City of Alexander, Arkansas v. Deep South Fire Trucks, Inc.
Filing
12
MEMORANDUM OPINION AND ORDER granting in part and denying in part 5 Motion to Remand to State Court. The motion is granted to the extent that the Complaint is dismissed without prejudice due to the absence of subject matter jurisdiction. The motion is otherwise denied. A separate judgment wil be entered herein. Signed by District Judge Keith Starrett on 4/28/2014 (scp)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
EASTERN DIVISION
CITY OF ALEXANDER, ARKANSAS
V.
PLAINTIFF
CIVIL ACTION NO. 2:14cv17-KS-MTP
DEEP SOUTH FIRE TRUCKS, INC.
DEFENDANT
MEMORANDUM OPINION AND ORDER
This matter is before the Court on the Defendant Deep South Fire Trucks, Inc.’s
Motion to Remand [5]. Although styled as a “Motion to Remand,” the Court construes
this filing substantively as a motion to dismiss for lack of subject matter jurisdiction since
this action was originally filed in this Court. Having considered the submissions of the
parties, the record, and the applicable law, the Court finds that subject matter
jurisdiction is lacking and this action will be dismissed without prejudice.
I. BACKGROUND
On February 5, 2014, the City of Alexander, Arkansas (the “City”) filed its
Complaint for Preliminary and Permanent Injunctive Relief [1] in this Court. The City
seeks a preliminary and permanent injunction preventing Deep South Fire Trucks, Inc.
(“Deep South”) “from selling, leasing, encumbering or otherwise disposing of or
diminishing the value of a fire truck and the equipment located on a fire truck . . . .”
(Compl. [1] at p. 1.) Subject matter jurisdiction is asserted on the basis of diversity of
citizenship under Title 28 U.S.C. § 1332. In relation to diversity jurisdiction, the City
alleges that it is a political subdivision of the State of Arkansas; that Deep South is a
Mississippi corporation; and, that the amount in controversy, exclusive of interest and
costs, exceeds $75,000.
The following circumstances, gleaned from the Complaint and its attachments,
are pertinent to the subject motion. In May of 2008, the City entered into a Lease
Purchase Agreement with Paul Anthony Graver d/b/a First Government Lease
Company (“Graver”) for a 1999 Freightliner FL80 fire truck (the “Fire Truck”). In October
of 2013, Graver, by and through an agent, repossessed the Fire Truck. Litigation
between the City, Graver, and other parties regarding Graver’s right to repossess the
Fire Truck and other matters subsequently ensued in the Circuit Court of Pulaski
County, Arkansas. In November of 2013, Graver sold the Fire Truck to Deep South.
The City requests that this Court enter a preliminary injunction prohibiting Deep South
from leasing, selling, or otherwise disposing of the Fire Truck pending the final
disposition of the aforementioned Arkansas state court action. A permanent injunction
requiring Deep South to return the Fire Truck to the City is also sought.
On February 24, 2014, Deep South filed its Motion to Remand [5]. Deep South
argues that the Court lacks subject matter jurisdiction because the amount in
controversy does not exceed $75,000. Deep South does not dispute that it and the City
are of diverse citizenship. The motion has been fully briefed and the Court is ready to
rule.
II. DISCUSSION
The City, the party invoking federal jurisdiction, bears the burden of showing that
it exists in this case. See Willoughby v. United States ex rel. U.S. Dep’t of the Army,
730 F.3d 476, 479 (5th Cir. 2013) (citing Ramming v. United States, 281 F.3d 158, 161
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(5th Cir. 2001)), cert. denied, 134 S. Ct. 1307 (2014). Because the Complaint does not
request a specific amount of damages, the City “must prove by a preponderance of the
evidence that the amount in controversy exceeds the jurisdictional amount.” St. Paul
Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998) (citing Allen v. R &
H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995)). The amount in controversy is
determined by the value of the object of the lawsuit when the plaintiff seeks injunctive
relief. Farkas v. GMAC Mortgage, L.L.C., 737 F.3d 338, 341 (5th Cir. 2013) (citation
omitted). Further, “‘[w]hen the validity of a contract or a right to property is called into
question in its entirety, the value of the property controls the amount in controversy’”.
Nationstar Mortgage LLC v. Knox, 351 Fed. Appx. 844, 848 (5th Cir. 2009) (quoting
Waller v. Prof’l Ins. Corp., 296 F.2d 545, 547-48 (5th Cir. 1961)). A court “may
determine that subject-matter jurisdiction is lacking based on (1) the complaint alone;
(2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the
complaint supplemented by undisputed facts plus the court's resolution of disputed
facts.” King v. U.S. Dep’t of Veterans Affairs, 728 F.3d 410, 413 (5th Cir. 2013) (citation
and internal quotation marks omitted).
Clearly, the Fire Truck is the object of this litigation and the City questions Deep
South’s rights to it altogether. Not one of the various figures offered by the parties as
the value of the Fire Truck ($50,000.00, $54,000.00, $63,333.33) exceeds the sum of
$75,000. Therefore, the Fire Truck’s value fails to support the exercise of diversity
jurisdiction.
The City argues that the amount in controversy should be measured by the retail
value of the Fire Truck ($63,333.33) plus the reasonable rental value of the Fire Truck
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for the period of time between its repossession and the filing of the Complaint
($17,000.00). The City posits that under Mississippi law, a claimant “can recover loss of
use damages for the loss of a vehicle, and those damages are calculated by
determining the reasonable costs associated with the plaintiff’s having to rent another
vehicle.” (Pl.’s Resp. to Mot. to Remand [10] at p. 1) (citing Pelican Trucking Co. v.
Rossetti, 251 Miss. 37, 170 So. 2d 573, 573-74 (Miss. 1965); Nat’l Dairy Prods. Corp. v.
Jumper, 241 Miss. 339, 130 So. 2d 922, 923 (Miss. 1961)).
There is one glaring problem with the City’s contention that loss of use damages
should be factored into the amount in controversy in this case. The City has not alleged
any tortious conduct on the part of Deep South or a resulting request for damages. Cf.
Rossetti, 170 So. 2d at 574 (“In case of tortious injury to a motor vehicle, the owner may
recover . . . the reasonable value of its use during the time the owner was necessarily
deprived of it.”) (citing, inter alia, Jumper, 130 So. 2d 922). In addition, the City fails to
cite any authority holding that loss of use damages are a component of the amount in
controversy with respect to a complaint for injunctive relief. Cf. LeVake v. Zawistowski,
No. 02-C-0657-C, 2003 WL 23200367, at *1, 5 (W.D. Wis. Oct. 10, 2003) (finding the
plaintiffs’ loss of use damage claims to be dubious in an action seeking injunctive relief
and money damages). The rental value of the Fire Truck for the period of time the
City has been dispossessed of it may be relevant to the City’s replevin and conversion
claims pending against Graver in Arkansas state court, but this measure of damages is
irrelevant to the Complaint for Preliminary and Permanent Injunctive Relief [1]. The
Court thus finds that the City has failed to prove by a preponderance of the evidence
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that § 1332(a)’s amount in controversy requirement is met in this case. This action
must be dismissed for lack of subject matter jurisdiction as a result.
Deep South “requests that this Court award attorney’s fees, expenses, and other
costs associated with filing th[e] Motion to Remand.” (Def.’s Mot. to Remand [5] at ¶ 6.)
The Court presumes that this request is made under 28 U.S.C. § 1447(c) given the style
of the subject motion and Deep South’s plea for remand to the Circuit Court of
Covington County, Mississippi. “An order remanding the case may require payment of
just costs and any actual expenses, including attorney fees, incurred as a result of the
removal.” 28 U.S.C. § 1447(c). There will be no remand or award of costs and
attorney’s fees under § 1447(c) since this action originated in federal court. The Court
is authorized to “order the payment of just costs” whenever a suit is dismissed for lack
of jurisdiction. 28 U.S.C. § 1919. Nevertheless, § 1919 is “purely permissive” and the
Court exercises its discretion to deny costs given the limited nature of the proceedings
to date. Religious Tech. Ctr. v. Liebreich, 98 Fed. Appx. 979, 986-87 (5th Cir. 2004)
(citing Miles v. California, 320 F.3d 986, 988 n.2 (9th Cir. 2003)).
III. CONCLUSION
IT IS THEREFORE ORDERED AND ADJUDGED that the Motion to Remand [5]
is granted in part and denied in part. The motion is granted to the extent that the
Complaint is dismissed without prejudice due to the absence of subject matter
jurisdiction. The motion is otherwise denied. A separate judgment will issue pursuant
to Federal Rule of Civil Procedure 58.
SO ORDERED AND ADJUDGED this the 28th day of April, 2014.
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s/ Keith Starrett
UNITED STATES DISTRICT JUDGE
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