WILMOTH et al v. CELADON TRUCKING SERVICES, INC.

Filing 11

CLOSED REMANDED - ENTRY ON MOTION TO REMAND: Accordingly, the Plaintiff's motion to remand (Dkt. No. 6) is GRANTED. This case is ORDERED REMANDED to Marion County Superior Court. As required by 28 U.S.C. § 1447(c), the Clerk shall mail a certified copy of this remand order to the Clerk of the Marion County Superior Court ***SEE ORDER FOR ADDITIONAL INFORMATION***. Signed by Judge William T. Lawrence on 4/6/2015.(DW)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
CHARLES WILMOTH and KENT VASSEY, )
on behalf of themselves and all others similarly )
situated,
)
)
Plaintiffs,
)
)
vs.
) CAUSE NO. 1:14-cv-2082-WTL-MJD
)
CELADON TRUCKING SERVICES, INC.,
)
)
Defendant.
)
ENTRY ON MOTION TO REMAND
This cause is before the Court on the Plaintiffs’ motion to remand (Dkt. No. 6). The
motion is fully briefed and the Court, being duly advised, GRANTS the motion for the reasons
set forth below.
In this class action breach of contract case, the Plaintiffs are a class of independent
owner/operator truck drivers who entered into a lease agreement with the Defendant, a publiclytraded transportation company. Under the lease agreement, the parties agreed that the Defendant
could withhold compensation for a driver for, among other things, charges and deductions
authorized by the driver. The Plaintiffs assert that the Defendant withheld more money from
their compensation than the Defendant actually paid for fuel purchases in breach of the lease
agreement. The Plaintiffs assert that the Defendant owes them $3,805,836.00, plus prejudgment
interest in the amount of $1,721,423.64.
The case was originally filed in Marion County Superior Court No. 7 on October 1, 2013.
The complaint stated that the proposed class action sought actual damages and an award of
prejudgment interest. On April 23, 2014, the state court certified the class. In its summary

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judgment brief, the class reaffirmed that it sought $3,805,836.00 in actual damages. The
Plaintiffs sent the Defendant a confidential letter on November 21, 2014, stating that the actual
damages were $3,805,836.00, and class counsel estimated that the class was entitled to
prejudgment interest in the amount of $1,721,424.64, for a total amount of damages of
$5,527,260.64. Both parties filed cross-motions for summary judgment in state court, and a
hearing on these motions was held on December 3, 2014. On December 12, 2014, the state court
granted judgment for the Plaintiffs and against the Defendant for $3,805,836.00 plus
prejudgment interest.
On December 19, 2014, the Defendant removed the action to this Court, asserting that the
actual damages and prejudgment interest should be aggregated and, therefore, that the damages
exceed the $5 million amount in controversy requirement under 28 U.S.C. § 1332(d) and 1453,
the Class Action Fairness Act (“CAFA”). Therefore, they assert that there is complete diversity
of citizenship and this Court has subject matter jurisdiction over the case pursuant to 28 U.S.C. §
1332.
In their motion to remand, the Plaintiffs argue that this Court lacks jurisdiction over this
case because the Defendant has failed to establish that the case satisfies the $5 million amount in
controversy required by the CAFA. 1 They argue that prejudgment interest cannot be considered
in determining whether the action meets the $5 million jurisdictional threshold. The Court
agrees.
28 U.S.C. § 1332(d)(2) provides, in pertinent part, that “[t]he district courts shall have

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The Plaintiffs also argue that the case should be remanded because the Defendant
waived its right to remove the case by participating in the hearing on the cross-motions for
summary judgment and that the removal is untimely under 28 U.S.C. § 1446(b). Since the
motion to remand is being granted on other grounds, the Court need not address these other
arguments.
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original jurisdiction of any civil action in which the matter in controversy exceeds the sum or
value of $5,000,000, exclusive of interest and costs[.]” (emphasis added). This exclusion of
prejudgment interest from the amount in controversy under the CAFA has recently been
reaffirmed by two cases. In Knowles v. Standard Fire Ins. Co., No. 4:11-cv-04044, 2013 WL
3968490 (W.D. Ark. Aug. 2, 2013), the court was tasked with interpreting the CAFA in order to
rule on a motion to remand similar to the one at bar. In Knowles, the court held that under the
CAFA, “the amount in controversy must be determined ‘exclusive of interests and costs’” and
“prejudgment interest must therefore be excluded from the base calculation of contract
damages.” Id. at *7 (internal citations omitted). Similarly, in Goodner v. Clayton Homes, Inc.,
No. 4:12-cv-4001, 2014 WL 4722748 (W.D. Ark. Sept. 23, 2014), the court held that “according
to the CAFA statute, the amount in controversy must be determined ‘exclusive of interest and
costs’” and “the Court, therefore, will exclude prejudgment interest from the amount in
controversy calculation.” Id. at *3 (internal citations omitted). The Court finds this reasoning to
be persuasive.
In its response, however, the Defendant cites Brown v. Webster, 156 U.S. 328 (1895), a
Supreme Court case that noted the distinction between “interest as such,” which cannot be
included in the amount in controversy, and interest “as an instrumentality in arriving at the
amount of damages to be awarded on the principal demand,” which should be included when
determining the amount in controversy. Id. at 329. Based on Brown, the Defendant argues that
the interest claimed by the Plaintiffs in this case is instrumental at arriving at the amount of
damages to be awarded and is, therefore, an “essential ingredient” of the claim that should be
included in determining the amount in controversy. The Court does not agree.
In Principal Mut. Life. Ins. Co v. Juntunen, 838 F.2d 942 (7th Cir. 1988), the Seventh

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Circuit was tasked with determining whether interest payable on a life insurance policy should be
considered in determining whether the insurer satisfied the amount in controversy requirement
for diversity jurisdiction. The Seventh Circuit relied on Velez v. Crown Life Ins. Co., 599 F.2d.
471 (1st Cir. 1979), which held that interest that becomes due because of a delay in payment is
considered “interest as such” under Brown and, thus, should be exclude from the amount in
controversy requirement. Applying this reasoning, the Seventh Circuit declined to include
interest in determining the amount in controversy.
This is further supported by Tri-State Refractories Corp. v. Certified Industrial
Technologies, No. EV 99-0014-CH/H, 2001 WL 388871 (S.D. Ind. Mar. 9, 2001). The plaintiff
in Tri-State relied on Brown, arguing that prejudgment interest was properly included in the
amount in controversy. However, the court found that this argument “stretches Brown beyond
recognition” and “would if accepted, effectively nullify the statutory language excluding interest
from the amount of controversy.” Id. at *3. The court noted that the plaintiff “could reach the
required amount in controversy only by including interest resulting solely from ‘delay in
payment,’ which Principal Mutual Life held may not be counted toward the amount.” Id.
This Court agrees that the interest owed to the Plaintiffs in this case is due because the
Defendant delayed payments. The prejudgment interest, therefore, is not an essential ingredient
of the Plaintiffs’ claim under Brown and cannot be included in the amount in controversy.
Because the amount in controversy is not met, this Court lacks subject matter jurisdiction over
this case and removal was improper. Accordingly, the Plaintiff’s motion to remand (Dkt. No. 6)
is GRANTED. This case is ORDERED REMANDED to Marion County Superior Court. As
required by 28 U.S.C. § 1447(c), the Clerk shall mail a certified copy of this remand order
to the Clerk of the Marion County Superior Court.

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SO ORDERED: 4/6/15
_______________________________
Hon. William T. Lawrence, Judge
United States District Court
Southern District of Indiana

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