Nagel v. Mitchell

Filing 15

MEMORANDUM with order to follow;Signed by District Judge Curtis L Collier on 9/25/2012. (AWH, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
at CHATTANOOGA

JED NAGEL,

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Plaintiff,
v.
WILLIAM PHILLIP MITCHELL,
Defendant.

No. 1:12-CV-213
Chief Judge Curtis L. Collier

MEMORANDUM
Before the Court is Defendant William Phillip Mitchell’s (“Defendant”) motion to dismiss
for lack of subject matter jurisdiction (Court File No. 11). Defendant argues the Court lacks
jurisdiction because the amount in controversy requirement in 28 U.S.C. § 1332 is not met. Plaintiff
responded to the motion (Court File No. 14). For the following reasons, the Court will DENY
Defendant’s motion (Court File No. 11).

I.

STANDARD OF REVIEW
A federal district court has original jurisdiction over civil actions where complete diversity

of citizenship exists and the matter in controversy exceeds the sum or value of $75,000. 28 U.S.C.
§ 1332(a). Generally, the amount in controversy claimed in a complaint determines whether this
requirement is satisfied. Charvat v. GVN Michigan, Inc., 561 F.3d 623, 628 (6th Cir. 2009). “The
rule governing dismissal for want of jurisdiction in cases brought in the federal court is that, unless
the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently
made in good faith. It must appear to a legal certainty that the claim is really for less than the

jurisdictional amount to justify dismissal.” St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S.
283, 288-89 (1938). The amount in controversy is assessed as of the time the complaint was filed.
Klepper v. First Am. Bank, 916 F.2d 337, 340 (6th Cir. 1990).

II.

RELEVANT FACTS
According to the complaint, Plaintiff delivered a 15 ½ foot boat to Defendant for repairs,

leaving the boat trailer used to transport the boat in Defendant’s possession. Although Defendant
agreed to complete the work by early spring 2011, the work was not completed until August 2011.
By the time the repair work was completed, Plaintiff had paid $23,721.47 to Defendant. Defendant
informed Plaintiff he could retrieve the boat whenever he paid the outstanding repair fee of $20,465.
Plaintiff gave his employee cashier’s checks in the outstanding amount and sent him to pay
defendant and pick up the boat. However, Defendant refused to accept payment because the checks
were from an out-of-state bank.
Plaintiff claims Defendant sought payment again in October 2011 and threatened to sell the
boat instead. Subsequently, Plaintiff alleges, Defendant sold the boat. In July 2012, Plaintiff filed
a complaint claiming conversion, theft, and breach of bailment duties. Plaintiff’s complaint did not
seek a specific amount, but sought compensatory and punitive damages. Plaintiff did assert the
amount in controversy is in excess of $75,000. Defendant initially filed a pro se answer in which
he alleged he was still in possession of the boat. Shortly thereafter, Defendant retained counsel who
filed this motion to dismiss on jurisdictional grounds arguing the amount in controversy is less than
$75,000 as required by 28 U.S.C. 1332. As part of Defendant’s motion, he submits an affidavit
alleging continued possession of the boat and willingness to return it to Plaintiff when the

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outstanding balance of $20,465 is paid.

III.

DISCUSSION
To justify a dismissal of Plaintiff’s claim for lack of subject matter jurisdiction, it must

appear to a legal certainty Plaintiff’s claim is really for less than the jurisdictional minimum amount
in controversy. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938); Rosen
v. Chrysler Corp., 205 F.3d 918, 920-21 (6th Cir. 2000).
Plaintiff claims Defendant committed conversion when he retained Plaintiff’s boat. In
Tennessee, conversion is “the appropriation of [property] to the party’s own use and benefit, by the
exercise of dominion over it, in defiance of plaintiff’s right.” Hanna v. Sheflin, 275 S.W.3d 423
(Tenn. Ct. App. 2008) (quoting Barger v. Webb, 391 S.W.2d 664 (Tenn. 1965)). Liability is
established if a defendant has intent to exercise dominion and control over the property that is in fact
inconsistent with the plaintiff’s rights and a defendant exercises that dominion and control. Id.
“This intention does not necessarily have to be a matter of conscious wrongdoing, but can merely
be an exercise of dominion or control over the property in such a way that would be inconsistent
with the owner’s rights and which results in injury to him.” General Elec. Credit Corp. of Tenn. v.
Kelly & Dearing Aviation, 765 S.W.2d 750 (Tenn. Ct. App. 1988). Damages in a conversion action
are “the value of the property converted at the time and place of conversion, with interest.” Lance
Productions, Inc. v. Commerce Union Bank, 764 S.W.2d 207, 213 (Tenn. Ct. App. 1988).
Here, Plaintiff alleges Defendant is liable for conversion because he exercised dominion and
control over the boat that was inconsistent with Plaintiff’s rights. Although no specific value of the
boat has been offered, the Court notes Plaintiff alleged the amount in controversy was over $75,000.

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Defendant does not argue the boat is worth less than that amount, but argues Defendant’s possession
and willingness to return the boat prevents Plaintiff from claiming conversion. However, “[t]he tort
of conversion is complete once the defendant has taken, detained, or disposed of a chattel for an
unreasonable length of time. . . . A defendant cannot undo his wrong by merely returning the
property to the owner.” Kelly & Dearing Aviation, 765 S.W.2d at 753. Further, although Defendant
argues he had a right to retain the boat, the success of a claim does not determine a court’s
jurisdiction. See Klepper v. First American Bank, 916 F.2d 337 (6th Cir. 1990) (holding jurisdiction
is not lost when claims establishing jurisdiction are later dismissed on a motion for summary
judgment). Because Defendant does not appear to dispute the boat is worth more than $75,000, the
Court cannot say it appears “to a legal certainty” Plaintiff’s claim is for less than the jurisdictional
limit. Accordingly, Defendant’s motion is DENIED.

IV.

CONCLUSION
For the reasons stated above, the Court will DENY Defendant’s motion to dismiss for lack

of subject matter jurisdiction (Court File No. 11).
An Order shall enter.

/s/
CURTIS L. COLLIER
CHIEF UNITED STATES DISTRICT JUDGE