WFG National Title Insurance Company v. Jury et al

Filing 19

Memorandum Opinion and Order denying 16 Motion to Remand to State Court. (Ordered by Senior Judge A. Joe Fish on 4/23/2018) (rekc)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

MAUREEN JURY, ET AL.,
Plaintiffs,
VS.
WFG NATIONAL TITLE INSURANCE
COMPANY,
Defendant.

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CIVIL ACTION NO.
3:17-CV-2108-G

MEMORANDUM OPINION AND ORDER
Before the court is the motion of the plaintiffs Maureen Jury, Michael Jury,
Dan Cleary, and Vortex Texas Partners, LLC (“Vortex”) to remand this case to the
298th Judicial District Court of Dallas County, Texas (docket entry 16). For the
reasons set forth below, the plaintiffs’ motion is denied.
I. BACKGROUND
This case involves the issuance of an owner’s policy of title insurance covering
a parcel of real property located at 6931 Royal Lane in Dallas, Texas. Two of the
plaintiffs, Maureen Jury and Michael Jury, are individual citizens of Texas, residing in
Plano, Texas. Notice of Removal at 2 (docket entry 1 in 3:17-CV-2972-G).
According to the defendant WFG National Title Insurance Company (“WFG”), a

third plaintiff, Dan Cleary, is an individual and citizen of the Commonwealth of
Virginia, residing in Woodville, Virginia.* Id. The fourth plaintiff, Vortex, is a
limited liability company organized under the laws of Texas with its principal place of
business located in Plano, Texas. Id. The defendant, WFG, is an insurance company
organized under the laws of South Carolina with its principal place of business in
Oregon. Id.
The case presently before the court was originally two cases. On August 10,
2017, WFG filed the first case, 3:17-CV-2108-G, in this court. Original Complaint
for Declaratory Relief (docket entry 1). In its original complaint, WFG alleged that it
seeks declaratory relief against Maureen Jury, Michael Jury, and Dan Cleary in a
dispute involving the parties’ legal obligations vis-à-vis one another in connection
with the issuance of an owner’s policy of title insurance in the amount of
$355,000.00. Id. ¶ 9; see Commitment for Title Insurance Issued by WFG National
Title Insurance Company at 1 (docket entry 10-3, exhibit C). Subsequently,
Maureen Jury, Michael Jury, and Dan Cleary filed a motion to dismiss pursuant to
Federal Rule of Civil Procedure 12(b)(1), contending that this court lacks subject

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From the parties’ submissions, it appears that there is some confusion
about Dan Cleary’s residence. While the plaintiffs assert that he is a resident of
Texas, see Plaintiffs’ First Amended Petition ¶ 3 (“Plaintiffs’ Amended Petition”)
(docket entry 1-7, exhibit 5 in 3:17-CV-2972-G), the defendant avers he is a citizen
of Virginia, residing in Woodville, Virginia. Notice of Removal at 2.

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matter jurisdiction over WFG’s claim for declaratory relief. Motion to Dismiss the
Complaint (docket entry 5); Brief in Support of Motion to Dismiss the Complaint
(docket entry 6). On September 21, 2017, WFG amended its complaint, adding
Vortex as a defendant. WFG’s Amended Complaint ¶ 2.
On August 30, 2017, Maureen Jury, Michael Jury, Dan Cleary, and Vortex
filed a second case in the 298th Judicial District Court of Dallas County, Texas. See
Notice of Removal at 1. In their original petition, the plaintiffs asserted a number of
state law claims against WFG, including, inter alia, breach of contract and promissory
estoppel, and specified that they seek “monetary relief of less than $100,000 and
non-monetary relief.” Plaintiffs’ Original Petition ¶¶ 2, 12-16 (docket entry 1-3,
exhibit 1 in 3:17-CV-2972-G). On October 10, 2017, the plaintiffs amended their
state court petition. Plaintiffs’ Amended Petition.
On October 27, 2017, WFG removed the state court action to this court,
alleging diversity of citizenship as the basis for this court’s subject matter jurisdiction.
Notice of Removal at 2. Once in federal court, the second suit received the case
number 3:17-CV-2972-G. Shortly after removal, on November 3, 2017, this court
issued an order consolidating the two cases and realigning the parties. Order (docket
entry 15). The order closed the second suit, 3:17-CV-2972-G, and stated that “[a]ll
future pleadings and other papers shall henceforth be filed under civil action number
3:17-CV-2108-G.” Id. at 1-2 (emphasis in original).

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Maureen Jury, Michael Jury, Dan Cleary, and Vortex, now the plaintiffs in this
consolidated suit, then filed a motion to remand the entire case to state court.
Plaintiffs’ Motion to Remand and Brief in Support (“Motion to Remand”) (docket
entry 16). In their motion, the plaintiffs also re-assert their previous contention that
the court should dismiss WFG’s claim for declaratory relief under Federal Rule of
Civil Procedure 12(b)(1). See id. at 6-7. On December 18, 2017, WFG filed a
response to the plaintiffs’ motion. Defendant WFG National Title Insurance
Company’s Response and Brief in Support Thereof to Plaintiffs’ Motion to Remand
(“WFG’s Response”) (docket entry 17). And on January 2, 2018, the plaintiffs filed
their reply. Defendants’ [sic] Reply to Plaintiff’s [sic] Response to Motion to
Remand and Brief in Support (docket entry 18). The plaintiffs’ motion is now ripe
for decision.
II. ANALYSIS
The plaintiffs’ motion asks the court to remand the case to state court, but
also asks for dismissal of WFG’s claim for declaratory relief. See Motion to Remand
at 6-7. The court will address the latter request first before turning to the question of
whether to remand the case.

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A. Legal Standards
1. Rule 12(b)(1)
Rule 12(b)(1) of the Federal Rules of Civil Procedure authorizes the dismissal
of a case for lack of jurisdiction over the subject matter. See FED. R. CIV. P. 12(b)(1).
A motion to dismiss pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction
must be considered by the court before any other challenge because “the court must
find jurisdiction before determining the validity of a claim.” Moran v. Kingdom of
Saudi Arabia, 27 F.3d 169, 172 (5th Cir. 1994) (internal citation omitted); see also
Ruhrgas AG v. Marathon Oil Company, 526 U.S. 574, 577 (1999) (“The requirement
that jurisdiction be established as a threshold matter . . . is inflexible and without
exception”) (citation and internal quotation marks omitted). On a Rule 12(b)(1)
motion, which “concerns the court’s ‘very power to hear the case . . . [,] the trial
court is free to weigh the evidence and satisfy itself as to the existence of its power to
hear the case.’” MDPhysicians & Associates, Inc. v. State Board of Insurance, 957 F.2d
178, 181 (5th Cir.) (quoting Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.), cert.
denied, 454 U.S. 897 (1981)), cert. denied, 506 U.S. 861 (1992). In ruling on a
motion to dismiss under Rule 12(b)(1), the court may rely on: “1) the complaint
alone; 2) the complaint supplemented by undisputed facts; or 3) the complaint
supplemented by undisputed facts and the court’s resolution of disputed facts.”
MCG, Inc. v. Great Western Energy Corporation, 896 F.2d 170, 176 (5th Cir. 1990)

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(citing Williamson, 645 F.2d at 413). Once jurisdiction is challenged, the burden
rests on the party seeking to invoke the court’s jurisdiction to prove that jurisdiction
is proper. Boudreau v. United States, 53 F.3d 81, 82 (5th Cir. 1995), cert. denied, 516
U.S. 1071 (1996).
2. Removal Jurisdiction
a. General Principles
28 U.S.C. § 1441(a) permits the removal of “any civil action brought in a
[s]tate court of which the district courts of the United States have original
jurisdiction.” 28 U.S.C. § 1441(a). The statute allows a defendant to “remove a
state court action to federal court only if the action could have originally been filed in
federal court.” Anderson v. American Airlines, Inc., 2 F.3d 590, 593 (5th Cir. 1993).
However, the removal statute must be strictly construed because “removal
jurisdiction raises significant federalism concerns.” Willy v. Coastal Corporation, 855
F.2d 1160, 1164 (5th Cir. 1988); see also Gutierrez v. Flores, 543 F.3d 248, 251 (5th
Cir. 2008). Therefore, “any doubts concerning removal must be resolved against
removal and in favor of remanding the case back to state court.” Cross v. Bankers
Multiple Line Insurance Company, 810 F. Supp. 748, 750 (N.D. Tex. 1992) (Means, J.);
see also Shamrock Oil & Gas Corporation v. Sheets, 313 U.S. 100, 108-09 (1941). The
party seeking removal bears the burden of establishing federal jurisdiction. Willy,
855 F.2d at 1164.

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There are two principal bases upon which a district court may exercise removal
jurisdiction: the existence of a federal question, see 28 U.S.C. § 1331, and complete
diversity of citizenship among the parties. See 28 U.S.C. § 1332. Here, because
neither party invokes § 1331 as the basis for this court’s subject matter jurisdiction,
the court will only consider whether the elements of § 1332 are met. The court can
properly exercise jurisdiction on the basis of diversity of citizenship after removal
only if three requirements are met: (1) the parties are of completely diverse
citizenship, see § 1332(a); (2) none of the properly joined defendants is a citizen of
the state in which the case is brought, see § 1441(b); and (3) the case involves an
amount in controversy of more than $75,000.00, see § 1332(a). In this case, the issue
is not whether the parties are of completely diverse citizenship, but rather whether
the amount in controversy exceeds $75,000.00. See Motion to Remand at 1-2. In
the plaintiffs’ motion, they stipulate that they seek a maximum of $74,999, including
attorney’s fees. Id. at 2. According to WFG, however, the plaintiffs’ stipulation is
insufficient to divest this court of subject matter jurisdiction because it “has
presented a plausible claim stating the amount in controversy is sufficient to sustain
jurisdiction under 28 U.S.C. § 1332(a).” WFG’s Response ¶¶ 12-13.
b. The Amount in Controversy Requirement
Normally, “[i]f removal of a civil action is sought on the basis of the
jurisdiction conferred by section 1332(a), the sum demanded in good faith in the

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initial pleading shall be deemed to be the amount in controversy.” 28 U.S.C.
§ 1446(c)(2). “Unless the law gives a different rule, the sum claimed by the plaintiff
controls if the claim is apparently made in good faith.” De Aguilar v. Boeing Company,
47 F.3d 1404, 1408 (5th Cir.) (quoting St. Paul Mercury Indemnity Company v. Red
Cab Company, 303 U.S. 283, 288 (1938)) (internal quotations omitted), cert. denied,
516 U.S. 865 (1995). As the Supreme Court expressed it in St. Paul, for a federal
court to decline subject matter jurisdiction, “[i]t must appear to a legal certainty that
the claim is really for less than the jurisdictional amount.” St. Paul, 303 U.S. at 289.
But in removal cases where the plaintiffs have alleged an indeterminate
amount of damages, the Fifth Circuit has indicated that the Supreme Court’s legal
certainty test does not apply. De Aguilar, 47 F.3d at 1409. Instead, in such cases,
the impetus is on the removing defendant to “prove by a preponderance of the
evidence that the amount in controversy exceeds [$75,000.00].” Id. In addition,
“[i]f it is facially apparent from the petition that the amount in controversy exceeds
$75,000 at the time of removal, post-removal affidavits, stipulations, and
amendments reducing the amount do not deprive the district court of jurisdiction.”
Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 883 (5th Cir. 2000). The court will
only consider such post-removal affidavits, stipulations, or amendments if “the basis
for jurisdiction is ambiguous at the time of removal.” Id.

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B. Application
1. Whether the Court has Jurisdiction over WFG’s Claim for Declaratory Relief
The Supreme Court has long held that the Declaratory Judgment Act (“DJA”)
does not confer subject matter jurisdiction. See Skelly Oil Company v. Phillips
Petroleum Company, 339 U.S. 667, 671 (1950). In 1950, the Court issued its
landmark opinion in Skelly Oil confirming that the DJA is “procedural only,” as
Congress passed the Act with the intention of enlarging the range of remedies
available in the federal courts without extending their jurisdiction. Id. Therefore,
any complaint seeking relief under the DJA must invoke an independent basis for
federal jurisdiction. See, e.g., Volvo Trucks North America, Inc. v. Crescent Ford Truck
Sales, Inc., 666 F.3d 932, 938 (5th Cir. 2012) (“In a declaratory judgment action, the
court must determine if there would be grounds for federal jurisdiction over a
hypothetical suit that would have been brought absent the availability of declaratory
relief.”).
With this long-standing precedent in mind, WFG contends that the court has
jurisdiction over its claim for declaratory relief “pursuant to 28 U.S.C. § 1332(a) as
the amount in controversy exceeds the sum of $75,000.00 and WFG and [the
plaintiffs] are citizens of different states.” WFG’s Amended Complaint ¶ 3. Because
neither side argues that complete diversity of citizenship is lacking, the only question
here is whether WFG’s claim satisfies the amount in controversy requirement.

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In their motion, the plaintiffs assert that WFG’s claim does not satisfy the
amount in controversy requirement because not only have none of the parties
asserted a claim against the policy cited by WFG in its amended complaint, no such
policy actually exists. See Motion to Remand at 7. The plaintiffs also cite Fifth
Circuit precedent for the proposition that when insurance coverage exceeds the
amount of the underlying claim, “the jurisdictional amount in controversy is
measured by the value of the underlying claim -- not the face amount of the policy.”
Id. (quoting Hartford Insurance Group v. Lou-Con, Inc., 293 F.3d 908, 911 (5th Cir.
2002)).
In its response to the plaintiffs’ motion, WFG clarifies the nature of its
amended complaint. According to WFG, its claim for declaratory relief came in light
of conduct of the individual plaintiffs “consistent with an attempt to set up WFG for
a claim to the policy.” WFG’s Response ¶ 9. Specifically, WFG contends that
through their actions, which included complicity in two conveyances and a refusal to
execute corrective documents, the individual plaintiffs “have a created a potential
adverse claim to title for which they now seek insurance.” Id.
“In an action for declaratory relief, the amount in controversy is ‘the value of
the right to be protected or the extent of the injury to be prevented.’” Hartford
Insurance, 293 F.3d at 910 (quoting Leininger v. Leininger, 705 F.2d 727, 729 (5th Cir.
1983)). In Hartford Insurance, the Fifth Circuit explained that “under certain

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circumstances the policy limits will establish the amount in controversy.” Id. at 911.
In particular, the Fifth Circuit specified that “policy limits [rather than the value of
the underlying claim] are controlling in a declaratory action . . . as to the validity of
the entire contract between the parties.” Id. (citation and internal quotation marks
omitted).
WFG maintains that the individual plaintiffs, through their counsel, have
demanded that WFG issue an owner’s policy of title insurance in their names
covering the property made the basis of this suit. WFG’s Response ¶ 8. But, WFG
argues, Dallas Metro Holding, LLC, the purported grantor to the individual plaintiffs,
conveyed the property to the fourth plaintiff, Vortex, on or about August 21, 2015.
Id. And, subsequently, the individual plaintiffs conveyed “whatever [remaining]
interest they had in the property to third parties.” WFG’s Amended Complaint ¶ 3.
According to WFG, “[b]ecause the Owner’s Policy of Title Insurance insures against a
lack of good and indefensible [sic] title,” if WFG were to acquiesce to the plaintiffs’
demand, WFG would instantly open itself to a claim for $355,000.00, the full value
of the policy. Id. In paragraph nine of its amended complaint, WFG asserts that it
“brings this declaratory judgment action to obtain a ruling from this [c]ourt as to
whether it is obligated to issue an owner’s policy of title insurance in the amount of
$355,000.00 to [the plaintiffs].” Id. ¶ 9. In other words, WFG asks this court to
consider whether, given the plaintiffs’ alleged conduct and failure to comply with

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requisite conditions precedent, WFG is obligated to issue the insurance policy. See
id. ¶¶ 9-10.
Although WFG has yet to issue the owner’s policy as the plaintiffs have
demanded and, because of that fact, the plaintiffs have not yet filed a claim for
indemnification, this dispute nonetheless falls squarely within the specific
circumstances the Fifth Circuit anticipated in Hartford Insurance. See Harford
Insurance, 293 F.3d at 911. Cf. Waller v. Professional Insurance Corporation, 296 F.2d
545, 547-48 (5th Cir. 1961) (concluding that when the validity of the contract or a
right to property is called into question in its entirety, the value of the property
controls the amount in controversy). Because the policy limit for an owner’s policy
of title insurance in this case easily satisfies the amount in controversy requirement,
WFG has met its burden under Boudreau, and the court concludes that it has subject
matter jurisdiction over the claim for declaratory relief. Accordingly, the court denies
the plaintiffs’ motion to dismiss WFG’s claim pursuant to Rule 12(b)(1) of the
Federal Rules of Civil Procedure.
2. Whether the Court Should Remand the Plaintiffs’ Claims
With the question of this court’s jurisdiction over WFG’s claim decided, the
next issue is whether the court should remand the plaintiffs’ claims to state court. In
its notice, WFG contends that this court has subject matter jurisdiction over the
claims contained in the plaintiffs’ amended petition under 28 U.S.C. § 1332. Notice

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of Removal at 2. Contesting WFG’s argument, the plaintiffs’ motion to remand
maintains that “nowhere in the state court petition is it ‘facially apparent’ that [the]
[p]laintiffs’ claims exceed the jurisdictional amount.” Motion to Remand at 1; see id.
at 4 (quoting Allen v. R & H Oil & Gas Company, 63 F.3d 1326, 1335 (5th Cir.), reh’g
denied, 70 F.3d 26 (5th Cir. 1995)). The plaintiffs support their contention by
stipulating that “they seek a maximum of $74,999, including attorney’s fees, by way
of their affirmative claims.” Id. at 2.
The court will only consider summary-judgment-type evidence -- i.e., postremoval affidavits, stipulations, or amendments -- if “the basis for removal is
ambiguous at the time of removal.” Gebbia, 223 F.3d at 883. At the time of removal,
the only indication as to the amount in controversy for the plaintiffs’ claims was a
single line in paragraph two of the state court petition: “As required by Rule 47 of the
Texas Rules of Civil Procedure, [the] [p]laintiffs plead for monetary relief of less than
$100,000 and non-monetary relief.” Plaintiffs’ Amended Petition ¶ 2 (emphasis
added). While the plaintiffs’ state court petition specifies that they seek specific
performance as a form of non-monetary relief for their claims, see id. ¶¶ 11-12, at the
time of removal -- before consolidation -- the court had not yet been made aware of
the policy limit for an owner’s policy of title insurance. Thus, because the basis for
this court’s jurisdiction was ambiguous at the time of removal, the court may

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consider the plaintiffs’ stipulation that they seek a maximum of $74,999 in monetary
damages, including attorney’s fees.
But even taking the plaintiffs’ stipulation into consideration, the court is
unwilling to accept their argument that remand is appropriate. The plaintiffs’
amended petition makes clear that in addition to monetary relief they also seek
specific performance. Plaintiffs’ Amended Petition ¶¶ 11-12. “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 the litigation.” Hunt v. Washington State Apple
Advertising Commission, 432 U.S. 333, 347 (1977). Similarly, in actions seeking
specific performance, the jurisdictional amount turns on the value of the property in
question rather than damages that might be suffered. E.g., Waller, 296 F.2d at 547;
Occidental Chemical Corporation v. Bullard, 995 F.2d 1046, 1047 (11th Cir. 1993).
Here, the plaintiffs allege that WFG breached its contract with the individual
plaintiffs by refusing to issue the owner’s policy of title insurance, the subject of the
parties’ prior agreement. Plaintiffs’ Amended Petition ¶ 11. Thus, while the
plaintiffs argue that because WFG has yet to issue a title policy, the policy limit of
that unissued policy cannot constitute the amount in controversy, in the wake of
removal and case consolidation it is plain that what lies at the center of this dispute
is not the monetary damages requested in the plaintiffs’ amended petition and
referenced in their motion to remand, but the issuance of the title policy. The

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questions in this case go directly to the plaintiffs’ rights to the title policy and the
defendant’s obligation to issue the policy. Indeed, the fulcrum of the plaintiffs’
claims -- and of the entire case -- is the issuance of an owner’s policy of title insurance
with a policy limit of $355,000.00. Because, again, this policy limit easily satisfies
the amount in controversy requirement, the court will retain the plaintiffs’ claims on
its docket. Accordingly, the motion to remand is denied.
III. CONCLUSION
For the reasons stated above, the plaintiffs’ motion to remand this case back to
state court is DENIED.
SO ORDERED.
April 23, 2018.
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A. JOE FISH
Senior United States District Judge

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