Cleartrac, LLC v. Lanrick Contractors, LLC, CIVIL ACTION NO. 19-12137
| Citation | 432 F.Supp.3d 648 |
| Decision Date | 08 January 2020 |
| Docket Number | CIVIL ACTION NO. 19-12137 |
| Parties | CLEARTRAC, LLC et al. v. LANRICK CONTRACTORS, LLC et al. |
| Court | U.S. District Court — Eastern District of Louisiana |
Brett M. Bollinger, Jeffrey E. McDonald, Larry Peter Englande, Jr., Treadaway Bollinger, LLC, Covington, LA, for Cleartrac, LLC et al.
Frank Joseph DiVittorio, Chehardy, Sherman, Williams, Murray, Recile, Stake, Hammond, LA, for Lanrick Contractors, LLC et al.
SECTION: "G"(2)
ORDER AND REASONS
Before the Court is Defendants Lanrick Contractors, LLC, Lanrick Real Estate, LLC, Southeast Dirt, LLC, Hudson Holdings, LLC, Hudson Holdings Equipment, LLC, and Thomas P. McKellar (collectively, "Defendants") "Motion to Dismiss under Rule 12(b)(1) for Lack of Subject Matter Jurisdiction and Rule 12(b)(3) for Improper Venue."1 In this litigation, Plaintiffs Cleartrac, LLC and Russell Kent Moore ("Plaintiffs") seek to enforce a foreign judgment under the Louisiana Enforcement of Foreign Judgments Act.2 In the instant motion, Defendants argue that this Court lacks subject matter jurisdiction over the case because the amount in controversy does not meet the jurisdictional requirements.3 Alternatively, Defendants assert that this Court should abstain from exercising jurisdiction over the case because there is an identical pending state court proceeding that has progressed to the point of a judgment dismissing Plaintiffs' claims.4 In opposition, Plaintiffs assert that the amount in controversy exceeds $75,000, and the state litigation does not affect the instant proceedings.5 Having considered the motion, the memoranda in support and opposition, the record, and the applicable law, the Court denies the motion.
On August 26, 2010, a default judgment was rendered in favor of Cleartrac, LLC ("Cleartrac") and against Lanrick Contractors Corp. ("Lanrick") by the 272nd Judicial District Court for the County of Brazos, State of Texas (the "Texas Judgment").6 The Texas Judgment awarded Cleartrac $51,519.47 in principal; pre-judgment interest in the amount of $1,313.16; $3,000 in attorneys' fees for filing and prosecuting the claim; $2,500 in post-judgment collection efforts; $500 in court costs; and post-judgment interest at the rate of 5% from the date of judgment until paid in full.7 Plaintiffs allege that the Texas Judgment is now final as no appeals were taken.8
On November 16, 2011, following entry on of the Texas Judgment, Cleartrac filed a "Petition to Make Judgment Executory" against Lanrick in the 21st Judicial District Court for the Parish of Tangipahoa, State of Louisiana.9 On November 21, 2011, the Louisiana state court ordered the Texas Judgment be made executory and the judgment of the Louisiana state court.10 On August 3, 2017, Cleartrac filed a "Petition to Enforce Judgment" in the Louisiana state court, seeking to enforce the Texas Judgment against Lanrick.11 On July 9, 2018, Cleartrac filed a "First Amended Petition to Enforce Judgment" in the Louisiana state court, adding Lanrick Real Estate, LLC, Southeast Dirt, LLC, Hudson Holdings, LLC, Hudson Holdings Equipment, LLC, Thomas P. McKellar, and Lisa C. McKellar as defendants.12 On August 5, 2019, the Louisiana state court granted Defendants' exception of no right of action.13 Cleartrac was given an opportunity to amend its petition to cure the defect, but it failed to do so.14 Therefore, on August 19, 2019, the Louisiana state court entered judgment dismissing Cleartrac's action.15 On December 9, 2019, Cleartrac filed a notice of appeal, and the Louisiana state court granted Cleartrac a suspensive appeal from the Judgment.16
In the interim, on August 13, 2019, Plaintiffs filed a Complaint in this Court against Defendants seeking to make the Texas Judgment executory and to enforce the Texas Judgment.17 On September 9, 2019, Defendants filed the instant motion to dismiss.18 On September 10, 2019, Plaintiffs filed an opposition to the motion.19
In the instant motion, Defendants argue that this Court lacks subject matter jurisdiction over the case because the amount in controversy does not meet the jurisdictional requirements.20 Alternatively, Defendants assert that this Court abstain from exercising jurisdiction over the case because there is an identical pending state court proceeding that has progressed to the point of a judgment dismissing Plaintiffs' claims.21
First, Defendants assert that the amount in controversy does not exceed $75,000.22 Defendants contend that the Texas Judgment awarded $51,519.47 in principal; $3,000 in attorney fees for filing and prosecution the claim; and $2,500 for post-judgment collection efforts, totaling $57,019.47.23 Defendants argue that "[i]nterest is not counted if it ‘was an incident arising solely by virtue of a delay in payment’ of the underlying amount in controversy."24 According to Defendants, the interest awarded by the Texas Judgment at issue in this case is based exclusively upon delay in payment and, therefore, not subject to inclusion in the amount in controversy.25 Defendants recognize that some authority indicates that pre-judgment interest may be included when calculating the amount in controversy, but here Defendants note that pre-judgment interest only totaled $1,306.10, which would bring the total amount in controversy to only $58,325.57.26 Defendants cite district court opinions to support their position that post-judgment interest cannot be used to establish the amount in controversy because then a party could delay suit in order to accumulate the jurisdictional amount.27 Therefore, Defendants argue that post-judgment interest should not be used to establish the amount in controversy in this case, and this case should be dismissed for lack of subject matter jurisdiction.28
Alternatively, Defendants assert that this Court should abstain from exercising jurisdiction over the case because there is an identical pending state court proceeding that has progressed to the point of a judgment dismissing Plaintiffs' claims.29 According to Defendants, Cleartrac filed an identical suit in Louisiana state court against Lanrick Contractors, LLC in August 2017 and amended the suit to include all of the defendants in July 2018.30 Defendants aver that "[a]fter years of litigation, extensive discovery, and multiple hearings, including a judgment dismissing plaintiffs' claims the plaintiffs now seek a second bite at the apple in this Court."31 Defendants note that the Louisiana state court entered judgment on August 5, 2019, and Plaintiffs initiated this suit on August 13, 2019.32 Defendants assert that the amount of process afforded in the Louisiana state court litigation should be a consideration of this Court in declining to exercise jurisdiction.33 Defendants contend that allowing Plaintiffs "to select a forum, litigate to the point of an adverse ruling years later, and simply pick another forum in hopes of a different result is not wise judicial administration."34 Therefore, Defendants argue that this Court should abstain from exercising jurisdiction over the case based upon the identical pending state court proceeding that has progressed to the point of a judgment dismissing Plaintiffs' claims.35
In opposition, Plaintiffs argue that the amount in controversy exceeds $75,000 because interest was part of the Texas Judgment and should be included in calculating the amount in controversy.36 Plaintiffs contend that they are seeking to collect the Texas Judgment, which unequivocally provided for post-judgment interest at a rate of 5% per day.37 Therefore, Plaintiffs assert that the amount in controversy exceeds the jurisdictional minimum.38
Next, Plaintiffs contend it is immaterial that Cleartrac has concurrent proceedings pending in state and federal court.39 Plaintiffs assert that abstention is not warranted in this case because this forum is not inconvenient to Defendants, who are Louisiana residents.40 Additionally, Plaintiffs argue that the state proceedings do not adequately protect the rights of Plaintiffs because the Louisiana state court is misinterpreting Texas law.41 Plaintiffs argue that this Court is in the better position to correctly interpret Texas.42 Furthermore, Plaintiffs note that Plaintiff Russell Kent Moore is not a party to the Louisiana state court action.43 Therefore, Plaintiffs contend that abstention would not serve the interests of justice.44 Finally, Plaintiffs contend that "Defendants' request to consider the amount of process in the state court action cuts the other way" as Defendants have repeatedly attempted to delay or hinder the proceedings in state court.45
"Federal courts are courts of limited jurisdiction," and "possess only that power authorized by the Constitution and statute."46 Under Rule 12(b)(1), "[a] case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case."47 In ruling on a Rule 12(b)(1) motion to dismiss, the Court may rely on: (1) the complaint alone, presuming the allegations to be true; (2) the complaint supplemented by undisputed facts; or (3) the complaint supplemented by undisputed facts and the court's resolution of disputed facts.48 The plaintiff, as the party asserting jurisdiction, has the burden of proving subject matter jurisdiction by a preponderance of the evidence.49
The diversity statute, 28 U.S.C. § 1332, is satisfied upon a showing of (1) diversity between the parties; and (2) an amount in controversy exceeding $75,000, "exclusive of interest and costs."50 The burden of proving diversity jurisdiction "rests upon the party who seeks to invoke the court's diversity jurisdiction."51 To determine whether the jurisdictional...
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