LOEW'S, INC. v. Royal, Civ. A. No. 1000.

• Decision Date: 16 February 1966
• Docket Number: Civ. A. No. 1000.
• Citation: 254 F. Supp. 88
• Court: U.S. District Court — Southern District of Mississippi
• Parties: LOEW'S, INC., Plaintiff, v. Alexander Lloyd ROYAL, Defendant.

254 F. Supp. 88

LOEW'S, INC., Plaintiff, v. Alexander Lloyd ROYAL, Defendant.

Civ. A. No. 1000.

United States District Court S. D. Mississippi, E. D.

February 16, 1966.

Earl T. Thomas, Jack W. Brand, Wells, Thomas & Wells, Jackson, Miss., and Sargoy & Stein, New York City, for plaintiff.

deQuincy V. Sutton, Meridian, Miss., for defendant.

RUSSELL, District Judge.

This diversity of citizenship action was filed in 1959 by Loew's, Incorporated, now M.G.M., a motion picture distributor, at the same time as actions by two other distributors, all three suits being against Alexander Lloyd Royal, individually and doing business under the name and style of Royal Theatres, who exhibited plaintiff's pictures at various of his theaters. The suits have not been consolidated. The complaint herein seeks to recover damages "in excess of $10,000.00" for incorrect, false and fraudulent under-reporting of gross admission receipts by defendant from three theaters beginning January 1, 1953, together with interest and costs. Defendant filed a motion to dismiss, asserting among other grounds, that the complaint fails to establish that the amount in controversy exceeds the jurisdictional amount of $10,000.00. This motion was overruled, and defendant filed his answer of general denial. Plaintiff moved for production of documents under Rule 34 of the Federal Rules of Civil Procedure, supported by a lengthy affidavit to the effect that the furnishing of records in the possession and control of defendant was necessary for plaintiff's proof. While this motion was pending, and after plaintiff filed answers to defendant's interrogatories, earlier requested, defendant moved to revive his motion to dismiss. The same District Judge, who overruled the original motion to dismiss, overruled the motion to revive, and sustained plaintiff's motion under Rule 34. Over a year later, defendant having not complied with the order of the Court to produce the documents, plaintiff secured an order from a second District Judge, then sitting, requiring defendant to produce same under penalty of arrest and default judgment, damages to be determined on proof. After authorizing plaintiff to secure certain of the documents from taxing and banking authorities, defendant refused to answer questions concerning same, and the second District Judge ordered him to do so and directed that he pay the sum of $250.00 in plaintiff's attorney fees. Thereafter, defendant again filed a motion to dismiss, alleging lack of jurisdictional amount, which motion was overruled by the aforesaid second District Judge. Prior to trial, defendant filed his fourth motion to dismiss for lack of jurisdiction and at the trial orally renewed this motion, which I, as the third District Judge to sit on the case, orally denied along with a denial of defendant's motion for jury trial. Because of defendant's repeated insistence that plaintiff's allegation of required jurisdictional facts was spurious, and because as hereinafter shown, plaintiff did indeed fail to show damages of more than the jurisdictional amount, and with all respect to the previous judges who considered defendant's motions at various times during the pleading skirmishes prior to trial, I feel it incumbent to consider the matter in detail. In two other cases on similar causes of action, Columbia Pictures Corporation v. Rogers (1949), D.C., 81 F. Supp. 580, and Columbia Pictures Corporation v. Grengs (1958), 7 Cir., 257 F.2d 45, wherein plaintiffs alleged damages in excess of the jurisdictional amount, at the same time pleading, as here, their inability to compute the exact amount of damages, such being based on facts peculiarly within the knowledge of defendants, both federal courts retained jurisdiction. In the Grengs case, the Court stated: "Obviously sham allegations and mere pretense should be penetrated when challenged, but the plaintiff need not twice establish his proof of value—once before trial on the merits and later on the merits when issues are joined under complaint and answer. Mere pretense of the disputed amount is one extreme in contrast with a jurisdictional claim appearing to be made in good faith." The Court then quoted from Mr. Justice Roberts in St. Paul Mercury Indemnity Co. v. Red Cab Company, 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845, which held: "It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal. The inability of plaintiff to recover an amount adequate to give the court jurisdiction does not show his bad faith or oust the jurisdiction." And as stated in Wade v. Rogala (1959), 3 Cir., 270 F.2d 280: "The necessary choice, except in the flagrant case, where the jurisdictional issue cannot be decided without the ruling constituting at the same time a ruling on the merits, is to permit the cause to proceed to trial." In the case before me, plaintiff charges...