Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-2_14-cv-01171/USCOURTS-almd-2_14-cv-01171-0/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1332 Diversity-Breach of Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

NORTHERN DIVISION

KEVIN PERKINS, et al.,

Plaintiffs,

v.

MERION REALTY SERVICES, 

LLC, et al.,

Defendants.

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CASE NO. 2:14-CV-1171-WKW

[WO]

MEMORANDUM OPINION AND ORDER

Before the court is Plaintiffs’ motion to remand. (Doc. # 4.) Defendants filed 

a response in opposition. (Doc. # 7.) For the reasons that follow, the motion to 

remand is due to be granted. 

I. STANDARD OF REVIEW

Federal courts have a strict duty to exercise the jurisdiction conferred on them 

by Congress. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). At the 

same time, “[f]ederal courts are courts of limited jurisdiction.” Burns v. Windsor 

Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Hence, in actions removed from state 

court to federal court, federal courts must strictly construe removal statutes, resolve 

all doubts in favor of remand, and place the burden of establishing federal 

jurisdiction on the defendant. Miedema v. Maytag Corp., 450 F.3d 1322, 1328–30 

(11th Cir. 2006). 

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II. DISCUSSION

Plaintiff Kevin Perkins, along with eleven other adults and thirteen children, 

filed this action in the Circuit Court of Montgomery County, Alabama. The 

complaint, sounding exclusively in state law, alleged claims of (1) breach of 

contract, (2) trespass, (3) conversion, and (4) civil conspiracy against Merion Realty 

Services, LLC; Merion Realty Management, LLC; Robert M. Dominy; Melissa 

Daughtery; and Sean Stanford (collectively, “Defendants”). Defendants removed 

the action, asserting diversity jurisdiction pursuant to 28 U.S.C. § 1332. Plaintiffs 

filed a motion to remand, contending that Defendants failed to show by a 

preponderance of the evidence that the amount in controversy exceeds $75,000 as 

required for a federal court to exercise diversity jurisdiction.1 

Plaintiffs’ complaint alleges that the practices and conditions of the Three 

Fountains Apartment complex, and its successor, the Green Meadow Apartment 

complex, violated Defendants’ contractual obligations to provide habitable 

conditions. Specifically, they contend that Defendants (1) refused to repair 

plumbing leaks permitting lower floor apartments to be flooded with waste water, 

(2) failed to inspect or repair electrical wiring resulting in shocks, smoking, and 

 

1

It is uncontested that the parties are diverse. 

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sparking from electrical outlets, and (3) failed to maintain or repair apartment units. 

The complaint also alleges that Plaintiffs’ right to the enjoyment of the apartment 

units was abridged when Defendants or their agents changed the locks on units, 

effectively evicting tenants without judicial authority, and removed the personal 

property of leaseholders without permission or authority. Importantly, Plaintiffs do 

not specify the damages or compensation sought to make them whole. Rather, 

Plaintiffs demand judgment against Defendants, separately and severally, “for all 

compensatory and exemplary damages recoverable under Alabama law, plus costs 

and attorney fees.” (Doc. # 1-1, at 15.)

When “a plaintiff makes ‘an unspecified demand for damages in state court, 

a removing defendant must prove by a preponderance of the evidence that the 

amount in controversy more likely than not exceeds the . . . jurisdictional 

requirement.’” Roe v. Michelin N. Am., Inc., 613 F.3d 1058, 1061 (11th Cir. 2010) 

(quoting Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1357 (11th Cir. 1996)). 

To meet its burden, the removing defendant may present additional evidence to 

establish that the amount in controversy exceeds $75,000. Id. (“In some cases, [the 

removing defendant’s] burden requires [it] to provide additional evidence 

demonstrating that removal is proper.” (footnote and citation omitted)). Here, 

Defendants offer three pieces of evidence in support of their contention that the 

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amount in controversy exceeds the jurisdictional requirement: (1) a pre-mediation 

settlement letter and a pro tanto settlement produced in related state causes of action; 

(2) Plaintiffs’ complaint; and (3) Plaintiffs’ claim for punitive damages.

1. The Pre-Mediation Settlement Letter and Pro Tanto Settlement

A settlement demand letter will not alone establish that the amount in 

controversy exceeds $75,000, but “it counts for something.” Burns v. Windsor Ins. 

Co., 31 F.3d 1092, 1097 (11th Cir. 1994). Because “[s]ettlement offers commonly 

reflect puffing and posturing,” they generally are “entitled to little weight in 

measuring the preponderance of the evidence.” Jackson v. Select Portfolio 

Servicing, Inc., 651 F. Supp. 2d 1279, 1281 (S.D. Ala. 2009) (citing Hall v. CSX 

Transp., Inc., No. 3:06–CV–37–WKW, 2006 WL 3313682, at *3 n.5 (M.D. Ala. 

Nov. 14, 2006)). A settlement offer will only be entitled to additional weight when 

it provides enough specific information to support the plaintiff’s claim for damages 

to indicate that the offer is a reasonable assessment of the value of the plaintiff’s 

claim. See Standridge v. Wal–Mart Stores, Inc., 945 F. Supp. 252, 256–57 (N.D. 

Ga. 1996) (citing Golden Apple Mgmt. Co. v. Geac Computers, Inc., 990 F. Supp. 

1368 (M.D. Ala. 1998)).

The relevant portion of the settlement letter upon which Defendants seek to 

rely provides as follows:

We have taken into account the Defendants’ concerns and, in the spirit 

of cooperation, we will modify our settlement demand. There are 12 

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children who were one-year-old or younger when they began living in 

the apartments. We are prepared to recommend settlement of those 

minors’ claims for $5000.00 each subject to approval by the guardian 

ad litem and the court. The plaintiff will unilaterally reduce their 

demand to $190,000.00 per plaintiff, a reduction of $35,000.00 per 

plaintiff from the initial demand, which in light of Alabama case law 

and results in other mass injury cases is quite modest–especially under 

the facts of these cases.

We are currently evaluating approximately 30 additional claims 

(including 10 minors) against these defendants and plan to either 

resolve these claims or litigate them in a separate [fourth] suit. 

 

(Doc. # 1, at 7.) Defendants argue that the letter establishes that Plaintiffs value the 

claim of each adult at $190,000.00. 

This letter, however, was not drafted with specific regard to Plaintiffs’ claims 

against these Defendants. Rather, the letter was mailed prior to the mediation of 

three state court causes of action that are related to the present lawsuit. While the 

three state actions arose out of the same factual allegations presented in this case and 

included all the parties present in the instant litigation,2the state lawsuits were 

brought on behalf of 145 claimants against a total of 13 defendants with a specific 

mind toward beginning a week-long mediation. Because the pre-mediation letter’s 

cursory valuations necessarily took into account plaintiffs and defendants whose 

interests are not present in the instant litigation, it is entitled to little weight.

Additionally, the pre-mediation settlement letter does not contain facts from 

which an assessment of damages could be reasonably inferred. Indeed, the letter 

 

2 Counsel for Plaintiffs in this action also represented the plaintiffs in the three state cases.

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expressly observes that the exercise is a speculative one.3 Because the settlement 

letter in this case does not reflect a reasonable estimate of the actual value of 

Plaintiffs’ claims, it does not support Defendants’ argument that the amount in 

controversy in this case exceeds $75,000. Cf. Benandi v. Mediacom Se., LLC, No. 

11-498, 2011 WL 5077403, at *3 (S.D. Ala. Sept. 30, 2011) (where plaintiff

counsel’s letter demanded $92,000 and described in detail plaintiff’s injuries, the 

costs incurred to date and anticipated, and specifically described the figure as “a 

conservative estimate,” it was not a speculative lump sum demand and was properly 

considered in denying motion to remand); McKeel v. Hodum Trucking, LLC, No. 

12-079, 2012 U.S. Dist. LEXIS 93781, at *10–13 (S.D. Ala. June 18, 2012) 

(plaintiff’s demand letter seeking $232,653.58 could be considered in determining 

whether the actual amount in controversy exceeded $75,000 where the damages 

were broken down into identified, specific costs for past and future damages). 

Ultimately, the letter fails to provide particularized information and a 

reasonable assessment of value and, instead, is indicative of posturing and abstract

assessments. See Jackson, 651 F. Supp. 2d at 1281; see also Diaz v. Big Lots Stores, 

Inc., No. 5:10cv319, 2010 WL 6793850, at *2 (M.D. Fla. Nov. 5, 2010) (“The 

evidentiary value of a settlement offer in establishing the amount in controversy 

 

3 Defendants ignore a relevant paragraph of the October 3 letter in which Plaintiffs’ counsel 

cites to the Alabama Pattern Jury Instructions on mental anguish, which instructs Alabama juries 

that there is no “legal rule or yardstick” for such damages. Counsel then specifically observes that 

“In the absence of a legal rule or yardstick then, setting the amount of plaintiffs’ claims is purely 

subjective regardless of whether that is done at mediation or trial.” (Doc. # 1-6, Ex. E) (emphasis 

added.)

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depends on the circumstances of the offer.”). Accordingly, the pre-mediation letter

does not establish by a preponderance of the evidence that Plaintiffs’ claims exceed 

the jurisdictional amount.

For similar reasons, the pro tanto settlement is also of little help to Defendants. 

As grounds for removal, Defendants highlighted that the state court mediation 

concluded in a confidential pro tanto settlement between the claimants and a portion 

of the state court defendants. While not disclosing the settlement amount, 

Defendants assert that the pro rata amount of the settlement each state court plaintiff 

received, when “multiplied by the 25 Plaintiffs in th[is]case[ ], produces an amount 

in excess of the jurisdictional minimum.” (Doc. # 1.) In addition to the settlement 

amount incorporating party interests not present in the instant litigation, Defendants 

appear to misapply relevant judicial principles. 

It is well settled that a claim by multiple plaintiffs normally cannot be 

aggregated to reach the jurisdictional threshold. Kirkland v. Midland Mortg. Co., 

243 F.3d 1277, 1280 (11th Cir. 2001) (“Generally, if no single plaintiff can satisfy 

the jurisdictional amount, then there is no diversity jurisdiction.”). Only if one 

plaintiff’s claims meet the jurisdictional minimum, will the court have diversity 

jurisdiction over the claims and be able to exercise supplemental jurisdiction over 

the claims of additional diverse plaintiffs. Exxon Mobil Corp. v. Allapattah Servs., 

Inc., 545 U.S. 546, 659 (2005). In light of this non-aggregation principle, the pro 

tanto settlement fails to prove by a preponderance of the evidence that any one 

Plaintiff’s claims meet the jurisdictional requirement.

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2. The Complaint

Defendants also contend that “removability, based on the amount in 

controversy, is apparent from the four corners of the complaint . . . .” (Doc. # 7, at 

4.) This is so, Defendants contend, because the court can make an independent 

valuation of the allegations of the complaint. They explain that this valuation may 

be made without regard to Plaintiffs’ assessment of the damages to be recovered and 

is accomplished using “reasonable deductions, reasonable inferences or other 

reasonable extrapolations.” (Doc. # 7, at 4.) The authority for such judicial divining 

is said to be Roe v. Michelin North American, Inc., 613 F.3d 1058 (11th Cir. 2010).

According to Defendants, Plaintiffs have made “serious and specific 

allegations against these Defendants” which enables the court to use “experience and 

common sense” to correctly determine the true amount in controversy. (Doc. # 7, at 

5.) Defendants’ reading of Roe is exuberant. Although Roe recognizes that “judicial 

experience and common sense” may support “reasonable inferences” drawn “from 

the pleadings” to determine whether “the case stated in [the] complaint meets federal 

jurisdictional requirements,” nothing in Roe permits the court to indulge in 

speculation or fill empty gaps in a plaintiff’s factual averments with unfounded 

assumptions about what the evidence may show. 613 F.3d at 1061. 

“Judicial experience and common sense” are useless for making “reasonable” 

deductions, inferences, and extrapolations when the complaint is devoid of any 

averments from which to deduce, infer, or extrapolate. A reasonable inference “is 

not a suspicion or a guess. It is a reasoned, logical decision to conclude that a 

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disputed fact exists on the basis of another fact that is known to exist.” Arrington v. 

State Farm Ins. Co., No. 2:14-cv-209-CSC, 2014 WL 2961104, at *6 (M.D. Ala. 

July 1, 2014) (quoting Siewe v. Gonzales, 480 F.3d 160, 168 (2d Cir. 2007)). 

“[W]ithout facts or specific allegations, the amount in controversy” can be 

determined “only through speculation – and that is impermissible.” Pretka v. Kolter 

City Plaza II, Inc., 608 F.3d 744, 753–54 (11th Cir. 2010) (citing Lowery v. Ala. 

Power Co., 483 F.3d 1184, 1209 (11th Cir. 2007)). 

Moreover, it is axiomatic that on a motion to remand all questions or doubts 

as to subject matter jurisdiction are to be resolved in favor of returning the matter to 

state court, see Burns, 31 F.3d at 1095; thus, to the extent that competing inferences 

may be drawn from the specific factual allegations of the complaint, the court must 

indulge those inferences most favorable to remand. See Kokkonen, 511 U.S. at 377 

(“It is to be presumed that a cause lies outside [the court's] limited jurisdiction); 

Pretka, 608 F.3d at 753–54 (“[W]ithout facts or specific allegations, the amount in 

controversy could be ‘divined [only] by looking at the stars’ – only through 

speculation – and that is impermissible.”). 

While Plaintiffs note that they do allege compensatory damages in the context 

of emotional distress, the court in Benton v. State Farm & Casualty Co., No. 2:14-

CV-77, 2014 WL 2002851 (M.D. Ala. May 15, 2014), highlighted that specific 

allegations of harm contained in a complaint says nothing about the value of the 

claims no matter the seriousness of the general assertion. 2014 WL 2002 851, at *3 

(“In the court’s ‘judicial experience,’ ‘physical and mental distress’ and ‘emotional 

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anguish’ vary widely depending on the circumstances, and similar circumstances 

may affect different plaintiffs in different ways.”). Simply contending that 

Defendants’ acts or omissions caused mental harm says nothing about the value of 

those claims. Accordingly, the complaint does not “on its face” support removing 

the action from the state court.

3. Punitive Damages

Lastly, Defendants contend that the court should weigh the “serious” nature 

of the allegations in the complaint in favor of assessing the damages for mental 

distress in excess of $75,000.00. Defendants are correct that a plaintiff prevailing 

on a tort claim is authorized under Alabama law to recover additional damages 

beyond the compensatory amount of the underlying policy claim, including for 

emotional distress and punitive damages. See Dempsey v. Auto Owners Ins. Co., 

717 F.2d 556, 561–62 (11th Cir. 1983). And it is appropriate for the court to consider 

the value of those categories of damages in light of the state-law standards governing 

their award and review. See Bell v. Preferred Life Assur. Soc. of Montgomery, Ala., 

320 U.S. 238, 240–43 (1943); Roe, 613 F.3d at 1065–66; Broughton v. Fla. Int’l 

Underwriters, Inc., 139 F.3d 861, 863–64 (11th Cir. 1998); Ryan v. State Farm Mut.

Auto. Ins. Co., 934 F.2d 276, 277 (11th Cir. 1991); Holley Equip. Co. v. Credit 

Alliance Corp., 821 F.2d 1531, 1535 (11th Cir. 1987). However, Defendants are not 

called on to show that Plaintiffs may be awarded more than the jurisdictional 

requirement; they must show that it is more likely than not that at least $75,000 is 

truly in controversy. See Arnold v. Guideone Specialty Mut. Ins. Co., 142 F. Supp. 

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2d 1319, 1321 (N.D. Ala. 2001) (“The more recent cases, both federal and state, 

require courts to look realistically at claims for punitive damage based on fraud 

and/or bad faith, especially if the punitive damages, as claimed or awarded, are badly 

out of proportion to the actual damages claimed or awarded.”).

Here, there is no basis from which an economic assessment may properly be 

said to begin. Plaintiffs alleged that Defendants’ conduct caused them distress and 

for that they should receive compensation and that Defendants should be punished, 

nothing more. Neither the “value” of the claim nor the amount of the punishment 

can be determined in any principled manner. The court is not authorized to engage 

in speculation in the absence of a factual starting point, which is clearly absent here.

III. CONCLUSION

Based on the foregoing analysis, it is ORDERED as follows:

1. Plaintiffs’ Motion to Remand (Doc. # 4) is GRANTED.

2. This case is REMANDED to the Circuit Court of Montgomery County, 

Alabama. 

The Clerk of the Court is DIRECTED to take appropriate steps to effectuate 

the remand. 

DONE this 6th day of March, 2015.

 /s/ W. Keith Watkins 

CHIEF UNITED STATES DISTRICT JUDGE

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