Dosdall v. Fraser

• Citation: 246 F. Supp. 311
• Decision Date: 12 October 1965
• Docket Number: Civ. No. 548.
• Parties: Orie DOSDALL, Plaintiff, v. R. B. FRASER and William Daum, Defendants.
• Court: U.S. District Court — District of Montana

246 F. Supp. 311

Orie DOSDALL, Plaintiff, v. R. B. FRASER and William Daum, Defendants.

Civ. No. 548.

United States District Court D. Montana, Billings Division.

October 12, 1965.

Joseph P. Hennessey, Billings, Mont., for plaintiff.

Crowley, Kilbourne, Haughey, Hanson & Gallagher and Sandall, Moses & Cavan, Billings, Mont., for defendants.

JAMESON, District Judge.

Plaintiff seeks (1) a judicial determination of conflicting lease claims to 160 acres of land on the Crow Indian Reservation owned by certain Crow Indians; (2) an order enjoining defendants from asserting any claims to the lands; and (3) a preliminary injunction to continue until the final determination of the action.

Defendants moved to dismiss on the ground that the court lacks jurisdiction (1) because the amount in controversy is less than $10,000, exclusive of interest and costs, and (2) because no federal question has been presented.

Plaintiff contends that the action is one which "arises under the Constitution, laws, or treaties of the United States" under 28 U.S.C.A. § 1331,¹ and that the amount in controversy exceeds $10,000, exclusive of interest and costs.

Defendants first attacked the jurisdiction of the court at the hearing on plaintiff's application for a temporary injunction. At that time the court ruled that the jurisdictional issue should be determined before proceeding further with the hearing. Briefs were filed by the respective parties, and thereafter the motion to dismiss was set for hearing pursuant to Rule 12(d), F.R.Civ.P.² At the hearing oral testimony was submitted by both parties, and following the hearing both parties filed supplemental briefs.

On the basis of all of the evidence now before the court, including the oral testimony, affidavits, and all documents submitted, I conclude the defendants' motion to dismiss for failure by plaintiff to establish the existence of the required amount in controversy must be granted. It is, therefore, unnecessary to reach the issue of the existence of a federal question.

Plaintiff's amended complaint does contain the formal allegation that the amount in controversy exceeds $10,000, exclusive of interest and costs.³ Although such an allegation is sufficient from the standpoint of pleading (KVOS, Inc. v. Associated Press, 1936, 299 U.S. 269, 277, 57 S.Ct. 197, 81 L.Ed. 183; Yoder v. Assiniboine and Sioux Tribes of Fort Peck Indian Reservation, 9 Cir. 1964, 339 F.2d 360), when it was denied by the defendants it became an issue of fact which the plaintiff had the burden of establishing. McNutt v. General Motors Acceptance Corporation, 1936, 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135; City of Forsyth v. Mountain States Power Co., 9 Cir., 1942, 127 F.2d 583; Yoder v. Assiniboine and Sioux Tribes of Fort Peck Indian Reservation, supra.

Plaintiff premises his entire argument on the assumption that the net profits which he could be expected to earn during the term of the lease represent the amount in controversy. In determining the propriety of this premise it is essential to keep in mind the nature of the relief sought by plaintiff. This is not an action for damages. No claim for either general or special damages resulting from the defendants' alleged wrongful holding of the property has been made.⁴ Rather, the relief sought is equitable in nature, i. e., that the adverse claims of the parties be resolved, and that the defendants be enjoined from asserting any claim to the property. In essence plaintiff treats the defendants as trespassers upon his alleged leasehold interest. He seeks to quiet his leasehold title, and by injunction oust the defendants from possession.

It is well settled that in a suit seeking an injunction the amount in controversy for jurisdictional purposes is the value to the plaintiff of the right to be protected. McNutt v. General Motors Acceptance Corp., supra, Yoder v. Assiniboine and Sioux Tribes of Fort Peck Indian Reservation, supra; Purcell v. Summers, 4 Cir. 1942, 126 F.2d 390. Here the plaintiff seeks to protect his leasehold interest in the land. Accordingly, the basic issue for determination is: "What is the value of plaintiff's claimed lease right?" In determining the value of the lease right we must consider the crucial question of the yardstick to be used in measuring the value of the right. On this point the parties are sharply divided.

Neither counsel have cited, nor have I found, a case factually in point, However, decisions involving analogous situations do provide guidelines which I deem determinative of the instant case.

As noted supra, the plaintiff is, in effect, attempting to quiet title to his lease interests. In Smith v. Adams, 1889, 130 U.S. 167, 9 S.Ct. 566, 569, 32 L.Ed. 895, 898, the Court stated the rule applicable in quiet title actions: "Thus a suit to quiet the title to parcels of real property, or to remove a cloud therefrom, by which their use and enjoyment by the owner are impaired, is brought within the cognizance of the court, under the statute, only by the value of the property affected." See also Woodside v. Ciceroni, 9 Cir. 1889, 93 F. 1, and Jones v. Box Elder County, 10 Cir. 1931, 52 F.2d 340, cert. den. 285 U.S. 555, 52 S.Ct. 456, 76 L.Ed. 944. Similarily in Butters v. Carney, C.C.Nev., 1904, 127 F. 622, 623, a suit seeking to recover possession of realty, it was held that "it is not the value of the defendant's claim that constitutes the amount in controversy, but it is the value of the whole property which plaintiff claims * * *."

In actions to enjoin a trespass which would either destroy the use of the land or involve the land as a whole, the value of the land is considered to be the amount in controversy. Northern Pac. Ry. Co. v. Cunningham, C.C.Wash., 1900, 103 F. 708, 709; Colony Coal and Coke Corp. v. Napier, E.D.Ky., 1939, 28 F.Supp. 76; Swan Island Club, Inc. v. Ansell, 4 Cir. 1931, 51 F.2d 337. If the whole value of the property is not involved, but only a possessory interest, it has been held the value of the possessory interest controls in determining the amount in controversy. Battle v. Atkinson, C.C.E.D.Ark., 1902, 115 F. 384, affirmed 191 U.S. 559, 24 S.Ct. 845, 48 L.Ed. 302; Pioneer Coal Co. v. Bush, E.D.Ky., 1936, 16 F.Supp. 117.

Although the instant case is distinguishable from the above decisions the relief sought involves many of the issues presented in those cases. The same rules are applicable. The "property" here is the lease and, except for plaintiff's argument that the value of the lease is to be measured by net profits, the conclusion seems inescapable that the amount in controversy is the rental value of the lease for the term.⁵

We turn now to a consideration of the plaintiff's argument that expected net profit is the proper basis for determining jurisdictional amount. Plaintiff cites one opinion from the Ninth Circuit, United States v. Cal-Bay Corp., 9 Cir. 1948, 169 F.2d 15, cert. den. 335 U.S. 859, 69 S.Ct. 134, 93 L.Ed. 406, and two Montana cases, Blaustein v. Pincus, 1913, 47 Mont. 202, 131 P. 1064, and Smith v. Fergus County, 1934, 98 Mont. 377, 39 P.2d 193. These cases do not deal with the question here presented and in my opinion are not in point. They simply hold that the item of expected profits is a proper element of damage. None involved the question of amount in controversy as a basis for the court's jurisdiction.⁶ As noted supra, we are not here concerned with the issue of damages.

Moreover, the courts have repeatedly held in actions analogous to the instant case that damages are not to be considered in determining jurisdictional amount. This rule was well stated in Waller v. Prof. Ins. Corp., 5 Cir. 1961, 296 F.2d 545, 547-548:

"Courts look to the value of the property involved rather than the damages that might be suffered, to determine the jurisdictional amount in suits for injunctions (Miller v. Woods, 1950 87 U.S.App.D.C. 324, 185 F.2d 499), in suits for specific performance of a contract to convey realty (Ebensberger v. Sinclair Refining Co., 5 Cir., 1948, 165 F.2d 803, cert. denied 335 U.S. 816 69 S. Ct. 35, 93 L.Ed. 371), and in suits to remove a cloud from the title of realty (Jones v. Box Elder County, 10 Cir., 1931, 52 F.2d 340, cert. den. 285 U.S. 555 52 S.Ct. 456, 76 L.Ed. 944). Underlying these cases is the principle that when the validity of a contract or a right to property is called into question in its entirety, the value of the property controls the amount in controversy."⁷

In my opinion the profits which the plaintiff can expect to earn from the land during the term of the lease (and which conversely, he may lose if relief is not granted) are not directly in controversy. Any loss of profits as a result of the defendants' continued possession of the premises would be in the nature of damages and not indicative of the value of the lease. As stated in Pioneer Coal Co. v. Bush, supra, at 16 F. Supp. 119:

"Controlling decisions show that, in determining

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