Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-1_07-cv-00728/USCOURTS-almd-1_07-cv-00728-0/pdf.json

Parties Involved:
Fleetwood Enterprises, Inc.
Defendant
Fleetwood Homes of Georgia, Inc.
Defendant
Robert Kennedy II
Plaintiff
Stephanie Kennedy
Plaintiff

Document Text:

Because diversity of citizenship and amount in controversy requirements are 1

satisfied, this Court has diversity subject matter jurisdiction, and the Court does not need

to reach the issue of whether federal question jurisdiction exists. 

IN THE UNITED STATES DISTRICT COURT FOR

THE MIDDLE DISTRICT OF ALABAMA

SOUTHERN DIVISION

ROBERT KENNEDY II and )

STEPHANIE KENNEDY, )

)

Plaintiffs, ) 

)

v. ) CASE NO. 1:07-cv-728-MEF

) 

FLEETWOOD ENTERPRISES, INC. and )

FLEETWOOD HOMES OF GEORGIA, INC., )

)

Defendants. )

 

MEMORANDUM OPINION AND O R D E R

I. INTRODUCTION

This cause is before the Court on Plaintiffs’ Motion to Remand (Doc. # 4). Plaintiffs

filed this case in the Circuit Court of Henry County, Alabama seeking declaratory relief with

respect to an arbitration provision in a contract on which the Plaintiffs seek to submit for

arbitration. (Doc. # 1-2, at 3). Defendants removed this case on the grounds that diversity

of citizenship and federal question jurisdiction exist. (Doc. # 1). Plaintiffs argue that the

case should be remanded because this Court has neither diversity nor federal question

jurisdiction. Because the Court finds that it has subject matter jurisdiction pursuant to 28

U.S.C. § 1332(a), the Motion to Remand is due to be DENIED.1

Case 1:07-cv-00728-MEF-SRW Document 11 Filed 12/05/07 Page 1 of 8
 According to the Complaint, Plaintiffs are citizens of Alabama, Defendant 2

Fleetwood Enterprises, Inc. is a California corporation, and Defendant Fleetwood Homes

of Georgia, Inc. is a Georgia corporation. (Doc. # 1-2, ¶¶ 1-3). Defendants admit that

diversity of citizenship exists between the parties. Notice of Removal (Doc. # 1, ¶ 4). 

2

II. STANDARD OF REVIEW

A civil case filed in state court may be removed by the defendant to federal court if

the case could have been brought in federal court originally. 28 U.S.C. §1441(a). Federal

courts have diversity jurisdiction over all civil actions where the amount in controversy

exceeds $75,000 and there is complete diversity of the parties, meaning that every plaintiff’s

state of residency is diverse from every defendant. See 28 U.S.C. §1332; Tapscott v. MS

Dealer Serv. Corp., 77 F.3d 1353, 1359 (11th Cir. 1996), abrogated on other grounds, 204

F.3d 1069, 1072 (11th Cir. 2000).

On a motion to remand, the party seeking removal has the burden of establishing

federal jurisdiction. Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir. 1996) (citing Tapscott

v. MS Dealer Serv. Corp., 77 F.3d 1353, 1356 (11th Cir.1996)). 

III. DISCUSSION

Diversity of citizenship exists between the Plaintiffs and the Defendants. Plaintiffs 2

argue that the amount in controversy requirement of diversity jurisdiction is not met. (Doc.

# 5, at 3). 

A. Standard for measuring the amount in controversy 

In declaratory actions, the amount in controversy is measured by the value of “the

Case 1:07-cv-00728-MEF-SRW Document 11 Filed 12/05/07 Page 2 of 8
3

object of the litigation.” Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. 333,

347 (1977). The Plaintiffs’ complaint asks the court to appoint an arbitrator and designate

the applicable rules and fees associated with arbitration. Complaint (Doc. # 1-2, at 5). In

this case, the parties disagree on what the “object of the litigation” is. 

Plaintiffs argue that the correct measure of the amount in controversy is “the value of

what is sought in the Complaint seeking to compel arbitration, not the claims in the

underlying dispute.” (Doc. # 5, at 3) (citing Citigroup Global Markets, Inc. v. Berggren,

2006 WL 3359653 (N.D. Ga. Nov. 20, 2006) (unpublished)). In Citigroup, the plaintiff

requested declaratory relief in federal court to enjoin an ongoing arbitration. With respect

to the amount in controversy, the plaintiff’s complaint merely stated that the amount in

controversy exceeded $75,000. Id. at *1. Without citing any legal authority, the Citigroup

court stated that 

[t]he “object of the litigation” in the present case is injunctive and declaratory

relief relieving Plaintiff from continuing with arbitration proceedings initiated

by Defendants. The underlying fraud and contract claims are not at issue.

What is at issue is whether the Plaintiff can obtain this Court's sanction to

cease arbitrating Defendants' claims. The Complaint does not allege facts to

show that this outcome is worth more than $75,000.

Id. at *2. In this case, Plaintiffs argue that, in light of the decision in Citigroup, the amount

in controversy does not exceed $75,000 because the Complaint seeks declaratory relief,

which they argue, cannot be proven to be worth in excess of $75,000. 

Defendants argue that the correct measure of the amount in controversy is the value

of the underlying claims in arbitration, which relate to an alleged defect in a manufactured

Case 1:07-cv-00728-MEF-SRW Document 11 Filed 12/05/07 Page 3 of 8
4

home. (Doc. # 1, at 1). Defendants point out that the Second, Third, Fifth, and Seventh

Circuit Courts of Appeals disagreed with the position taken by Plaintiffs and the Northern

District of Georgia, which wrote the unpublished decision that constituted Plaintiff’s sole

legal authority. (Doc. # 7-2, at 1-3) (citing Davenport v. Procter & Gamble Mfg. Co., 241

F.2d 511, 514 (2d Cir. 1957) (finding that the amount in controversy requirement was

satisfied in a case where plaintiff sought to compel arbitration and affirming the district court

decision that denied plaintiff’s motion to remand); Jumara v. State Farm Ins. Co., 55 F.3d

873, 877 (3d Cir. 1995) (finding that the amount in controversy requirement was satisfied in

a case where the plaintiffs sought to compel arbitration); Webb v. Investacorp, Inc., 89 F.3d

252, 256-57 (5th Cir. 1996) (finding that the amount in controversy requirement was satisfied

in a case where plaintiff sought to enjoin arbitration and affirming the district court decision

that denied plaintiff’s motion to remand); America’s Money Line, Inc. v. Coleman, 360 F.3d

782, 786 (7th Cir. 2004) (holding that the amount in controversy in a suit to compel

arbitration is the amount disputed in the underlying claim, and affirming a dismissal for lack

of subject matter jurisdiction because the amount disputed in the underlying claim did not

exceed $75,000)). 

Plaintiffs cite no authority that is contrary to these cases other than the unpublished

decision from the Northern District of Georgia, which did not cite any authority for its

position on this issue. See Citigroup, 2006 WL 3359653, at *2. This Court finds that the

underlying claim in arbitration is the correct measure of the amount in dispute because the

Case 1:07-cv-00728-MEF-SRW Document 11 Filed 12/05/07 Page 4 of 8
5

“petition to compel arbitration is only the initial step in a litigation which seeks as its goal

a judgment affirming the award.” Jumara, 55 F.3d at 877. Therefore, the amount in

controversy should be measured by the underlying claims that Plaintiffs seek to arbitrate. 

B. Whether the amount in controversy requirement is satisfied 

Plaintiffs did not specify the amount of damages that they seek in the Complaint filed

in the Henry County Circuit Court. Therefore, Defendants have the burden of showing by

a preponderance of the evidence that the amount in controversy exceeds $75,000. Lowery

v. Alabama Power Co., 483 F.3d 1184, 1208-09 (11th Cir. 2007) (citing Tapscott v. MS

Dealer Serv. Corp., 77 F.3d 1353, 1356-57 (11th Cir.1996)). In Lowery, the Eleventh Circuit

noted the “unique tension in applying a fact-weighing standard” to a situation “where the

court has only naked pleadings to consider.” Id. at 1209. “[A]ny attempt to engage in a

preponderance of the evidence assessment at this juncture would necessarily amount to

unabashed guesswork, and such speculation is frowned upon.” Id. at 1211 (citing Lindsey

v. Ala. Tel. Co., 576 F.2d 593, 595 (5th Cir. 1978)). Nevertheless, as the Eleventh Circuit

put it in Lowery, “our precedent compels us to continue forcing this square peg into a round

hole.” Id. 

The Court should consider the notice of removal and accompanying documents,

including the complaint. Id. at 1213-14. “When a plaintiff seeks unliquidated damages and

does not make a specific demand, . . . the factual information establishing the jurisdictional

amount must come from the plaintiff.” Id. at 1214 n.66. “If the jurisdictional amount is

Case 1:07-cv-00728-MEF-SRW Document 11 Filed 12/05/07 Page 5 of 8
6

either stated clearly on the face of the documents before the court, or readily deducible from

them, then the court has jurisdiction. If not, the court must remand.” Id. at 1211. “[N]either

the defendants nor the court may speculate in an attempt to make up for the notice's failings.”

Id. at 1214-15 (citing Lindsey, 576 F.2d at 595). 

In this case, the Court will consider the Complaint that Plaintiffs filed in the Circuit

Court of Henry County (Doc. # 1-2, at 2-5), excerpts from the contract between Plaintiffs and

Defendants that Plaintiff submitted to the Circuit Court (Doc. # 1-2, at 6-8), and the

Complaint that Plaintiffs filed with the American Arbitration Association (Doc. # 1-2, at 9-

23) (“AAA Complaint”). If the amount in controversy in the underlying dispute is stated

clearly in or readily deducible from these documents, then this Court has diversity

jurisdiction. 

Plaintiffs seek compensatory damages in counts one through seven, nine, ten, and

eleven of their AAA Complaint for alleged defects in the manufactured home that Plaintiffs

purchased from Defendants. AAA Complaint (Doc. # 1-2, at 16). Plaintiffs alleged that they

paid $50,000 for the home, and that the home “is rendered worthless.” (Id. at 13-14). In

count eight, Plaintiffs state that “Defendants should be required to disgorge all sums . . .

received from Plaintiffs.” (Id. at 20). Based on these requests and on the allegation that

Plaintiffs $50,000 home was rendered worthless, the Court finds that it is readily deducible

from the AAA Complaint that the amount in controversy in this case is at least $50,000

because that is the amount that would be necessary to compensate Plaintiffs for their loss. 

Case 1:07-cv-00728-MEF-SRW Document 11 Filed 12/05/07 Page 6 of 8
7

 

Deducing the jurisdictional amount in controversy with respect to the other claims is

not as straightforward as deducing the compensatory damages request for the loss of the

home. When faced with this issue, courts have looked at the amount of damages awarded

“in cases on the same type of suit.” Lowe's OK'd Used Cars, Inc. v. Acceptance Ins. Co., 995

F. Supp. 1388, 1392 (M.D. Ala. 1998) (citing De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th

Cir. 1993); Bolling v. Union Nat’l Life Ins. Co., 900 F. Supp. 400, 404 (M.D. Ala. 1995);

Steele v. Underwriters Adjusting Co., Inc., 649 F. Supp. 1414, 1417 (M.D. Ala. 1986)). 

Plaintiffs seek compensatory damages for “mental anguish, . . . emotional distress,

anxiety, embarrassment, anger, fear, frustration, disappointment, worry, annoyance, [and]

inconvenience.” AAA Complaint (Doc. # 1-2, at 16). In Southern Energy Homes, Inc. v.

Washington, a purchaser of a manufactured home sued the manufacturer and alleged many

of the same claims that Plaintiffs allege in this case. 774 So. 2d 505 (Ala. 2000). The

Alabama Supreme Court upheld a compensatory damages award of $375,000, a “substantial

portion” of which was for mental anguish. Id. at 518-19. 

Plaintiffs seek punitive damages in counts seven, nine, ten, and eleven of the AAA

Complaint. These counts allege wantonness; fraudulent, negligent, and wanton concealment;

and liability under the Alabama Extended Manufacturers Liability Doctrine. Plaintiffs may

recover punitive damages for fraudulent and wanton conduct. Johnson v. McMurray, 461

So. 2d 775, 779 (Ala. 1984) (punitive damages allowed for fraudulent concealment claim);

Case 1:07-cv-00728-MEF-SRW Document 11 Filed 12/05/07 Page 7 of 8
8

Surrency v. Harbison, 489 So. 2d 1097, 1105 (Ala. 1986) (punitive damages allowed for

claims of wantonness). In Horton Homes, Inc. v. Brooks, a purchaser of a manufactured

home sued the manufacturer and alleged many of the same claims that Plaintiffs allege in this

case. 832 So. 2d 44 (Ala. 2001). The jury awarded $138,000 in mental anguish damages,

which was affirmed by the Alabama Supreme Court, and $600,000 in punitive damages,

which was reduced to $150,000. Id. at 54, 59. 

The prior decisions cited by Defendants involving mental anguish and punitive

damages and the fact that the $50,000 home is allegedly worthless indicate that the amount

in controversy exceeds $75,000. Plaintiffs have not presented any evidence that successful

plaintiffs in similar cases have recovered less than the jurisdictional amount Therefore, the

Court finds by a preponderance of the evidence that the amount in controversy is satisfied

in this case. 

IV. CONCLUSION

The Court has subject matter jurisdiction because there is diversity of citizenship

between the parties and the amount in controversy is satisfied. Accordingly, it is hereby

ORDERED that 

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

Done on this the 5 day of December, 2007. 

th

 /s/ Mark E. Fuller 

CHIEF UNITED STATES DISTRICT JUDGE

Case 1:07-cv-00728-MEF-SRW Document 11 Filed 12/05/07 Page 8 of 8