Digilormo et al v. Capital One, N.A.

Filing 15

MEMORANDUM RULING GRANTING 9 MOTION to Remand filed by Claudette Digilormo, Dominick Digilormo. By separate judgment, the case shall be REMANDED to the First Judicial District Court for the Parish of Caddo, State of Louisiana. Signed by Magistrate Judge Karen L Hayes on 5/16/14. (crt,Crawford, A)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
DOMINICK DIGILORMO & CLAUDETTE
DIGILORMO

CIVIL ACTION NO. 5:14-00515

VERSUS

JUDGE HICKS

CAPITAL ONE, N.A.

MAGISTRATE JUDGE HAYES
MEMORANDUM RULING

Before the undersigned magistrate judge, on reference from the district court, is a Motion
to Remand, [doc. # 9], filed by Plaintiffs Dominick and Claudette Digilormo.1 The Motion is
opposed. For reasons stated below, the Motion is GRANTED.
Background
On January 24, 2014, Plaintiffs, husband and wife2, sued Defendant Capital One in the
First Judicial District Court, Parish of Caddo, State of Louisiana, seeking payment of principal
and interest on two $50,000 certificates of deposit. [doc. # 1-1, p. 2]. According to the Petition,
on February 17, 1995, Plaintiffs each deposited $50,000 into Pioneer Bank (Pioneer Bank
merged with Hibernia National Bank and Defendant Capital One, in turn, acquired Hibernia) and
Pioneer, in return, issued two separate certificates of deposit3, one to Dominick in Dominick’s
name only and one to Claudette in Claudette’s name only. Id. Plaintiffs aver that they presented

1

As this is not a motion excepted in 28 U.S.C. § 636(b)(1)(A), nor dispositive of any
claim on the merits within the meaning of Rule 72 of the Federal Rules of Civil Procedure, this
Ruling is issued under the authority thereof, and in accordance with the standing order of this
Court. Any appeal must be made to the district judge in accordance with Rule 72(a) and L.R.
74.1(W).
2

3

6].

[doc. # 11-1, p. 2].
Each certificate of deposit is actually labeled, “Savings Certificate.” [doc. # 1-1, p. 5,

both certificates for payment but Defendant refused to pay. As a result, Plaintiffs seek the
following relief: (1) payment of principal; (2) payment of interest; (3) payment of legal interest;
(4) payment of all costs of expert witnesses; (5) attorney’s fees; and (6) all other relief to which
they may be entitled. Id. at 4.
On March 10, 2014, Defendant removed the matter on the basis of diversity jurisdiction.
[doc. # 1, p. 2]. In addition to asserting that the parties are diverse, Defendant argues that the
amount in controversy is met because “Plaintiffs have asserted a claim against Capital One for
the value of two savings certificates totaling $100,000 plus payment of interest at the rate of
7.00% per annum. Id. On April 8, 2014, Plaintiffs filed the instant Motion to Remand, arguing
that the amount in controversy does not exceed $75,000 because their two claims cannot be
aggregated. [doc. # 9].
Defendant, in response, argues: “Plaintiffs attempt to defeat this Court’s jurisdiction by
arguing that each certificate at issue is a separate and distinct claim not subject to aggregation to
meet the $75,000 amount in controversy requirement for diversity jurisdiction. The facts,
however, establish that the entire amount at issue, $114,490, is one claim that is part of
Plaintiffs’ community property regime.” [doc. # 11, p. 1-2]. Defendant explains, “Plaintiffs’
community property regime is intact, both certificates are community assets, making the claim
against [Defendant] a claim owned by the community that satisfies the amount in controversy
requirement . . . .” Id. at 2.
The matter is now before the Court.
Law and Analysis
Federal courts are courts of limited jurisdiction. Howery v. Allstate Ins. Co., 243 F.3d
912, 916 (5th Cir. 2001). Thus, a suit is presumed to lie outside this limited jurisdiction unless
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and until the party invoking federal jurisdiction establishes otherwise. Id. Federal law authorizes
the removal to federal court of “any civil action brought in a State court of which the district
courts of the United States have original jurisdiction . . . .” 28 U.S.C. § 1441(a).
In this case, Defendant invokes the Court’s jurisdiction via diversity, which requires
complete diversity of citizenship between the adverse parties and an amount in controversy
greater than $75,000. 28 U.S.C. § 1332(a). Plaintiffs do not contest that the parties are diverse;
rather, as mentioned, they dispute Defendant’s assertion that the amount in controversy exceeds
the jurisdictional minimum.
Plaintiffs ordinarily may not aggregate their damage claims to satisfy the requisite
jurisdictional minimum. Derouselle v. Wal-Mart Stores, Inc., 934 F. Supp. 214, 217 (W.D. La.
1996) (citing Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1330 (5th Cir. 1995)), abrogated on
other grounds by H&D Tire and Automotive-Hardware, Inc. v. Pitney Bowes Inc., 227 F.3d 326
(5th Cir. 2000). “The Supreme Court has long interpreted § 1332's phrase ‘matter in controversy’
not to allow multiple plaintiffs to add together ‘ separate and distinct demands, unite[d] for
convenience and economy in a single suit,’ to meet the requisite jurisdictional level.” Allen, 63
F.3d at 1330. However, two plaintiffs may be permitted to aggregate their damages if the
plaintiffs “unite to enforce a single title or right in which they have a common and undivided
interest.” Snyder v. Harris, 394 U.S. 332, 335 (1969). The Fifth Circuit, in Allen, explained this
“single title or right” test thusly:
The application of this standard depends upon the history-laden notion of what
constitutes an individual cause of action.4 Therefore, a necessary first step is an

4

Therefore, this rule is not to be confused with that of joinder under FED . R. CIV . P. 20,
which requires that plaintiffs’ claims be transactionally related. The fact that claims arise from
the same transaction or occurrence is an insufficient justification to allow aggregation. See 1
3

examination of the configuration of the state-law right at issue. Again, the purpose
of this inquiry is to determine whether the state law claim creates one right of
recovery.
Allen, 63 F.3d at 1331 (internal citations omitted).
Here, the Court must decide whether Plaintiffs’ claims for damages under Louisiana law
constitute two single and distinct causes of action or one unified cause of action that seeks to
enforce a single title or right in which Plaintiffs possess a common and undivided interest.5
Defendant essentially argues that Plaintiffs’ claims constitute one right of recovery because the
funds used to buy the certificates of deposit, the certificates themselves, and the interest earned
thereon, are community property in which Plaintiffs possess a common and undivided interest.
[doc. # 11, p. 1-2].
Louisiana maintains a community property regime. LA . CIV . CODE ANN . art. 2334.
Under the regime, “[e]ach spouse owns a present undivided one-half interest in the community
property,” and “[e]ach spouse acting alone may manage, control, or dispose of community
property unless otherwise provided by law.” Id. art. 2336, 2346. However, “A spouse has the
exclusive right to manage, alienate, encumber, or lease movables issued or registered in his name
as provided by law.” Id. art. 2351 (emphasis added).

Moore, supra, ¶ 0.97[3], at 920 (“The appropriateness of aggregation depends upon the nature of
the plaintiffs' claims rather than on the source of the right to sue or transactional relatedness of
the claims.”).
5

Plaintiffs’ claims for money owed under two certificates of deposit sound in contract.
For instance, in Lilliedahl & Mitchel, Inc. v. Avoyelles Trust and Sav. Bank, 352 So. 2d 781, 785
(La. App. 3d Cir. 1977), the court held that a corporation’s suit against a bank to recover
proceeds from three certificates of deposit arose ex contractu because its purpose was to recover
on a contract between the bank and its depositor. The court explained: “When the Bank issued
the certificate of deposit it acknowledged a receipt of money from the Corporation and promised
to repay the money to the Corporation with interest at a later date. This suit is merely to enforce
the promise to pay . . . .” Id.
4

In Louisiana, a certificate of deposit is a movable. Arnold v. Fenno, 652 So. 2d 1078,
1081 (La. App. 4th Cir. 1995). Thus, a spouse has the exclusive right to manage a certificate of
deposit if it is issued or registered in his or her name. That in mind, “if one spouse is the
managing spouse with respect to the community right sought to be enforced, then that spouse is
the proper plaintiff to bring an action to enforce the right.” LA . CODE CIV . PROC. ANN . art. 686.
Here, Plaintiffs present one certificate registered in Dominick Digilormo’s name only and
another certificate registered in Claudette Digilormo’s name only.6 Each Plaintiff, therefore
maintains the exclusive right to manage7 his or her own respective certificate and the
concomitant exclusive right to bring an action to enforce any rights relative to his or her
certificate. Claudette cannot bring an action to enforce Dominick’s rights relative to the
certificate registered in Dominick’s name and Dominick cannot bring an action to enforce rights
relative to the certificate registered in Claudette’s name.8
As one treatise explains: “[I]f one spouse contracts with a third person, the other spouse
cannot ‘cancel the contract, extend the time for performance, enforce the contract, or recover
damages for its breach.’ Nor can the non-incurring spouse enforce the obligation.” 16 LA . CIV .
LAW TREATISE § 5:4. By way of example, “[I]f one spouse contracts with a manufacturer for

6

Plaintiffs do not dispute Defendant’s position that the certificates constitute community
property.
7

Defendant concedes that “the name of the spouse set forth on each savings certificate
identifies which spouse is managing that certificate on behalf of the community.” [doc. # 11, p.
4].
8

This result, dictated by the Louisiana community property laws, is consistent with
Louisiana’s commercial laws. Each Plaintiff, in other words, appears to be the holder in due
course, LA . REV . STAT . ANN . 10:3-302(a), of a negotiable instrument, LA . REV . STAT . ANN .
10:3-104(j), that only he or she, with respect to his or her own registered certificate, is entitled to
enforce, LA . REV . STAT . ANN . 10:3-301.
5

furniture, only the contracting spouse can cancel or enforce the contract.” Id. This is because
third persons contract with individuals—a husband, a wife, or both—not with a community. Id.
§ 5:20. If litigation commences over such a contract, “The other spouse may be affected
financially by any judgment, and, thus, may have an interest in the litigation, but the third person
is entitled to be sued by and to litigate with the person with whom he contracted.” Id. If the noncontracting spouse sues the third-party, the third-party “should succeed with an exception of no
right of action . . . .” Id. All of this is to say that only the contracting spouse, regardless of
whether he or she contracts for or with community property, can bring an action to enforce that
contract; consequently, if two spouses each enter their own separate contracts involving
community property and then both spouses sue to enforce their own respective contracts, each
suit constitutes a separate and distinct demand.
Defendant spends considerable time attempting to convince the Court that “[t]he fact that
each Plaintiff took $50,000 of community funds and purchased a savings certificate each in their
own name does not remove the certificates from the community property regime.” [doc. # 11, p.
4]. Defendant argues similarly, “simply because the law allows one spouse to manage, control,
and dispose of a community asset, that right does not change the nature of the ownership of the
asset.” Id. While the Court agrees with Defendant’s premise, the narrow issue at hand is not
whether the certificates remain in the community property pool, but whether there is one right of
recovery or two rights of recovery. Stated differently, the ownership of the assets is irrelevant;
instead, the relevant inquiry is who has the right to enforce a claim to the assets.
Defendant, similarly, appears to focus on the language in Snyder supra stating that two
plaintiffs may aggregate damages if the plaintiffs “unite to enforce a single title or right in which
they have a common and undivided interest,” and attempts to establish that Plaintiffs have a
6

common and undivided interest in the two certificates. However, Defendant overlooks the
“single title or right” phrase. Indeed, Plaintiffs may have a common and undivided interest in the
two certificates, but, as explained above, they cannot “unite” to enforce the other’s rights in his
or her certificate9 because each Plaintiff’s claim constitutes a “separate and distinct demand.”
Allen, 63 F.3d at 1330.
The Fifth Circuit, in Muse v. U.S. Cas. Co., 306 F.2d 30 (5th Cir. 1962), addressed an
issue remarkably similar to the one at bar. There, a wife sued an insurance company for her own
personal injuries, her own lost wages, and damage to her family’s vehicle. Id. She attempted to
aggregate all of the damage claims because her personal injury claim alone did not meet the
jurisdictional amount.10 Id. However, under Louisiana law at the time, the claims for damage to
the family vehicle and lost wages belonged to the community and only the husband had the right
to sue on behalf of the community. Id. Disregarding the communal nature of the property, the
court held that, because only the husband could pursue the vehicle damage and lost profit claims,
those claims could not be aggregated with the wife’s personal injury claim to meet the
jurisdictional amount. Id.

9

In Rodrigue v. Rodrigue, 218 F.3d 432, 438 (5th Cir. 2000), the Fifth Circuit recognized
this distinction and stated that “the Civil Code specifies . . . that [the spouse in whose name a
movable is registered] has exclusive management rights . . . but preserves for the spouses jointly
the right to enjoy the benefit (the fructus) of such property.” The court provided examples of
exclusive management of community property versus shared enjoyment of the property: “A
paycheck issued by the employer in the name of the employee-spouse alone can be cashed . . .
only by that spouse; yet, the proceeds of the paycheck representing earnings of one spouse in
community, belong to the community. Likewise, a motor vehicle purchased with community
funds but titled in the name of one spouse alone can be sold, leased, or encumbered only by the
named spouse; yet the proceeds of any such disposition belong to the community.” Id. (internal
footnote omitted).
10

She claimed $30,000 in personal injuries, which was over the $10,000 jurisdictional
threshold, but the insurance carrier’s liability limit was $10,000. Muse, 306 F.2d at 30.
7

Here, there are two rights of recovery. Neither spouse can bring suit to enforce the
certificate of deposit registered in the other spouse’s name. This is not a case where multiple
plaintiffs seek to enforce a common interest separable amongst themselves, this is case where
two plaintiffs seek to enforce two separate causes of action which, if successful, will result in an
essentially inseparable damage award belonging to the community. In short, the two claims,
while jointly triable, belong to each Plaintiff for jurisdictional purposes; therefore, Defendant
may not aggregate the claims to meet the minimum amount in controversy.
Conclusion
For the foregoing reasons, Plaintiffs’ Motion to Remand, [doc. # 9], is GRANTED. By
separate judgment, the case shall be REMANDED to the First Judicial District Court for the
Parish of Caddo, State of Louisiana.
In Chambers, Monroe, Louisiana, this16th day of May, 2014.

__________________________________
KAREN L. HAYES
UNITED STATES MAGISTRATE JUDGE

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