Opinion
CIVIL ACTION No. 02-2245-GTV
August 14, 2002
MEMORANDUM AND ORDER
Plaintiff, the City of Atchison, Kansas, filed suit in Kansas state court against Defendant, Maczuk Industries, Inc., for possession of property that Plaintiff claims
Defendant has been unlawfully occupying. Defendant removed the case pursuant to 28 U.S.C. § 1441, claiming that this court has original diversity subject matter jurisdiction pursuant to 28 U.S.C. § 1332.
The matter is currently before the court on Plaintiff's motion to remand (Doc. 8). For the reasons set forth below, Plaintiff's motion is granted.
I. BACKGROUND
On May 24, 2002, Plaintiff, a Kansas municipality, filed this action in the District Court of Atchison County, Kansas, seeking possession from Defendant, a Missouri corporation, of a tract of land owned by Plaintiff on the west bank of the Missouri River in Atchison, Kansas (the "Missouri River tract"). The following relevant facts are alleged in Plaintiff's state court petition or are contained in the exhibits attached to Plaintiff's petition.
In May 1967, Boos Brothers, a now-bankrupt company, entered into a lease with Plaintiff for the Missouri River tract. The lease was for an initial term of ten years with options to extend the lease for nine additional periods of ten years. To exercise one of the options to extend, the tenant was required to provide Plaintiff with written notice of its intention to extend the lease at least 90 days but not more than 120 days prior to the expiration of the then-current term of the lease. The rental rate under the options to extend was $50 per year.
Defendant was assigned the Boos Brothers' interest in the Missouri River tract in 1977. Although Plaintiff's petition and the exhibits attached to it are not entirely clear on the matter, it appears that Defendant properly exercised options to extend for two additional ten year periods, with the second ten year period expiring on approximately May 1, 1997. Despite the expiration of the second extension, Defendant continued to remain in possession of the tract. In March 2002, Plaintiff notified Defendant that the term of the lease had expired and that Defendant had not paid rent or other compensation for the continued use of the property. Plaintiff demanded that Defendant either enter into a new lease with Plaintiff or immediately vacate the tract. Defendant refused to do either, and Plaintiff filed suit. Plaintiff did not allege an amount in controversy in its petition, requesting only that the court "award to Plaintiff from Defendant, the possession of the Property; award to Plaintiff, from Defendant, Plaintiff's costs of collection incurred herein, including reasonable attorneys' fees; and grant Plaintiff such other and further relief as the Court deems just and proper."
Defendant removed the action to this court on May 31, 2002. In its notice of removal, Defendant asserts that this court has original diversity subject matter jurisdiction pursuant to 28 U.S.C. § 1332 because the parties are citizens of different states and the amount in controversy exceeds $75,000. Defendant does not provide a specific accounting in its notice of removal of how the amount in controversy exceeds $75,000, other than to state the following: "[Plaintiff] seeks a declaration that it is entitled to possession of real property claiming that it has title to the subject tract and all improvements. The value of the tract and fertilizer plan[t] clearly exceeds the jurisdictional minimum of $75,000. Accordingly, the amount in controversy requirement is satisfied." Defendant's notice contains only two additional references to monetary amounts. First, Defendant claims that it acquired the Boos Brothers' interest in the Missouri River tract, as well as other property rights of the Boos Brothers, in 1977 for $300,000. Second, Defendant contends that it owns and has paid all of the personal and real property taxes on the Missouri River tract for the past twenty-five years. Defendant does not outline the specific amount of taxes paid in the notice of removal.
II. STANDARD FOR REMAND
A defendant may remove a case filed in state court only if the plaintiff could have filed suit in federal court originally. 28 U.S.C. § 1441(a). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." Id. § 1447(c). As the party invoking the federal court's jurisdiction, the defendant carries the burden of demonstrating that the requirements for exercising jurisdiction are present. Martin v. Franklin Capital Corp., 251 F.3d 1284, 1290 (10th Cir. 2001) (citation omitted). "Because the courts of the United States are courts of limited jurisdiction, there is a presumption against federal jurisdiction." Frederick Warinner v. Lundgren, 962 F. Supp. 1580, 1582 (D.Kan. 1997) (citing Basso v. Utah Power Light Co., 495 F.2d 906, 909 (10th Cir. 1974)). "Doubtful cases must be resolved in favor of remand." Thurkill v. Menninger Clinic, Inc., 72 F. Supp.2d 1232, 1234 (D.Kan. 1999) (citing Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995) (further citations omitted)).
III. DISCUSSION
Plaintiff seeks to remand this case on two grounds. First, Plaintiff contends that the court lacks diversity subject matter jurisdiction over the case because Defendant cannot show that the amount in controversy exceeds $75,000. Second, Plaintiff argues that one of Defendant's counterclaims against Plaintiff requires joinder of a party, the State of Kansas, over which the court cannot acquire jurisdiction pursuant to the Eleventh Amendment of the United States Constitution. Plaintiff also requests that the court award it the costs and attorney fees it has expended in moving to remand the action to state court.
A. Amount in Controversy
In the Tenth Circuit, "[t]he amount in controversy is ordinarily determined by the allegations of the complaint, or, where they are not dispositive, by the allegations in the notice of removal." Laughlin, 50 F.3d at 873 (citing Lonnquist v. J.C. Penney Co., 421 F.2d 597, 599 (10th Cir. 1970)). The defendant must "set forth, in the notice of removal itself, the `underlying facts supporting [the] assertion that the amount in controversy exceeds [$75,000]'" Id. (quoting Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir. 1992)). The defendant must establish the requisite jurisdictional amount in controversy by a preponderance of the evidence. Martin, 251 F.3d at 1290 (citations omitted). Conclusory allegations of jurisdiction are insufficient, Honeycutt v. Dillard's, Inc., 989 F. Supp. 1375, 1377 (D.Kan. 1997) (citing Gaus, 980 F.2d at 567), and "after-the-fact-rationalization[s]" that the defendant has met its burden will not be considered by the court, Alley v. Am. Med. Sys., No. 98-2217-KHV, 1998 WL 596715, at *2 (D.Kan. July 22, 1998) (citing Gray v. N.Y. Life Ins. Co., 906 F. Supp. 628, 637 (N.D.Ala. 1995)).
Plaintiff did not allege an amount in controversy in its petition in this case. Plaintiff requested only that the court "award to Plaintiff from Defendant, the possession of the Property; award to Plaintiff, from Defendant, Plaintiff's costs of collection incurred herein, including reasonable attorneys' fees; and grant Plaintiff such other and further relief as the Court deems just and proper." Therefore, under Laughlin, the court is limited to examining whether the underlying facts advanced by Defendant in its notice of removal establish by a preponderance of the evidence that the amount in controversy exceeds $75,000.
Where, as here, a plaintiff seeks injunctive or equitable relief related to possession of property, "the amount in controversy is the value of the realty directly affected." Sanchez v. Taylor, 377 F.2d 733, 736 (10th Cir. 1967) (citations omitted); A. C. McKoy, Inc. v. Schonwald, 341 F.2d 737, 739 (10th Cir. 1965) (citations omitted); Ronzio v. Denver R.G.W.R. Co., 116 F.2d 604, 606 (10th Cir. 1940) (citations omitted). The court may examine the value of the realty from the perspective of either the plaintiff or the defendant. Ronzio, 116 F.2d at 606 (citations omitted).
Defendant has not advanced sufficient underlying facts in its notice of removal to establish that the value of the Missouri River tract, from the perspective of either party, exceeds the jurisdictional minimum of $75,000. Most importantly, Defendant's notice of removal never provides the court with a specific allegation of the amount in controversy. Defendant alleges in its notice only that: "[Plaintiff] seeks a declaration that it is entitled to possession of real property claiming that it has title to the subject tract and all improvements. The value of the tract and fertilizer plan[t] clearly exceeds the jurisdictional minimum of $75,000. Accordingly, the amount in controversy requirement is satisfied." This conclusory allegation is insufficient to establish jurisdiction. Honeycutt, 989 F. Supp. at 1377.
Otherwise, Defendant's notice of removal contains only two ambiguous references to monetary amounts. First, Defendant states that it acquired the Boos Brothers' interest in the Missouri River tract, as well as other property rights of the Boos Brothers, in 1977 for $300,000. Defendant fails, however, to outline how much of the $300,000 was allocated toward the Missouri River tract itself as opposed to the other unnamed property rights or, for that matter, what the other unnamed property rights were. Second, Defendant asserts that it has paid all taxes on the Missouri River tract for the past twenty-five years, but, again, Defendant fails to provide the court with any specific accounting of the amount of taxes paid. Defendant's ambiguous assertions fail to establish by a preponderance of the evidence that the value of the Missouri River tract exceeds $75,000.
The court notes that it has reviewed the additional materials submitted by Defendant in connection with its opposition to Plaintiff's motion to remand. As noted, however, the court cannot rely on any of the facts advanced by Defendant in its opposition if those facts were not previously raised in the notice of removal itself. Laughlin, 50 F.3d at 873; see also Coca-Cola Bottling of Emporia, Inc. v. South Beach Beverage Co., 198 F. Supp.2d 1280, 1283 (D.Kan. 2002) ("The additional assertions and facts proffered in [Defendant's] later filed response to [Plaintiff's] motion to remand are untimely; [Defendant] should have addressed the underlying facts and should have attached any supporting affidavits to its Notice of Removal.").
In sum, the court concludes that Defendant has failed to carry its burden of advancing sufficient underlying facts in its notice of removal to establish by a preponderance of the evidence that the value of the Missouri River tract exceeds $75,000. Accordingly, the court remands this case to the District Court of Atchison County, Kansas for further proceedings.
B. Eleventh Amendment Immunity
Plaintiff also contends that remand is appropriate because one of Defendant's counterclaims against Plaintiff requires joinder of a party, the State of Kansas, over which the court cannot acquire jurisdiction pursuant to the Eleventh Amendment of the United States Constitution. Given the court's conclusion that remand is already appropriate due to Defendant's failure to establish the jurisdictional minimum amount in controversy, the court need not address this argument
C. Attorney Fees and Costs
Finally, Plaintiff requests that the court award it the costs and attorney fees it expended in moving to remand this action to state court. 28 U.S.C. § 1447(c) permits the court to award "just costs and any actual expenses, including attorney fees, incurred as a result of the removal." As noted, Defendant failed to abide by the removal requirements imposed by Laughlin, a case which has been the law of the Tenth Circuit since 1995. As a result, the court determines that payment of Plaintiff's just costs and actual expenses, including attorney fees, incurred as a result of removal is appropriate in this case.
IT IS, THEREFORE, BY THE COURT ORDERED that Plaintiff's motion to remand (Doc. 8) is granted. The case is remanded to the District Court of Atchison County, Kansas.
IT IS FURTHER ORDERED that pursuant to 28 U.S.C. § 1447(c), Defendant is ordered to pay the just costs and actual expenses, including attorney fees, that Plaintiff has incurred as a result of removal. Plaintiff shall file a Bill of Costs pursuant to D. Kan. Rule 54.1. Plaintiff must claim attorney fees incurred as a result of removal in accordance with D. Kan. Rule 54.2.
The case is closed.
IT IS SO ORDERED.