Hale v. O'Charley's Restaurant Properties, LLC
Filing
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MEMORANDUM OPINION AND ORDER: 1. Plaintiff's motion to Remand 9 is GRANTED. 2. This matter is hereby REMANDED to Fayette Circuit Court. 3. All schedules and deadlines are CONTINUED GENERALLY. 4. This matter shall be STRICKEN FROM THE COURT'S ACTIVE DOCKET. Signed by Judge Joseph M. Hood on 3/22/2016.(LC)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
ADAM HALE, as Next Friend of
B.H.,
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Plaintiff,
v.
O’CHARLEY’S RESTAURANT
PROPERTIES, LLC,
Civil Case No.
5:16-cv-00058-JMH
MEMORANDUM OPINION
AND ORDER
Defendant.
***
This matter is before the Court on Plaintiff’s Motion to
Remand to State Court.
[DE 9].
Defendant has responded [DE 11]
and Plaintiff replied [DE 12], thus, Plaintiff’s motion is ripe
for decision.
Having reviewed the motion, response, and reply,
and being otherwise adequately advised, the Court will grant
Plaintiff’s motion for the reasons set forth below.
Background
This
case
arises
from
an
incident
O’Charley’s Restaurant on August 3, 2015.
that
occurred
at
an
Plaintiff, Adam Hale,
next friend of B.H., alleges that, on that day, the tip of B.H.’s
left ring finger was severed by a bathroom door hinge at the
restaurant.
On February 1, 2016, Plaintiff brought suit against
Defendant O’Charley’s Restaurant, LLC in Fayette Circuit Court
asserting negligence, res ipsa loquitur, and negligence per se and
seeking damages for past, present, and future physical pain and
suffering, medical expenses, and mental anguish; punitive damages;
actual, consequential, incidental, and foreseeable damages; and
attorneys’ fees, costs, pre-judgment and post-judgment interest
and expenses.
Following Kentucky Rule of Civil Procedure 8.01(2),
Plaintiff did not specify the amount of damages in his Complaint,
but rather averred that the amount in controversy exceeded the
minimum jurisdictional limit of the Fayette Circuit Court.
After
filing its Answer in Fayette Circuit Court, Defendant filed a
Notice of Removal to this Court, alleging federal jurisdiction
under 28 U.S.C. § 1332(a) (diversity of citizenship) “because the
parties and interests are diverse, and a good faith reading of the
Complaint and other information provided by Plaintiff shows the
amount in controversy exceeds the sum of $75,000 exclusive of
interests and costs.”
[DE 1 at ¶5].
Plaintiff responded to the removal by moving the Court to
remand the case to Fayette Circuit Court.
[DE 9].
In support of
his motion, Plaintiff argues that Defendant has not met its burden
of establishing that the amount in controversy exceeds the $75,000
jurisdictional minimum of this Court.
In addition, while the
parties appear to agree that the current named parties are diverse
at this time, Defendant also argues that there is the potential
for a non-diverse party to be brought into the action soon, namely,
the person responsible for the installation and maintenance of the
subject door hinge.
In its response to Plaintiff’s Motion to
2
Remand, Defendant states that it would agree that a remand is
appropriate if Plaintiff is willing to stipulate that the amount
sought in this matter will not exceed $75,000.
Defendant further
asks that, if the case is remanded, it not be foreclosed from
removing the action at that time.
Plaintiff replies by arguing
that Plaintiff’s Motion to Remand does not make a stipulation as
to the amount of controversy but, rather, asserts that Defendant
has failed to meet its burden of proof as the removing party as to
the amount in controversy for diversity jurisdiction.
Standard
The statute authorizing removal, 28 U.S.C. § 1441, provides
that an action is removable only if it initially could have been
brought in federal court. A federal court has original “diversity”
jurisdiction where the suit is between citizens of different states
and the amount in controversy exceeds $75,000, exclusive of costs
and interest.
28 U.S.C. § 1332(a).
Therefore, a defendant
desiring to remove a case from state to federal court has the
burden of establishing the diversity jurisdiction requirements of
an
original
federal
court
controversy requirement.
action,
including
the
amount
in
Chapman v. Houston Welfare Rights Org.,
441 U.S. 600, 612 n. 28 (1979). That burden is not an insubstantial
one.
McKinney v. ICG, LLC, No. 13-cv-12, 2013 WL 1898632, at *1
(E.D. Ky. May 7, 2013).
3
Where, as here, the complaint seeks an unspecified amount of
damages “that is not self-evidently greater or less than the
federal
amount-in-controversy
defendants
evidence.
must
carry
its
requirement,”
burden
by
a
the
removing
preponderance
of
the
Id. at *2 (E.D. Ky. May 7, 2013)(citing Gafford v. Gen.
Elec. Co., 997 F.2d 150, 158 (6th Cir.1993), abrogated on other
grounds
by
Friend,
530
U.S.
77).
The
preponderance-of-the-
evidence test requires defendants to support their claims to
jurisdiction
by
“jurisdictional
producing
facts.”
“competent
Id.
(citing
160)(internal citations omitted).
proof”
of
the
Gafford,
997
necessary
F.2d
at
“Competent proof” can include
affidavits, documents, or interrogatories.
Ramsey v. Kearns, No.
12-cv-06, 2012 WL 602812, at *1 (E.D. Ky. Feb. 23, 2012)(citing
Gentek Bldg. Prods., Inc. v. Sherwin–Williams Co., 491 F.3d 320,
330 (6th Cir. 2007)(internal citation omitted)).
If the defendant does not produce evidence showing it is more
likely than not that the plaintiffs' claims exceed $75,000, the
case must be remanded to state court.
Id.
Federal courts are
courts of limited jurisdiction, therefore, any doubts regarding
federal jurisdiction should be construed in favor of remanding the
case to state court.
Shamrock Oil & Gas Corp. v. Sheets, 313 U.S.
100, 109 (1941); Walsh v. American Airlines, Inc., 264 F. Supp.
514, 515 (E.D. Ky. 1967).
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Discussion
Here, because Defendant removed this case from state court,
it has the burden of proving that the requirements of diversity
jurisdiction, including the amount in controversy, are satisfied
by a preponderance of the evidence.
*2.
McKinney, 2013 WL 1898632, at
Regarding the amount in controversy, Defendant states as
follows in its Notice of Removal:
Upon information and belief, the Plaintiff’s medical
bills are somewhere between $15,000 and $20,000.
Considering the allegations, the type of injury (the
amputation and re-attachment of a finger), and the
type of damages sought, especially punitive damages,
it is apparent from the Complaint and other
information from Plaintiff that the amount in
controversy exceeds $75,000.
Kentucky law allows a
plaintiff to claim as much as nine (9) times special
damages for punitive damages. If the medical bills
are $15,000, the potential punitive damages are well
in excess of the jurisdictional amount without
consideration of pain and suffering, physical and
emotional, as well as future medical bills.
[DE 1, Defendant’s Notice of Removal at ¶12].
Thus,
rather
than
submitting
proof
about
the
amount
in
controversy, Defendant asks the Court to make an assumption about
the value of the claims involved, namely, that “Plaintiff’s medical
bills
are
somewhere
between
$15,000
and
$20,000.”
This
approximation is not proof, and the law in the Sixth Circuit is
clear
that
neither
speculation
constitute competent proof.
nor
conclusory
allegations
Ramsey v. Kearns, No. 12-cv-06, 2012
WL 602812, at *1 (E.D. Ky. Feb. 23, 2012).
5
In its Motion to Remand, Plaintiff submits proof of B.H.’s
medical bills received to date, which total $5,884.46 and include
the expense of transporting B.H. to the University of Kentucky
medical center, reattachment of B.H.’s finger, a skin graft, and
periodic follow-up appointments.
[DE 9, Exhibits 1 and 2].
Plaintiff further states that “the possibility of physical therapy
has been discussed if BH cannot independently regain dexterity in
his finger.
Otherwise, there are no concrete or prospective plans
for future medical treatment beyond the periodic checkups.”
9 at 2].
[DE
In its response to Plaintiff’s Motion to Remand,
Defendant provides no evidence at all of its $15,000 to $20,000
estimate nor any rebuttal to Plaintiff’s argument that Defendant
has failed to establish the amount in controversy as required by
28 U.S.C. § 1332.
Rather, Defendant states that it agrees that
remand is appropriate “[i]f Plaintiff is willing to stipulate, as
it appears from his motion, that the amount in this matter will
not exceed $75,000.00.”
[DE 11].
Plaintiff replies by stating
that his Motion to Remand should not be construed as a stipulation
as to the amount in controversy but rather simply as an assertion
that Defendant has failed to meets its burden of proof, as the
removing party, as to the amount in controversy.
[DE 12 at 1].
The Court agrees with Plaintiff that Defendant has not met
its burden of demonstrating that the amount in controversy has
been met.
Not only has Defendant not submitted “competent proof”
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that the amount in controversy has been, Defendant has submitted
no proof.
See McKinney, 2013 WL 1898632, at *2 (citing Gafford,
997 F.2d at 158, abrogated on other grounds by Friend, 530 U.S.
77.
This Court has found that while, in some cases, establishing
the
amount
in
controversy
requires
“no
great
leap
of
the
imagination,” “[t]he value of bodily injuries, on the other hand,
is more difficult to ascertain,” especially absent a grievous
injury.
Ramsey, 2012 WL 602812 at *2.
Such was the case in
Burgett v. Troy-Bilt, LLC, No. 11-cv-110, 2011 WL 4715176, at *2
(E.D. Ky. Oct. 5, 2011) wherein, as a result of the defendants
failing to adequately prove the value of plaintiff’s two amputated
toes, Judge Thapar remanded the case to state court.
Thus, while
this Court does not disbelieve that B.H. sustained a serious
injury, without proof that the jurisdictional amount has been
satisfied, this case must be remanded.
Shamrock Oil, 313 U.S. at
109; Walsh 264 F. Supp. at 515.
The Court further agrees with Plaintiff that a refusal to
stipulate
damages
is
not
jurisdiction in this Court.
sufficient
to
confer
diversity
Lemaster v. Bob Evans Farms, LLC, No.
15-cv-50, 2015 WL 4987890, at *2 (E.D. Ky. Aug. 19, 2015).
To
allow a refusal to stipulate damages to confer jurisdiction would
be “flip[ping] the jurisdictional burden on its head.”
2013 WL 1898632 at *5.
McKinney,
As the removing party, it is the Defendant
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who bears the burden of producing evidence of the amount in
controversy.
As Judge Thapar explained in McKinney:
To hold that Defendants can remove these cases based
solely on the Plaintiffs' refusal to stipulate to
damages below $75,000.00 would force a Hobson's choice
on Plaintiffs. If they refuse to stipulate to the
limitation, they abandon the forum they feel best
serves their interest. And if they sign the
stipulation, they eliminate the possibility that
discovery might reveal their claims are worth more
than they initially thought, or that the jury will
return an unexpectedly large award. The per se
approach pushed here would allow Defendants to use
removal as a tool to ensure that they either receive
the form that they want or eliminate the possibility
of an award greater than $75,000.00. Federal diversity
jurisdiction was not meant for such strategic ends.
Id.
As the case currently stands, the bulk of medical bills have
been received by Plaintiff’s counsel and amount to $5,884.46.
Plaintiff
states
that
“[a]ny
outstanding
medical
bills
would
simply reflect perfunctory follow-ups or medical treatment that
have not yet been recommended.”
[DE 9 at 5].
As Plaintiff argues,
because these expenses are not yet known to Plaintiff, they could
not have been known to Defendant at the time of removal.
In sum,
even if Defendant’s 9:1 punitive ratio is correct, which need not
be addressed by the Court at this time, this would amount to
$52,960.14 in damages at the time of removal ($5,884.46 x 9), which
falls short of the $75,000 amount in controversy requirement of
this Court.
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In conclusion, diversity has not been established, and this
Court cannot properly exercise jurisdiction over this matter.
As
such, this case will be remanded to Fayette Circuit Court.
If
Defendant discovers evidence demonstrating that the amount in
controversy has been met, it may seek removal again at that time.1
McKinney, 2013 WL 1898632, at *6.
Accordingly, IT IS HEREBY ORDERED:
(1)
that Plaintiff’s Motion to Remand [DE 9] is GRANTED;
(2)
that this matter is hereby REMANDED to the Fayette
Circuit Court;
(3)
that all schedules and deadlines are CONTINUED
GENERALLY; and
(4)
that this matter shall be and hereby is STRICKEN FROM
THE COURT’S ACTIVE DOCKET.
This the 22nd day of March, 2016.
1
When the complaint is silent as to the amount in controversy,
the defendant should engage in discovery on that issue before
removing the case. Burgett, 2011 WL 4715176, at *3.
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