Glover v. Midland Mortgage Co. of Oklahoma, Inc.
| Decision Date | 07 December 1998 |
| Docket Number | No. CV 98-BU-1211-S.,CV 98-BU-1211-S. |
| Citation | 228 BR 293 |
| Parties | Ronald E. GLOVER, Plaintiff, v. MIDLAND MORTGAGE COMPANY OF OKLAHOMA, INC., Defendant. |
| Court | U.S. District Court — Northern District of Alabama |
Cindee Dale Holmes, Regina Rose Hudson, Birmingham, AL, Shawn M. Hill, Anniston, AL, for plaintiff.
Michael R. Pennington, John Edward Goodman, Douglas E. Eckert, Birmingham, AL, for defendant.
Under 28 U.S.C. § 1447(a), the district court may "at any time prior to final judgment" remand a case to state court if "it appears that the district court lacks subject matter jurisdiction." The court also notes that it is free, at any time during the proceedings of a case to evaluate its subject matter jurisdiction. Federal Rule of Civil Procedure 12(h)(3).1 Upon reviewing the file, the court determines that jurisdiction is lacking and the matter will be REMANDED to the Circuit Court of Jefferson County, Alabama.2
The district court earlier concluded that remand was inappropriate because the plaintiff satisfied the amount in controversy requirement of the diversity jurisdiction statute 28 U.S.C. § 1332(a). Upon reconsideration, this court reaches a different conclusion. The court also concludes that although there may exist bankruptcy jurisdiction over the instant case, the case should be equitably remanded to the state court.
In resolving the issues pertaining to removal and remand, the court first notes certain precepts that are well-established in this circuit:
... On a motion to remand, the removing party bears the burden of establishing jurisdiction. See Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1356 (11th Cir.1996). The removal statute should be construed narrowly with doubt construed against removal. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 107-09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941).
Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir.1996).3
The named plaintiff in the instant case asserts the existence of a purported nationwide class action against the defendant Midland Mortgage Company of Oklahoma, Inc. ("Midland"). According to Glover, Midland, a servicer of home mortgages, charges borrowers in default on their loan payments monthly "property inspection fees," which, he alleges, are not permitted by applicable loan documents and are not necessary for Midland to protect its security interest in the borrowers' real property.
On January 23, 1997, the plaintiff filed a bankruptcy petition under Chapter 13 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Alabama. During proceedings in that court, Midland filed a proof of claim that included the property inspection fees that are the subject of the instant suit. The plaintiff included the property inspection fees among the claims that he would repay under his Chapter 13 plan.
Two bases for removal were originally proposed by the defendant in the instant action. First, the defendant contended that removal was proper under 28 U.S.C. § 1441(a) & (b) because diversity jurisdiction exists pursuant to 28 U.S.C. § 1332. It was on this basis that the court earlier denied remand. The defendant also argued that removal was appropriate under the bankruptcy removal statute, 28 U.S.C. § 1452, because the instant case is related to a bankruptcy action under 28 U.S.C. § 1334.4 The district court did not address this argument.
DIVERSITY OF CITIZENSHIP.
The general removal statute, 28 U.S.C. § 1441(a), permits a defendant to remove from state to federal court "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." In the instant case, it was determined that the court had original jurisdiction over the action based on diversity of citizenship. The requirements of diversity jurisdiction under 28 U.S.C. § 1332(a)(1) are, first, complete diversity of state or foreign citizenship between the plaintiffs and all defendants (see Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806) and Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978)) and satisfaction of the present statutory amount in controversy requirement of over "$75,000.00, exclusive of interest and costs." There is no issue here that diversity of citizenship exists between the parties; the named plaintiff is an Alabama citizen and Midland is, apparently, a citizen of the State of Oklahoma. See Supreme Tribe of Ben-Hur v. Cauble, 255 U.S. 356, 364-65, 41 S.Ct. 338, 65 L.Ed. 673 (1921). Instead, the court focuses its attention on whether the amount in controversy requirement has been met.
The court based its earlier opinion that jurisdiction exists on the grounds that the named plaintiff sought, on behalf of the putative class, injunctive relief that could be aggregated and that any class-wide attorneys' fee award would be aggregate relief. For the following reasons, the court will depart from that earlier ruling.
AGGREGATION OF ATTORNEYS' FEES.
The court earlier held it appropriate to aggregate any attorneys' fees that might be awarded and to attribute the amount of those fees to each plaintiff. This conclusion extends the rationale of Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353 (11th Cir.1996), to the aggregation of attorneys' fees to satisfy the amount in controversy requirement in cases involving class claims. This court is aware of a substantial difference of opinion on the issue of whether, and under what circumstances, an attorneys' fee award creates a common and undivided right of a group of plaintiffs subject to aggregation. In explicating the rationale behind such an extension, the court will briefly review Tapscott and some of the history behind it.
In Oliver v. Alexander, 31 U.S. (6 Pet.) 143, 8 L.Ed. 349 (1832), a group of plaintiff seamen attempted to appeal a ruling regarding the recovery of wages, though the claims of none of the individual seamen surpassed the amount in controversy requirement of two thousand dollars for appellate jurisdiction. The Court determined that, although under admiralty law the seamen could jointly bring their contract claims, the claim of each seaman was "distinct and several." Id., 31 U.S. at 147.
One seaman cannot appeal from the decree made in regard to the claim of another, for he has no interest in it, and cannot be aggrieved by it. The controversy, so far as he is concerned, is confined solely to his own claim; and the matter of dispute between him and the owners, or other respondents, is the sum or value of his own claim, without any reference to the claims of others. It is very clear, therefore, that no seaman can appeal from the district court to the circuit court, unless his own claim exceeds fifty dollars; nor from the circuit court to the Supreme Court, unless his claim exceeds two thousand dollars. And the same rule applies to the owners or other respondents, who are not at liberty to consolidate the distinct demands of each seaman into an aggregate, thus making the claims of the whole the matter in dispute; but they can appeal only in regard to the demand of a seaman which exceeds the sum required by law for that purpose, as a distinct matter in dispute.
Id. at 147-48. This holding of the Supreme Court, that separate and distinct claims of plaintiffs cannot be aggregated to satisfy jurisdictional prerequisites, has been reaffirmed several times. See Stewart v. Dunham, 115 U.S. 61, 64-65, 5 S.Ct. 1163, 29 L.Ed. 329 (1885) (); Troy Bank of Troy, Indiana v. G.A. Whitehead & Co., 222 U.S. 39, 40-41, 32 S.Ct. 9, 56 L.Ed. 81 (1911) ().
Although plaintiffs with separate and distinct claims are not permitted to aggregate those claims to reach the amount in controversy, where the matter in controversy involves a collective right, not particular to each individual plaintiff, the Court has held that aggregation is permissible. See The "Connemara", 103 (13 Otto) 754, 755-56, 26 L.Ed. 322 (1880). Thus, where a group of plaintiffs "have a common and undivided interest in the matter in controversy" aggregation is appropriate. Gibbs v. Buck, 307 U.S. 66, 74, 59 S.Ct. 725, 83 L.Ed. 1111 (1939).
In Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969), the Supreme Court addressed the question of whether the claims of the plaintiffs in a class could, merely by virtue of the plaintiffs' class status, be aggregated to satisfy the amount in controversy requirement. The Supreme Court rebuffed this suggestion, holding that the mere fact that plaintiffs bring their action as a class does not justify aggregating the plaintiffs' claims for satisfaction of the amount in controversy. Id. at 338, 89 S.Ct. 1053. Only those or "in which two or more plaintiffs unite to enforce a single title or right in which they have a common and undivided interest" would aggregation be permitted. Id. at 335, 89 S.Ct. 1053.
In considering what constitutes a common and undivided interest susceptible to aggregation, the Fifth Circuit Court of Appeals has stated:
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