Rosenn, Jenkins Greenwald v. Spritzer

Full title: ROSENN, JENKINS GREENWALD, Plaintiff, v. YAAKOV SPRITZER, Defendant

Court: United States District Court, M.D. Pennsylvania

Date published: May 16, 2005

Civil Action No. 3:CV-05-0352 (M.D. Pa. May. 16, 2005)

Opinion

Civil Action No. 3:CV-05-0352.

May 16, 2005

MEMORANDUM

A. RICHARD CAPUTO, District Judge

Before me is Plaintiff's Motion to Remand Action to the Court of Common Pleas of Luzerne County (Doc. 4) whereby Plaintiff seeks a remand of its breach of contract action to the Luzerne County Court of Common Pleas. Defendant removed the matter to this court based upon diversity of citizenship. 28 U.S.C. § 1332(a).

The issue is whether the amount in controversy is in excess of $75,000. Plaintiff argues that any interest and counsel fees is excluded for purposes of determining the amount necessary for federal jurisdiction. The Defendant argues that interest is included in that determination because it was a term of the contract upon which suit is brought (See Compl. Ex. A.)

Because the interest provided for in the contract was a late payment fee and not the price for the use of money, and because the complaint does not seek the late payment fee in any event, the motion will be granted and the case will be remanded to the Court of Common Pleas of Luzerne County.

DISCUSSION

The burden is on the defendant/removing party to establish federal jurisdiction by a preponderance of the evidence. Federal courts are courts of limited jurisdiction, and "in order to carry out the Congressional intent to limit jurisdiction in diversity cases, doubts must be resolved in favor of remand." Samuel-Bassett v. Kia Motors America, Inc., 357 F.3d 392 (3d Cir. 2004). When the relevant facts are not in dispute, the burden is on the defendant (removing party) to establish, to a legal certainty, that there is federal jurisdiction. Id. at 398. When there are federal disputes, the preponderance of the evidence standard is "appropriate". Id. Here, there is no factual dispute, but even if there were, Defendant has not established any relevant fact by a preponderance of the evidence.

The diversity jurisdiction statute provides that the amount in controversy must exceed the sum of $75,000 "exclusive of interest and costs." 28 U.S.C. § 1332(a). It has been recognized that where interest is on the "agreed upon price for the hire of money" the interest is counted in determining the amount in controversy. See Brainin v. Melikian, 396 F.2d 153, 155 (3d. Cir. 1968) (suit on a promissory note bearing interest). In the instant case, the fee agreement between the parties provided for a late charge on unpaid bills which remained unpaid for thirty days. ( See Compl. Ex. A.) This is not a charge for the hire of money, but rather a late fee for the delayed payment of money owed for services. See Id. at 154.

Moreover, the Plaintiff's Complaint makes no claim for the late payment fee or interest. Paragraph 10 seeks payment of $70,441.02, "exclusive of interest provided for in the Fee Agreement between the parties." In addition, the Plaintiff's letter demanding payment dated September 30, 2004 recites and demands an outstanding balance of $70,441.02 and gives Defendant until October 29, 2004 to pay "$70,441.02" in full or reach an acceptable payment plan to pay it. (See Compl. Ex. C.) There is no mention of the late payment fee or interest in this letter.

Defendant has not met his burden of demonstrating the existence of federal jurisdiction. The case will, therefore, be remanded to the Court of Common Pleas of Luzerne County.

An appropriate Order follows.

ORDER

NOW, this 16th day of May, 2005, Plaintiff Rosenn, Jenkins Greenwald's Motion to Remand Action to the Court of Common Pleas of Luzerne County (Doc. 4) is GRANTED, and the Clerk of Court is directed to remand this case to the Court of Common Pleas of Luzerne County.