K2 Holdings, LLC v. New Cingular Wireless PCS, LLC et al
OPINION & ORDER: (1) Plaintiff's Motion to Remand 10 is GRANTED;(2) this matter is hereby REMANDED to the Fayette County Circuit Court; (3) The defendants' motion to substitute a party defendant 7 is DENIED asMOOT; and (4) that this case is STRICKEN FROM THE COURTS ACTIVE DOCKET. Signed by Judge Karen K. Caldwell on 03/27/2017.(LC)cc: COR, Fayette Circuit Court Via US Mail
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
K2 HOLDINGS, LLC,
CIVIL NO. 5:16-cv-134-KKC
ORDER & OPINION
NEW CINGULAR WIRELESS, PCS, LLC,
and CROWN CASTLE PT, INC.,
*** *** ***
When a plaintiff moves to remand a case—one originally brought in state court but
removed to federal court—for lack of subject matter jurisdiction, it is the defendant’s burden
to keep the case in federal court. Gafford v. Gen. Elec. Co., 997 F.2d 150, 155 (6th Cir. 1993),
abrogated on other grounds by Hertz Corp. v. Friend, 130 S. Ct. 1181 (2010). Because
Defendants New Cingular Wireless PCS, LLC and Crown Castle PT, Inc. have failed to prove
by a preponderance of the evidence that the amount in controversy in this case exceeds
$75,000, they have not satisfied that burden. The Court will therefore GRANT K2 Holdings,
LLC’s motion (DE 10) to remand.
On September 9, 2010, K2 Holdings purchased real property now known as 2600 and
2602 Gribbin Drive (“Property”) in Lexington, Kentucky at a Master Commissioner’s sale.
(Compl. ¶ 6). Fourteen years before, the original owners (“Grantors”) of the Property—Town
and Country Rentals, Inc., Moneywatch Richmond Road Investors, Inc., J. Jeffrey Scates,
and Theresa Scates—entered into a Memorandum of Option and Lease Agreement with
BellSouth Mobility, Inc. (Compl. ¶ 7), leasing a 1,600 square foot portion of the Property
(“Tower Site”) together with a Right of Way—a non-exclusive, twenty-foot access and utility
easement. Collectively this is known as 2602 Gribbin Drive, Lexington, Kentucky
(collectively, “Leased Property”). (Compl. ¶ 7-8).
Throughout the years, this 1996 Lease Agreement was added to and amended, and it
exchanged hands through various successors in interest. On June 2, 1999, BellSouth entered
into a Site Designation Supplement and Memorandum of Sublease with Crown Castle South,
Inc. to sublease the Leased Property. (Compl. ¶ 9). Months later, on May 9, 2000, the
Grantors entered into a Declaration of Easement and an Addendum of Declaration of
Easement with Crown Communications, granting Crown Communications a perpetual right
to exclusively use the Leased Property, subject to BellSouth’s rights under the 1996
Agreement. (Compl. ¶ 10). That 2000 Easement described the Right of Way as allowing
for ingress and egress, seven (7) days per weeks, 24 hours per day, on foot or
vehicle, including trucks, and for the installation and maintenance of utilities,
wires, poles, cables, conduits and pipers over, under or along a 20 feet wide
Right of Way across the Property extending from the nearest public right of
way to the [Leased Property].
(Compl. ¶ 13, Ex. 3 and 4).
The next year, Crown Communications, Inc. entered into an Assignment of Perpetual
Easement with Cingular Real Estate Holdings of Georgia, LLC, which assigned all of Crown
Communications, Inc.’s rights under the May 2000 Easement to Cingular of Georgia. (Compl.
¶ 16, Ex. 6). In June 2001, BellSouth Mobility, a successor in interest to BellSouth, and
Cingular of Georgia entered into an Amended and Restated Site Designation Supplement
and Memorandum of Lease with Crown Castle South, Inc., a subsidiary of Crown
Communications, Inc., making Cingular of Georgia a party to the Crown Castle Sublease.
(Compl. ¶ 18, Ex. 7).
On March 19, 2004, the Grantors, now comprised of only Town and Country Rentals,
Inc. and Moneywatch Richmond Road Investors, Inc., (Compl ¶ 20), conveyed the Property to
Nuti Builders, Inc. (Compl. ¶ 21), who entered into an Amendment to Declaration of
Easement, Addendum of Declaration of Easement, and Memorandum of Easement with
Cingular Real Estate Holdings of the Southeast, LLC (a successor by merger with Cingular
of Georgia) in 2006. (Compl. ¶ 22). Nuti Builders and Cingular Southeast agreed to amend
the May 2000 Easement to relocate the right of way included in the easement so that it
“basically follows the driveway of the building back to the Tower Site.” (Compl. ¶ 23). K2
Holdings bought the Property subject to these agreements.
Defendant New Cingular is a successor, by merger to BellSouth and to Cingular
Southeast, to the Leased Property (Compl. ¶ 23) and is subject to the various agreements
made by its predecessors in interest, including a perpetual easement for the exclusive use of
a 40’ x 40’ area and a non-exclusive use of the Right of Way for access. New Cingular and
Crown Castle PT, “or their predecessors in interest,” erected a cellular phone tower on the
Property, purportedly on the Tower Site. (Compl. ¶ 32). The 2006 Amendment to Easement
showed the Tower Site to be located “about four-fifths down” the lot from Gribbin Drive.
(Compl. ¶ 36).
But, as is true with all things related to real property, location is everything. On
October 31, 2014, Anthony Mandak, a real estate specialist for Crown Castle PT, sent K2
Holdings an email claiming that the 2006 Agreement, which relocated the Right of Way in
the easement, “included an incorrect legal description’” for the cell phone tower located on
the Property. (Compl. ¶ 38). This incorrect location, according to Mandak, showed “[the
defendant’s] lease area being in the middle of the road leading to your parking lot in the back
of your building.” (Compl. ¶ 40). Mandak sent K2 Holdings a letter reiterating that the
“previous legal description and survey defined our easement area incorrectly at the site.”
(Compl. ¶ 41). Mandak attached to the letter a proposed Second Amendment to Declaration
of Easement, Addendum to Declaration of Easement, and Memorandum of Interest which
sought to relocate the easement area. The same letter also included a November 5, 2014
survey of the Property, which according to K2 Holdings, showed that the cell phone tower
was actually located “at the end of the lot from Gribbin Drive.” (Compl. ¶ 43).
Kevin Balcirak, the sole member of K2 Holdings, responded with a letter of his own,
asserting that Crown Castle PT or its predecessors in interest “had actually constructed the
cell phone tower in an incorrect location on the Property” (Compl. ¶ 45) behind the defined
easement area and outside the permitted area.
K2 Holdings filed suit in Fayette County Circuit Court to resolve this property
dispute. K2 Holdings alleges five causes of action: (1) a declaration of rights pursuant to KRS
418.040 regarding the alleged trespass; (2) a breach of the 2001 memorandum of easement;
(3) a breach of the 2006 memorandum of easement; (4) unjust enrichment; and (5)
harassment. K2 Holdings seeks injunctive relief, a declaration of rights, as well as monetary
On May 3, 2016, New Cingular and Crown Castle PT removed this action pursuant to
28 U.S.C. §§ 1441, 1446, stating that this Court has jurisdiction under 28 U.S.C. § 1332
because the citizenship of the parties is diverse and the amount in controversy is satisfied by
combining K2 Holdings’ claims for compensatory damages and injunctive relief. (DE 1).
K2 Holdings timely filed a motion to remand the case back to Fayette County Circuit
Court, arguing that the amount in controversy is not supported by a preponderance of the
evidence. (DE 10).
A case may be removed to federal court only if it is one over which the federal court
could exercise original jurisdiction. See 28 U.S.C. §§ 1441, 1446. One such exercise of federal
jurisdiction is based on diversity jurisdiction. This Court has original jurisdiction to hear
causes of action where the matter in controversy exceeds $75,000 and is between citizens of
different states or between citizens of a State and citizens or subjects of a foreign state. 28
U.S.C. § 1332(a)(1)-(2). To invoke jurisdiction there must be “complete diversity” between the
parties, meaning that no plaintiff may be a citizen of the same state of which any defendant
is a citizen. See 28 U.S.C. § 1332; Glancy v. Taubman Ctrs., Inc., 373 F.3d 656, 664 (6th Cir.
2004) (citing Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996)); Citizens Bank v. Plasticware,
LLC, 830 F. Supp. 2d 321, 325 (E.D. Ky. 2011).
Federal jurisdiction in a diversity case is determined at the time of removal. Rogers v.
Wal–Mart Stores, Inc., 230 F.3d 868, 871 (6th Cir. 2000). The burden of proving that a court
retains subject matter jurisdiction over a case falls on the defendant. See Everett v. Verizon
Wireless, Inc., 460 F.3d 818, 829 (6th Cir. 2006); King v. Household Fin. Corp. II, 593
F.Supp.2d 958, 959 (E.D. Ky. 2009). Because federal courts are courts of limited jurisdiction,
any doubts regarding federal jurisdiction are to be construed in favor of remanding the case
to state court. Everett, 460 F.3d at 829; Tankersley v. Martinrea Heavy Stampings, Inc., 33 F.
Supp. 775, 777 (E.D. Ky. 2014).
A further layer applies here. The Kentucky Rules of Civil Procedure both prohibit
plaintiffs from specifying the amount in damages they seek to recover and allow plaintiffs to
recover more in damages than what they seek in their complaints. See Ky. R. Civ. P. 8.01(2)
(“In any action for unliquidated damages the prayer for damages in any pleading shall not
recite any sum as alleged damages other than an allegation that damages are in excess of
any minimum dollar amount necessary to establish the jurisdiction of the court . . .”); Ky. R.
Civ. P. 54.03 (“[E]very final judgment shall grant the relief to which the party in whose favor
it is rendered is entitled, even if the party has not demanded such relief in his pleadings.”).
Thus, in cases like this, removal is only appropriate if “the district court finds by the
preponderance of the evidence that the amount in controversy exceeds the amount specified
in section 1332(a).” Tankersley, 33 F. Supp. at 777. The preponderance-of-the-evidence test
requires the defendants to support their claim to jurisdiction by producing “competent proof”
of the necessary “jurisdictional facts.” Walker v. ProNational Ins. Co., No. 12-cv-100, 2012
WL 6060368, at *2 (E.D. Ky. Dec. 5, 2012) (citing Gafford, 997 F.2d at 160). Without
affirmative proof, the case must be remanded.
The sole issue to be decided in the present motion is whether the amount in
controversy requirement has been satisfied. New Cingular and Crown Castle PT contend that
the amount in controversy is satisfied because K2 Holdings has requested declaratory and
injunctive relief that, in combination with monetary damages, far exceeds the $75,000
threshold. Despite the defendants’ arguments, the Court concludes that they have failed to
satisfy their burden of establishing by a preponderance of the evidence that the amount in
controversy exceeds $75,000.
In Count I, K2 Holdings seeks a declaration of rights and injunctive relief to alleviate
an alleged trespass caused by a misplaced cellular tower on its property outside of the
easement area. When a party seeks declaratory or injunctive relief, it is well-settled that “the
amount in controversy is measured by the value of the object of the litigation.” Cleveland
Hous. Renewal Project v. Deutsche Bank Tr. Co., 621 F.3d 554, 560 (6th Cir. 2010) (quoting
Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S. 333, 347 (1977)).
Defendants New Cingular and Crown Castle PT argue that “[t]he value of Defendants’
interests in the property in question and their continued and uninterrupted operation of
their communications facilities on that property” and “the relief sought by K2 Holdings,
including but not limited to the demolition and removal of a cellular telecommunication
tower, would cause significant loss to Defendants” that would exceed the jurisdictional
requirement for removal. (DE 1, Page ID # 5). To prove that point, New Cingular and Crown
Castle PT offer the declaration of Jeremy Ford, a Senior Technical Project Manager at AT&T
Mobility, who avers that the cost of dismantling and removing the cellphone tower and all of
its parts would cost the defendants in excess of $100,000. (DE 13-2, at 2).
In addressing the merits of this argument, however, the Court must make a threshold
inquiry. The defendants’ assertion that it is their interests and their potential of loss that this
Court should consider in determining the amount in controversy propels this case headlong
into a question that has not been answered in this Circuit: from which party’s perspective is
this Court to evaluate the value of the injunctive relief?
“[T]here is a circuit split as to whether a court may determine the amount in
controversy from the perspective of either party (the ‘either viewpoint rule’) or whether a
court may only consider the plaintiff’s viewpoint.” Everett, 460 F.3d at 829 (internal quotation
marks omitted) (quoting Olden v. LaFarge Corp., 383 F.3d 495, 503 n.1 (6th Cir. 2004)). “The
Sixth Circuit has not yet resolved whether it ‘view[s] the amount in controversy from the
perspective of the plaintiff or the defendant.’” Northup Props., Inc. v. Chesapeake Appalachia,
LLC, 567 F.3d 767, 770 n.1 (6th Cir. 2009)). Nonetheless, the Sixth Circuit has stated that
“[i]t is generally agreed . . . that the amount in controversy should be determined from the
perspective of the plaintiff, with a focus on the economic value of the rights he seeks to
protect.” Smith v. Nationwide Prop. & Cas. Ins. Co., 505 F.3d 401, 407 (6th Cir. 2007) (quoting
Woodmen of the World/Omaha Woodmen Life Ins. Soc’y v. Scarbro, 129 F. App’x 194, 195–
96 (6th Cir. 2005).
New Cingular and Crown Castle PT cite two cases, Everett v. Verizon Wireless, Inc.,
460 F.3d 818, 829 (6th Cir 2006), and Cleveland Housing Renewal Project v. Deutsche Bank
Trust Co., 621 F.3d 554, 560 (6th Cir. 2010), to support the general proposition that, in theory,
the “property-rights valuation perspective . . . is  not the only way to approach determining
the value of the non-monetary relief requested.” (DE 13, at 3) (emphasis in original).
However, the defendants do not cite how the present case is one that necessitates deviation
from the general rule. In Cleveland Housing, for example, while acknowledging that the value
of injunctive relief is difficult to quantify, the Court of Appeals for the Sixth Circuit concluded
that “the notion that abatement of nuisances on twenty-five parcels of abandoned property
would amount to improvement valued at less than $75,000 [was] patently suspect.” 621 F.3d
at 560. Thus, without deciding the issue, the court found that the amount in controversy was
satisfied, in part, because even if “the value of the requested injunctive relief . . . [was]
difficult to quantify,” it was a case where the amount in controversy was without question
satisfied. Id. at 560. This case is not so clear so as to satisfy the amount of controversy on the
face of the complaint.
Additionally, the only case from this District mentioned by either party that expressly
adopted the “defendant viewpoint” approach, Petrey v. K. Petroleum, Inc., No. 07-cv-168, 2007
WL 2068597, at *3 (E.D. Ky. July 16, 2007), is distinguishable from the present case. The
plaintiff in Petrey sought a declaration of superior title to certain real property upon which
the defendant intended to produce natural gas. As the Court of Appeals for the First Circuit
explained, in the only case to discuss Petrey, the circumstances faced in Petrey were “not as
straightforward as it would be in an action for the recovery of specific property or monies . . .
.” CE Design Ltd. V. American Economy Ins. Co., 755 F.3d 39, 48 (1st Cir. 2014).
While the amount in controversy is easily satisfied from the defendants’ perspective—
by totaling the cost for destroying and replacing the tower structure—the Court is not
persuaded that this case presents similar circumstances to those in Petrey to justify following
that rule. Therefore, with no reason to deviate from the language in Smith, the Court will
determine the amount in controversy from the prospective of K2 Holdings. See, e.g., Houchens
v. Gov’t Employees Ins. Co., No. 3:13-cv-214, 2013 WL 5740131, at *2 (W.D. Ky. Oct. 22, 2013);
Glass v. Steinberg, No. 3:09–cv–355, 2010 WL 6592935, at *1 (W.D. Ky. Jan. 15, 2010).
In this case, K2 Holdings’ claim is one of trespass where the value of real property, or
a part of real property, can be more easily valued. From K2 Holdings’ perspective, the object
of the litigation is the amount of the right to be protected or the extent of the injury to be
prevented. In determining the jurisdictional amount in an action to prevent a continuing
trespass on one’s land, “it is only the value to the part of land that will be destroyed without
the injunction that is considered; the total value of the property is measured only if the entire
value of plaintiff’s property will be protected by the injunction.” James Neff Kramper Family
Farm P’ship v. IBP, Inc., 393 F.3d 828, 833 (8th Cir. 2005); Colony Coal & Coke Corp. v.
Napier, 28 F. Supp. 76, 78–79 (E.D. Ky. 1939); see also 14AA Charles Alan Wright, et. al.,
Fed. Prac. & Proc. § 3702.5 (4th ed.) (“[I]f the trespass will diminish only a portion of the
value of the plaintiff’s property, the amount in controversy is only the decrease in the value
of the land.”).
K2 Holdings avers that the total value of the 40’ x 40’ property is $65,000, without the
added value of any improvements from the tower. (DE 10, Ex. 1). If $65,000 is the value of
the entire parcel without any added value, the value of a portion of parcel that is allegedly
encumbered by the trespassing tower must be less than the total amount of the parcel. New
Cingular and Crown Castle PT do not proffer what that less-than-whole amount is. Even
more so, New Cingular and Crown Castle PT fail to put forth any evidence of what the dollar
amount of the decrease in the value of land would be. Regardless of the amount, it is not
plainly in excess of $75,000.
New Cingular and Crown Castle PT argue that the $65,000-property-valuation is
improper because it “ignores the value put on the landowner’s giving up the right not to have
a tower on a 40’ x 40’ parcel on the property [in the May 2000 Easement]” and “the value of
having a 40’ x 40’ parcel of land rid of a tower and associated access use.” (DE 13, at 3). That
value, according to the defendants, is priced at $95,000—the consideration K2 Holdings paid
to give up its exclusive use of the 40’ x 40’ area and right of way for access. (DE 13, Ex. A).
But framing the value this way sets up a false premise. At issue is not the value of the entire
easement, or whether or not the defendants will lose their right to the $95,000 easement, or
the easement itself. This alleged trespass does not concern the defendants’ easement. At issue
is that the defendants are allegedly trespassing on an area outside of the easement. Mandak’s
letter makes this clear. Mandak requested in his letter to K2 Holdings that the easement be
amended to include the area in which the tower was located. (Compl. ¶ 44). If K2 Holdings
had hypothetically paid $95,000 in consideration for that area and then sued to enjoin the
trespass, the consideration amount for the additional land would be relevant to valuating the
object of the litigation. But here, the complaint alleges that K2 Holdings did not give up its
exclusive rights to the area on which there is a trespass. K2 Holdings sued to properly
demarcate the property. The $95,000 in consideration for the easement has no impact in the
valuation of the property on which K2 Holdings seeks quiet enjoyment.
New Cingular and Crown Castle PT have not offered evidence as to what the value of
that part of land would be unclouded by trespass. Even taking the value of the entire
property, which the defendants say is $1,051,000, there are no facts or circumstances
disclosed that indicate the value of the particular rights constituting the matter in
controversy—the right of the land to be free from trespass—are the same or equivalent to the
value of the land in its entirety. Proof of the price of land as a whole is insufficient to prove
the value of the right that K2 Holdings seeks to protect because the amount in controversy
here as a matter of law is less than the value of the entire land. New Cingular and Crown
Castle PT have offered nothing by way of evidence to value the portion of the property on
which the tower allegedly trespasses or what the value of the tower-less property would be
or how the decrease in the value of land exceeds the requisite amount in controversy. Without
evidence showing how the particular rights at issue meet or exceed the necessary
jurisdictional amount, the defendants do not meet their burden to establish jurisdiction based
solely on plaintiff’s claim for injunctive and declaratory relief.
K2 Holdings’ claims for injunctive and declaratory relief do not stand in isolation.
Included in the calculation of the amount in controversy are K2 Holdings’ claims for monetary
damages arising from breach of easement, harassment, and unjust enrichment. But New
Cingular and Crown Castle PT do not provide any evidence for how these compensatory
damages, when combined with the claim for injunctive relief, somehow exceed the
jurisdictional amount. The defendants argue that even if the value for the injunctive relief is
$65,000, K2 Holdings still “effectively values at $0 all of the monetary claims made in the
Petition.” (DE 13, at 4) (emphasis in original). But to say so is not the same as offering
evidence of what those claims might be worth. Restating the pleadings—particularly when
those pleadings do not (and cannot) seek specific damages—is not sufficient to establish
“competent proof” that the amount in controversy is met. Cleveland Hous. Renewal Project,
621 F.3d at 559. Nor is K2 Holdings’ failure to stipulate damages sufficient to confer diversity
jurisdiction. Lemaster v. Bob Evans Farms, LLC, No. 15-cv-50, 2015 WL 4987890, at *2 (E.D.
Ky. Aug. 19, 2015). The amount in controversy is not established without more than these
As the removing parties, New Cingular and Crown Castle PT have the burden of
producing evidence of the amount in controversy, not K2 Holdings. See Gafford, 997 F.2d at
158. The amount in controversy has not been established, and therefore this Court cannot
properly exercise jurisdiction over this matter. This case will be remanded to Fayette County
Accordingly, IT IS HEREBY ORDERED:
(1) that Plaintiff’s Motion to Remand (DE 10) is GRANTED;
(2) that this matter is hereby REMANDED to the Fayette County Circuit Court;
(3) that the defendants’ motion to substitute a party defendant (DE 7) is DENIED as
(4) that this case is STRICKEN FROM THE COURT’S ACTIVE DOCKET.
Dated March 27, 2017.
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