White v. Alfa Agency, Inc. et al

Filing 59

ORDER REMANDING CASE FOR LACK OF JURISDICTION. Signed by District Judge Debra M. Brown on 1/5/16. (jtm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
GREENVILLE DIVISION
PAULINE WHITE

PLAINTIFF

V.

NO. 4:14-CV-00171-DMB-JMV

ALFA AGENCY, INC., ET AL.

DEFENDANTS

ORDER REMANDING CASE
FOR LACK OF JURISDICTION
This matter, which began in state court and was removed to federal court, is before the
Court sua sponte on the issue of subject matter jurisdiction. As explained below, this Court does
not have jurisdiction to adjudicate this case and must remand it to state court.
I
Background and Procedural History
On January 10, 2014, Plaintiff Pauline White filed a complaint in the Circuit Court of
Leflore County, Mississippi, against Alfa Agency, Inc., Alfa Financial Corporation, John Does
1-10, and John Doe Corporation 1-10. Doc. #1-1. In her complaint, White claims she was
covered by two insurance policies issued by Alfa Agency, Inc., and Alfa Financial Corporation
(“Alfa Defendants”), worth $25,000 each. Doc. #2 at 3. White alleges that while the policies
were in effect, she was in an automobile accident resulting in injury and damage to her vehicle.
Id. She further alleges that despite being covered, Alfa Defendants did not pay for the damage.
Id. at 3–4.
On October 31, 2014, White filed in state court a motion for leave to amend her
complaint, attaching a proposed amended complaint as an exhibit. Doc. #1-2. The proposed
amended complaint sought to add Myeesha McCall, an alleged citizen of Mississippi, as a
negligence defendant and included claims of breach of contract, bad faith, and breach of

fiduciary duty on the part of “Defendant Alfa,” for which White sought punitive damages. Id. at
3, 6–7. The motion for leave to amend and the proposed amended complaint were served on
Alfa Defendants on November 5, 2014. Doc. #1 at 1–2; Doc. #1-2 at 1.
On December 4, 2014, Alfa Defendants removed the case to federal court pursuant to 28
U.S.C. §§ 1441 and 1446, arguing that the punitive damages alleged in White’s proposed
amended complaint placed the amount in controversy over $75,000. Doc. #1 at 2. The notice of
removal also alleged that McCall, a non-diverse defendant, was improperly joined. Id. White
did not move to remand the case.
On August 7, 2015,1 Alfa Defendants filed a motion to dismiss White’s case for failure to
prosecute pursuant to Rule 41, citing White’s failure to designate experts and appear for her
noticed deposition, among other things.2 Doc. #31. On October 23, 2015, this Court ordered
White to respond to the motion to dismiss or show cause for failing to designate experts and
attend the deposition. Doc. #38. On November 2, 2015, White responded to the order to show
cause, explaining that she had no experts and that she had missed her deposition because she
believed an attorney was settling her case. Doc. #42.
On December 9, 2015, this Court held a hearing on Alfa Defendants’ motion to dismiss.
At the hearing, Alfa Defendants’ attorney, in arguing that White had not acted to prosecute her
case, advised that the motion for leave to amend her complaint filed in state court had not been
pursued by White because it had never been set for hearing or ruled upon, resulting in the
amended complaint never being filed. Alfa Defendants’ counsel further noted that because the
1

By this time, Plaintiff was proceeding pro se, and still is. White’s most recent counsel was allowed to withdraw as
her attorney on February 3, 2015. Doc. #11. White informed the Court that she wished to proceed pro se on April
14, 2015. Doc. #23.
2

The same day, Alfa Defendants also filed a motion for summary judgment and a motion in limine. Docs. #33 &
#35. Alfa Defendants subsequently filed two additional motions in limine. See Docs. #52 & #54. White recently
filed a motion to supplement the record. See Doc. #57.

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proposed amended complaint had not been filed, the amount in controversy in this case is
$50,000.
II
Law and Analysis
District courts have an “independent obligation to determine whether subject-matter
jurisdiction exists, even in the absence of a challenge from any party.” Arbaugh v. Y&H Corp.,
546 U.S. 500, 514 (2006) (citation omitted). “The district courts shall have original jurisdiction
of all civil actions where the matter in controversy exceeds the sum or value of $75,000,
exclusive of interest and costs, and is between … citizens of different States.” 28 U.S.C. §
1332(a)(1). “[A]ny civil action brought in a State court of which the district courts of the United
States have original jurisdiction, may be removed by the defendant or the defendants, to the
district court of the United States for the district and division embracing the place where such
action is pending.” 28 U.S.C. § 1441(a). The party asserting diversity jurisdiction bears the
burden of proving that the claim exceeds the statutory amount. Allen v. R & H Oil & Gas Co.,
63 F.3d 1326, 1335 (5th Cir. 1995). Where “‘it appears that the district court lacks subject
matter jurisdiction’ prior to final judgment, the district court must remand the case to state
court.” CamSoft Data Sys., Inc. v. S. Elecs. Supply, Inc., No. 15-30133, 2015 WL 5530262, at *4
(5th Cir. Sept. 21, 2015) (quoting 28 U.S.C. § 1447(c)).
When an original complaint does not state a federal claim but a plaintiff moves to amend
the complaint in such a way that would then allow for removal, there is no basis for removal
until the motion to amend is granted. Sullivan v. Conway, 157 F.3d 1092, 1094 (7th Cir. 1998).
See also Schoonover v. W. Am. Ins. Co., 665 F. Supp. 511, 514 (S.D. Miss. 1987) (case not
removable “because the state court retained discretion to deny the leave to amend”) (citations
omitted).

“[R]emoval before the state court actually amends the complaint may have the
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anomalous effect that the removed case lacks federal jurisdiction at the time that it is removed.”
Freeman v. Blue Ridge Paper Prods., Inc., 551 F.3d 405, 410 (6th Cir. 2008). As a result, where
“the plaintiff has not yet amended the complaint to include a claim which confers federal
jurisdiction, courts have held that it would be premature to remove the case.” Sanchez v.
Aerogroup Retail Holdings, Inc., No. 12-CV-05445-LHK, 2013 WL 1820841, at *5 (N.D. Cal.
Apr. 30, 2013) (collecting cases).
Here, Alfa Defendants removed the case because White’s proposed amended complaint
included a claim for an unspecified amount of punitive damages, which Alfa Defendants claim
would put the amount in controversy over $75,000. Doc. #1 at 2. However, as the record
indicates, and as counsel for Alfa Defendants pointed out at the hearing, White’s motion for
leave to file the amended complaint was never granted and the amended complaint was never
filed. As a result, the only complaint before the Court is White’s original complaint.
In her original complaint, White claims damages under two insurance policies, each of
which is worth $25,000. Doc. #2 at 3. White claims that Alfa Defendants are indebted to her for
“the approximate amount of $50,000, utilizing stacking,” along with interest and costs. Id. at 4.
Because interest and costs are excluded from determining the amount in dispute for purposes of
federal jurisdiction, the amount in controversy according to the original complaint is $50,000,
which is less than what is required to establish jurisdiction.

See 28 U.S.C. § 1332(a).

Accordingly, this Court does not have jurisdiction over the matter and must remand the case to
state court. See generally Abel v. Allstate Prop. & Cas. Ins. Co., No. 4:14-CV-00064-DMB,
2015 WL 1292220, at *4 (N.D. Miss. Mar. 23, 2015) (utilizing stacking for determining amount
in controversy).

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III
Conclusion
For the reasons above, this matter is REMANDED to the Circuit Court of Leflore
County, Mississippi.

Accordingly, Alfa Defendants’ motion to dismiss [31], motion for

summary judgment [33], and motions in limine [35], [52], [54] are DENIED as moot; and
White’s recently filed motion [57] is also DENIED as moot.
SO ORDERED, this 5th day of January, 2016.

/s/ Debra M. Brown
.
UNITED STATES DISTRICT JUDGE

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