Weddington v. Ford Motor Credit Co.

• Decision Date: 21 July 1999
• Docket Number: No. Civ.A. 299-0297.,Civ.A. 299-0297.
• Citation: 59 F.Supp.2d 578
• Court: U.S. District Court — Southern District of West Virginia
• Parties: Allen WEDDINGTON and Kimberly Weddington, Plaintiffs, v. FORD MOTOR CREDIT COMPANY, a Michigan Corporation, Defendant.

59 F.Supp.2d 578

Allen WEDDINGTON and Kimberly Weddington, Plaintiffs, v. FORD MOTOR CREDIT COMPANY, a Michigan Corporation, Defendant.

No. Civ.A. 299-0297.

United States District Court, S.D. West Virginia, at Charleston.

July 21, 1999.

L. David Duffield, Chad S. Lovejoy, The Duffield Law Firm, Barboursville, WV, for plaintiffs.

Michael Chaney, Rita Massie Biser, Kay Casto & Chaney, PLLC, for defendant.

ORDER

HALLANAN, Senior District Judge.

Now pending before the Court is Plaintiffs' Motion to Remand the case at hand to the Circuit Court of Mingo County, West Virginia. Plaintiffs contend that the potential sum of damages in controversy does not exceed the jurisdictional amount of $75,000, and therefore the Court can not entertain subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a).¹ Defendant opposes Plaintiffs' request for remand, and has filed a Response with the Court contending that the amount in controversy exceeds the jurisdictional requirement of $75,000. Therefore, the only issue before the Court on the present motions is the disagreement as to the amount in controversy. Having reviewed said motions, as well as all related pleadings and relevant case law, the Court is prepared to issue its ruling.

Plaintiffs' claims against Defendant have their genesis in 1995 although their civil action was not filed until March 4, 1999. On April 9, 1999, Defendant filed a Notice of Removal to the United States District Court for the Southern District of West Virginia asserting that the Court has original jurisdiction over the above matter pursuant to 28 U.S.C. §§ 1331, 1332(a) & 1441(a)(b) & (c).² The case was subsequently removed and assigned to this Court.

On or about July 31, 1995, Plaintiffs, Allen and Kimberly Weddington, visited Moore Chrysler, located in Williamson, West Virginia, to inquire about purchasing a new motor vehicle. Plaintiffs conversed with certain Moore Chrysler representatives concerning the purchase of a 1995 Chrysler Sebring. While doing so, Plaintiffs also explored with said representatives, the possibility of trading-in their 1995 BMW to be used towards the purchase price of said 1995 Sebring. On or about August 5, 1995, Plaintiffs again visited Moore Chrysler and entered into a retail installment contract for the purchase of said 1995 Sebring for a total sales price of $37,792.80. Plaintiffs did not trade in their BMW as part of said contract. Moore Chrysler, through its employees, assisted Plaintiffs in obtaining financing for said Sebring through Defendant.

On or about August 21, 1995, Plaintiffs returned to Moore Chrysler, and by agreement with the dealership, entered into a new retail installment contract ("Second Contract") for the same 1995 Sebring, this time using the BMW as a trade-in. The finance manager for Moore Chrysler conducted the negotiation with Plaintiffs. Subsequent to the signing of the second contract, which thereby superseded the first contract, Plaintiffs were purportedly told that they would receive a copy of the second contract in the mail within the next few days. Upon receiving the second contract by mail, Plaintiffs promptly inspected the same and found to their apparent detriment, that the contract was not the same one they had originally signed on or about August 21, 1995, at the dealership (hereinafter "alleged forged contract"). The amount owing on the alleged forged contract was approximately $10,000 more than Plaintiffs previously agreed to pay in the transaction, and further, Plaintiffs contend their signatures on said contract are forged.

As a consequence of the increased debt created by the alleged forged contract, Plaintiffs refused to keep the 1995 Sebring and returned the car to Moore Chrysler stating that they were refusing to pay under the terms of the alleged forged contract. As a repercussion of Plaintiffs' failure to make timely payments under the terms of said contract, Defendant subsequently reported the car as "repossessed" on Plaintiffs' credit record and profiles, which resulted in the dissemination of alleged false information to be published with the National Credit Networks, local credit bureau affiliates, and or other entities.

On or about March 25, 1996, some seven months after Plaintiffs received the alleged forged contract. Defendant was informed that the contract Plaintiffs received via mail from Moore Chrysler was forged and thus, not valid. Plaintiffs allege that Defendant assured them by repeated representations that it would take the necessary actions to safeguard Plaintiffs' interests and to correct the situation created or contributed to by the conduct of Defendant. Plaintiffs assert that although Defendant was notified of the alleged forgery, it refused to take the appropriate steps to remedy its dissemination of the alleged false and fraudulent information until or about some two years later, March 13, 1997.

As a consequence of Defendant's actions, Plaintiffs demand a rescission of their financing contract with Defendant, a nonspecified amount in monetary damages, punitive damages and attorneys' fees for fraud, breach of contract, negligent supervision and/or training, negligence and civil conspiracy.³ Plaintiffs claim that the damages include, without limitation, damages for mental anxiety, suffering, annoyance, aggravation and inconvenience, humiliation and other damages caused by Defendant. Plaintiffs are residents of Mingo County, West Virginia, and Defendant, Ford Motor Credit, is a Delaware corporation with its principal office located in Michigan. Therefore, the Court finds complete diversity in this matter. However, the sole question for the Court to decide is whether the nonspecified amount in controversy is sufficient to confer jurisdiction upon this Court.

Courts and statutory law have declared that a defendant facing possible liability in excess of the monetary jurisdictional requirements shall be allowed to remove a case from state court, and unless it is evident that said liability will be less than the jurisdictional requirement, the removal will stand. 28 U.S.C. § 1332. However, the party seeking removal from state to federal court has the burden of establishing federal jurisdiction. Mulcahey v. Columbia Organic Chem. Co., Inc., 29 F.3d 148, 151 (4th Cir.1994). This burden is usually met because the "sum claimed by the plaintiff controls if the claim is apparently made in good faith." St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938); see also Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353, 81 S.Ct. 1570, 6 L.Ed.2d 890 (1961) (holding that the general federal rule is that the complaint determines the amount in controversy and, consequently, federal jurisdiction). A problem arises in removal cases however, when the plaintiff's ad damnum clause does not specify the amount in damages sought to be recovered. To make matters worse, over the past several years there has been a divergence among the posture of many courts, in particular, several located in the Southern District of West Virginia, as to what test applies to the party bearing the burden of proving federal jurisdiction when the action includes a nonspecified, or even a nonexistent monetary claim.⁴ Unfortunately, neither the Court of Appeals for the Fourth Circuit nor the Supreme Court has adopted a specific standard for the courts to follow.

Several courts in the Southern District of West Virginia determine whether the jurisdictional requirement is met when a plaintiff pleads a nonspecified amount in damages by applying the legal certainty test. Cline v. Matney, 20 F.Supp.2d 977 (S.D.W.Va.1998) (Haden, C.J.); Adkins v. Gibson, 906 F.Supp. 345 (S.D.W.Va.1995) (Haden, C.J.); Mullins v. Harry's Mobile Homes, Inc., 861 F.Supp. 22 (S.D.W.Va. 1994) (Faber, J.). The United States Supreme Court created the legal certainty test some sixty-one years ago in St. Paul Mercury Indemn. Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938). In Red Cab, plaintiff filed a complaint in state court that was subsequently removed to federal court. Red Cab, 303 U.S. at 284, 58 S.Ct. 586. At the time of removal from state court, the complaint disclosed an amount in controversy requisite to the federal court's jurisdiction, however a subsequent amendment by plaintiff reduced the sum claimed to substantially less than that amount, necessitating the remand of the case to state court. Id. The Supreme Court granted writ of certiorari "because of the alleged conflict with [its] [other] decisions and with those of other federal courts." Id.

In a well reasoned opinion, the Supreme Court held that it has always been the intent of Congress to drastically restrict and "rigorously enforce" federal jurisdiction in controversies between citizens of different states. Id. In doing so, the High Court resolved the ongoing conflict by stating that, "it must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal." Id. at 289, 58 S.Ct. 586. The Court continued:

[F]rom the face of the pleadings, it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed or if, from the proofs, the court is satisfied to a like certainty that the plaintiff never was entitled to recover that amount, and that his claim was therefore colorable for the purpose of conferring jurisdiction, the suit will be dismissed.

Id. (emphasis added). However, the Court further opined that, "[e]vents occurring subsequent to the institution of suit which reduce the amount recoverable below the statutory limit do not oust jurisdiction." Id. at 290, 58 S.Ct. 586.

From this language, the Court of Appeals for the Ninth Circuit, agreeing with the reasoning set forth in Garza v. Bettcher Indus., Inc., 752 F.Supp. 753 (E.D.Mich. 1990), found that Red Cab's "legal certainty" test is applicable in only two types of cases: "(1) those brought in the ...