Manshack et al v. Ocwen Loan Servicing L L C et al

Filing 12

MEMORANDUM RULING: 6 MOTION to Remand filed by Jack M Bailey, Jr, Kimberly Manshack is granted, subject to the stay in the accompanying order. In light of this decision, it is unnecessary to address Plaintiffs argument that the removal was untimely. On remand, Plaintiffs recovery, including penalties and attorneys fees, shall be limited in accordance with their stipulation in this court. Signed by Magistrate Judge Mark L Hornsby on 3/5/14. (crt,Delgado, S)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION

KIMBERLY MANSHACK, ET AL

CIVIL ACTION NO. 13-cv-3231

VERSUS

JUDGE FOOTE

OCWEN LOAN SERVICING, LLC, ET AL

MAGISTRATE JUDGE HORNSBY

MEMORANDUM RULING
Introduction
Kimberly Manshack and Jack M. Bailey, Jr. (“Plaintiffs”) filed suit in state court
against Defendants Ocwen Loan Servicing, LLC and American Security Insurance Company.
The suit claims bad faith breach of contract on the part of Defendants for their failure to
make payment of insurance proceeds due Plaintiffs for damages resulting from a house fire
at the residence of Kimberly Manshack. Plaintiff Bailey asserted subrogation rights resulting
from money he paid to repair the Manshack residence.
Defendant Ocwen Loan Servicing, LLC (with the consent of defendant American
Security Insurance Company), removed the case based on an assertion of diversity
jurisdiction. Plaintiffs filed a Motion to Remand (Doc. 6) on the grounds that the notice of
removal was untimely filed and the amount in controversy does not exceed $75,000. For the
reasons that follow, the motion will be granted.

Law and Analysis
Removing Party’s Burden
A notice of removal may assert the amount in controversy if the plaintiff’s initial
pleading seeks a money judgment but state practice does not permit demand for a specific
sum. 28 U.S.C. § 1446(c)(2)(A)(ii). Removal of such an action is proper on the basis of an
amount in controversy asserted in the notice of removal “if the district court finds, by the
preponderance of the evidence, that the amount in controversy exceeds” $75,000 exclusive
of interest and costs. 28 U.S.C. §§ 1446(c)(2)(B) and 1332(a). The burden is on the
removing party to show that removal is proper, and any doubts should be resolved against
federal jurisdiction. Vantage Drilling Co. v. Hsin-Chi Su, 741 F.3d 535, 537 (5th Cir. 2014).
Ocwen asserted in its notice of removal that the amount in controversy exceeds
$75,000. Ocwen may satisfy its burden on that issue by: (1) demonstrating that it is “facially
apparent” that the claims are likely above $75,000, or (2) setting forth the facts in
controversy -- in the notice of removal or an affidavit -- that support a finding of the requisite
amount. Luckett v. Delta Airlines, 171 F.3d 295, 298 (5th Cir. 1999); Simon v. Wal-Mart
Stores, Inc., 193 F.3d 848 (5th Cir. 1999).
Facially Apparent
Ocwen states in the notice of removal that the insurance policy at issue had a limit of
$50,000. Ocwen also states that the amount sought by Plaintffs is $41,618.57, “plus
penalties, attorneys’ fees and judicial interest....” Ocwen concludes that “it is clear that the
amount in controversy has been satisfied.” Doc. 1, ¶ 8.
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In support of their motion to remand, Plaintiffs attach an affidavit (dated after the
removal) of Plaintiff Bailey. Bailey testifies that Plaintiffs “seek damages in the amount of
$41,618.57, including penalties, but exclusive of attorneys fees, judicial interest, and costs.”
Affidavit, ¶ 7. Bailey’s affidavit concludes with this stipulation: “Plaintiffs will not accept
compensation for any damages that exceed $75,000, exclusive of judicial interest and costs.”
A plaintiff’s post-removal stipulation that his damages do not exceed $75,000 cannot
defeat jurisdiction if it has been established. A post-removal affidavit may, however, be
considered if it contains facts that clarify an uncertainty about the amount in controversy at
the time of removal. Gebbia v. Wal-Mart, 233 F.3d 880, 883 (5th Cir. 2000).
It is difficult to determine, looking solely at Plaintiffs’ original Petition, what amount
they are claiming as damages. However, the Amended Petition – when considered in light
of Plaintiff Bailey’s affidavit – satisfies the court the amount sought is less than $75,000.
After quoting Louisiana law regarding penalties, Plaintiffs allege: “This means $41,618.57,
plus attorney’s fees and judicial interest from March 29, 2004, when the money became due
and owed to Plaintiffs.” Amended Petition, ¶ 18. To the extent that allegation is ambiguous,
Plaintiff Bailey’s affidavit clarifies that the amount demanded includes penalties.
The possibility of an award of attorney’s fees in Plaintiffs’ favor is not enough to
salvage Ocwen’s removal. Only a reasonable estimate of an attorney’s fee award can be
considered in determining the amount in controversy. Wright Family Investments v. Jordan
Carriers, 2012 WL 2457664 (W.D. La. 2012). To exceed the sum of $75,000, the court

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would have to award Plaintiffs an attorney’s fee in excess of $30,000. Such an award is
possible, but unlikely in this case.
Conclusion
As explained above, any doubt about the propriety of the removal must be resolved
in favor or remand. Ocwen has not satisfied its burden of showing by a preponderance of the
evidence that the amount in controversy exceeds $75,000. Accordingly, the Motion to
Remand (Doc. 6) is granted, subject to the stay in the accompanying order. In light of this
decision, it is unnecessary to address Plaintiffs’ argument that the removal was untimely. On
remand, Plaintiffs’ recovery, including penalties and attorney’s fees, shall be limited in
accordance with their stipulation in this court.
THUS DONE AND SIGNED in Shreveport, Louisiana, this 5th day of March, 2014.

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