Opinion
No. 3:02-CV-1575-H
January 31, 2003
MEMORANDUM OPINION AND ORDER
Before the Court are Plaintiffs Motion and Brief to Remand, or in the Alternative, Motion for Judgment as Matter of Law, filed August 23, 2002; Plaintiffs Brief in Support of Motion for Judgment as a Matter of Law, filed August 23, 2002; Defendant's Response to Plaintiffs Motion to Remand, filed September 12, 2002; Defendant's Response to Plaintiffs Motion for Summary Judgment, filed September 12, 2002; and Plaintiffs Reply Brief in Support of Motions to Remand and for Summary Judgment, filed September 24, 2002. Also before the Court are Defendant's Motion for Summary Judgment, filed December 11, 2002; Plaintiffs Response to Defendant's Motion for Summary Judgment, filed December 19, 2002; and, Defendant's Reply thereto, filed January 10, 2003.
Upon review of the pleadings, briefs, and relevant authorities, the Court is of the opinion for the reasons stated below that Plaintiffs Motion for Remand should be DENIED.
I. BACKGROUND
Plaintiff Fernando Viera ("Viera") filed this lawsuit against Defendant Sprint United Management Company ("Sprint") on June 16, 2002 in the 44th Judicial Court in Dallas, Texas alleging that Sprint breached his employment contract. Plaintiff alleges that he was employed by Sprint in 1996, and that on November 12, 2001 he received a letter from Twilla Skelton, Director of Human Resources Operations at Sprint regarding his employment status. He claims this letter was an employment contract for 12 months beginning November 12, 2001. (Pl.'s App. in Supp. of Mot. to Remand at 1, 4). He further alleges that Sprint breached the contract by terminating him without cause, as part of a general round of layoffs, 243 days before the expiration of his contract term. (Pl.'s Br. in Supp. of Mot. for J. as a Matter of Law at 2). Plaintiff alleges that as a result of the termination he suffered actual damages of $61,637.70 which he now demands. (Pl.'s Mot. and Br. to Remand at 2). He also asks for interest, costs of court, and "reasonable and necessary attorney's fees in an amount to be determined by the trier of fact, but estimated to be less than $13,000." (Pl.'s Original Pet. at 5).
Plaintiff demands attorney fees pursuant to TEX.CIV.PRAC. REM. CODE. § 38.001 (Vernon 1986). He estimates his attorney fees differently in his different pleadings. As stated above, in his Original Petition he asks for "[r]easonable and necessary attorney's fees in an amount to be determined by the trier of fact, but estimated to be less than $13,000." (Pl.'s Original Pet. at 5). In his Motion and Brief to Remand or in the Alternative, Motion for Judgment as a Matter of Law, Plaintiff estimates that attorney's fees will not exceed $13,000 "particularly if the Court grants the requested Motion for Summary Judgment based on the written contract." (4). In his Brief in Support of Motion for Judgment as a Matter of Law, Plaintiff asks for $4,780.00 in attorney fees. (7). Finally, in his affidavit filed as a part of his Appendix in Support of the Motion to Remand/Motion for Summary Judgment, Mr. Crouch estimates that his attorney fees will be $4,780.00 if an appeal of the case is not necessary and $8,780.00 if an appeal is necessary. (Pl.'s App. at 24-25).
Defendant removed the case to District Court on July 24, 2002 alleging diversity jurisdiction under 28 U.S.C. § 1332. (Def.'s Notice of Removal at 1-2). Plaintiff filed this Motion to Remand on August 23, 2002.
II. ANALYSIS
Defendants in a civil case may remove a civil action if a federal court would have had original jurisdiction. See De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995). 28 U.S.C. § 1332 (a)(1) requires complete diversity of citizenship and an amount in controversy in excess of $75,000 exclusive of interest and costs for federal jurisdiction to attach. See Manguno v. Prudential Prop. and Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).
It is not contested that the parties in the case are diverse: Viera is a resident of Texas, and Sprint is a resident of Delaware, where it is incorporated, and Kansas, where it has its principal place of business. The jurisdictional issue is whether or not the amount in controversy exceeds $75,000.
Defendant alleges that the amount in controversy exceeds $75,000 based on Plaintiffs claims for $61,637.70 plus statutory attorneys' fees in an amount to be determined by a jury. ( Id. at 2). It argues that federal jurisdiction is proper, because Viera's stated actual damages are $61,637.70, and his attorney fees will "likely exceed" $13,000 based on Sprint's calculations. (Def.'s Resp. to Pl.'s Mot. to Remand at 2). It cites to De Aguilar to show that although the sum claimed by a plaintiff normally is controlling, a defendant may show that the amount in controversy exceeds the jurisdictional amount. (Def.'s Resp. To Pl.'s Mot. to Remand at 3 (citing De Aguilar, 47 F.3d at 1411)).
When a statutory cause of action entitles a party to attorneys' fees, the fees are included in the amount in controversy for purposes of 28 U.S.C. § 1332 (a). See HD Tire and Automotive-Hardware, Inc., 227 F.3d 326, 330 (5th Cir. 2000).
Viera claims that federal jurisdiction is improper, because Defendant's notice of removal was insufficient and conclusory regarding the amount in controversy, and he argues that the Defendant has the burden of proof to show that the amount in controversy exceeds $75,000. (Pl.'s Mot. and Br. to Remand at 3).
The question before the Court is whether removal is proper in this case.
A. Burden of Proof
The burden of proving that federal jurisdiction exists falls on the removing party. See De Aguilar, 47 F.3d at 1408. "Unless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith" Id. at 1408 (citing St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938)). "Any ambiguities are construed against removal because the removal statute should be strictly construed in favor of remand." Manguno, 276 F.3d at 723 (citing Acuna v. Brown Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000)).
Sprint admits that it carries the burden to show that the amount in controversy is greater than $75,000. (Def.'s Resp. to Pl.'s Motion to Remand at 2). It points to De Aguilar, however, to show that a court need not accept a plaintiffs allegations of damage amounts if there is a question of the plaintiffs good faith in its pleading. De Aguilar, 276 F.3d at 1411.
Texas is one of a number of states which prohibits plaintiffs from pleading specific amounts for unliquidated damages. De Aguilar, 47 F.3d at 1410. Plaintiffs attorney's fees are unliquidated damages. See Siddiqui v. West Bellfort Property Owners Assoc., 819 S.W.2d 657, 659 (Tex.Civ.App.-El Paso 1991, writ granted). Therefore, as Defendant notes, Viera's original complaint which estimates the amount of reasonable and necessary attorney's fees to be "less than $13,000" was in violation of the Texas rule.
Tex.R.Civ.P. 47(b) states: "An original pleading . . . shall contain . . . (b) in all claims for unliquidated damages only the statement that the damages sought are within the jurisdictional limits of the court" (quoted in De Aguilar, 47 F.3d at 1412).
In De Aguilar, a case also involving issues of diversity jurisdiction, the Fifth Circuit dealt with the same kind of violation of Tex.R.Civ.P. 47(b) in a Texas case. In that case, plaintiffs filed affidavits purporting to limit the amount of their unliquidated claims to less than the jurisdictional amount. De Aguilar, 47 F.3d at 1407. The Circuit, in effect, disallowed the plaintiffs' allegations, but left the burden on the defendant to show that removal was justified. The Circuit held: "[A] plaintiff in a case for unliquidated damages, cannot, absent a further showing, avoid removal by pleading for damages under the jurisdictional amount where a state rule prevents such pleading and where defendants are able to show that it is facially apparent that the amount in controversy exceeds [the jurisdictional amount]." Id. at 1414.
In De Aguilar the Circuit found that it was "facially apparent" that the amount in controversy exceeded the jurisdictional amount, because the claims were for wrongful death, terror in anticipation of death, loss of companionship, and funeral expenses, and the defendants offered "testimonial evidence and published precedent showing that damages in the the instant case and similar cases would probably exceed [the jurisdictional amount]." De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993). In addition, the defendants offered evidence that in other courts the plaintiffs had asked for up to five million dollars for the same injuries. Id.
In Manguno the Fifth Circuit further elaborated on the defendant's burden in such cases. It held that a defendant must prove that the amount in controversy exceeds $75,000 by a preponderance of the evidence. The defendant's burden is met if: "(1) it is apparent from the face of the petition that the claims are likely to exceed $75,000, or, alternatively, (2) the defendant sets forth `summary judgment type evidence' of facts in controversy that support a finding of the requisite amount." 276 F.3d at 723 (citing Simon v. Wal-Mart Stores, Inc., 193 F.3d 848, 850 (5th Cir. 1999); Allen v. RH Oil Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995)). In Manguno the Circuit found that the Defendant — an insurance company — had carried its burden of proving the jurisdictional amount by submitting an undisputed affidavit with statistical evidence showing that the attorney's fees would likely exceed $75,000. 276 F.3d at 724.
If a defendant can meet that burden, a "plaintiff must be able to show that, as a matter of law, it is certain that he will not be able to recover more than the damages for which he has prayed in the state court complaint." De Aguilar, 47 F.3d at 1411. This is not a burden-shifting framework, however. The plaintiff "must make all information known at the time he files the complaint." Id. at 1412. Plaintiffs can meet this burden by citing a state law that would limit their damages, or by filing a binding stipulation or affidavit with their complaints. Id.
B. De Aguilar/Manguno Analysis
The Court employs the De Aguilar/Manguno analysis in the instant case:
First, Viero's complaint is taken as presumptively correct that state court jurisdiction is proper. He has no initial burden of proof on this issue, and it is not clear from the face of the complaint that the amount in controversy in the complaint exceeds the jurisdictional amount.
As in De Aguilar, Plaintiff's estimate of attorney's fees has no effect, because it is in violation of the Texas pleading rule.
Second, Sprint, the party seeking to defeat a motion for remand, must show by a preponderance of the evidence that the actual amount in controversy in this case exceeds $75,000. De Aguilar requires the defendant to produce evidence that establishes that the actual amount in controversy exceeds the jurisdictional amount. 47 F.3d at 1412. Manguno requires this to be "summary judgment type evidence." Manguno, 276 F.3d at 723.
In the instant case, Sprint employs the complaint, motions, and affidavit of the Plaintiff to argue that Plaintiffs attorney's fees will likely exceed $13,362.30, the amount needed in addition to the actual damages claim to impart federal jurisdiction. (Def.'s Resp. to Pl.'s Mot. to Remand at 4-7). Sprint points to Viera's Counsel's affidavit in support of the Motion to Remand/Motion for Summary Judgment, where he states that his billing rate is $200 per hour, and he estimates that his fees for the case will be $8,780. ( Id. at 5-6). Sprint argues that this would allow the Plaintiffs Counsel less than 23.5 additional hours to expend on the case before his fees exceed the jurisdictional amount. ( Id.)
The Defendant's argument is telling. In the course of the case Plaintiff will undoubtedly need to do discovery, will need to respond to Sprint's discovery requests, will be involved in depositions on both sides, and has already responded to a motion for summary judgment by Sprint. All of this activity will "more likely than not" result in hours and fees which will push the total damage amount to more than $75,000. ( Id. at 5-7). The Defendant has provided evidence from the Plaintiffs complaint and pleadings from which the Court can find it more likely than not that the amount in controversy in this case is greater than $75,000. (Pl.'s Reply Br. in Supp. of Mots. to Remand and or for Summ. J. at 1-2).
The Court finds that Defendant's evidence and arguments are sufficient to show that the amount in controversy in this case exceeds $75,000, and therefore there is sufficient evidence to impart federal diversity jurisdiction in this case.
III. CONCLUSION
The Court finds that the amount in controversy in this case has been shown by a preponderance of the evidence to exceed $75,000. Therefore, this Court has diversity jurisdiction under 28 U.S.C. § 1332.
For the reasons stated above, Plaintiffs Motion for Remand is DENIED. Plaintiffs and Defendant's Motions for Summary Judgment will be decided at a later date.
SO ORDERED.