Ware v. Wells Fargo Bank N A
Filing
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Memorandum Opinion and Order granting 4 MOTION to Remand to State Court. Plaintiff's Motion to Remand is granted, and this action is remanded to the 116th Judicial District of Dallas County. Plaintiff's request for attorney's fees and costs is denied. (Ordered by Judge Barbara M.G. Lynn on 7/14/2015) (jrr)
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
CYNTHIA WARE,
Plaintiff,
v.
WELLS FARGO BANK, N.A.,
Defendant.
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Case No. 3:15-cv-1636-M
MEMORANDUM OPINION AND ORDER
Before the Court is Plaintiff’s Motion to Remand [Dkt. No. 4]. For the reasons discussed
below, the Motion is GRANTED.
FACTUAL AND PROCEDURAL BACKGROUND
This action concerns an employment dispute between Plaintiff Cynthia Ware (“Ware”)
and Defendant Wells Fargo Bank, N.A. (“Wells Fargo”). On April 30, 2015, Ware filed suit in
the 116th Judicial District of Dallas County against Wells Fargo. Dkt. No. 1-1, Def. Ex. A-2
(Pl.’s Orig. Pet.). In her Original Petition, Ware alleged one cause of action—wrongful
termination—arguing that Wells Fargo terminated Ware’s employment because of a disability, in
violation of the Texas Commission on Human Rights Act, Tex. Lab. Code § 21.051. Id. ¶¶ 17–
19. Ware sought damages, attorneys’ fees, injunctive relief, and declaratory relief. Id. ¶¶ 20–28.
The damages sought include back and front pay, compensatory damages, pre-judgment interest,
post-judgment interest, and punitive damages. Id. ¶¶ 21–23. Ware also asked for reinstatement
of her employment with Wells Fargo. Id. ¶ 28(b).
Ware alleged that she was hired as a Consumer Loan Underwriter for Wells Fargo on
February 18, 2013. Id. ¶ 6; Dkt. No. 1–1 at 12 (Pl.’s TWC Charge of Discrimination).
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According to Ware, she was later diagnosed with cancer, and had surgery, the complications
from which caused her to need to take disability leave. Dkt. No. 1–1, Def. Ex. A-2 ¶¶ 7–8.
While Ware was on leave, Wells Fargo told allegedly told Ware that she was being terminated
because of “downsizing,” and that her layoff would be effective as of October 19, 2013. Id. ¶¶
9–10. Ware alleged that other, less qualified, persons were not terminated, and that immediately
after October 19, 2013, Wells Fargo began interviewing others to fill Ware’s position. Id. ¶¶ 11–
12. Accordingly, Ware claims that Wells Fargo terminated her employment because of her
disability or perceived disability. Id. ¶ 18.
On May 11, 2015, Wells Fargo removed, contending that the Court has diversity
jurisdiction. Dkt. No. 1. Despite Ware’s sworn declaration that limits her recovery to $74,000,
Wells Fargo argues that Ware’s monetary and non-monetary requests for relief, including
reinstatement and back pay, exceed the $75,000 jurisdictional minimum for diversity cases. Id. ¶
13; Id. at 10 ¶¶ 8-9 (Decl. of Cynthia Ware). On May 12, 2015, Ware moved to remand,
contending that she legally bound herself to a recovery of no more than $74,000. Dkt. No. 4 at
3–4 (Pl.’s Mot. to Remand and Br. in Support). Ware also requests attorneys’ fees in association
with her Motion to Remand, arguing that Wells Fargo’s removal was objectively unreasonable.
Id. at 13.
DISCUSSION
A. Legal Standard
To establish diversity jurisdiction, the amount in controversy must exceed $75,000 and
the parties must be citizens of different states. 28 U.S.C. § 1332(a)(1). As long as Ware’s claim
is made in good faith, the amount in controversy is equal to “the amount sought on the face of
[her] pleadings.” Firewheel Surgical Sales, LLC v. Exact Surgical, Inc., No. 3:12-CV-1971-L,
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2013 U.S. Dist. LEXIS 4461, at *6–7 (N.D. Tex. Jan. 11, 2013) (citing 28 U.S.C. § 1446(c)(2)).
However, “[i]t is well established that a plaintiff may avoid federal-court jurisdiction by claiming
a sum below the amount in controversy.” In re 1994 Exxon Chem. Fire, 558 F.3d 378, 387 (5th
Cir. 2009) (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288–89 (1938)).
If the removing party shows by a preponderance of the evidence that the plaintiff “would in fact
recover more than $75,000, if successful,” then the plaintiff must show that “[s]he has legally
bound [her]self to a recovery below the jurisdictional threshold.” Richard v. Time Warner Cable
Media, Inc., 960 F. Supp. 2d 659, 664 (N.D. Tex. 2013) (citing 28 U.S.C. § 1446).
B. Analysis
Ware argues that removal was improper and moves to remand, arguing that she has
legally bound herself to a recovery of $74,000, which is below the $75,000 amount-incontroversy requirement of 28 U.S.C. § 1332.
Wells Fargo responds that Plaintiff’s Original Petition requests that she be reinstated to
her position, the value of which counts toward the amount in controversy, placing Ware’s
potential recovery in excess of $75,000. Dkt. No. 6 at 2–3 (Def.’s Resp. to Pl.’s Mot. to
Remand). Wells Fargo argues that Ware could have limited her recovery by “filing a binding
stipulation that limited her potential recovery to an amount less than $75,000,” but she did not do
so. Id. at 4. Ware responds that she did file a sworn declaration as an attachment to her Original
Petition, making clear her intent to “limit[] the amount of [her] recovery, and the amount of any
judgment, to $74,000, exclusive of interest and costs.” Dkt. No. 1-1 at 10 ¶¶ 8-11 (Decl. of
Cynthia Ware).
First, before considering the validity of Ware’s efforts to limit her recovery, the Court
must consider whether Ware would be likely to recover more than $75,000 if she prevailed on
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the merits of her claim and received all of her requested relief. Richard, 960 F. Supp. 2d at 664.
Here, Ware seeks back and front pay, compensatory damages, punitive damages, attorneys’ fees,
injunctive relief, and declaratory relief. Dkt. No. 4–1, Ex. A ¶ 30 (Pl.’s Orig. Pet.). To calculate
back pay in determining the amount in controversy, the Court “include[s] the compensation
allegedly lost up until the anticipated trial date.” Richard, 960 F. Supp. 2d at 661. Wells Fargo
contends, and Ware does not dispute, that Ware made an annual salary of $70,000 per year, or
approximately $5,833 per month, during her employment with Wells Fargo. See Dkt. No. 1 ¶ 12
(Def.’s Notice of Removal); Dkt. No. 1, Def. Ex. B ¶ 5 (Decl. of Sandra Wallace, Human
Resources Business Partner). Absent any stipulation or limitation to the contrary, these damages
would total over $116,000 ($5,833 x 20 months) from the date of her termination until the
present date, which obviously does not include any amounts that will accrue between now and
the time of trial. See id. Thus, Ware’s request for back pay alone amounts to more than $75,000.
Moreover, Wells Fargo argues that, even if Ware did limit her monetary damages, the value of
the equitable relief she seeks (namely, her reinstatement) would cause her total recovery to
exceed the jurisdictional threshold. See id. ¶ 13. The Court agrees with those points and, had
Ware not limited her recovery, removal would have been proper.
However, the Court finds that Ware “has legally bound [her]self to a recovery below the
jurisdictional threshold.” See Richard, 960 F. Supp. 2d at 664. Under Texas law, stipulations in
a plaintiff’s petition “that purport to limit prospective theories of recovery” qualify as binding
judicial admissions. Id. at 662 (citing Walker v. City of Georgetown, 86 S.W.3d 249, 254 (Tex.
App.—Austin July 26, 2002, pet. denied). A “judicial admission” is a formal concession,
typically found in the pleadings or in stipulations by the parties, which conclusively binds the
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admitting party and “has the effect of withdrawing a fact from contention.” Martinez v. Bally’s
Louisiana, Inc., 244 F.3d 474, 476 (5th Cir. 2001).
Although courts differ on whether declarations filed after removal can limit a plaintiff’s
recovery, Wells Fargo has cited no authority that holds a declaration attached to a petition filed
in state court before removal cannot suffice to limit a plaintiff’s recovery. Accordingly, federal
courts consider “the claims in the state court petition as they existed at the time of removal” to
determine the amount in controversy. Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d
720, 723 (5th Cir. 2002). For example, in Richard, the plaintiff’s post-removal declaration was
not an independently binding judicial admission, but this Court nonetheless considered the
declaration as highly probative evidence of the plaintiff’s intent to limit his recovery, making
removal improper. See Richard, 960 F. Supp. 2d at 664.
In contrast, in Ford v. United Parcel Serv. (Ohio), although the court ultimately reached a
different conclusion than did this Court in Richard, the court only noted that the plaintiff’s postremoval declaration was not a jurisdictional fact that could preclude removal “[b]ecause [the
plaintiff] failed to include her declaration with her petition.” No. 3:14-CV-1872-D, 2014 WL
4105965, at *4 (N.D. Tex. Aug. 21, 2014) (Fitzwater, C.J.). Moreover, the court found that the
plaintiff’s statements in Ford were not the kind of “conclusive and indisputable admissions”
necessary to legally bind [the plaintiff] to an amount below the jurisdictional threshold. 1 Id. at
*2.
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The court in Ford distinguished the decision in Richard, finding that it could not use the postremoval declaration as evidence of intent to limit recovery in a case where the plaintiff’s
statements were unambiguous. Ford, 2014 WL 4105965, at *4. To the extent the two cases are
in tension, this Court respectfully disagrees with the analysis in Ford.
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Notably, neither Richard nor Ford establish that a pre-removal declaration should not be
used to limit recovery. See id. at *4; Richard, 960 F. Supp. 2d at 664. In fact, Ford specifically
indicates that the plaintiff there could have precluded removal had she included her declaration
with the original pleadings. Ford, 2014 WL 4105965, at *4. Unlike the plaintiff in Ford, Ware
filed a sworn declaration attached to her Petition before removal. See Manguno, 276 F.3d at
723; Richard, 960 F. Supp. 2d at 664; Dkt. No. 4–1, Ex. A at 8. Thus, the Court can properly
consider Ware’s declaration and the statements in her Petition as evidence of her intent to limit
her recovery.
A number of district courts in the Fifth Circuit, including this Court, have found that a
limitation on damages claimed in the pleadings can defeat diversity jurisdiction. See Richard,
960 F. Supp. 2d at 663 (holding diversity jurisdiction was not established where plaintiff
affirmatively limited his potential recovery to $74,000); Washington-Thomas v. Dial Am. Mktg.,
Inc., No. EP-12-CV-00340-DCG, 2012 WL 5287043, at *3 (W.D. Tex. Oct. 23, 2012) (same);
Wright v. Normandy Terrace Healthcare & Rehab. Ctr., No. SA-12-CA-0622-XR, 2012 WL
2979040, at *2 (W.D. Tex. July 19, 2012) (stipulating that the maximum damages sought or
accepted would not exceed $75,000). Here, Ware made four statements in her Original Petition
limiting her “final judgment, exclusive of interest and costs” to $74,000. Dkt. No. 4–1, Ex. A ¶¶
4, 23, 26, 30. In her sworn declaration, Ware made four more statements limiting her recovery to
$74,000, including a statement that she “do[es] not seek, [] will not seek, and [] will not accept, a
final judgment in excess of $74,000.00, exclusive of interest and costs.” Dkt. No. 4–1, Ex. A ¶¶
8–11.
Relying on Tovar v. Target Corporation, Wells Fargo counters that Ware’s statements
are contradictory and therefore insufficient to defeat diversity jurisdiction. See Tovar v. Target
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Corp., No. CIV.A. SA04CA0557XR, 2004 WL 2283536, at *4 (W.D. Tex. Oct. 7, 2004); Dkt.
No. 6 at 5 (Def.’s Resp. to Pl.’s Mot. to Remand). In Tovar, the court found that the plaintiff
failed to limit his potential recovery when he stated that he sought no more than $74,000, but
vacillated between including and excluding attorneys’ fees and punitive damages as part of his
requested recovery. Tovar, 2004 WL 2283536, at *3. Because his petition was ambiguous on
this issue, the court found that the plaintiff did not legally bind himself to a recovery below
$75,000. Id. at *4. On the other hand, in Wright, the court distinguished Tovar, and held that a
plaintiff successfully limited his total potential recovery by stating that he “d[id] not seek and
w[ould] not accept any award” exceeding $75,000. Wright, 2012 WL 2979040, at *2. In other
words, the plaintiff’s stipulations in Wright were sufficiently unambiguous to conclusively limit
the entirety of the plaintiff’s possible recovery.
Ware’s stipulations in this case are similarly unambiguous, and are distinguishable from
those in Tovar. Ware stated in her sworn declaration, “I am limiting the amount of my recovery,
and the amount of any judgment, to $74,000, exclusive of interest and costs” and “[a] final
judgment of $74,000.00 . . . would make me whole for the damages I suffered.” Dkt. No. 4–1,
Ex. A ¶¶ 8, 11. In her Original Petition, Ware requests that the Court enter judgment “not to
exceed $74,000.00, exclusive of interest and costs,” and provides an itemized list of the relief to
be covered by that amount, including reinstatement. See id. at 6, ¶ 30. Contrary to Wells
Fargo’s argument, Ware’s statements cannot be reasonably construed as addressing only
monetary damages, as Ware repeatedly and unambiguously limited the total amount she could
recover. See Wright, 2012 WL 2979040, at *2.
Thus, the Court concludes that the statements in Ware’s Original Petition, along with the
sworn declaration attached to her Original Petition stating that she would not accept a judgment
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or recovery greater than $74,000, were sufficient to bind Ware to a recovery of no more than
$74,000, which is less than the amount in controversy necessary to establish diversity
jurisdiction. Accordingly, removal was improper and Plaintiff’s Motion to Remand is
GRANTED.
C. Attorneys’ Fees
Ware asks the Court to award her attorneys’ fees and costs because Wells Fargo had no
objectively reasonable basis for removal. She argues that Wells Fargo ignored her numerous
statements that she intended to limit her recovery, along with seven decades of case law stating
that she had the right to do so. Dkt. No. 4 at 17. Wells Fargo responds that it had an objectively
reasonable basis for believing removal was proper even if the Court determines that Ware limited
the amount in controversy to $74,000. Dkt. No. 6 at 7 n.1.
The Court retains the discretion to award to the nonmoving party “payment of just costs
and any actual expenses, including attorneys’ fees, incurred as a result of the removal.” 28
U.S.C. 1447(c). To award attorneys’ fees and costs, however, the Court must find that Wells
Fargo “lacked an objectively reasonable basis for seeking removal.” Martin v. Franklin Capital
Corp., 546 U.S. 132, 141 (2005). The fact that removal is later deemed improper does not give
the nonmovant an automatic right to attorneys’ fees. Id. at 136; Valdes v. Wal-Mart Stores, Inc.,
199 F.3d 290, 293 (5th Cir. 2000). Moreover, the Court does not consider the defendant’s
motive for removal, but only the objective merits of its case at the time of removal. Valdes, 199
F.3d at 292. For example, in Valdes, the Fifth Circuit held that removal was objectively
reasonable and declined to award attorneys’ fees to the nonmoving party, even though removal
was later deemed improper. Id. at 293–94. The Valdes court reasoned that the defendant had
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considerable case law to support its removal, whereas the plaintiff only pointed to one outdated
case that was factually distinguishable. Id. at 294.
In supporting the propriety of its removal, Wells Fargo relies on a number of cases, both
within and outside of the Fifth Circuit, which are factually distinguishable from the present case
because they lack requests for reinstatement. See, e.g., Amon v. Cadec Design Sys., Inc., 253
F.3d 706, at *2 (5th Cir. 2001); Goss v. San Jacinto Junior Coll., 588 F.2d 96, 97–98 (5th Cir.
1979); Gable v. MSC Waterworks Co., Inc., 12-CV-47-CVE, 2012 WL 1118980, at *4–5 (N.D.
Okla. Apr. 3, 2012); Fetters v. United Parcel Serv., Inc., No. 06-CV-542, 2006 WL 2375493, at
*2 (S.D. Ind. Aug. 16, 2006). The key argument Wells Fargo derived from these cases was that
the Court must include the value of Ware’s reinstatement in the amount-in-controversy
calculation, a relatively uncontroversial proposition.2 Dkt. No. 6 at 2–3. Wells Fargo also cites
to Black’s Law Dictionary’s definition of “damages” and points to Tovar as an example of
contradictory statements, focusing on the distinction between limiting her damages versus
limiting her recovery. Dkt. No. 6 at 4–5. Defendant makes the argument that Ware’s statements
in her declaration are therefore not a binding stipulation because they are contradictory to those
in her Petition. Id. at 5.
As discussed above, the Court disagrees with Wells Fargo’s position, because Ware
limited the total amount she claimed to $74,000. However, although Wells Fargo’s focus on
Ware’s request for reinstatement was misplaced, it was not “objectively unreasonable” so as to
warrant attorneys’ fees. Wells Fargo “could conclude from this case law that its position was not
an unreasonable one.” Valdes v. Wal-Mart Stores, Inc., 199 F.3d 290, 293 (5th Cir. 2000).
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Wells Fargo concluded that the amount in controversy exceeded the $75,000 threshold because
Plaintiff had not specifically included the reinstatement value in the $74,000 limit. Dkt. No. 6 at
2–3.
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Likewise, it was not objectively unreasonable for Wells Fargo to find Ware’s statements
ambiguous, if not contradictory. Although removal was improper, Wells Fargo had an
objectively reasonable basis for seeking removal. Therefore, Plaintiff’s request for attorneys’
fees and costs is DENIED.
CONCLUSION
For the reasons stated, Plaintiff’s Motion to Remand is GRANTED, and this action is
REMANDED to the 116th Judicial District of Dallas County. Plaintiff’s request for attorney’s
fees and costs is DENIED.
SO ORDERED.
July 14, 2015.
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BARBARA M. G. LYNN
UNITED STATES DISTRICT JUDGE
NORTHERN DISTRICT OF TEXAS
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