Summary
denying motion to remand when plaintiff's stipulation and other record documents were contradictory and seemed to excluded punitive damages from the stipulation
Summary of this case from Hamilton v. Markel American Insurance CompanyOpinion
Civil Action No: SA-04-CA-0557-XR.
October 7, 2004
ORDER
On this date the Court considered Plaintiff's Motion to Remand Defendant removed this case from state court to this Court based on diversity of citizenship and its assertion that it is facially apparent from Plaintiff's Original Petition that the amount in controversy jurisdictional requirement is met. After considering Plaintiff's motion, as well as Defendant's response and the pleadings, the Court is of the opinion that the motion to remand should be DENIED (docket no. 4).
I. Factual and Procedural Background
According to Plaintiff's Original Petition filed in state court, Plaintiff began working for Defendant in 1985. Plaintiff is diabetic and as a result suffers from vision problems. Plaintiff was terminated on June 22, 2003, with a stated reason of poor performance. Plaintiff claims that this was a pretext to the decision to terminate him because of his disability.
Plaintiff filed suit against Defendant in County Court at Law No. 10 for Bexar County, Texas on May 17, 2004. The case was timely removed to this Court by Defendant on June 28, 2004. On July 26, 2004, Plaintiff moved for remand Complete diversity exists between the parties and is not disputed. Plaintiff's request for remand alleges that it is not "facially apparent" from the initial pleading that the amount in controversy exceeds $75,000.
The petition attempts to state a maximum amount of damages in four different places. In Section I, Discovery Control Plan, the petition states that "Plaintiff affirmatively pleads that he seeks monetary relief greater than $50,000, but in no event greater than $74,000, as outlined herein, excluding court costs, pre- and post-judgment interest, punitive damages, and attorney's fees." Significantly, in this section, Plaintiff has specifically excluded those classes of damages from the limitation. However, in Section X, Damages and Stipulation Regarding Damages, Plaintiff "stipulates under oath that Plaintiff is not seeking in excess of $74,000." This section includes (1) lost earnings and benefits, (2) compensatory damages, and (3) exemplary damages. Section XI apparently asks for a separate award of attorney's fees. Additionally, Plaintiff's Prayer for Relief includes requests for court costs, pre- and post-judgement interest, punitive damages, attorney's fees, lost past and future wages and benefits, and damages for emotional distress. Plaintiff also specifically requests punitive damages above the jurisdictional limits of the state court, with no apparent limitation. Finally, attached to the petition is an affidavit from Plaintiff, stating that "[u]nder no circumstances am I seeking to recover more than $74,000.00, for all damages, including attorney's fees, but excluding costs and interest." In the notice of removal, Defendant asserted that Plaintiff sought more than $75,000 in damages through its Original Petition.
II. Analysis
A. Standard of Review
"Unless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938). A plaintiff who does not "desire to try his case in federal court . . . may resort to the expedient of suing for less than the jurisdictional amount, and though he would be justly entitled to more, the defendant cannot remove." Id. at 294. The face of the plaintiff's pleading will not control, however, if made in bad faith. De Aguilar v. Boeing Co., 47 F.3d 1404, 1409 (5th Cir. 1995). The party seeking to maintain federal jurisdiction is required to establish by a preponderance of the evidence that the amount in controversy exceeds $75,000. Grant v. Chevron Phillips Chem. Co. L.P., 309 F.3d 864, 868 (5th Cir. 2002). When the case is one that has been removed from state court, such party may satisfy this burden in either of two ways: (1) by demonstrating that it is "facially apparent" from the petition that the claim likely exceeds $75,000 or (2) "by setting forth the facts in controversy — preferably in the removal petition, but sometimes by affidavit — that support a finding of the requisite amount." Allen v. R H Oil Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995). "The defendant must produce evidence that establishes that the actual amount in controversy exceeds [the jurisdictional threshold]." De Aguilar, 47 F.3d at 1412. If a defendant can show that the amount in controversy actually exceeds the jurisdictional amount, the plaintiff must be able to show that, to a legal certainty, he will not be able to recover more than the damages for which he has prayed in the state court complaint. Id. at 1411. Plaintiff's obligation may be met in various ways, including the filing of a "binding stipulation or affidavit with [his] complaint." Id. at 1412; Manguno v. Prudential Property Casualty Ins. Co., 276 F.3d 720, 724 (5th Cir. 2002); Maley v. Design Benefits Plan, Inc., 125 F. Supp.2d 197, 200 (E.D. Tex. 2000).
B. Plaintiff's Attempt To Limit Damages
Plaintiff's petition confusingly attempts to limit the maximum amount sought by placing limiting language in the petition in the first instance. Unfortunately, Plaintiff's language contradicts itself throughout. Plaintiff attempts to limit himself to an award no greater than $74,000, but does not directly state in the petition whether this is meant to include exemplary damages or attorney's fees. The statement in Section I states that the amount of $74,000 is exclusive of exemplary damages or attorney's fees. The combination of Sections X and XI, in which Plaintiff "stipulates under oath," suggests that the amount of $74,000 is inclusive of exemplary damages, but exclusive of attorney's fees. Additionally, Plaintiff's prayer requests actual damages, compensatory damages, emotional distress damages, attorney's fees, and punitive damages in excess of the jurisdictional limits of the state court. Finally, Plaintiff's affidavit, which is under oath and notarized, suggests that the amount of $74,000 is inclusive of both exemplary damages and attorney's fees.
1. Inclusion of Punitive Damages and Attorney's Fees
Defendant asserts Plaintiff's prayer for actual damages, compensatory damages, emotional distress damages, punitive damages, and attorney's fees supports the contention that it is "facially apparent" from the petition the amount in controversy exceeds $75,000. However, the Defendant must first show that under governing state law Plaintiff is entitled to be awarded the exemplary and punitive damages if they are to be considered for determining whether the jurisdictional threshold has been met.
Section 21.2585(d)(4) of the Texas Labor Code entitles Plaintiff to recover up to $300,000 in punitive damages. Additionally, attorney's fees are recoverable for this claim under TEX. LAB. CODE § 21.259. The Fifth Circuit has held that a request for punitive damages in itself may, under certain circumstances, support a finding that it is "facially apparent" the amount in controversy exceeds the threshold amount. Allen v. R H Oil and Gas Co., 63 F.3d 1326, 1336 (5th Cir. 1995). In fact, in Fields v. Keith, No. 3-99-CV-2682, 2000 WL 748152, *5-6 (N.D. Tex. 2000), the court analyzed a jurisdictional controversy under the assumption that the Plaintiff would prevail in all of the claims for damages. The court in Fields granted a motion to remand in part because the plaintiff's claims "for past and future lost earnings[,] . . . lost earning capacity, mental anguish, emotional distress, physical distress, punitive damages and attorneys fees all support the conclusion that if she ultimately prevails on all of her claims, Plaintiff's damages exceeded $75,000 at the time of removal." Id. at *6 (emphasis added).
The court also based its ruling on the fact that the plaintiff had not "expressly stipulated that she [sought] damages for an amount less than the jurisdictional amount." Fields v. Keith, No. 3-99-CV-2682, 2000 WL 748152, at*3 (N.D. Tex. 2000).
Plaintiff contends the Fifth Circuit refused to apply attorney's fees to the amount in controversy determination in HD Tire and Automotive-Hardware, Inc. vs. Pitney Bowes, Inc., 227 F.3d 326 (5th Cir. 2000). In HD Tire, the statutory language of the Connecticut statute authorized "plaintiffs" to collect attorney's fees and did not specifically identify "class representatives" as having a right to the fees. Id. at 331. This ruling is inapposite to the current action because in HD Tire, the plaintiff was involved in a class action. The Court in HD Tire held that because the statute allowed "plaintiffs" to recover attorney's fees there was no reason to attribute attorney's fees solely to one "class representative" for determining the amount in controversy. Id. Consequently, the Court ruled that the use of the word "plaintiff" in the Connecticut statute did not dictate that aggregated attorney's fees were to be assigned solely to one representative party in a class action. Id. The Court ordered remand to the state court in which it was initially filed because the amount in controversy was not fulfilled. Id. at 331. The Court made this determination because the attorney's fees could be attributed to the entire plaintiff class and allocated proportionately amongst all class members. There was no reason to allocate fees to one "class representative" for determining the amount in controversy. Id. at 330-331. Furthermore, in HD Tire, the Fifth Circuit stated that "[w]hen a statutory cause of action entitles a party to receive attorneys' fees, the amount in controversy includes those fees." Id. at 330. Accordingly, Plaintiff's claim for attorney's fees and punitive damages should be evaluated when determining whether it is "facially apparent" from the petition that the claim exceeds $75,000.
2. Plaintiff's Petition
Plaintiff's petition is not technically correct under the Texas Rules of Civil Procedure. See De Aguilar, 47 F.3d at 1412 (noting that pleading a maximum recovery for unliquidated damages in the original petition violates Rule 47(b)). Rule 47 requires the original pleading to contain, "in all claims for unliquidated damages only the statement that the damages sought are within the jurisdictional limits of the court." TEX. R. CIV. P. 47(b). Upon special exception by the defendant, however, "the court shall require the pleader to amend so as to specify the maximum amount claimed." Id. Plaintiff's pleading of a maximum damages amount is, of course, an attempt to avoid federal jurisdiction; a situation with "the potential for abusive manipulation by plaintiffs, who may plead for damages below the jurisdictional amount in state court with the knowledge that the claim is actually worth more." De Aguilar, 47 F.3d at 1410.
Defendant argues that it is facially apparent from Plaintiff's petition that he is seeking far in excess of $75,000, despite Plaintiff's stipulation and affidavit. Defendant points to Plaintiff's contradictory statements regarding his purported maximum amount of damages. It argues that because punitive damages and attorney's fees are included in the amount in controversy, see, e.g., HD Tire Automotive-Hardware, Inc. v. Pitney-Bowes, Inc., 227 F.3d 326, 330 (5th Cir. 2000), Plaintiff's contradictory assertions as to the inclusion or exclusion of punitive damages and attorney's fees should be held to be an assertion that the amount in controversy is over $75,000. Defendant points to the fact that Plaintiff is seeking exemplary damages, which may be recoverable up to $300,000 should Plaintiff ultimately prevail in this case, see TEX. LAB. CODE § 21.2585(d)(4), as support that Plaintiff is seeking more than $75,000.
Plaintiff argues in his motion for remand that his intent is to seek no more than $74,000. He relies on the stipulation in the petition and the affidavit to show that, to a legal certainty, he will not recover more than $75,000. Plaintiff does not, unfortunately, address the effect of his contradictory statements in the petition and the affidavit. Instead, Plaintiff focuses solely on his general statement that he does not seek more than $74,000 in damages.
3. The Effect of Plaintiff's Stipulation and Affidavit
The Fifth Circuit has seemingly adopted the statement from the Seventh Circuit in In re Shell Oil Co., 970 F.2d 355, 356 (7th Cir. 1992) (per curiam), that "[l]itigants who want to prevent removal must file a binding stipulation or affidavit with their complaints." See Manguno, 276 F.3d at 724. "In Texas, litigants who want to prevent removal must file with their [petitions] a binding stipulation or affidavit that limits the scope of their recovery." White v. Bank of America, N.A., No. 5-01-CV-0189-B, 2001 WL 804517, at *3 (W.D. Tex. July 9, 2001). District courts have consistently used this statement as a reason for denying a motion to remand where the plaintiff has failed to file a binding stipulation or affidavit. See, e.g, Martin v. Southwest PCS, L.P., No. 3-03-CA-966-XR, 2003 WL 22477692, at *3 (W.D. Tex. Nov. 3, 2003); Maley, 125 F. Supp.2d at 200.
It would stretch reason to deny remand in a situation where a plaintiff actually has filed a stipulation and affidavit limiting damages to $75,000. Defendant argues, and the Court agrees, that Plaintiff's stipulation and affidavit does not limit his entire possible recovery to $74,000. Plaintiff's stipulation within the petition and Plaintiff's affidavit attached to the petition are contradictory. Moreover, it is unclear whether the affidavit, that is in conflict with three sections of the plaintiff's petition, is even intended as a binding stipulation to limit the amount of damages recoverable. Plaintiff's attached affidavit is not sufficient to warrant remand Accordingly, the Court does not read Plaintiff's stipulation and affidavit as limiting Plaintiff's maximum recoverable damages to $74,000. Therefore, the Court finds that Plaintiff has not properly filed a binding stipulation and affidavit, and that he has failed to limit his maximum amount recoverable to $74,000. Plaintiff's attempts, through his arguments, to limit his damages post-removal is not effective. Once a claim is removed, a plaintiff may not have the claim remanded to state court by reducing the amount recoverable below the jurisdictional limit. St. Paul Mercury, 303 U.S. at 292 (rejecting the attempt of the plaintiff to limit its damages post-removal, either through amendment or affidavit).
4. Plaintiff's Alleged Damages
If Plaintiff were awarded lost past and future wages and benefits for a number of years before and after the cause of action is concluded, the sum of damages would mount. Additionally, if Plaintiff is successful in his bid for an award of attorney's fees, punitive damages, and emotional distress damages it is more than likely that a successful action would result in an award greater than $74,000. Giving due consideration to the damage claims, and Plaintiff's attempts to limit his damages, it is more likely than not if Plaintiff is successful in the demand for the award of punitive damages, past and future lost wages and benefits, attorney's fees, and emotional distress damages he would accrue more than $75,000 in damages. Taking into account the many different classifications of damages sought by Plaintiff, it is "facially apparent" from the petition that the claim exceeds jurisdictional limits. Because the Court does not read Plaintiff's stipulation and affidavit as binding in the attempt to limit recovery of damages, Plaintiff has not succeeded in showing that, to a legal certainty, he will not be able to recover more than $75,000.
III. Conclusion
Though a plaintiff would have the statutory right to a greater recovery should he ultimately prevail on his claim, a defendant is not entitled to removal where Plaintiff has submitted a binding stipulation or affidavit at the time of the filing of his state court petition that he is willing to forego the greater recovery in order to maintain his action in state court. When constructed appropriately, a binding stipulation or affidavit limiting the total recoverable damages would be sufficient to prevent removal of a claim and will be recognized by the Court. Nevertheless, it is imperative the affidavit or stipulation be consistent and binding in its limiting nature if a plaintiff desires to restrict the total amount recoverable and ensure that the claim cannot be removed. A plaintiff who does not "desire to try his case in federal court . . . may resort to the expedient of suing for less than the jurisdictional amount, and though he would be justly entitled to more, the defendant cannot remove." St. Paul Mercury Indem. Co., 303 U.S. at 294. However, in this case the Court finds that the stipulation and affidavit is not binding. In Plaintiff's petition, it is unclear whether he is seeking damages in excess of $74,000, despite the attempted stipulation, due to the inconsistent positions throughout. The Court has read the petition and the affidavit together and determined that, because of their conflicting nature, the documents do not constitute a binding limitation on Plaintiff's maximum possible recovery. The Court finds, by a preponderance of the evidence, that it is "facially apparent" from the initial pleadings that the amount in controversy is greater than the jurisdictional minimum. This Court maintains subject matter jurisdiction as the amount in controversy is within its jurisdictional limits. Accordingly, Plaintiff's motion to remand is DENIED.