Opinion
CIVIL ACTION NO. 3:17-cv-2389
07-30-2018
JOHN J. LATZANICH, II, Plaintiff v. JAMES HARDIE BUILDING PRODUCTS, INC. et al., Defendants
(MANNION, D.J.) ()
REPORT & RECOMMENDATION
I. INTRODUCTION
On November 21, 2017, Plaintiff filed his Original Complaint in The Court of Common Pleas of Monroe County, Pennsylvania. (Doc 1, Ex. A). The Complaint asserts several claims concerning defective siding on Plaintiff's house that was allegedly marketed, manufactured, and sold by Defendant James Hardie Building Products, Inc. ("Defendant"). Id.
In Plaintiff's Original Complaint (Doc. 1-1), Plaintiff collectively lists as "Defendants": James Hardie Building Products, Inc.; DBA James Hardie Building Products, Inc., and DBA Cemplank. In that same document, Plaintiff clarifies that he is actually referring to a single entity. (Doc. 1-1, ¶ 11). Plaintiff also lists "Does 1 to 20" in the caption, but does not mention "Does" throughout the rest of the Original Complaint. (Doc. 1-1, p. 1). The Court will use the singular "Defendant" throughout this Report and Recommendation.
On December 22, 2017, Defendant removed Plaintiff's Complaint to Federal Court. (Doc. 1). On January 16, 2018, Plaintiff filed a Motion to Remand this matter back to the Monroe County Court of Common Pleas. (Doc. 9).
On January 12, 2018, Defendant filed a Motion to Dismiss (Doc. 5), as well as a Brief in Support (Doc. 7) on January 17, 2018. On February 1, 2018, Plaintiff filed a Brief in Opposition to Defendant's Motion to Dismiss. (Doc. 10).
For the reasons provided herein, I recommend Plaintiff's Motion to Remand (Doc. 9) be GRANTED, and Defendant's Motion to Dismiss (Doc. 5) be DENIED as moot. II. FACTUAL & PROCEDURAL HISTORY
Plaintiff alleges that in December of 2012 he purchased a previously-built house on which siding manufactured by Defendant had been installed. (Doc. 1-1, ¶ 45). Plaintiff alleges various defects with the siding, as well as misrepresentations and breaches of warranty by Defendant. (Doc. 1-1, pp. 5-27).
Plaintiff's Original Complaint, filed in state court, alleges the following counts: (1) Breach of Express Warranty (Doc. 1-1, ¶¶ 59-72); (2) Breach of Implied Warranties of Merchantability and Fitness of a Particular Purpose (Doc. 1-1, ¶¶ 73-83); (3) Negligence (Doc. 1-1, ¶¶ 84-89); and (4) Declaratory and Injunctive Relief (Doc. 1-1, ¶¶ 90-92).
As relief, Plaintiff requests "[m]onetary damages in an amount not to exceed $74,000." (Doc. 1-1, p. 28). Plaintiff also includes the following waiver:
As indicated above, the total of all damages sought in this case and actual amount in controversy does not exceed $74,000 inclusive of costs and interest and Plaintiff hereby waives any amount in damages, interest and costs including attorney fees, punitive or compensatory
damages and all other potential claims, now and in the future regardless of the award of said court, jury, arbitration or other trier of fact.(Doc. 1-1, p. 29).
On December 22, 2017, Defendant Hardie removed this case to federal court through the filing of his Notice of Removal. (Doc. 1). Therein, Defendant Hardie argues:
Because Plaintiff's injunction seeks to prevent the reoccurrence of James Hardie's actions that allegedly breached various warranties and damaged the foundation of his house and adjoining properties (in addition to his siding), the value of the rights Plaintiff seeks to protect reasonably exceeds $1,000. When combined with the $74,000 in monetary damages sought by Plaintiff, the amount in controversy in this case is more than the jurisdictional amount for diversity jurisdiction.(Doc. 1, pp. 1-2).
On January 12, 2017, Defendant filed a Motion to Dismiss for Failure to State a Claim (Doc. 5), and on January 17, 2018, Defendant filed a corresponding Brief in Support (Doc. 7).
On January 16, 2018, Plaintiff filed his Motion to Remand. (Doc. 9).
On February 1, 2018, Plaintiff filed a Brief in Opposition to Defendant's Motion to Dismiss. (Doc. 10). On February 12, 2018, Defendant filed a reply. (Doc. 11). III. DISCUSSION
Plaintiff, as master of the Complaint, should have control over the venue of his action. In contrast, Defendant should have access to federal courts and a trial free from the bias of Plaintiff's home state. The parties' interests in forum control belie the court's imperative to prevent forum manipulation and forum shopping. At the same time, in the context of federalism, there is a strong preference that state courts settle state claims.
C. Kinnier Lastimosa, One Man's Ceiling is Another Man's Floor: The Effect of Post-Removal Damage Stipulations on the Amount in Controversy Requirement of a Diversity Case, 81 Wash. U. L. Q. 633 (2003), available at http://openscholarship.wustl.edu/law_lawreview/vol81/iss2/14. --------
Federal district courts, as courts of limited jurisdiction, have a continuing duty to satisfy themselves of jurisdiction before addressing the merits of the case. Packard v. Provident Nat'l Bank, 994 F.2d 1039, 1049 (3d Cir. 1993) cert. denied sub nom Upp v. Mellon Bank, N.A., 510 U.S. 964 (1993). Moreover, federal courts have the obligation to address the question of subject matter jurisdiction sua sponte. Meritcare, Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214, 217 (3d Cir. 1999); see generally Nelson v. Keefer, 451 F.2d 289, 293-95 (3d Cir. 1971) (finding that the federal judiciary has been too cautious in addressing the large number of cases which do not belong in federal courts). If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action. Fed. R. Civ. P. 12(h)(3).
Pursuant to 28 U.S.C. § 1332, jurisdiction is proper in federal district court where the action involves citizens of different states and an amount in controversy, exclusive of interest and costs, in excess of $75,000.00. See 28 U.S.C. § 1332(a).
As the party invoking federal jurisdiction, Defendant bears the burden of demonstrating the appropriateness of removal. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d. Cir. 1990). Where diversity of citizenship is the sole basis of federal jurisdiction, Defendant must establish that the amount in controversy exceeds $75,000. Meritcare, 166 F.3d at 222.
Where a case has been removed from state court, the amount in controversy analysis begins with a review of the complaint filed originally in the state court. Samuel-Bassett v. KIA Motors America, Inc., 357 F.3d 392, 398 (3d Cir. 2004). A court then shall take the amount in controversy from the face of that complaint unless Defendant puts forth evidence of bad faith in the calculation of that amount. Stewart v. Xrimz, LLC, Civ. No. 3:10-cv-2147, 2011 WL 5878381 at *2 (M.D. Pa. Nov 23, 2011) (Caputo, J.) (citing Leslie v. BancTec Service Corp., 928 F. Supp. 341, 348 (S.D.N.Y. 1996)). If the underlying facts pertaining to the jurisdictional amount are not so contested, "a federal court must decide whether it appears to a 'legal certainty' that the plaintiff is not entitled to recover an amount exceeding the jurisdictional requirement." Chrin v. Ibrix, Inc., 293 F.App'x. 125, 127 (3d Cir. 2008) (citation omitted). Thus,
if, from the face of the pleadings, it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed . . . the suit will be dismissed. Events occurring subsequent to the institution of suit which reduce the amount recoverable below the statutory limit do not oust jurisdiction.St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289-90 (1938). Moreover, claims made against a single plaintiff can generally be consolidated for purposes of the amount in controversy, even if they are wholly unrelated. Suber v. Chrysler Corp., 104 F.3d 578, 588 (3d Cir. 1997) (citing Snyder v. Harris, 394 U.S. 332, 335 (1969)).
Turning to the facts of this case, Defendant Hardie alleges the amount in controversy exceeds the $75,000 threshold. Defendant arrives at this conclusion by adding "the $74,000 in monetary damages sought by Plaintiff" to the "value of injunctive relief sought by Plaintiff, which Defendant asserts is measured by the value of the rights Plaintiff seeks to protect through his requested injunctions." (Doc. 1, p. 1). Defendant Hardie contends that the value of these rights "reasonably exceeds $1,000" and, thus, when combined with the $74,000, meets the amount in controversy requirement for diversity jurisdiction. (Doc. 1, pp. 1, 2).
In his Motion to Remand, Plaintiff argues Defendants have failed to meet their burden of demonstrating an amount in controversy in excess of $75,000. (Doc. 9, pp. 4-5). First, Plaintiff argues Defendants have misconstrued Plaintiff's waiver of all damages above $74,000 as a valuation of the case at $74,000. (Doc. 9, p. 5). Specifically, Plaintiff explains:
Essentially, Plaintiff claims he is either entitled to have . . . all of his defective siding replaced, at an estimated cost to Defendant of approximately $10,000 and a retail value of $20,000 to $30,000, payment of $2,000 for V Channels that Plaintiff already has installed, at a cost of $2,000, $4,100 for the cost to repaint said house which are significantly less than the $75,000 required for diversity jurisdiction. The $20,000 for repainting every five (5) years because of defective siding would only apply if all the siding was not replaced. The two types of relief are mutually exclusive. Whether or not Plaintiff sustained structural damages and/or neighbors sustained damages is unknown to Plaintiff at this time and is only pled to protect the statute of limitations.(Doc. 9, p. 6). Second, Plaintiff contends that Defendants alleged valuation of injunctive relief is purely speculative as Defendants have offered no proof to support the valuation. Id.
In support of removal, Defendants rely heavily upon Angus v. Shiley, 989 F.2d 142 (3d Cir. 1993). In Angus, the Third Circuit held that a post-removal damage stipulation could not destroy federal jurisdiction. Id. After the defendant filed a notice of removal, the plaintiff filed an answer to the notice that stipulated that "her damages d[id] not exceed the sum of $50,000.00[,]" at a time when the amount in controversy was $50,000. Id. at 144. The Third Circuit reasoned that the plaintiff's damage stipulation had no legal significance, because simply amending a complaint cannot destroy federal jurisdiction. Id. at 145. The Third Circuit thus limited the determination of the amount in controversy to only the allegations in the complaint. Id. The Third Circuit stated that a court should not use the "low-end of an open-ended claim" to satisfy the amount in controversy requirement; instead, a court should make "a reasonable reading of the value of the rights being litigated" to satisfy the amount in controversy requirement. Id. at 146. The Third Circuit further stated that the district court properly found the amount in controversy in an independent appraisal, because the complaint did not "limit its request for damages to a precise monetary amount." Id.
However, the instant case is easily distinguishable from Angus. Perhaps most importantly, Plaintiff explicitly and repeatedly waived his right to recover more than a total of $74,000 in his Original Complaint. (Doc. 1-1, ¶¶ 71, 72, 82, 83, 89, 92; p. 27). By contrast, the plaintiff in Angus failed to limit her damages in her complaint, instead attempting to limit her damages in an "answer to notice of removal." Angus, 989 F.2d at 144. The Angus Court stated: "Given that the complaint does not limit its request for damages to a precise monetary amount, the district court properly made an independent appraisal of the value of the claim . . . ." Id. at 146. Of particular relevance to the instant issue, the Third Circuit stated in a footnote:
We do not address the issue of whether remand would have been appropriate if Angus's complaint stated that her damages were exactly $40,000. We note that such a pleading presents a different legal issue, and at least one court has held that under such circumstances, remand is required absent a showing of bad faith on the plaintiff's part. See Kliebert v. Upjohn Co., 915 F.2d 142 (5th Cir. 1990), vacated on
grant of rehearing in banc, 923 F.2d 47 (5th Cir.), dismissed after settlement, 947 F.2d 736 (5th Cir. 1991); see also Hicks v. Universal Housing, Inc., 792 F.Supp. 482, 484 (S.D.W.Va. 1992) (holding that where plaintiff demanded judgment for only $49,900, removal was inappropriate regardless of what his actual damages might be).Id. at n.4.
I agree with Plaintiff that Defendant has misinterpreted the value of Plaintiff's requested damages. Plaintiff repeatedly waives any damages over $74,000. Indeed, this "waiver" does not suggest that Plaintiff has damages of $74,000; rather, it merely waives any right to recover damages above $74,000. Further, Defendant makes no allegation of bad faith on the part of Plaintiff.
Even absent a waiver, Plaintiff's requested relief falls well below the $75,000 threshold. Although there exists some ambiguity in the calculation of relief in Plaintiff's pro se Complaint, it appears clear he requests that the Court award him one of two mutually exclusive remedies: (1) a total of $36,610 to replace all siding on the house, refund $2000 Plaintiff spent to fix damaged V channels, and refund $4100 Plaintiff spent to paint the damaged siding, or (2) approximately $20,000 to repaint the siding in the event that a full replacement is not awarded. (Doc. 1-1, pp. 28-29).
For these reasons, I will recommend this case be remanded to The Court of Common Pleas of Monroe County, and, accordingly, the Motion to Dismiss be denied as moot. V. RECOMMENDATION
For the reasons provided herein, I RECOMMEND that:
(1) Plaintiff's Motion to Remand (Doc. 9) be GRANTED;Date: July 30, 2018
(2) Defendant's Motion to Dismiss (Doc. 5) be DENIED as moot; and
(3) The Court enter an Order directing the Clerk of Court to remand this matter to The Court of Common Pleas of Monroe County, Pennsylvania, and CLOSE this case.
BY THE COURT
s/William I . Arbuckle
William I. Arbuckle
U.S. Magistrate Judge
NOTICE OF RIGHT TO OBJECT
[LOCAL RULE 72.3]
Any party may object to a magistrate judge's proposed findings, recommendations or report addressing a motion or matter described in 28 U.S.C. § 636 (b)(1)(B) or making a recommendation for the disposition of a prisoner case or a habeas corpus petition within fourteen (14) days after being served with a copy thereof. Such party shall file with the clerk of court, and serve on the magistrate judge and all parties, written objections which shall specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The briefing requirements set forth in Local Rule 72.2 shall apply. A judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge, however, need conduct a new hearing only in his or her discretion or where required by law, and may consider the record developed before the magistrate judge, making his or her own determination on the basis of that record. The judge may also receive further evidence, recall witnesses or recommit the matter to the magistrate judge with instructions.Date: July 30, 2018
BY THE COURT
s/William I . Arbuckle
William I. Arbuckle
U.S. Magistrate Judge