Opinion
Civil Action No. 3:99-CV-2382-L.
July 31, 2000.
MEMORANDUM OPINION AND ORDER
Before the court is Plaintiff's Motion to Remand, filed May 9, 2000. The motion is opposed. Upon consideration of the motion, response and the applicable law, the court, for the reasons that follow, grants Plaintiff's Motion to Remand.
I. Factual and Procedural Background
This is a breach of contract case. Plaintiff Laura Sutherland ("Plaintiff') filed suit against Defendant First Nationwide Mortgage Company ("Defendant" or "FMNC") on September 14, 1999 in County Court at Law No. 5, Dallas County, Texas. Prior to her termination on March 29, 1999, Plaintiff had been employed by Defendant for nearly thirteen years. Plaintiff alleges that in addition to her salary, she was paid monthly, quarterly and annual incentive pay. Plaintiff seeks relief against Defendant for its failure to pay significant portions of her incentive pay during 1998 and 1999. On October 19, 1999, Defendant removed the action to this court on the basis of the court's diversity jurisdiction. Plaintiff now challenges the court's subject matter jurisdiction, contending that Defendant has not properly established that the amount in controversy exceeds the jurisdictional limits of the court.
II. Legal Standard
Pursuant to 28 U.S.C. § 1441 (a), a defendant may remove from state court any civil action over which the federal court would have original jurisdiction. Removal on the basis of diversity of citizenship is proper where the case involves citizens of different states and the amount in controversy, exclusive of interest and costs, exceeds $75,000. See 28 U.S.C. § 1332 (a). As the removing party, Defendant bears the burden of establishing the basis for federal jurisdiction. See St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998). All doubts concerning removal are to be resolved against removal and in favor of remanding the case to state court. See Cross v. Bankers Multiple Line Ins. Co., 810 F. Supp. 748, 750 (N.D.Tex. 1992).
In this case, where it is not facially apparent from Plaintiff's Original Petition that the amount in controversy exceeds 75,000, Defendant must prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional amount. See St. Paul, 134 F.3d at 1253. The court may rely on summary judgment-type evidence to ascertain the amount in controversy. Id. In determining whether the removing party has met its burden, the court considers the following: 1) whether the complaint specifies an amount of damages, or otherwise indicates on its face that the damages sought or incurred are likely to exceed the jurisdictional amount of the court; 2) whether defendant offers only conclusory statements in its notice of removal regarding the amount in controversy or evidence demonstrating that the amount in controversy exceeds the jurisdictional amount of the court; and 3) whether plaintiff has contested removal with a sworn, unrebutted affidavit indicating that the requisite amount in controversy is not present. See Asociacion Nacional de Pescadores a Pequena Escala O Artesanales de Colombia (ANPAC) v. Dow Quimica de Colombia S.A., 988 F.2d 559, 566 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994), abrogated on other grounds, Marathon Oil Co. v. Ruhrgas, 145 F.3d 211 (5th Cir. 1998).
III. Discussion
Plaintiff seeks to remand this action to state court, contending that this court does not have subject matter jurisdiction as the amount in controversy does not exceed $75,000. To support her position, Plaintiff provides the affidavit of her attorney, Kendra Karlock. In her affidavit, Ms. Karlock states that "[t]he amount in controversy does not exceed the sum value of $75,000 exclusive of interest and costs." See Affidavit of Kendra Karlock at p. 1. In response, Defendant contends that Plaintiff's motion was not timely filed and that a demand letter dated May 7, 1999, sent by Plaintiff's counsel to Defendant's counsel prior to her filing this lawsuit, indicates that the amount in controversy exceeds $75,000. In the demand letter, Plaintiff's counsel states that "FNMC has failed to pay Ms. Sutherland significant portions of her incentive pay totaling over $415,000." See Exhibit A attached to Defendant's Response in Opposition to Plaintiff's Motion to Remand. Although the letter is not in affidavit or declaration form, Plaintiff has not objected to the authenticity of the letter, and it was obviously written by Plaintiff's counsel; therefore the court accepts the letter as valid. Nevertheless, the court finds that, although not a model of pellucid draftsmanship, Plaintiff's counsel's subsequent affidavit effectively supersedes her demand letter of May 7, 1999, because the affidavit 1) affirmatively states that the amount in controversy does not exceed $75,000, and 2) modifies the amount stated in the demand letter in light of the payment or settlement of certain claims.
Based on the evidence before it, the court concludes that Defendant has failed to meet its burden of proof. First, Plaintiff has submitted an unrebutted affidavit by her counsel which states that the amount in controversy does not exceed $75,000. Second, the affidavit also states that Defendant paid Plaintiff an unspecified amount pertaining to some of the claims set forth in the letter after it was initially sent to Defendant. Third, while Defendant makes the declarative statement, in its response to Plaintiff's Motion to Remand, that it paid Plaintiff approximately $66,208.55 in additional compensation prior to the initiation of this lawsuit, Defendant offers no competent evidence by affidavit, declaration, or otherwise, that this was the amount in fact paid to settle some of Plaintiff's claims. Fourth, the letter by Plaintiff's counsel was a demand letter, and it is not unusual for the amount requested in such letters to be exaggerated. This is particularly significant in this case because subsequent to the demand letter, Plaintiff's counsel expressly stated by affidavit that the amount in controversy was less than $75,000, and Defendant offers no competent evidence to rebut this assertion. The court notes that in light of its reliance on Plaintiff's counsel's affidavit, Plaintiff should be estopped from asserting or recovering any damages in state court in excess of $75,000. To allow otherwise would permit Plaintiff to perpetrate a fraud upon this court.
Defendant also contends that Defendant's motion to remand was untimely filed and that Plaintiff has failed to set forth her attorney's fees for a proper calculation of the amount in controversy. The court is unpersuaded by Defendant's first argument. 28 U.S.C. § 1447 (c), provides that "[a] motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a). If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." A case can be dismissed at any time for lack of subject matter jurisdiction, even on appeal. Because Plaintiff's motion to remand is based on the grounds that this court lacks subject matter jurisdiction, the court finds that it was not untimely filed.
The court is also unpersuaded by Defendant's argument that the court should retain jurisdiction because Plaintiff has failed to allege the amount of her attorney's fees for a proper calculation of the amount in controversy. Attorney's fees are included in determining whether the requisite amount in controversy exists. See St. Paul, 134 F.3d at 1253. In this case, however, Plaintiff alleges no specific amount in her state petition for attorney's fees. As Plaintiff's evidence does not address her attorney's fees, and Defendant presents no evidence that Plaintiff's attorney's fees along with Plaintiff's claims exceed $75,000, the court is unable to determine whether federal jurisdiction exists on this basis. Because all doubts and uncertainties about federal court jurisdiction must be resolved in favor remand, and because Defendant has failed to establish by a preponderance of the evidence that the amount in controversy exceeds $75,000, the court determines that the action should be remanded.
IV. Conclusion
For the reasons previously stated, the court concludes that 1) Defendant has failed to establish by a preponderance of the evidence that the amount in controversy exceeds $75,000, 2) it lacks subject matter jurisdiction over the case, and 3) this action should be remanded to state court. Accordingly, Plaintiff's Motion to Remand is granted, and this action is hereby remanded to the County Court at Law No. 5, Dallas County, Texas. The clerk of the court is directed to mail a certified copy of this order of remand to the clerk of Dallas County, pursuant to 28 U.S.C. § 1447 (c).