Rwn Development Group v. Travelers Indem. Co.

• Decision Date: 29 February 2008
• Docket Number: Civil Action No. 07-1546 (RBW).
• Citation: 540 F.Supp.2d 83
• Parties: RWN DEVELOPMENT GROUP, LLC, et. al., Plaintiffs, v. TRAVELERS INDEMNITY COMPANY OF CONNECTICUT, Defendant.
• Court: U.S. District Court — District of Columbia

540 F.Supp.2d 83

RWN DEVELOPMENT GROUP, LLC, et. al., Plaintiffs, v. TRAVELERS INDEMNITY COMPANY OF CONNECTICUT, Defendant.

Civil Action No. 07-1546 (RBW).

United States District Court, District of Columbia.

February 29, 2008.

Richard W. Luchs, William C. Casano, Greenstein Delorme & Luchs, PC, Washington, DC, for Plaintiffs.

Steven M. Klepper, Kramon & Graham, P.A., Baltimore, MD, for Defendant.

MEMORANDUM OPINION

REGGIE B. WALTON, District Judge.

The plaintiffs, RWN Development Group, LLC, 1700 Kalorama Condominium LLC, and Richard W. Naing, filed their complaint in this action in the Superior Court of the District of Columbia on July 31, 2007, seeking a declaratory judgment against the defendant, The Travelers Indemnity Company of Connecticut. Notice of Removal Exhibit ("Ex.") 2 (Complaint for Declaratory Judgment and for Damages) ("Compl.") ¶¶ 1-4, 20. The plaintiffs requested, inter alia, that the Superior Court enter a judgment declaring that the defendant "had a duty under the [subject insurance] Policy to defend [the][p]laintiffs in the Underlying Suits [pending against the plaintiffs in the Superior Court]" and enter an order for the defendant to assume the plaintiffs' defense. Id. ¶ 20. The defendant filed a Notice of Removal in this Court on August 30, 2007, "on the basis of diversity jurisdiction under 28 U.S.C. § 1332(a)(1)." Notice of Removal ¶¶ 1-7; see also 28 U.S.C. § 1332(a)(1) (2000) ("The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000 ... and is between (1) Citizens of different States[.]"). Currently before the Court is the plaintiffs' Motion to Remand Case to Superior Court for the District of Columbia.¹ Motion to Remand Case to Superior Court for the District of Columbia ("Pls.' Mot."). For the reasons set forth below, the plaintiffs' motion to remand is granted.

I. BACKGROUND

The parties allege the following facts in support of their claims. The defendant is a Connecticut corporation with its principal place of business in Hartford, Connecticut and the plaintiffs are all citizens of Maryland, the District of Columbia, or both jurisdictions. Defendant's Motion for Leave to File Amended Notice of Removal ("Def.'s Mot. to File") Attachment ("Attach.") 1 (Am. Notice of Removal) ¶¶ 3-6; see also id. Ex. A (Compl.) ¶¶ 1-4. The defendant issued an insurance policy to plaintiff 1700 Kalorama Condo LLC in November 2004, which listed the other plaintiffs as insureds under the policy and provided coverage for "general liability, business owners, and boiler and machinery ... concerning a condominium ... to be developed by Condo, LLC[.]" Id., Ex. A (Compl.) ¶ 6. In the summer of 2006, three lawsuits ("the Underlying Suits") were filed against the plaintiffs in the Superior Court alleging, inter alia, breach of contract and negligence on the part of the plaintiffs. See generally Def.'s Mot., Ex. A (Compl.) ¶¶ 10-11; see also id., Ex. E (Complaint filed by Tommy Rudgers and Sharon Bresin), Ex. F (Complaint filed by Julia Hyman Tomala), and Ex. G (Complaint filed by The Unit Owners Association of 1700 Kalorama Lofts, A Condominium) (collectively referred to as "Complaints in the Underlying Suits"). These three lawsuits apparently are currently still pending in the Superior Court, Pls.' Reply at 2 ("The Underlying Suits are currently pending and no liability for damages has as yet been imposed on [the p]laintiff[s][]"), and collectively seek damages totaling $802,880. Def.'s Mot. ¶ 4(c); id., Exs. E-G (Complaints in the Underlying Suits),

The plaintiffs then filed this action in the Superior Court on July 31, 2007, after the defendant refused to defend them in the Underlying Suits, Pls.' Mot. ¶ 1; Def.'s Mot., Ex. A (Compl.), and the defendant filed its Notice of Removal on August 30, 2007, removing the case to this Court pursuant to 28 U.S.C. § 1332(a)(1) and 28 U.S.C. § 1441(a) (2000). Notice of Removal filed on August 30, 2007; see also 28 U.S.C. § 1332(a)(1)(conferring to federal district courts original jurisdiction in "civil actions where the matter in controversy exceeds the sum or value of $75,000" and all parties are from different states); 28 U.S.C. § 1441(a) (allowing a defendant to remove a civil action brought in a state court to federal court when the federal court has original jurisdiction). The plaintiffs filed their Motion to Remand with this Court on September 19, 2007, alleging that the Complaint "does not satisfy the jurisdictional amount requirement of 28 U.S.C. § 1332(a)" and the "[d]efendant has failed to establish anything to the contrary." Pls.' Mot. ¶ 5. Subsequently, on October 10, 2007, the defendant also filed its Motion for Leave to File an Amended Notice of Removal seeking to amend its original notice of removal in order to include documents referenced in the plaintiffs' complaint to dispel any purported ambiguity as to the amount in controversy in this case.

II. STANDARD OF REVIEW

A defendant may remove a civil action from a state court to the federal district court "embracing the place where such action is pending" when the district court has original jurisdiction. 28 U.S.C. § 1441(a); see Julien v. CCA of Tenn., Inc., 268 F.Supp.2d 19, 21 (D.D.C.2003); see also Int'l Union of Bricklayers & Allied Craftworkers v. Ins. Co. of the West, 366 F.Supp.2d 33, 37 (D.D.C.2005) (Walton, J.) ("Only state-court actions that originally could have been filed in the federal court may be removed to federal court by the defendant.") (quoting Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987)). A federal district court has original jurisdiction when the amount in controversy in the civil action exceeds $75,000, exclusive of interest and costs, and the action is between "citizens of different states." 28 U.S.C. § 1332(a); see Adolph Coors Co. v. Truck Ins. Exch., No. 04-2150, 2005 WL 486580, *2, 2005 U.S. Dist. LEXIS 3588, at *5 (D.D.C. Feb. 28, 2005) ("Diversity jurisdiction exists when the action involves citizens of different states and the amount in controversy exceeds $75,000 per plaintiff, exclusive of interest and costs."). When a plaintiff seeks to remand to state court a case that was removed to federal court, "[t]he party opposing a motion to remand bears the burden of establishing that subject matter jurisdiction exists in federal court." Int'l Union, 366 F.Supp.2d at 36; see also Phillips v. Corr. Corp. of Am., 407 F.Supp.2d 18, 20 (D.D.C.2005) (placing the burden of proving jurisdiction on the defendant when the plaintiff files a motion to remand); Harding-Wright v. D.C. Water & Sewage Auth., 350 F.Supp.2d 102, 104 (D.D.C.2005) ("[B]ecause the defendant is the party asserting federal court jurisdiction, it bears the burden of proving that jurisdiction.").

When calculating whether the party opposing a motion to remand has met its burden of establishing federal jurisdiction, a federal court must "strictly construe" the removal statute, Int'l Union, 366 F.Supp.2d at 36 (citing Kopff v. World Research Group, LLC, 298 F.Supp.2d 50, 54 (D.D.C.2003)); Julien, 268 F.Supp.2d at 21 (citation omitted), "because federal courts are courts of limited jurisdiction." Int'l Union, 366 F.Supp.2d at 36 (citation omitted); see Nwachukwu v. Karl, 223 F.Supp.2d 60, 65 (D.D.C.2002) (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938)) ("Federal courts have limited jurisdiction."). As a result of this jurisdictional limitation, "the law presumes that `a cause lies outside of [a federal court's] limited jurisdiction.'" Julien, 268 F.Supp.2d at 21 (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994))(alterations in original); Coors, 2005 WL 486580, **1-2, 2005 U.S. Dist. LEXIS 3588, at **4-5. Any doubts as to whether federal jurisdiction exist must be resolved in favor of remand. See Harding-Wright, 350 F.Supp.2d at 104 (citing Nwachukwu, 223 F.Supp.2d at 66); see also Int'l Union, 366 F.Supp.2d at 36 (quoting Johnson-Brown v. 2200 M St., LLC, 257 F.Supp.2d 175, 177 (D.D.C.2003)) ("[T]he court must resolve any ambiguities concerning the propriety of removal in favor of remand."). A federal court must also remand an action to state court "if a defect in removal proceedings or lack of subject-matter jurisdiction becomes apparent at any point prior to final judgment[.]" Julien, 268 F.Supp.2d at 21 (citing 28 U.S.C. § 1447(c) (2000)); see Harding-Wright, 350 F.Supp.2d at 104 ("When a federal district court determines at any time prior to final judgment that it lacks jurisdiction over a case that has been removed from state court, the district court must remand the case to the state court.").

"In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation." Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977) (holding that the "object" was the right of apple growers and dealers to conduct their business affairs free from the interference of a state statute). This predicate for exercising diversity jurisdiction is "established at the commencement of the action." Nwachukwu, 223 F.Supp.2d at 66 (citing 28 U.S.C. § 1335(a) (2000)). However, even "[i]f it becomes apparent during the course of litigation that from the outset the maximum conceivable amount in controversy was less than the jurisdictional minimum, the [c]ourt ... lack[s] ... subject matter jurisdiction." Nwachukwu, 223 F.Supp.2d at 66.

III. LEGAL ANALYSIS

The plaintiffs argue that the "[d]efendant has failed to satisfy its burden to establish the jurisdiction of this Court, and remand is therefore mandated." Pls.' Mem. at 2. As support for this argument, the plaintiffs contend that they did not specify any amount of damages² in their Complaint except for...