Freeman v. MH Equipment Company

Filing 18

MEMORANDUM AND ORDER (See Full Order) IT IS HEREBY ORDERED that plaintiff James Matthew Freeman's Motion for Remand [ECF # 8 ] is denied. Signed by District Judge Catherine D. Perry on 11/13/15. (EAB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
JAMES MATTHEW FREEMAN,
Plaintiff,
v.
MH EQUIPMENT COMPANY,
Defendant.

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No. 4:15CV1473 CDP

MEMORANDUM AND ORDER
James Matthew Freeman was a sales representative for MH Equipment
Company and earned commissions based upon a percentage of gross profit on
equipment sales. When Freeman’s employment with MH Equipment ended on
December 2, 2014, MH Equipment owed him commissions and other compensation.
In this breach of contract action, Freeman seeks recovery of these monies. Freeman
also seeks additional statutory damages as provided under the Missouri Commission
Sales Act (MCSA), Mo. Rev. Stat. § 407.911, et seq., given that MH Equipment
continues to refuse to pay him his earned commissions.
Freeman filed this action in the Circuit Court of St. Louis County, Missouri,
on August 12, 2015. On September 25, 2015, MH Equipment removed the action
to this Court, invoking federal diversity jurisdiction. 28 U.S.C. § 1332. Freeman
now moves to remand the matter back to state court, arguing that the amount in

controversy does not exceed $75,000 and thus does not meet the jurisdictional
threshold for diversity jurisdiction. Because the face of Freeman’s complaint
shows that the amount in controversy is more than $75,000, I will deny the motion to
remand.
BACKGROUND
In his complaint, Freeman claims that he earned a commission of
approximately $76,092 in relation to an equipment sale he arranged on behalf of MH
Equipment in 2014. Freeman contends that, under his employment agreement with
MH Equipment, his total compensation associated with this sale amounted to
$101,876, which included his total commission, bonus, and incentive compensation.
Of this amount, MH Equipment paid Freeman $77,622. Freeman claims that MH
Equipment breached the employment agreement by failing to pay him the remainder
of his earned compensation from this sale, and specifically, $24,254; and further, by
failing to pay him approximately $1616 in commissions earned from other
equipment sales. Accordingly, Freeman seeks $25,870 as actual damages from
MH Equipment’s breach of the employment agreement.
Freeman also seeks statutory damages under the MCSA inasmuch as MH
Equipment has not yet paid the commissions he claims are due him. Under the
MCSA, all commissions due to a sales representative whose employment with his
principal has terminated shall be paid to the sales representative within thirty days of
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his termination. Mo. Rev. Stat. § 407.912.3. As is relevant to this action,
[a]ny principal who fails to timely pay the sales representative
commissions earned by such sales representative shall be liable to the
sales representative in a civil action for the actual damages sustained by
the sales representative and an additional amount as if the sales
representative were still earning commissions calculated on an
annualized pro rata basis from the date of termination to the date of
payment.
Mo. Rev. Stat. § 407.913. In his complaint, Freeman avers that he earned sales
commissions at the pro rata monthly rate of $9275 for the year preceding his
termination. Accordingly, in addition to his actual damages of unpaid commissions
and other compensation, Freeman seeks additional statutory damages “in the amount
of $9,275.00 per month from January 2015 until such time as all unpaid
commissions are paid[.]” (State Petn., ECF #4 at p.5.)
Freeman filed this action in state court in August 2015.
DISCUSSION
Federal courts are courts of limited jurisdiction. Myers v. Richland Cnty.,
429 F.3d 740, 745 (8th Cir. 2005) (citing Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375, 377 (1994)). A claim may be removed to federal court only if it
could have been brought in federal court originally. Peters v. Union Pac. R.R. Co.,
80 F.3d 257, 260 (8th Cir. 1996). Here, MH Equipment removed the case on the
basis of diversity jurisdiction, which exists where there is complete diversity of
citizenship between the parties and the amount in controversy exceeds $75,000,
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exclusive of interest and costs. 28 U.S.C. § 1332(a). The parties do not dispute
that there is complete diversity between the parties.1 The issue is whether the
amount in controversy exceeds the $75,000 statutory requirement.
“The general federal rule has long been to decide what the amount in
controversy is from the complaint itself, unless it appears or is in some way shown
that the amount stated in the complaint is not claimed ‘in good faith.’” Horton v.
Liberty Mut. Ins. Co., 367 U.S. 348, 353 (1961). See also St. Paul Mercury Indem.
Co. v. Red Cab Co., 303 U.S. 283, 288 (1938) (“[U]nless the law gives a different
rule, the sum claimed by the plaintiff controls if the claim is apparently made in good
faith.”). Accordingly, “when the amount in controversy claimed in the plaintiff’s
state court complaint exceeds $75,000, the complaint is generally determinative of
the amount in controversy for purposes of federal jurisdiction upon removal.” 14C
Charles Alan Wright, Arthur R. Miller, Edward H. Cooper & Joan E. Steinman,
Federal Practice & Procedure § 3725.1 (4th ed. 2009).
A defendant seeking removal and opposing remand has the burden of
establishing federal jurisdiction by a preponderance of the evidence. In re Prempro
Prods. Liab. Litig., 591 F.3d 613, 620 (8th Cir. 2010). With regard to the requisite
amount in controversy, the question is not whether the damages are in fact greater
than $75,000, but whether a fact finder might legally conclude they are. James Neff

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Freeman is a citizen of Missouri. MH Equipment is a citizen of Illinois.
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Kramper Family Farm P’ship v. IBP, Inc., 393 F.3d 828, 833 (8th Cir. 2005).
Where a review of the face of the complaint alone shows the amount in controversy
to exceed $75,000, the defendant satisfies its burden of proving the jurisdictional
amount by a preponderance of the evidence. See Hartis v. Chicago Title Ins. Co.,
694 F.3d 935, 946 (8th Cir. 2012). In such circumstances, the removing defendant
need not provide additional evidence demonstrating the amount in controversy.
Ken Behlmann Auto. Servs., Inc. v. Reynolds & Reynolds Co., No. 4:12CV317 CDP,
2012 WL 2565027, at *3 (E.D. Mo. July 2, 2012). Cf. Feller v. Hartford Life &
Accident Ins. Co., 817 F. Supp. 2d 1097, 1101 (S.D. Iowa 2010).
Here, the face of Freeman’s state court complaint shows him to seek an
amount in excess of $75,000. The complaint clearly states that Freeman seeks to
recover commissions and other compensation totaling $25,870 and, further, that he
seeks additional statutory damages equaling $9,275 per month since January 2015.
When Freeman filed this action in August 2015, seven months had passed since
January 2015. As such, the additional statutory damages sought by Freeman upon
the filing of his complaint totaled $64,925. Combining Freeman’s claimed actual
and statutory damages, the total amount in controversy equals at least $90,795.
I disagree with Freeman’s argument that his MCSA claim for statutory
damages requires speculation and that therefore MH Equipment must provide
additional evidence of the total amount in controversy. By including a sum certain
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in his complaint regarding the pro rata monthly amount of his claimed commissions
and a specific prayer that he recover this amount “per month from January 2015 until
such time as all unpaid commissions are paid,” coupled with his claim made in
August 2015 that MH Equipment continued to refuse to pay his commissions,
Freeman removed any speculation as to the amount of additional damages he seeks
under the MCSA. Therefore, because the face of Freeman’s complaint shows the
amount in controversy to exceed $75,000, MH Equipment has satisfied its burden of
proving the requisite jurisdictional amount by a preponderance of the evidence and
need not provide additional evidence.
Accordingly,
IT IS HEREBY ORDERED that plaintiff James Matthew Freeman’s
Motion for Remand [ECF #8] is denied.

_________________________________
CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE

Dated this 13th day of November, 2015.

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