Renard's Cheese Store LLC v. Ricoh USA Inc
Filing
15
ORDER denying 9 Motion to Remand to State Court, signed by Chief Judge William C Griesbach on 8/13/2014. The clerk is directed to set this matter for a Rule 26 scheduling conference. The parties may appear by telephone. (cc: all counsel) (Griesbach, William)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
RENARD’S CHEESE STORE, LLC,
Plaintiff,
v.
Case No. 14-CV-559
RICOH USA, INC,
Defendant.
ORDER DENYING MOTION TO REMAND
This action arises out of a lease agreement for a copy machine between Plaintiff Renard’s
Cheese Store, LLC (Renard’s) and Defendant Ricoh USA, Inc. (Ricoh). The action was originally
commenced in the Circuit Court for Door County in Door County, Wisconsin on April 14, 2014.
On May 14, 2014, Ricoh filed a notice of removal and on June 30, 2014, Renard’s filed a motion to
remand the case to the Circuit Court for Door County on the ground that Ricoh failed to meet its
burden to establish that the amount in controversy exceeds $75,000. For the reasons below,
Renard’s motion will be denied.
As the party seeking to invoke federal jurisdiction, Ricoh bears the burden of demonstrating
that this court has jurisdiction pursuant to 28 U.S.C. § 1332. Ricoh’s notice of removal states that
complete diversity of citizenship exists because Renard’s is a citizen of Wisconsin and Ricoh is not.1
(See Notice of Removal ¶¶ 3–4, ECF No. 1.) Renard’s does not dispute this. (Pl.’s Br. 1, ECF
1
More specifically, the notice of removal states that Ricoh’s is a corporation organized
under the laws of the State of Delaware with its principal place of business in Pennsylvania and
therefore it is not a citizen of Wisconsin. (ECF No. 1 ¶ 5.) The notice of removal also states
that Renard’s is a citizen of Wisconsin because each of its members is domiciled in Wisconsin.
(Id. ¶ 3.)
No.10.) Ricoh’s notice of removal also states that the amount in controversy requirement is satisfied
because Renard’s seeks rescission of the lease agreement at issue and, based on the terms of the
agreement that are set forth in Renard’s complaint, the total value of the agreement is $102,540.
(Notice of Removal ¶¶ 5–6 (citing Compl. ¶ 7), ECF No. 1.) Renard’s takes issue with this
conclusion, but its arguments miss the mark.
Renard’s initially argues that Ricoh has failed to provide any evidence showing how the total
damages in this case can exceed $75,000 when Renard’s has made payments under the lease
agreement as of the date of removal totaling only $28,848. (Pl.’s Br. 3, ECF No. 10.) However,
as Ricoh points out in its response brief, Renard’s is seeking to rescind the lease agreement. (Def.’s
Resp. Br. 4, ECF No. 12.) The complaint alleges that as a result of several of Renard’s causes of
action, including fraud, Renard’s “is entitled to rescind the contract” (Compl. ¶¶ 22, 39, 42, 45), and
Renard’s reply brief also states that “Renard’s agrees with Ricoh that it has requested, in addition
to other damages, rescission of the contract” (Pl.’s Reply Br. 1, ECF No. 14.)
When a party seeks to rescind a contract, the value of the contract determines the amount
in controversy for the purpose of determining jurisdiction. See Hartford Acc. & Indem. Co. v.
Northwest Nat. Bank of Chicago, 228 F.2d 391, 402 (7th Cir. 1955) (“[W]here . . . the relief sought
is a declaration of the validity or invalidity of a contract, the value of the contract determines the
amount in controversy for the purpose of determining jurisdiction.” (quoting Home Ins. Co. of New
York v. Trotter, 130 F.2d 800, 803 (8th Cir. 1942))); see generally 14AA Charles Alan Wright et
al., FEDERAL PRACTICE & PROCEDURE JURISDICTION § 3710 (4th ed. 2011). The conclusion that
the sum of money due at the time of suit is not necessarily determinative for amount-in-controversy
purposes “is in logical accord with the reasoning of the Supreme Court in various cases where it was
2
held that the value of the right in dispute determines the jurisdiction; that where the controversy
regards the effect of a contractual right, the value of the latter is the determining feature.” Davis v.
American Foundry Equipment Co., 94 F.2d 441, 443 (7th Cir. 1938) (collecting cases).
“Rescission is an equitable remedy, the effect of which is to ‘restore the parties to the
position they would have occupied if no contract had ever been made between them.’” Kilian v.
Mercedes-Benz USA, LLC, 2011 WI 65, ¶ 41, 335 Wis. 2d 566, 799 N.W.2d 815 (quoting Seidling
v. Unichem, Inc., 53 Wis. 2d 552, 557–58, 191 N.W.2d 205 (1971)). Here, if Renard’s is successful
in seeking to have the lease agreement rescinded, it would receive not only restitution for past lease
payments, it would also be relieved of its obligation to make the remaining lease payments contracted
for. Accordingly, the total contract value (i.e., the aggregate of all monthly payments under the
lease) is an appropriate measure for determining the amount in controversy.
Renard’s would complicate the issue by requiring Ricoh to discount the total contract value
thereby showing that the actual present value of the agreement exceeds $75,000. (See Pl.’s Br. 4,
ECF No. 10.) Renard’s cites two cases to illustrate its position, but the cases are distinguishable
because they do not deal with claims that an entire contract was invalid. See Sarnoff v. American
Home Products Corp., 798 F.2d 1075, 1077 (7th Cir. 1986), abrogated on other grounds by
Gardynski-Leschuck v. Ford Motor Co., 142 F.3d 955 (7th Cir. 1998); Schimmer v. Jaguar Cars,
Inc., 384 F.3d 402, 403 (7th Cir. 2004). The Court finds that the case at bar is much more closely
analogous to Hartford Acc. & Indem. Co. and Davis, which clearly and logically apply the principle
that the total contract value is determinative when the whole contract is in dispute. Renard’s reply
brief did not direct the Court to any authority calling the application of this principle into question,
and the Court has found none.
3
The Court also notes that Renard’s complaint includes a claim for punitive damages.
(Compl. ¶¶ 50–51.) Punitive damages recoverable under a complaint count in determining whether
the amount in controversy requirement is satisfied.
Bell v. Preferred Life Assur. Soc. of
Montgomery, 320 U.S. 238, 240 (1943); Cadek v. Great Lakes Dragaway, Inc., 58 F.3d 1209,
1211–12 (7th Cir. 1995). Punitive damages are indeed recoverable under Renard’s complaint
because it includes a claim for fraudulent misrepresentation. See Jeffers v. Nysse, 98 Wis. 2d 543,
552, 297 N.W.2d 495, 499 (1980) (permitting punitive damages when jury found defendant made
fraudulent misrepresentation). Accordingly, Renard’s prospect for a punitive damage award, if
successful on its claim for fraudulent misrepresentation in relation to a more than $100,000 contract,
provides further support for the Court’s finding that the amount in controversy requirement in this
case is satisfied.
For all of these reasons, Renard’s motion to remand this case is hereby DENIED. The clerk
is directed to set this matter for a Rule 26 scheduling conference. The parties may appear by
telephone.
SO ORDERED this 13th day of August, 2014.
s/ William C. Griesbach
William C. Griesbach, Chief Judge
United States District Court
4
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?