Mcc Mortgage Lp v. Office Depot Inc, Civ. No. 10-191 (RHK/JJK).

Decision Date12 February 2010
Docket NumberCiv. No. 10-191 (RHK/JJK).
Citation685 F.Supp.2d 939
PartiesMCC MORTGAGE LP, Plaintiff, v. OFFICE DEPOT, INC., Defendant.
CourtU.S. District Court — District of Minnesota

Kevin R. Coan, Laura N. Maupin Barnes & Thornburg LLP, Minneapolis MN, for Plaintiff.

Ronn B. Kreps, Andre T. Hanson, Sparrowleaf Dilts McGregor, Fulbright & Jaworski LLP, Minneapolis, MN, for Defendant.


RICHARD H. KYLE, District Judge.


In this action, Plaintiff MCC Mortgage LP ("MCC") sued Defendant Office Depot Inc. ("Office Depot") in Minnesota state court, seeking to evict it from certain commercial property it had leased from MCC. Office Depot timely removed the action to this Court, asserting diversity jurisdiction. MCC now moves to remand. For the reasons set forth below, the Court will deny the Motion.


The following facts are gleaned from the parties' pleadings and the documents attached thereto. In 1999, MCC leased to Office Depot, a nationwide chain of officesupply stores, nearly 27, 000 square feet of retail space at an office/retail complex in Minneapolis known as Minneapolis City Center.1 Pursuant to the lease, Office Depot agreed to pay MCC a monthly rent of slightly more than $15,000. The lease was for an initial ten-year term, and Office Depot, at its discretion, had the option to renew it for additional five-year terms, up to four times (ie., up to an additional 20 years); the rent would change with each renewal, but would always remain at least $10,000 per month.

The presence of other retail stores at Minneapolis City Center was an important consideration for Office Depot entering into the lease, as such stores would drive customers to the Office Depot location. Accordingly, MCC agreed to include in the lease an incentive for Office Depot: a "rent-abatement" provision. Under that provision, MCC agreed that if less than 65% of the space in Minneapolis City Center were leased to retail establishments Office Depot's rent would be abated—that is, it would owe no rent until the retail occupancy exceeded 65%.

Beginning in mid-2003, the required retail occupancy level at Minneapolis City Center was not achieved. Accordingly, Office Depot invoked the rent-abatement provision and informed MCC that it would not be paying rent. MCC agreed with Office Depot's assessment and abated its rent. That abatement continued for more than 5 years, into 2009, after Office Depot had exercised its first renewal option.

According to Office Depot, MCC eventually tired of having a rent-free tenant in prime Minneapolis real estate and began coming up with ways to justify Office Depot's eviction. In early 2009, it sent Office Depot a letter complaining of sign and awning problems at the store. Office Depot quickly corrected the sign problems but could not correct the awning problem without MCC's approval, which, according to Office Depot, was slow in coming. Approval was finally granted in October 2009 and Office Depot then undertook the task of hiring a contractor to fix the problem, but repairs were not completed until January 2010. In the meantime, MCC claimed that Office Depot's failure to remedy the problem within 30 days of being authorized to do so rendered it in default under the lease—it then asserted that the rentabatement provision no longer applied and began demanding monthly rent, which Office Depot has not paid.

On December 29, 2009, MCC commenced the instant action in Hennepin County District Court, seeking Office Depot's eviction pursuant to Minnesota Statutes § 504B.001 et seq.; the matter was set for a hearing on January 11, 2010. Office Depot answered the Complaint and demanded a jury trial, and at the January 11 hearing, the parties jointly agreed to a February 2, 2010, trial date before a Hennepin County District Court Judge. A short time later, MCC amended its Complaint, and Office Depot then removed the action to this Court, invoking diversity jurisdiction. In its Notice of Removal, Office Depot asserted that the $75,000 amount-in-controversy requirement has been satisfied because "the value of the alleged right sought to be enforced by Plaintiff in this action, recovery of the property or the forced payment of rent in contravention of the Lease's abatement provision,... exceeds $100,000 for this year alone, and exceeds $2,000, 000.00 for the remaining life of the lease." (Notice of Removal ¶ 6.)

MCC then moved to remand this action to state court. In its Motion, it asserted that an eviction action under Chapter 504B seeks possession of property only and not damages, and therefore the $75,000 jurisdictional threshold had not been met. After reviewing MCC's Motion, the Court, sua sponte, also raised two additional issues: (1) whether jurisdiction is lacking because of the summary nature of eviction proceedings versus the plenary nature of civil actions in federal court, and (2) whether the Court should abstain from hearing this action even if subject-matter jurisdiction exists.2 The Court directed Office Depot to address these issues in writing on or before February 8, 2010. Office Depot timely filed a response, and on February 10, 2010, MCC filed a reply. The matter is now ripe for disposition.

I. The amount in controversy

A. Removal and remand generally

28 U.S.C. § 1441(a) permits the removal of "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." If a case over which the Court lacks jurisdiction is removed from state court, it must be remanded. 28 U.S.C. § 1447(c).

Under the diversity-jurisdiction statute, district courts enjoy original jurisdiction over cases between citizens of different states where the amount in controversy exceeds $75,000. 28 U.S.C § 1332(a). Where a case is removed on diversity grounds, the defendant bears the burden of establishing that the amount-incontroversy requirement has been satisfied. E.g., Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir.2009). If the complaint does not specify an amount in controversy the defendant must show by a preponderance of the evidence that the jurisdictional threshold has been met. E.g., In re Minn. Mut. Life Ins. Co. Sales Practices Litig., 346 F.3d 830, 834 (8th Cir.2003). Stated differently, in such a situation a removing defendant must show that the claims "could, that is might, legally satisfy the amount in controversy requirement." James Neff Kramper Family Farm P'ship v. IBP, Inc., 393 F.3d 828, 831 (8th Cir. 2005); accord, e.g., Kopp v. Kopp, 280 F.3d 883, 885 (8th Cir.2002) ("The jurisdictional fact... is not whether the damages are greater than the requisite amount, but whether a fact finder might legally conclude that they are.") (emphases added).

B. The amount-in-controversy requirement here

The crux of MCC's argument is that this action seeks only repossession of the leased property, not damages (save de minimis costs and disbursements incurred in connection with filing this case). (See Pl. Mem. at 6.) Because eviction actions in Minnesota "provide [no] vehicle for a monetary award," it argues that this lawsuit "does not meet the 'amount in controversy' requirement of 28 U.S.C. § 1332(a)." (Id. at 6-7.) In support, it has cited one case: Mousel v. Knutson Mortgage Corp., 823 F.Supp. 658 (D.Minn.1993) (MacLaughlin, J.). The facts and procedural history of Mousel are complicated and need not be repeated here. Suffice it to say, Mousel concerned several lawsuits arising out of the foreclosure of a mortgage on real property on which Brett Mousel lived. One such lawsuit was an unlawful-detainer action commenced against Mousel by his mortgagee (Knutson), which had been removed to this Court. In dicta, Mousel noted that remand of the unlawful-detainer action was appropriate because the Court lacked diversity jurisdiction:

In order for diversity jurisdiction to exist, the action must be between parties of different states, and the amount in controversy must exceed $50,000. 28 U.S.C. § 1332(a). Although the parties to this action are citizens of different states, the amount in controversy does not exceed $50,000. In its unlawful detainer action, Knutson seeks only restitution of the premises and its costs and disbursements. Because Knutson's complaint does not meet the amount in controversy requirement, diversity jurisdiction does not exist.

Id. at 662. MCC seizes on this dicta to argue that diversity jurisdiction is lacking here. The Court does not agree.

It is true that the Complaint in this case seeks only repossession of the leased property and not monetary damages. But federal courts often are confronted with cases seeking various types of non-monetary relief, such as declaratory judgments confirmation or vacation of arbitration awards, injunctions, and other equitable remedies. Under MCC's logic, subjectmatter jurisdiction would be lacking in all such actions, because no money damages are sought therein. Clearly that is not the law. See, e.g., City of Univ. City, Mo. v.AT & T Wireless Servs., Inc., 229 F.Supp.2d 927, 933 (E.D.Mo.2002) ("It is the substance of the claim, not the conclusory recitation of its worth, that will determine if federal jurisdiction is extant."). Instead, "[t]he amount in controversy is tested by the value of the suit's intended benefit to the plaintiff." Mass. State Pharm. Ass'n v. Fed. Prescription Serv., Inc., 431 F.2d 130, 132 (8th Cir.1970); accord, e.g., Advance Am. Servicing of Ark., Inc. v. McGinnis, 526 F.3d 1170, 1173 (8th Cir.2008); Burns v. Mass. Mut. Life Ins. Co., 820 F.2d 246, 248 (8th Cir.1987). "Thus, a court should examine the value of the right the plaintiff seeks to enforce, or put differently, the object the plaintiff seeks to accomplish through litigation." Garland v. Mortgage Elec. Registration Sys., Inc., Civ. Nos. 09-71, 09-72, 09-342, 09-430, 2009 WL 1684424, at *1 (D. Minn. June 16, 2009) (Ericksen, J., adopting Report & Recommendation of Graham, M.J.). Mousel makes no...

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