Tellez-Giron et al v. Conn's Appliances, Inc.
MEMORANDUM OPINION AND ORDER by District Judge William P. Johnson DENYING 6 Plaintiff's Motion to Remand; and GRANTING 20 Motion for Leave to File Surresponse. (mag)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
individually and as a parent and
next friend of CHELSEA HERREID,
Case No. 1:17-cv-01074 WJ/SCY
CONN’S APPLIANCES, INC,
d/b/a CONN’S HOME PLUS,
and JOHN DOE,
MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFFS’ MOTION TO REMAND
THIS MATTER comes before the Court upon Plaintiffs’ Motion to Remand to State
Court (hereinafter, the “Motion”), filed November 21, 2017 (Doc. 6), and a Motion for Leave to
File Surresponse, filed December 22, 2017, (Doc. 20). Having reviewed the parties’ briefs and
applicable law, the Court finds that Plaintiffs’ Motion is not well taken and, therefore, is denied.
This is a slip and fall case. Plaintiffs allege that on November 2, 2014, Chelsea Herreid,
at the time seven years old, slipped and fell on a puddle of water in one of Defendant’s stores and
was injured. Chelsea broke her elbow, suffered a head injury, and suffered back and neck pain.
Over approximately sixteen months, Chelsea received medical treatment.
compensation for medical expenses, pain and suffering over that sixteen month period, and,
apparently, punitive damages. Plaintiff Carlotta Tellez-Giron also seeks lost income.
In a demand letter dated December 6, 2016, Plaintiffs requested $99,000. Plaintiffs
detailed, in three single spaced pages, Chelsea’s medical treatment and pain and suffering.
Plaintiffs detailed medical expenses totaling approximately $14,000. Plaintiffs alleged Chelsea
Herreid suffered a head injury, concussion, possible fracture of her left elbow, knee pain, back
pain, and neck pain.
The letter indicates she experienced pain and suffering.
symptoms, however, were not necessarily resolved over those sixteen months, and she was
advised to seek physical therapy. Plaintiff Carlotta Tellez-Giron estimated her lost income
amounted to $4,000. Plaintiffs concluded: “[i]f this case proceeds to trial, I will ask the jury to
return a verdict in an amount in excess of what my client is asking now to settle their claim.”
Doc. 1-4, p. 6.
Plaintiffs filed their state court complaint on October 4, 2017, alleging negligence,
negligence per se, prima facie tort (an intentional tort), negligent supervision and training, and
Plaintiffs also alleged that punitive damages are warranted, because
Defendant acted recklessly and wantonly. They requested compensatory damages for medical
expenses and pain and suffering, and punitive damages, “all in an amount not presently
determinable.” Plaintiffs alleged that Chelsea suffered serious, severe and permanent injuries,
which has impaired her ability to function normally. In addition to the damages previously
mentioned, she requested future medical expenses.
Defendant removed this case on October 27, 2017. Defendant attached to its Notice of
Removal Plaintiffs’ state court complaint and initial demand letter. After removal, Plaintiffs
offered to settle this case for $70,000, and stipulated that damages are under $75,000. Plaintiffs
filed this Motion on November 21, 2017, asserting that the Court lacks diversity jurisdiction
because the amount in controversy requirement has not been met. Following briefing on the
Motion for Leave to File Surresponse, this Motion is now ready to be decided.
Plaintiffs removed this case to federal court on the basis of diversity jurisdiction pursuant
to 28 U.S.C. § 1332(a). See 28 U.S.C. § 1446. Diversity jurisdiction requires diversity of
citizenship and an amount in controversy in excess of $75,000, exclusive of interest and costs.
28 U.S.C. § 1332(a). The sole issue is whether the amount in controversy exceeds $75,000.
“Removal statutes are to be strictly construed, and all doubts are to be resolved against
removal.” Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir. 1982) (citations
omitted). “Courts should interpret the removal statute narrowly and presume that the plaintiff
may choose his or her forum.” Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993).
“[T]here is a presumption against removal jurisdiction.” Laughlin v. Kmart Corp., 50 F.3d 871,
873 (10th Cir. 1995). “The removing party has the burden to show that removal was properly
accomplished.” McShares, 979 F. Supp. at 1342.
Amount in Controversy is More than $75,000.
Where the complaint does not assert an amount due, the Defendant, as the party asserting
federal jurisdiction must prove by a preponderance of the evidence jurisdictional facts that the
amount in controversy may exceed $75,000. McPhail v. Deere & Co., 529 F.3d 947, 953-55
(10th Cir. 2008) (“defendant must affirmatively establish jurisdiction by proving jurisdictional
facts that made it possible that $75,000 was in play”) (citation omitted) (emphasis in original).
This burden arises only when plaintiff argues the amount in controversy is insufficient to support
Dart Cherokee Basin Operating Co., LLC v. Owen, 135 S.Ct. 547, 554
(2014). The amount in controversy “is an estimate of the amount that will be put at issue in the
course of the litigation.” McPhail, 529 F.3d at 955. Once the defendant puts forth jurisdictional
facts that makes it possible that the amount in controversy exceeds $75,000, the case stays in
federal court “unless it is legally certain that less than $75,000 is at stake.” McPhail, 529 F.3d at
954 (internal quotation marks omitted), quoted in Chen v. Dillard Store Servs., Inc., 579 F.
App'x 618, 620–21 (10th Cir. 2014).
Defendant may prove these jurisdictional facts by pointing to:
contentions, interrogatories or admissions in state court; by calculation from the
complaint's allegations[;] by reference to the plaintiff's informal estimates or
settlement demands[;] or by introducing evidence, in the form of affidavits from
the defendant's employees or experts, about how much it would cost to satisfy the
McPhail v. Deere & Co., 529 F.3d 947, 954 (10th Cir. 2008), quoting Meridian Security Ins. Co.
v. Sadowski, 441 F.3d 536, 540-43 (7th Cir. 2006). Defendant may also look to the “substance
and nature of the injuries and damages described in the pleadings” and a “plaintiff’s refusal to
stipulate or admit that he or she is not seeking the damages in excess of the requisite amount.”
Hanna v. Miller, 163 F. Supp. 2d 1302, 1306 (D.N.M. 2001) (Kelly, J.). Here, Plaintiffs argue
that the amount in controversy is less than $75,000. Defendant therefore bears the burden of
proving by a preponderance of the evidence jurisdictional facts that the amount at issue may
involve more than $75,000.
Defendant attached Plaintiffs’ complaint and demand letter to its removal petition. Even
if a complaint does not specify the amount of damages, “[a] complaint that presents a
combination of facts and theories of recovery that may support a claim in excess of $75,000 can
McPhail, 529 F.3d at 955.
Here, the complaint alleges negligence,
negligence per se, prima facie tort, and negligent supervision or training. Plaintiff also sought
medical expenses in the amount of $14,000, pain and suffering, lost income of $4,000, and
punitive damages. Defendant argues that pain and suffering may reasonably equal one to two
times medical expenses. Doc. 7. It appears that damages for medical expenses, pain and
suffering and lost income in issue may amount to more than $46,000.
Moreover, “[p]unitive damages may be considered in determining the requisite
jurisdictional amount.” Woodmen of World Life Ins. Soc'y v. Manganaro, 342 F.3d 1213, 1218
(10th Cir. 2003). However, a defendant’s mere assertion that punitive damages may be possible
is insufficient. Frederick v. Hartford Underwriters Ins. Co., 683 F.3d 1242, 1248 (10th Cir.
2012), citing McPhail, 529 F.3d at 954. “A defendant seeking to remove because of a claim for
punitive damages must affirmatively establish jurisdiction by proving jurisdictional facts that
make it possible that punitive damages are in play.” Id. (internal quotation omitted). “The
defendant may point to facts alleged in the complaint, the nature of the claims, or evidence in the
record to demonstrate that an award of punitive damages is possible.” Id. The defendant need
not prove that recovery of punitive damages is more likely than not, but that “(1) state law
permits a punitive damages award for the claims in question; and (2) the total award, including
compensatory and punitive damages, could exceed $75,000.” Id. See also Back Doctors Ltd. v.
Metropolitan Property and Cas. Ins. Co., 637 F.3d 827, 830 (7th Cir. 2011) (“[U]nless recovery
of an amount exceeding the jurisdictional minimum is legally impossible, the case belongs in
In New Mexico, punitive damages are generally not available for negligence claims, but
may be appropriate where a defendant has the requisite culpable mental state, which includes
willfulness or recklessness. NMRA, Civ. UJI 13-1827; Paiz v. State Farm Fire & Casualty Co.,
880 P.2d 300, 308 (N.M. 1994) (defining recklessness as when the defendant knows of potential
harm to the interests of the plaintiff but nonetheless “utterly fail[s] to exercise care to avoid the
harm.”); see also Burrell v. Burrell, 229 F.3d 1162, 2000 WL 1113702 (10th Cir. 2000). The
complaint alleges punitive damages on the basis that Defendant or its employees were reckless,
willful, or knowing in their disregard for the safety of others. The complaint also asserts that
Defendant was reckless in its supervision or training of employees. These allegations were
repeated in the demand letter, in which Plaintiffs alleged “[y]our insured’s actions were willful,
wanton, and in complete disregard to the safety of others.” Finally, Plaintiff pled prima facie
tort, an intentional tort. The Court concludes that Defendant established facts that show it
possible that punitive damages are at issue, and that state law permits punitive damages in this
context. Frederick, 683 F.3d at 1248; McDaniel v. Fifth Third Bank, 568 Fed. Appx. 729, 731
(11th Cir. 2014); see also Burrell v. Burrell, 229 F.3d 1162, 2000 WL 1113702 (10th Cir. 2000)
(“We find no need to conduct a mini-trial to approximate the value of a punitive damage award.
Burrell has not only pled elements of fraud and deceit, but he has alleged the appellees’ conduct
was fraudulent to substantiate his claim of punitive damages.”).
Moreover, “a plaintiff's proposed settlement amount is relevant evidence of the amount in
controversy if it appears to reflect a reasonable estimate of the plaintiff's claim.” McPhail, 529
F.3d at 956 (internal quotation omitted), citing Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th
Cir. 2002). “The amount in controversy is not proof of the amount the plaintiff will recover… it
is an estimate of the amount that will be put at issue in the course of the litigation.” McPhail,
529 F.3d at 956. Here, Plaintiffs offered to settle for $99,000 in their initial demand letter, and
stated that they would pursue more if the case went to trial. Plaintiffs argue that this amount in
their demand letter was merely “posturing” and “arbitrary.” The Court disagrees. As explained
above, when considering both punitive damages and compensatory damages, this appears to be a
reasonable estimate of what will be put at issue in the course of litigation. The Court notes that
Plaintiffs’ subsequent, post-removal settlement offer of $70,000 was merely a transparent
attempt to avoid federal jurisdiction.
When considering both the compensatory and punitive damages here, the total award
could exceed $75,000.1 See Meridian Sec Ins. Co. v. Sadowski, 441 V.3d 536, 544 (7th Cir.
2006) (“uncertainty about whether plaintiff can prove its substantive claim, and whether
damages will exceed the threshold, does not justify dismissal”); Burrell v. Burrell, 229 F.3d
1162, 2000 WL 1113702 (10th Cir. 2000). Based on the above, the Court cannot conclude that it
is legally certain that less than $75,000 is at stake.
Plaintiffs do not argue that punitive damages are legally impermissible here. Rather,
Plaintiffs argue that their pleading of punitive damages has no factual support, and was only
asserted as a placeholder. The Court need not determine whether it is likely that Plaintiffs would
recover punitive damages. McPhail, 529 F.3d at 955 (“uncertainty about whether the plaintiff
can prove its substantive claim, and whether damages … will exceed the threshold, does not
justify dismissal. Only if it is ‘legally certain’ that the recovery … or cost of complying with the
judgment … will be less than the jurisdictional floor may the case be dismissed.”), quoting
Meridian, 441 F.3d at 543. Rather, the Court must merely determine whether Defendant has
asserted jurisdictional facts that make it possible that punitive damages are in play. See Back
Doctors, 637 F.3d at 830 (explaining that “the question ... is not whether the class is more likely
than not to recover punitive damages, but whether [state] law disallows such a recovery”), cited
in Frederick, 683 F.3d at 1248. The Court concludes that Defendant has done so.
The parties have not pointed to any specific limit on punitive damages in this context. Defendant suggested that a
total award of three times the compensatory damages is possible.
Post-Removal Stipulation Does Not Divest Court of Jurisdiction.
Plaintiffs argue that their post-removal stipulation that damages are under $75,000 makes
it legally certain that damages are less than the jurisdictional amount. Plaintiffs made this
stipulation in an email on November 30, 2017. Doc. 14-2. “Once jurisdiction has attached,
events subsequently defeating it by reducing the amount in controversy are unavailing.” Miera
v. Dairyland Ins. Co., 143 F.3d 1337, 1340 (10th Cir. 1998). While a stipulation made prior to
removal may be effective, any stipulation made after the case has been removed does not divest
the Court of jurisdiction. See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 292
(1938); see also Workman v. United Parcel Serv., Inc., 234 F.3d 998, 1000 (7th Cir. 2000)
(stipulation must be made at the time suit is filed since jurisdiction is determined then); Matter of
Shell Oil Co., 970 F.2d 355 (7th Cir. 1992) (plaintiff wishing to avoid federal jurisdiction must
file stipulation in complaint that amount is less than jurisdictional amount); Rael v. GEICO Gen.
Ins. Co., 2017 WL 3051953, at *4 (D.N.M. 2017) (Yarbrough, J.) (concluding that Plaintiff’s
post-removal stipulation that she would not seek more than $75,000 came too late). Because the
stipulation was made post-removal, the Court concludes that it cannot be used as a reason to strip
the Court of diversity jurisdiction.
Defendant’s Motion to File Surresponse.
Defendant requests leave to file a surresponse. Defendant filed a “surresponse”, which
was subsequently stricken by the Clerk’s office because Defendant did not seek leave to file it.
D.N.M.L.R.-Civ. 7.4(b) provides that “[t]he filing of a surreply requires leave of the Court.”
Defendant argues that it did not require permission to file the surresponse, because the local rule
only requires permission to file a surreply, not a surresponse. Defendant is apparently correct
that what they filed was a surresponse and not a surreply. See Black’s Law Dictionary (2014).
Nevertheless, both local rules and local custom authorize only three pleadings to be filed:
the motion, the response, and the reply. See D.N.M.L.R.-Civ. 7.4. Courts typically grant a
motion to file a surresponse where the reply presents new arguments or new evidence. See
Walker v. THI of New Mexico at Hobbs Ctr., 2011 WL 2728344, at *1 (D.N.M. 2011); Black v.
TIC Inv. Corp., 900 F.2d 112, 116 (7th Cir. 1990); Plant Oil Powered Diesel Fuel Sys., Inc. v.
ExxonMobil Corp., 2012 WL 1132527, at *15 (D.N.M. 2012). In a detailed and well-written
reply brief, Plaintiffs raised new arguments and attached new evidence. The Court concludes it
is appropriate to allow Defendant to respond.
Attorney Fees Are Not Warranted
Plaintiffs request they be awarded attorney fees.
“[A]bsent unusual circumstances,
attorney’s fees should not be awarded when the removing party has an objectively reasonable
basis for removal.” Martin v. Franklin Capital Corp., 546 U.S. 132, 136 (2005). Attorney fees
are not warranted, as the Court denied Plaintiffs’ motion to remand. Defendant also had an
objectively reasonable basis for removal, based on Plaintiffs’ initial demand letter.
In sum, the Court concludes that the amount in controversy is over $75,000, and this
Court has diversity jurisdiction. Therefore, the Court denies Plaintiff’s Motion.
IT IS ORDERED that Plaintiffs’ Motion for Remand to State Court (Doc. 9) is hereby
DENIED for reasons described in this Memorandum Opinion and Order;
IT IS FURTHER ORDERED that Plaintiffs’ request for attorney fees is hereby
DENIED for reasons described in this Memorandum Opinion and Order; and
IT IS FINALLY ORDERED that Defendant’s Motion to File Surresponse is granted.
The Court has already considered the Surresponse attached as an exhibit in connection with this
Motion, and Defendant need not file it again.
UNITED STATES DISTRICT JUDGE
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