiff can prove its
substantive claim, and whether damages (if the
plaintiff prevails on the merits) will exceed the
threshold, does not justify the dismissal. Only if it
is legally certain that the recovery (from the
plaintiff’s perspective) or the cost of complying with
the judgment (from defendant’s) will be less than the
jurisdictional floor may the case be dismissed.

Meridian Security Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th
Cir. 2006) (internal citations omitted). Young bears the burden
of establishing that the amount in controversy meets the
statutory requirement. Appert v. Morgan Stanley Dean Witter,
Inc., 673 F.3d 609, 617-18 (7th Cir. 2012) (“The party invoking
federal jurisdiction bears the burden of demonstrating its
existence.”).

Because Klarice Schutz challenges jurisdiction,

Young must support his allegation of the amount in controversy
with “competent proof.” McMillan v. Sheraton Chicago Hotel &
Towers, 567 F.3d 839, 844 (7th Cir. 2009).

“To satisfy this

burden, a party must do more than ‘point to the theoretical
availability of certain categories of damages.’” Id. (internal
citations omitted).

Proof is “competent” so long as it provides

“proof to a reasonable probability that jurisdiction exists.”
Anthony v. Sec. Pac. Fin. Services, Inc., 75 F.3d 311, 315 (7th
Cir. 1996) (internal citation omitted).

3

Young responded to Ms. Schutz’s assertion that the amount in
controversy requirement was not met by offering the Declaration
of Louis Schutz, who served as the president of Prestige for over
twenty years.1 In his Declaration, Louis Schutz states that he
has worked at Prestige for over four decades and has “been
responsible for buying and selling inventory, running the entire
art gallery, conducting fine art appraisals, buying and selling
museum quality custom framing, and overseeing the conservation
and restoration of fine art works.” Schutz Dec. at ¶ 2-4.

He

also notes that he has taken and passed “the core courses of the
International Society of Appraisers (“ISA”) on the mechanics and
ethics of appraisal.” Id. at ¶ 5.

According to Louis Schutz, the

Subject Art Works “were collectively worth well in excess of
Seventy Five Thousand Dollars ($75,000)” when Klarice Schutz took
possession of them. Id. at ¶ 11.

In support of his estimation of

the cumulative value of the Subject Art Works, Louis Schutz lists
each work individually and provides his estimation of its current
value. Id. at ¶ 12a-12l. He appraises the value of the Subject
Art Works at over $223,000.
Plaintiff also refers to the Consumer Price Index inflation
calculator which indicates that the value of $58,700 in 2002 is
currently $77,354.79. Plt. Resp. Br. at 4.

He argues that

1 Louis Schutz is also Bernard Schutz’s son and Klarice Schutz’s brother.

4

“[b]ased purely on inflation,” the value of the Subject Art Works
meets the statutory minimum.

Id.

Klarice Schutz challenges Young’s proof, arguing that
because Louis Schutz is an “interested” party by virtue of his
adversarial relationship with her, he cannot offer competent
proof. Def. Reply Br. at 3. Notwithstanding the familial squabble
that involves the Subject Art Works and casts some shadow over
Louis Schutz’s partiality, he does have over forty years’
experience in the art appraisal business.

Moreover, I am

convinced that the value of the Subject Art Works, which were
valued at $58,000 in 2002, could have appreciated more than
$17,000 over the intervening twelve years, as demonstrated by the
inflation information provided by the United States Bureau of
Labor Statistics.

Young has offered sufficient proof that there

is a reasonable probability that the Subject Art Works’ value
exceeds $75,000.

“Once the proponent of federal jurisdiction has

explained plausibly how the stakes” exceed $75,000, “then the
case belongs in federal court unless it is legally impossible for
the plaintiff to recover that much.”
528 F.3d 982, 986 (7th Cir. 2008).

5

Spivey v. Vertrue, Inc.,

III.
For the foregoing reasons, Defendant’s motion to dismiss is
denied.

ENTER ORDER:

Dated: August 18, 2014
____________________________
Elaine E. Bucklo
United States District Judge

6