Daniels v. Compass Bank
Filing
11
MEMORANDUM OPINION AND ORDER: For the reasons stated herein, the court determines that Defendant has failed to establish that the amount in controversy exceeds $75,000. Accordingly, the court lacks subject matter jurisdiction to hear this ac tion, grants Plaintiff's 4 Motion to Remand, and remands this action to the 298th Judicial District Court, Dallas County, Texas. The clerk of court shall effect this remand in accordance with the usual procedure. (Ordered by Judge Sam A Lindsay on 10/30/2014) (tln)
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
SHERI DANIELS,
Plaintiff,
v.
COMPASS BANK,
Defendant.
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Civil Action No. 3:14-CV-1746-L
MEMORANDUM OPINION AND ORDER
Before the court is Plaintiff’s Motion to Remand, filed June 1, 2014. After careful
consideration of the motion and brief, response, record, and applicable law, the court grants
Plaintiff’s Motion to Remand and remands this action to the 298th Judicial District Court, Dallas
County, Texas.
I.
Background
Sheri Daniels (“Plaintiff” or “Daniels”) filed this action against Compass Bank
(“Defendant” or “Compass”) on April 3, 2014, in the 298th Judicial District Court, Dallas County,
Texas. By way of Plaintiff’s Original Petition (“Petition”), Daniels asserts a claim for breach of
contract; and she seeks damages, a declaratory judgment, a mandatory injunction, and attorney’s
fees. Pl.’s Orig. Pet. 3-5. From what the court can ascertain, the overarching goal of this action is
to obtain a judicial declaration from the court as to the remaining balance owed on a home equity
loan (the “Loan”) obtained by Daniels in 2005. Daniels signed a Promissory Note (“Note”) in
connection with the Loan. The Loan is secured by a Deed of Trust covering Daniels’s property
(the “Property”) located at 8106 Barbaree Boulevard, Dallas, Texas. Compass is the current holder
of the Note and Loan.
Memorandum Opinion and Order – Page 1
Compass removed this action to federal court on May 12, 2014, contending that, as required
by 28 U.S.C. § 1332(a), complete diversity of citizenship exists between the parties and the amount
in controversy, exclusive of interest and costs, exceeds $75,000. Daniels counters that Compass
has not met its burden to show that the amount-in-controversy requirement has been satisfied. The
parties do not dispute that complete diversity exists between them. Moreover, as the court
independently determines that there is complete diversity between the parties, it will focus its
analysis solely on whether the amount-in-controversy requirement has been satisfied by Compass.
II.
Analysis
A.
Standard for Amount in Controversy in Diversity Cases
For diversity purposes, the amount in controversy normally is determined by the amount
sought on the face of the plaintiff’s pleadings, so long as the plaintiff’s claim is made in good faith.
28 U.S.C. § 1446(c)(2); St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir.
1998); De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995). Removal is thus proper if it
is “facially apparent” from the complaint that the claim or claims asserted exceed the jurisdictional
amount. Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir.), reh’g denied, 70 F.3d 26
(5th Cir. 1995). In a removal case, when the complaint does not state a specific amount of
damages, the defendant must establish by a preponderance of the evidence that “the amount in
controversy exceeds the [$75,000] jurisdictional amount.” St. Paul Reinsurance, 134 F.3d at 1253.
“The preponderance burden forces the defendant to do more than point to a state law that might
allow the plaintiff to recover more than what is pled. The defendant must produce evidence that
establishes that the actual amount of the claim will exceed [the jurisdictional amount].” De
Aguilar, 47 F.3d at 1412 (footnotes omitted). The test to be used by the district court is “whether
it is more likely than not that the amount of the claim will exceed [the jurisdictional amount].” St.
Memorandum Opinion and Order – Page 2
Paul Reinsurance, 134 F.3d at 1253 n.13. As the Fifth Circuit has stated, “[t]he district court must
first examine the complaint to determine whether it is ‘facially apparent’ that the claims exceed
the jurisdictional amount. If it is not thus apparent, the court may rely on ‘summary judgmenttype’ evidence to ascertain the amount in controversy.” Id. at 1253. If a defendant fails to establish
the requisite jurisdictional amount, the court must remand the case to state court. If a defendant
establishes that the jurisdictional amount has been met, remand is appropriate only if a plaintiff
can establish “to a legal certainty” that his recovery will not exceed the jurisdictional threshold.
In re 1994 Exxon Chem. Fire, 558 F.3d 378, 387-88 (5th Cir. 2009).
‘“In actions seeking declaratory or injunctive relief, it is well established that the amount
in controversy is measured by the value of the object of litigation.”’ Farkas v. GMAC Mortg.
L.L.C., 737 F.3d 338, 341 (5th Cir. 2013) (quoting Hunt v. Washington State Apple Adver.
Comm’n, 432 U.S. 333, 347 (1977)). Stated more precisely, ‘“the amount in controversy, in an
action for declaratory or injunctive relief, is the value of the right to be protected or the extent of
the injury to be prevented.’” Farkas, 737 F.3d at 341 (quoting Leininger v. Leininger, 705 F.2d
727, 729 (5th Cir. 1983)).
Any doubts as to the propriety of removal should be construed strictly in favor of remand.
Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). “The burden of
establishing subject matter jurisdiction in federal court rests on the party seeking to invoke it.” St.
Paul Reinsurance, 134 F.3d at 1253 (footnote omitted). Accordingly, if a case is removed to
federal court, the defendant has the burden of establishing subject matter jurisdiction; if a case is
initially filed in federal court, the burden rests with the plaintiff to establish that the case “arises
under” federal law, or that diversity exists and that the amount in controversy exceeds the
jurisdictional threshold.
Memorandum Opinion and Order – Page 3
B.
Contentions of the Parties
1.
Plaintiff
According to Daniels, she filed this action because she was “stymied in her attempts to
obtain information to permit independent calculation and verification of the correct pay-off amount
of the Loan.” Pl.’s Mot. to Remand 1 (citing Pl.’s Orig. Pet., §§ III (D) & (H)). Although Plaintiff
filed a breach of contract claim and seeks damages in her Petition, she emphasizes that “the object
of the Petition is to obtain a judicial declaration of the balance owing on the Loan, and injunctive
relief requiring that [Compass] accept payment of the amount judicially declared to be owing in
satisfaction of the Loan.” Id. Daniels does not seek relief from any foreclosure efforts. As a result
of the pleadings and what she seeks, Daniels contends that Compass has failed to establish by a
preponderance of the evidence that the amount in controversy exceeds $75,000. Daniels argues
that the unauthenticated record regarding the valuation of her Property used by Compass is not the
proper way to determine the amount in controversy because she is not requesting an injunction
against foreclosure. She contends that the amount in controversy, at most, is $36,448.96, as it is
the figure that Compass stated would be necessary to pay off the Loan.
2.
Defendant
Compass contends that Plaintiff’s Petition seeks damages of $100,000 or less and that this
amount is inconsistent with her current assertion that the amount in controversy is the amount set
forth in the payoff statement Compass provided to her. Defendant also contends that Plaintiff
seeks declaratory and injunctive relief related to the debt secured by the Property and that the
amount in controversy should be determined by the value of the object of the litigation, which is
the value of the right to be protected or the injury prevented. According to Compass, since Plaintiff
disputes the amount of arrearage on the debt, which is secured by the Property that is claimed by
Memorandum Opinion and Order – Page 4
Defendant, the validity of Defendant’s right to the Property is called into question and therefore
the value of the Property determines the amount in controversy.1 The court disagrees.
C.
Discussion
First, Defendant’s argument that Plaintiff seeks $100,000 or less and nonmonetary relief
does little or nothing to establish the amount in controversy. When a party files an original
pleading in a Texas state court, applicable state law requires the pleading to include one of five
categories of relief sought. Tex. R. Civ. P. 47(c)(1)-(5). By including the statement in the Petition,
Plaintiff was merely complying with relevant Texas law. Moreover, the category selected by
Plaintiff does not establish that the amount necessarily exceeds $75,000, as the category she
selected also includes $75,000 and amounts under $75,000, all of which are less than the
jurisdictional threshold. Defendant’s speculation and interpretation as to the amount of specific
monetary relief sought by Plaintiff does not provide the basis for establishing that the amount in
controversy exceeds $75,000.
Second, Compass misconstrues what constitutes the object of the litigation. “‘[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 Mortg., LLC v. Knox, 351 F. App’x
844, 848 (5th Cir. 2009) (quoting Leininger v. Leininger, 705 F.2d 727, 729 (5th Cir. 1983)).
Compass urges the court to follow this authority and hold that the alleged value of the Property,
$293,440, is the amount in controversy.
1
According to Compass, records of the Dallas County Appraisal District value Plaintiff’s Property
at $293,440, and Compass urges the court to accept this figure as the amount in controversy.
Memorandum Opinion and Order – Page 5
In this action, Plaintiff seeks a declaration from the court as to the balance owed on the
Loan and a mandatory injunction requiring Compass to accept payment of the amount the court
declares that is owed to satisfy the Loan. She does not question the validity of a contract,2 call
into question the right to the Property in its entirety, or seek to enjoin foreclosure proceedings.
Daniels seeks a judicial declaration and mandatory injunction because she disputes the amount of
the remaining balance of the Loan and wants to avoid or prevent further injury, or loss to her.
Thus, it is the balance owed, not the value of the Property, that is the object of litigation and
determines the amount in controversy. According to Compass, as of April 30, 2014, this amount
was $36,448.96, which is disputed by Daniels and is less than half of the amount required to meet
the jurisdictional threshold.
Daniels also seeks attorney’s fees in this action. Attorney’s fees may be included to
determine the amount in controversy when such fees are permitted by contract or a state statute.
Foret v. Southern Farm Bureau Life Ins. Co., 918 F.2d 534, 537 (5th Cir. 1990) (citations omitted).
No information, however, has been provided to the court as to the amount of attorney’s fees that
Daniels seeks; thus, the court has no monetary amount for attorney’s fees that could be added to
the value of the object of the litigation to meet the amount-in-controversy requirement.
For these reasons, the court concludes that Compass has failed to carry its burden and
establish that the amount in controversy more likely than not exceeds $75,000.
As the
jurisdictional threshold has not been met, the court lacks subject matter jurisdiction to entertain
this action.
2
Although Daniels asserts a claim for breach of contract, she does not question the validity of any
contract, as one of the elements for such claim is that a valid contract must exist between the parties.
Memorandum Opinion and Order – Page 6
III.
Conclusion
For the reasons stated herein, the court determines that Defendant has failed to establish
that the amount in controversy exceeds $75,000. Accordingly, the court lacks subject matter
jurisdiction to hear this action, grants Plaintiff’s Motion to Remand, and remands this action to
the 298th Judicial District Court, Dallas County, Texas. The clerk of court shall effect this remand
in accordance with the usual procedure.
It is so ordered this 30th day of October, 2014.
_________________________________
Sam A. Lindsay
United States District Judge
Memorandum Opinion and Order – Page 7
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