Rising-Moore v. Red Roof Inns, Inc.

Decision Date31 January 2006
Docket NumberNo. 05-1976.,05-1976.
Citation435 F.3d 813
PartiesJohn R. RISING-MOORE, Plaintiff-Appellant, v. RED ROOF INNS, INC., Defendant-Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

David W. Gray (argued), Gary P. Price, Lewis & Kappes, Indianapolis, IN, for Plaintiff-Appellant.

Harold Abrahamson (argued), Abrahamson & Reed, Hammond, IN, for Defendant-Appellee.

Before EASTERBROOK, MANION, and WOOD, Circuit Judges.

EASTERBROOK, Circuit Judge.

John Rising-Moore prefers to litigate this slip-and-fall case in state court. But after his lawyer said that the claim was worth between $180,000 and $200,000, and demanded $160,000 in settlement, the suit was removed to federal court, where summary judgment was granted in defendant's favor. 368 F.Supp.2d 867 (S.D.Ind.2005). Rising-Moore asks us to return the proceedings to Indiana, where he can have a second chance on the merits. Diversity of citizenship is established, but the amount in controversy is disputed.

Rising-Moore slipped just outside the lobby door of a Red Roof Inn during a sleet storm. He had been driving late at night from Indianapolis to his home in Bloomfield when bad weather led him to stop at the motel rather than complete the journey. It is unclear whether Rising-Moore had experienced icing conditions on the road or just expected to encounter them before reaching home. He says that the ramp between the lobby door and the parking lot was ice-free when he arrived but had become slick by the time he left the office. Rising-Moore maintains that the fall cost him about $10,000 in direct medical outlays, caused him to miss work for about 10 weeks, and left him with permanent injuries (including ongoing pain and suffering). He makes about $175,000 annually from his business, so Red Roof Inns counts his lost income as about $35,000, which when added to the $10,000 in out-of-pocket costs falls only $30,000 short of the jurisdictional minimum. A modest allowance for pain, suffering, and future losses (either income foregone or medical expenses incurred) brings the total over the threshold. Counsel's estimate that the stakes are more than double the jurisdictional minimum shows, Red Roof Inns maintains, that pain, suffering, and future loss cannot be dismissed as negligible. The district court agreed and denied Rising-Moore's motion to remand. 368 F.Supp.2d 867 (S.D.Ind. 2005).

The complaint filed in state court does not reveal how much Rising-Moore wants as damages. Indiana no longer allows pleadings to do so. Ind. Trial R. 8(A)(2). All too many litigants had made whopping demands in order to generate publicity; Indiana concluded that the best way to curtail this practice is to forbid any statement about how much money the plaintiff seeks. In a system of courts having general jurisdiction, that makes a great deal of sense; it does not mesh well, however, with federal jurisdiction, because removal in diversity suits under 28 U.S.C. § 1332 depends on the amount in controversy. When the complaint includes a number, it controls unless recovering that amount would be legally impossible. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938). When the complaint omits a number, however, the size of the claim must be evaluated in some other way.

A defendant who removes a suit in which the complaint lacks an ad damnum must establish a "reasonable probability" that the amount in controversy exceeds $75,000. See, e.g., Smith v. American General Life & Accident Insurance Co., 337 F.3d 888, 892 (7th Cir.2003); Chase v. Shop `N Save Warehouse Foods, Inc., 110 F.3d 424, 427-28 (7th Cir.1997). The burden of persuasion rests on the removing party, see Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir.2005), but once this demonstration has been made the rule of St. Paul Mercury kicks in. A removing party need not show that the plaintiff will prevail or collect more than $75,000 if he does. The burden, rather, is to show what the plaintiff hopes to get out of the litigation; if this exceeds the jurisdictional amount, then the case proceeds in federal court unless a rule of law will keep the award under the threshold. See Brill, 427 F.3d at 449; Pratt Central Park Limited Partnership v. Dames & Moore, Inc., 60 F.3d 350 (7th Cir.1995).

Rising-Moore's lawyer has revealed what he thinks his loss amounts to: between $180,000 and $200,000. This is the amount "in controversy." In this court, Rising-Moore dismisses this figure as one offered early in the negotiations; the settlement demand of $160,000 receives similar treatment, coupled with a plea that it be ignored given Fed.R.Evid. 408, which provides that offers in compromise generally are inadmissible. If the court is to look at the parties' negotiations, Rising-Moore insists, it should give principal weight to his offer to settle for $60,000 while the motion for summary judgment was pending. Although post-removal events—even an irrevocable promise not to accept more than the jurisdictional minimum—do not authorize remand of a suit that was within federal jurisdiction when removed, see St. Paul Mercury, 303 U.S. at 293, 58 S.Ct. 586, Rising-Moore contends that the $60,000 offer shows his real aims and demonstrates that the dispute between the parties never exceeded $75,000.

Rule 408 says that a settlement offer is not admissible "to prove liability for or invalidity of the claim or its amount." Red Roof Inns did not use the offers to show either its own liability or...

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