Opinion
C. A. 6:23-CV-00022-ADA-JCM
04-18-2023
ALICE STANDIFER, Plaintiff, v. DOLGENCORP OF TEXAS, INC., Defendant.
THE HONORABLE ALAN D ALBRIGHT, UNITED STATES DISTRICT JUDGE.
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
JEFFREY C. MANSKE, UNITED STATES MAGISTRATE JUDGE.
This Report and Recommendation is submitted to the Court pursuant to 28 U.S.C. § 636(b)(1)(C), Fed.R.Civ.P. 72(b), and Rules 1(f) and 4(b) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas, Local Rules for the Assignment of Duties to United States Magistrate Judges. Before the Court is Plaintiff Alice Standifer's Motion to Remand, ECF No. 5, and Defendant Dolgencorp of Texas, Inc.'s Response, ECF No. 6. For the reasons discussed below, the undersigned RECOMMENDS that Plaintiff's Motion to Remand under 28 U.S.C. § 1447(c) be GRANTED.
I. BACKGROUND
Alice Standifer sued Dolgencorp of Texas, Inc. for personal injuries resulting from a slip and fall accident in a store owned by Dolgencorp. Def.'s Notice of Removal, Ex. B, ECF No. 1, at 2. Standifer alleges that she is a resident of McLennan County, Texas. Id. She also alleges that Dolgencorp is a Kentucky company but did not allege the location of Dolgencorp's principal place of business. Id.
Standifer sued Dolgencorp in the 414th Judicial District of McLennan County, Texas on April 12, 2022. Id. at 1. Standifer indicated that she sought monetary damages under $250,000 pursuant to Texas Rule of Civil Procedure 47(c). Id. In the next paragraph, Standifer further pled that “the amount in controversy is not greater than $75,000.00” Id.
Dolgencorp removed this case to federal court on January 12, 2023. Def.'s Notice of Removal. Dolgencorp filed its notice of removal after receiving a settlement demand of $120,000 from Standifer's counsel. Id. at 2. Dolgencorp alleges that it is a citizen of Kentucky and Tennessee. Id. Dolgencorp also alleges that Standifer's settlement demand makes it clear that the amount in controversy is greater than $75,000, granting this Court subject matter jurisdiction.
II. LEGAL STANDARD
Plaintiffs may file a motion to remand under 28 U.S.C. § 1447(c) if they believe that removal to federal court was improper. Plaintiffs can seek remand for lack of subject matter jurisdiction, a procedural defect in removal, or both. See Baris v. Sulpico Lines, Inc., 932 F.2d 1540, 1543 (5th Cir. 1991). Plaintiffs can move to remand for lack of subject matter jurisdiction at any time. See id. at 1543-44.
The party seeking removal bears the burden of proving that removal was proper. Tex. Brine Co. v. Am. Arb. Ass'n, 955 F.3d 482, 485 (5th Cir. 2020). Defendants can generally remove any state court civil action for which the federal district courts have original jurisdiction. 28 U.S.C. § 1441. To remove a state court civil action, defendants must file a notice of removal in the federal district and division where the state court action is proceeding. 28 U.S.C. § 1446. The notice of removal must include a short and plain statement of the grounds for removal along with copies of all process, pleadings, and orders served upon the defendants. Id.
Defendants generally must remove state court civil actions within thirty days of receipt of service of the initial pleading. Id. If the face of the initial pleading does not indicate that defendants can remove the case-but a subsequently amended petition, motion, order, or other paper allows defendants to ascertain that the case is removable-defendants can remove within thirty days from service of that amended petition, motion, order, or other paper. Id. In any event, all properly joined and served defendants must join or consent to removal. Id.
Several procedural removal requirements are unique for diversity of citizenship cases. For diversity of citizenship cases, the plaintiff's good faith demand controls the amount in controversy. Id. Defendants may not remove a state court action solely based on diversity of citizenship more than one year after the plaintiff has commenced the state court action unless the district court finds that the plaintiff acted in bad faith to prevent removal. Id. If diversity of citizenship is the defendants' sole basis for removing a state court action, the defendants may not properly remove the action if any properly joined and served defendant is a citizen of the forum state. 28 U.S.C. § 1441.
III. ANALYSIS
Standifer filed this Motion to Remand, arguing that the amount she pled in her state court petition controls over the amount in her settlement demand. Standifer argues that her settlement demand is not evidence of the amount in controversy because it is not a reasonable estimate of the value of her claim. Pl.'s Mot. at 1 (citation omitted).
Dolgencorp argues first that Standifer is not permitted to plead that the amount in controversy is not greater than $75,000. Def.'s Resp. at 2. To support its position, Dolgencorp cites several cases that rely on the Fifth Circuit's recently overturned opinion in De Aguilar v. Boeing Co., 47 F.3d 1404, 1410 (5th Cir. 1995). Until 2013, Texas Rule of Civil Procedure 47 provided that “An original pleading ... shall 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) (1990). Under that rule, Texas state court plaintiffs could not plead a specific sum.
Recently, the Fifth Circuit overturned that rule, holding that a Texas state court plaintiff may file a specific amount under the 2013 amendment to Texas Rule of Civil Procedure 47. Durbois v. Deutsche Bank Nat'l Tr. Co. as Tr. of Holders of AAMES Mortgage Inv. Tr. 20054 Mortgage Backed Notes, 37 F.4th 1053, 1060 (5th Cir. 2022). This was because the amendment omitted the word “only.” Id. “Even more, after the amendment, Rule 47 contemplates pleadings that ‘specify the maximum amount claimed.'” Id. citing Tex.R.Civ.P. 47. Thus, a state plaintiff may plead damages in such a way that deprives federal courts of diversity jurisdiction. Id. Dolgencorp's argument that Standifer was not permitted to plead that the amount in controversy is not greater than $75,000 is inconsistent with Durbois.
Dolgencorp also argues that Plaintiff's damage allegation was “fraudulent and made in bad faith.” Def.'s Resp. at 2-3. Dolgencorp asserts that the settlement demand letter clearly indicates that Standifer's initial pleading demand was not made in good faith. See id. Standifer argues that she “has no intention of asking a jury for an amount in excess of $75,000.00 for this action because [her] overall medical bills total $20,654.25, and [she] did not receive any life altering injuries as a result of the incident made the basis of this suit.” Pl.'s Mot. at 2. Standifer further contends that the amount in the “demand was six times [her] total medical bills and was sent in an effort of ‘posturing' hoping to allow [the parties] to amicably resolve this claim without unnecessary litigation.” Id. Standifer goes on to say that Dolgencorp's “unwillingness to respond or attempt to resolve this claim at all should be telling evidence of the reasonable value of this claim.” Id. at 3.
Courts must determine whether bad faith exists on a case-by-case basis. Vallecillo v. Wells Fargo Home Mort. Fin., No. 5:16-CV-935-DAE, 2017 WL 9935522, at *2 (W.D. Tex. Sept. 18, 2017) (citations omitted). A determination of bad faith is generally subject to a high burden, and courts are reluctant to find a party acted in bad faith without clear and convincing proof. Bone v. Lowe's Home Ctrs. LLC, No. 3:19-CV-1211-S, 2019 WL 5579206, at *2 (N.D. Tex. Oct. 29, 2019). The burden of showing bad faith lies with the defendant seeking removal. Id.
Here, Dolgencorp did not carry its burden. Many courts in the Fifth Circuit consider demand letters as evidence of the amount in controversy. King v. Ameriprise Fin. Servs., Inc., No. Civ.A. C-09-112, 2009 WL 1767641, at *3-4 (S.D. Tex. June 19, 2009) (collecting citations). Demand letters, however, are only useful when they are a reasonable estimate of the value of the plaintiff's claims. See Maddox v. Walgreen, Co., No. 3:05CV430BN, 2005 WL 8171695, at *3 (S.D.Miss. Aug. 26, 2005) (holding that a demand of $195,000 was a reasonable estimate of plaintiff's claims when the demand letter indicated that “the case has a value of at least $500,000.”). No party here argues that Standifer's demand was a reasonable estimate of the value of her claim. Instead, Standifer all but acknowledges that her demand was outrageous. See Pl.'s Mot. Thus, Standifer's demand letter does not carry the burden of proving that Standifer acted in bad faith by pleading that she does not seek more than $75,000. Accordingly, Standifer's Motion should be granted and this case should be remanded to the 414th Judicial District Court in McLennan County, Texas.
IV. CONCLUSION
After thoroughly reviewing the record, the undersigned RECOMMENDS that Standifer's Motion to Remand, ECF No. 5, be GRANTED. Therefore, the undersigned RECOMMENDS that this cause be REMANDED to the 414th Judicial District Court in McLennan County, Texas.
V. OBJECTIONS
The parties may wish to file objections to this Report and Recommendation. Parties filing objections must specifically identify those findings or recommendations to which they object. The District Court need not consider frivolous, conclusive, or general objections. See Battle v. U.S. Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen (14) days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report. See 28 U.S.C. § 636(b)(1)(C); Thomas v Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415 (5th Cir. 1996) (en banc). Except upon grounds of plain error, failing to object shall further bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas, 474 U.S. at 150-53; Douglass, 79 F.3d at 1415.