Hayes Bros. Flooring Co. v. Kenworth Motor Truck Co., B-71-C-7.

• Decision Date: 14 March 1973
• Docket Number: No. B-71-C-7.,B-71-C-7.
• Parties: HAYES BROTHERS FLOORING CO., Plaintiff, v. KENWORTH MOTOR TRUCK CO., Defendant.
• Court: U.S. District Court — Eastern District of Arkansas

355 F. Supp. 1099

HAYES BROTHERS FLOORING CO., Plaintiff, v. KENWORTH MOTOR TRUCK CO., Defendant.

No. B-71-C-7.

United States District Court, E. D. Arkansas, N. D.

March 14, 1973.

John Norman Harkey, of Harkey & Walmsley, Batesville, Ark., for plaintiff.

H. David Blair of Murphy, Arnold & Blair, Batesville, Ark., for defendant.

Memorandum and Order of Remand

HENLEY, Chief Judge.

This action at law for damages resulting from alleged negligence in the repair of a motor vehicle was commenced by plaintiff, Hayes Brothers Flooring Co., against the defendant, Kenworth Motor Truck Co., in the Circuit Court of Izard County, Arkansas. The case was timely removed to this Court on the basis of diversity of citizenship and an alleged amount in controversy in excess of $10,000.

The case duly came to issue and was set for trial at Batesville, Arkansas, during the December 1972 session of Court held at that point. By agreement the case was removed from the trial docket, and it was further agreed that it would be submitted to the Court upon two discovery depositions.

Before considering the depositions the Court reexamined the pleadings in the case and noted that the total amount of plaintiff's demand was $11,100. The Court also noted, however, that the complaint showed on its face that $2,000 of the amount claimed was attributed to loss of use of the vehicle allegedly caused by the negligence of the defendant. And loss of use damage is not recoverable in Arkansas in a case of this kind. It is obvious that if the $2,000 item is eliminated in determining whether jurisdictional amount is present, the remainder of the demand does not meet the jurisdictional requirement of 28 U. S.C.A., section 1332(a) and section 1441(a).

It is elementary that federal subject matter jurisdiction cannot be conferred by consent, and 28 U.S.C.A., section 1447(c) specifically provides that if at any time before final judgment it appears that a case was removed from State court improvidently and without jurisdiction, the federal district court is to remand the case to the State court whence it was removed.

In an action to recover unliquidated tort damages jurisdictional amount is generally determined by reference to the amount claimed by the plaintiff when the suit was filed or at the time of removal, and the fact that plaintiff may ultimately recover less than the federal jurisdictional amount does not defeat federal jurisdiction. That general rule, however, is subject to an important exception which is applicable to this case and which requires it to be remanded to the Circuit Court.

If as a matter of substantive State law the plaintiff cannot recover more than $10,000, exclusive of interest and costs, the federal court has no jurisdiction even though plaintiff may ask for judgment in excess of the jurisdictional minimum. St. Paul Mercury Indemnity Co. v. Red Cab Co., 1938, 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845. And if an element of damage claimed by a plaintiff is not recoverable as a matter of substantive law, that element cannot be considered in determining jurisdictional amount. Ringsby Truck Lines, Inc. v. Beardsley, 8 Cir., 1964, 331 F.2d 14; Wright On Federal Courts, 2d Ed., § 33, p. 112.

In Beardsley, supra, plaintiff sued in federal court in Missouri to rescind a contract on the ground of fraud. In addition to rescission plaintiff sought compensatory damages in the amount of $6,000 and punitive damages in the amount of $25,000. The controlling substantive law was that of Colorado, and under that body of law punitive damages are not recoverable in an action for rescission. The Court of Appeals held that the $25,000 figure should have been left out of account in determining the question of jurisdiction, and that the complaint should be dismissed for lack of jurisdiction.

In an effort to sustain this Court's jurisdiction, counsel for defendant cites Bell v. Hood, 1946, 327 U.S. 678, 66 S. Ct. 773, 90 L.Ed. 939. In that case the Supreme Court held that the question of whether a federal court has jurisdiction of a case is different from the question of whether the complaint states a cause of action....