Creppel et al v. Fred's Stores of Tennessee, Inc.

Filing 11

ORDER & REASONS denying 7 Motion to Remand to State Court. Signed by Judge Carl Barbier on 7/9/13. (sek, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

BRYSON "RUSTY" CREPPEL AND
ANNETTE CREPPEL

CIVIL ACTION

VERSUS

NO: 13-734

FRED'S STORES OF TENNESSEE,
INC.

SECTION: "J”(3)

ORDER AND REASONS
Before the Court is a Motion to Remand (Rec. Doc. 7), filed by
Plaintiffs, Bryson “Rusty” Creppel (“Mr. Creppel”) and his wife,
Annette Creppel (“Mrs. Creppel”). The Defendant, Fred’s Stores of
Tennessee, Inc. (“Fred’s”) has filed an opposition. (Rec. Doc. 9).
The motion was set for hearing on Wednesday, June 19, 2013, on the
briefs. Having considered the motion, the memoranda, the record,
and the applicable law, the Court finds, for reasons explained more
thoroughly below, that Plaintiffs’ motion should be DENIED.
PROCEDURAL HISTORY AND BACKGROUND FACTS
On March 15, 2013, Plaintiffs filed suit against Defendant in
the 17th Judicial District Court for the Parish of Lafourche,
Louisiana. (Rec. Doc. 1) In their state petition, Plaintiffs allege
that on March 16, 2012, they were shopping for a new home stereo

system at a Fred’s store in Thibodaux, Louisiana. (Compl., Rec.
Doc. 9-1, p. 1, ¶ 2) Plaintiffs claim that after Mr. Creppel
located the stereo system that he wished to purchase, a Fred’s
attendant told Mr. Creppel to reach up and pull the box containing
the stereo system down from the top shelf where, unbeknownst to Mr.
Creppel, the boxes were stacked three high. (Compl., Rec. Doc. 9-1,
p. 1, ¶¶ 3-4) Plaintiffs further allege that as Mr. Creppel was
pulling on the second box, the third box “came crashing down on his
head and almost knocked him off his feet.” (Compl., Rec. Doc. 9-1,
p. 1, ¶ 4) Plaintiffs allege that the accident was caused by the
negligence of Fred’s in (a) improperly stacking heavy boxes, (b)
failing to provide assistance to customers getting heavy boxes off
of high shelves, (c) failing to have appropriate equipment to
assist customers in moving heavy boxes, and (d) any all other fault
to be shown at trial. (Compl., Rec. Doc. 9-1, p. 2, ¶ 8)

Mr.

Creppel alleges that he sustained injuries as a result of the
accident and seeks to recover damages for his past and future
medical expenses, past and future physical pain and suffering, past
and future mental pain and suffering, disability, and “loss of
life’s pleasures.” (Compl., Rec. Doc. 9-1, p. 2, ¶¶ 4, 9) In
addition, Mrs. Creppel claims damages for loss of consortium.
(Compl., Rec. Doc. 9-1, pp. 2, 10) In accordance with Article 893
of the Louisiana Code of Civil Procedure, Plaintiffs did not demand

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a specific dollar amount of damages in their state petition.
On January 24, 2013, before Plaintiffs filed suit in state
court, Plaintiffs sent a demand letter to Sedgwick Claims, Fred’s
third-party claims administrator. (Rec. Doc. 9-3) In the letter,
Plaintiffs asserted that Mr. Creppel suffered spinal injuries as a
result

of

the

accident,

detailed

his

past

medical

history,

explained that at the time of the accident, Mr. Creppel was on
Social Security Disability as a result of spinal problems and
issues with his liver and diabetes, and detailed the medical
treatment Mr. Creppel had received since the accident. (Rec. Doc.
9-3, pp. 1-2) Plaintiffs also stated (a) that Mr. Creppel’s postaccident medical bills, excluding bills from his family physician,
Dr. Abou Issa, and from the Imaging Center and Houma EMA, totaled
$14,189.66, (b) that the future for Mr. Creppel “includes the
distinct possibility of neck surgery and continued treatment of his
neck and shoulder injuries,” and (c) that Mr. Creppel was willing
to settle his claim for $80,000, inclusive of all medicals, in
return for a full release of Fred’s and its employees. (Rec. Doc.
9-3, p. 2) On April 11, 2013, Fred’s removed the case to this Court
on the basis of diversity of citizenship contending, based on
Plaintiffs’ demand letter and jury trial request, that the amount
in controversy exceeds $75,000 exclusive of interest and costs. The
parties do not dispute that there is complete diversity in the
instant case. Plaintiffs are both citizens of Louisiana, and Fred’s
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is a Tennessee corporation with its principal place of business in
Tennessee. However, they dispute whether the jurisdictional amount
in controversy requirement is satisfied.
LEGAL STANDARD
The

Fifth

Circuit

for

resolving

framework
controversy

for

has

actions

“established

disputes
removed

a

clear

concerning

from

the

Louisiana

analytical
amount

state

in

courts

pursuant to § 1332(a)(1).” Gebbia v. Wal-Mart Stores, Inc., 233
F.3d 880, 882 (5th Cir. 2000) (citing Luckett v. Delta Airlines,
Inc., 171 F.3d 295, 298 (5th Cir. 1999). Since Louisiana law
prohibits plaintiffs from specifying the numerical value of their
damages,

the

removing

party

must

prove

that

the

amount

in

controversy exceeds $75,000 by a preponderance of the evidence.
Manguno v. Prudential Prop. and Cas. Ins. Co., 276 F.3d 720, (5th
Cir. 2002) (citing De Aguilar v. Boeing Co., 47 F.3d 1404, 1412
(5th Cir. 1995)); Gebbia, 233 F.3d at 882; Allen v. R&R Oil & Gas
Co., 63 F.3d 1326, 1335 (5th Cir. 1995). First, the district court
inquires whether it is facially apparent that the claims are likely
to exceed $75,000 and, if so, removal is proper. Manguno, 276 F.3d
at 723; Allen, 63 F.3d at 1335. When making the “facially apparent”
determination, the correct procedure is to look exclusively at the
face of the complaint and ask whether the amount in controversy is
likely to exceed $75,000. Allen, 63 F.3d at 1336. If it is not
facially apparent that the claims are likely to exceed $75,000,
4

“the district court can then require parties to submit summaryjudgment-type evidence, relevant to the amount in controversy at
the time of removal.” Id.; see also Manguno, 276 F.3d at 723. Once
the removing party makes this showing by a preponderance of the
evidence, “removal is deemed proper unless the plaintiffs show to
a

legal

certainty

that

their

recovery

will

not

exceed

the

jurisdictional amount.” Fairchild v. State Farm Mut. Automobile
Ins. Co., 907 F. Supp. 969, 970 (M.D. La. 1995) (citing De Aguilar,
47 F.3d at 1412).
DISCUSSION
The first issue the Court must address is whether Fred’s has
satisfied its burden of proving that this case is removable on the
basis of diversity of citizenship under 28 U.S.C.

§ 1332 and 28

U.S.C. § 1446(a). First, Plaintiffs make a blanket contention that
it is not facially apparent that the amount in controversy exceeds
$75,000 in this case. Second, Plaintiffs point out that Fred’s
removed the case based on (a) their initial settlement demand of
$80,000 and (b) their request for a jury trial when jury trials are
not permitted in Louisiana unless the amount in controversy exceeds
$50,000. Plaintiffs point out that initial settlement offers are
usually subject to significant negotiation, that their settlement
demand did not state that it was non-negotiable, that the Fred’s
did not attach any other evidence, such as “medical evidence or the
prior condition of the plaintiff,” or evidence of quantum, to its
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notice of removal, and that Mr. Creppel has not undergone or
received

a

recommendation

to

undergo

any

type

of

surgical

procedure. Based on these circumstances, Plaintiffs contend that
Fred’s has not produced sufficient evidence to satisfy its burden
of proving that the amount in controversy exceeds $75,000.
Fred’s argues that by producing Plaintiffs’ pre-petition
settlement demand letter, it has met its burden of showing by a
preponderance of the evidence that the amount in controversy
exceeds $75,000. Fred’s asserts that it is well-established that
pre-complaint settlement demand letters may be relied upon in
proving the amount in controversy for jurisdictional purposes and
argues that this case is analogous to Carver v. Wal-Mart Stores,
Inc., No. 08-42-M2, 2008 WL 2050987 (E.D. La. May 13, 2008), in
which a removing defendant successfully relied on a detailed precomplaint settlement demand letter to support removal and defeat a
motion to remand. Moreover, Fred’s argues that as it has met its
burden of showing by a preponderance of the evidence that the
amount in controversy exceeds $75,000, Plaintiffs must prove to a
legal certainty that the amount in controversy does not exceed the
jurisdictional threshold. Fred’s contends that the Plaintiffs’ only
argument is that the settlement offer is “subject to negotiation,”
and that this is not sufficient to show “with legal certainty” that
Plaintiffs’ potential for recovery does not exceed $75,000.
The Court finds that Plaintiffs’ pre-petition settlement
6

demand letter is relevant evidence of the amount in controversy at
the time of removal. At least two district courts within the Fifth
Circuit have considered pre-petition demand letters as evidence of
the amount in controversy at the time of removal. Carver, 2008 WL
2050987, at * 2 (noting that although the Fifth Circuit “has not
conclusively

addressed

the

issue

of

whether

a

pre-petition

settlement demand letter can be considered as relevant evidence of
the amount in controversy, it can be inferred from several Fifth
Circuit

cases

that

such

a

practice

is

permissible

when

the

settlement offer reflects an honest assessment of the value of the
plaintiff’s claims.”); Fairchild, 907 F. Supp. 969 at 970-71
(regarding a plaintiff’s pre-petition settlement demand itemizing
the amounts claimed for various categories of damages was “valuable
evidence to indicate the amount in controversy at the time of
removal”). In addition, the Fifth Circuit has generally stated that
a defendant may prove by a preponderance of the evidence that the
amount in controversy exceeds $75,000 based on “'summary judgment
type evidence’ of facts in controversy that support a finding of
the requisite amount.” Manguno, 276 F.3d at 723. Rule 56 of the
Federal Rules of Civil Procedure provides that a party may support
its factual assertions in the context of a summary judgment motion
by

“citing

including

to

particular

depositions,

parts

of

documents,

materials

in

the

electronically

record,
stored

information, affidavits or declarations, stipulations (including
7

those

made

for

interrogatory

purposes

answers,

or

of

the

other

motion

only),

materials.”

Fed.

admissions,
R.

Civ.

P.

56(c)(1)(A). Given that the list of materials in Rule 56 that can
be used to support factual contentions in the context of a summary
judgment motion ends with a catchall phrase permitting the use of
“other materials” in the record, the Court sees no reason why the
pre-petition settlement demand that Fred’s attached to its notice
of removal should not be treated as relevant “summary judgment
type” evidence of the amount in controversy at the time that Fred’s
removed the case. Finally, the Ninth, Tenth Circuits have held that
a district court is permitted to consider settlement offers when
deciding the jurisdictional question. McPhail v. Deere & Co., 529
F.3d 947, 956 (10th Cir. 2008); Cohn v. Petsmart, Inc., 281 F.3d
837,

840

(9th

Cir.

2002)

(plaintiff’s

settlement

demand

“is

relevant evidence of the amount in controversy if it appears to
reflect a reasonable estimate of the plaintiff’s claim.”) Thus, the
Court finds that the pre-petition settlement demand in this case
can be used to support Fred’s contention that the amount in
controversy exceeds $75,000 in this case.
Moreover, the Court finds that this case is analogous to
Carver and agrees with the court’s reasoning in Carver. In Carver,
the court observed that based solely on the allegations in the
plaintiff’s petition – which simply contained the “usual and
customary damages set forth by personal injury plaintiffs” – it was
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not “facially apparent” that plaintiff’s damages in the matter
would exceed $75,000 exclusive of interest and costs. Id. However,
the court found that the defendant met its burden of proving,
through

summary

judgment-type

evidence,

that

the

amount

in

controversy likely exceeded the jurisdictional minimum based on a
copy of a settlement demand letter that plaintiff’s counsel sent to
defendant’s Claims Manager two months before plaintiff filed suit
in state court. Id. The court noted that:
[i]n that letter, plaintiff’s counsel provides a detailed
description of Carver’s physical injuries and treatment
and notes that [plaintiff’s] medical treatment is still
ongoing. Plaintiff’s counsel explains that [plaintiff]
has incurred medical expenses in the total amount of
$9,120.50 for her injuries, and . . . is willing to
settle her case for $150,000.
Id. (alterations added).
In reaching that conclusion, the court noted that (a) the
plaintiff did not argue in her motion to remand that the settlement
demand she submitted was inflated or did not honestly assess her
damages and (b) that several courts have found a settlement demand
alone sufficient to support removal where the plaintiff did not
argue in opposition to removal that his settlement demand was
inflated or was not an honest assessment of his damages. Id. at *23. The court also observed that the fact that the settlement offer
contained four pages “addressing [plaintiff’s] injuries, treatment,
and medical expenses in detail (with references to supporting
records and billing) cautions against finding that the letter was
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not an honest assessment of her damages.” Id. at *3.
Similarly, in this case, Plaintiffs' petition is ambiguous as
to

whether

Plaintiffs'

damages

would

exceed

$75,000,

because

Plaintiffs merely pleaded the usual and customary damages set forth
by personal injury plaintiffs. Without identifying the specific
physical injuries Mr. Creppel allegedly suffered as a result of the
accident, the petition merely states that as a result of the
accident, plaintiff sustained “injuries and damages,” including,
inter alia, past and future medical expenses, past and future
physical pain and suffering, past and future mental pain and
suffering, disability, and loss of life’s pleasures. (Rec. Doc. 91, p. 2, ¶¶ 7, 9) In addition, the Court finds that in this case,
like in Carver, Defendant, Fred’s has satisfied its burden based on
the $80,000 settlement demand letter that Plaintiff sent Fred’s
approximately

two

months

before

filing

suit

in

state

court.

Although Plaintiffs offered to settle the instant case for $80,000,
a lesser amount than the Carver plaintiff and one that is much
closer to the $75,000 jurisdictional threshold, the letter is
sufficient evidence that the amount in controversy exceeds the
jurisdictional threshold for two reasons. First, as the Carver
court pointed out, the Fifth Circuit has recognized that “'a
plaintiff’s settlement offer is ordinarily less than the damages
plaintiff expects to receive if victorious at trial, because the
offer is obviously discounted by the risk of an outright loss at
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trial.’” Id. at 2, n. 6 (quoting Pollet v. Sears Roebuck and Co.,
2002 WL 1939917, at *1 (5th Cir. 2002)). Second, Plaintiffs, like
the plaintiff in Carver, have not argued in their motion to remand
that the settlement demand was inflated or did not constitute an
honest

assessment

of

Mr.

Creppel's

damages.

Plaintiffs'

observations that the settlement demand in this case did not “state
that it was non-negotiable” and that initial settlement offers are
“usually subject to significant negotiation,” do not amount to
contentions that Mr. Creppel's settlement demand was inflated or
did not reflect an honest assessment of his damages. (Rec. Doc. 72, p. 3) Also, the fact that the settlement demand letter in this
case, like the settlement demand letter in Carver, extensively
addresses Mr. Creppel’s injuries, treatment, and medical expenses,
with references to supporting documentation,1 leads the Court to
believe

it

represents

an

honest

assessment

of

Mr.

Creppel’s

damages.
Although Plaintiffs argue that Fred’s cannot rely solely on
Mr. Creppel's settlement demand to support removal but was required
to attach “other evidence,” such as medical evidence of Mr.
Creppel's prior condition or evidence of quantum, they have not
offered any authority for this position, and Carver, as well as the
authorities it relies on, speaks to the contrary. See id. at *2

1

Rec. Doc. 9-3, pp. 1-2.

11

(“Several courts have even found that a settlement demand alone is
sufficient to support removal jurisdiction where the plaintiff does
not argue in opposition to removal that his settlement demand was
inflated or was not an honest assessment of his damages.”) The
Court similarly finds Plaintiffs' contentions that Mr. Creppel has
not undergone any type of surgical procedure and that no surgery
has been recommended unavailing. These post-removal assertions do
not change the fact that at the time Fred’s removed the case,
Plaintiffs assessed his damages at $80,000, an amount in excess of
the jurisdictional minimum. For these reasons, the Court finds that
Fred’s has met its burden of proof in this case.
The

final

question

the

Court

must

address

is

whether

Plaintiffs have shown to a “legal certainty,” that Mr. Creppel will
not be able to recover the jurisdictional amount. De Aguilar v.
Boeing Co., 47 F.3d 1404, 1412 (5th Cir. 1995). Plaintiffs have not
offered any argument on this point. Fred’s has argued that Mr.
Creppel’s only argument is that the settlement offer is “subject to
negotiation,” and that this is not sufficient to show “with legal
certainty,” that their potential for recovery does not exceed
$75,000. (Rec. Doc. 9, p. 4) A plaintiff may satisfy the burden of
showing that it is a “legal certainty” that he or she will not be
able to recover the jurisdictional amount by: (1) showing state
procedural rules binding the plaintiffs to their pleadings, or (2)
filing a binding stipulation or affidavit to that effect with their
12

petition. See id. Plaintiffs have not and could not make the first
showing, because Louisiana law prohibits plaintiffs from pleading
a specific amount of damages in their petition. Plaintiffs have
also failed to make the second showing, because Mr. Creppel failed
to file any binding stipulation with his state court petition
indicating that he would not seek more than $75,000. Thus, in light
of the lack of any binding stipulation and the settlement demand
letter in which Mr. Creppel assessed the value of his case at
$80,000, the Court finds that Mr. Creppel has failed to demonstrate
that it is a “legal certainty” that he will not be able to recover
the jurisdictional minimum. Id. at *4.
Accordingly,
IT IS HEREBY ORDERED that Plaintiffs' Motion to Remand (Rec.
Doc. 7) is DENIED.
New Orleans, Louisiana this 9th day of July, 2013.

CARL J. BARBIER
UNITED STATES DISTRICT COURT

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