Court Opinion

ID: 1058464
Source: CourtListenerOpinion
Date Created: 2013-10-09 18:30:52.528378+00
Date Added: 2024-06-11T12:05:56.212213
License: Public Domain

Present: Hassell, C.J., Keenan, Koontz, Kinser, Lemons, and
Goodwyn, JJ., and Lacy, S.J.

SHERMAN WHITAKER

v.   Record No. 071197                OPINION BY SENIOR JUSTICE
                                          ELIZABETH B. LACY
                                            June 6, 2008
HEINRICH SCHEPERS GMBH & CO. KG

        FROM THE CIRCUIT COURT OF THE CITY OF PORTSMOUTH
                   James A. Cales, Jr., Judge

      In this appeal we consider whether the trial court abused

its discretion in denying the plaintiff’s motion to amend his

ad damnum clause.

                         FACTS and PROCEEDINGS

      On August 14, 2002, Sherman E. Whitaker was injured while

working as a longshoreman on a boat docked in Portsmouth,

Virginia and owned by Heinrich Schepers GMBH & Co. KG, a

German corporation (Heinrich).     On January 30, 2004, Whitaker

filed a motion for judgment in the Circuit Court of the City

of Portsmouth alleging Heinrich’s negligence caused Whitaker’s

injuries and seeking damages of $74,000.     In answers to

interrogatories filed on April 26, 2004, Whitaker stated that

his damages exceeded $74,000, but he did not seek to amend the

ad damnum clause of his motion for judgment.     Whitaker

supplemented these answers on October 14, 2004, again

indicating that his damages exceeded $74,000.
     In November 2004, Heinrich asked Whitaker to stipulate

that his damage claim was limited to $74,000.      Whitaker

declined to make the requested stipulation.      On December 14,

2004, Heinrich filed a notice of removal in the United States

District Court for the Eastern District of Virginia based on

diversity and because “the amount in controversy now exceeds

$75,000.”   See 28 U.S.C. § 1332(a) (2000).      Whitaker filed a

motion to remand the case to the state court asserting that

Heinrich’s notice of removal was untimely.      Whitaker argued

that the April 26 interrogatory answers put Heinrich on notice

that the damage claim exceeded $74,000 and therefore, under 28

U.S.C. § 1446(b) (2000) Heinrich was required to file its

notice of removal within 30 days of that date.      Prior to any

hearing on either party’s motion, Heinrich agreed to a consent

order remanding the case to the state court.

     In December 2005, Whitaker filed a motion to amend his ad

damnum clause to $2.5 million.       The trial court denied that

motion and Whitaker’s motion for reconsideration.      Whitaker

sought to amend the ad damnum clause again in June 2006, and

the trial court again denied that motion, finding that the

original motion for judgment seeking damages of only $74,000

was filed in bad faith because it deliberately pled “damages

below the jurisdictional amount with the intention of evading

federal jurisdiction” and that Heinrich would be prejudiced by

                                 2
this bad faith action.   The trial court granted Whitaker leave

to file a petition for interlocutory appeal pursuant to Code

§ 8.01-670.1.   This Court declined to grant the interlocutory

appeal and dismissed the petition for appeal by order entered

on January 9, 2007.    Whitaker v. Heinrich Schepers GMBH & Co.

KG, Record No. 061672 (January 9, 2007).

     On February 22, 2007, Whitaker filed another motion to

increase the ad damnum clause to $5,000,000, which motion was

again denied by the trial court on the ground previously

stated.    Whitaker then chose to have the matter tried by the

court rather than by a jury.   After Whitaker presented his

evidence, Heinrich asked that summary judgment be entered in

Whitaker’s favor and that damages be awarded in the amount

requested in the ad damnum clause, $74,000.   In response,

Whitaker argued that his evidence established damages in

excess of $74,000, and requested that the court either grant

his renewed request to amend the ad damnum clause, or enter

judgment for an amount “that would fairly and reasonably

compensate Mr. Whitaker for his injuries.”    The trial court

denied Heinrich’s summary judgment motion and Whitaker’s

motions, but entered judgment in favor of Whitaker for

$74,000.   Whitaker timely appealed to this Court.

                            DISCUSSION

                                 3
        In deciding whether to grant the amendment of a pleading

to increase the amount sought in the ad damnum clause, “a

circuit court must consider whether the defendant will be

prejudiced” by allowing the amendment, and “whether such

prejudice will affect the defendant’s ability to have a fair

trial.”     Peterson v. Castano, 260 Va. 299, 303, 534 S.E.2d
736, 738 (2000).    In addition, the circuit court must consider

“the plaintiff’s right to be compensated fully for any damages

caused by the defendant’s acts or omissions.”     Id.   This

decision rests within the discretion of the circuit court and

our review on appeal is limited to whether the circuit court

abused its discretion.     Id.

        Whitaker argues that the factual premise upon which the

trial court relied in determining prejudice was erroneous and,

thus, the trial court abused its discretion in denying the

motion to amend the ad damnum clause.    Whitaker also argues

that Heinrich would not have been prejudiced by the amendment

to the ad damnum clause in December 2005 because Heinrich had

been aware of the increased damage claim since April 26 or

October 14, 2004, no discovery had been taken, the discovery

deadline was March 24, 2006, the period afforded for expert

designation had not expired, and trial was set for April 26,

2006.    Therefore, Whitaker asserts that allowing him to amend

his ad damnum clause would not have prejudiced Heinrich’s

                                  4
ability to have a fair trial and that refusing the motion

denied Whitaker the ability to be fully compensated for his

losses.

     Because the denial of a motion to amend is based on a

finding of prejudice to the defendant, we begin by reviewing

the prejudice the trial court found in this case.   The trial

court determined that the “[d]efendant would be prejudiced

from plaintiff’s bad faith conduct in deliberately pleading

damages below the jurisdictional amount with the intention of

evading federal jurisdiction by virtue of the pleading.” 1

Stated another way, the trial court found that Heinrich was

prejudiced because Whitaker intentionally declined to increase

the ad damnum clause until after Heinrich’s right to remove

the case to federal court “evaporated.”

     Under 28 U.S.C. § 1446(b), a litigant may remove a case

to federal court if there is diversity of citizenship between

the litigants and the amount in controversy exceeds $75,000.

See 28 U.S.C. § 1332(a).   Notice of removal must be filed

within 30 days of the filing of the original pleading or any

“other paper” indicating that the amount sought in damages

exceeds $75,000.   28 U.S.C. § 1446(b).   The case is removed to

     1
       Although the trial court stated that Whitaker’s counsel
engaged in bad faith conduct, neither Heinrich nor the trial
court, sua sponte, suggested that sanctions for such conduct
should be imposed under Code § 8.01-271.1.

                                5
federal court upon filing the notice of removal but may be

remanded to the state court if the conditions for removal are

not met.   28 U.S.C. § 1446(d).       In construing this provision,

federal courts have not limited the amount in controversy to

the amount requested in the plaintiff’s ad damnum clause.          The

amount in controversy for purposes of removing a case to

federal court can be determined from the “totality of the

circumstances,” including answers to interrogatories.        See

Schwenk v. Cobra Mfg. Co., 322 F. Supp. 2d 676, 678 (E.D. Va.

2004); Lien v. H.E.R.C. Prods., Inc., 8 F. Supp. 2d 531, 534

(E.D. Va. 1998); see also Van Gosen v. Arcadian Motor

Carriers, 825 F. Supp. 981, 982 (D. Kan. 1993) (answers to

interrogatories can constitute an “other paper” under 28

U.S.C. § 1446(b) giving notice that a state court action has

become removable); accord Smith v. International Harvester,

621 F. Supp. 1005, 1006-08 (D. Nev. 1985).

     In this case, Whitaker sent Heinrich answers to

interrogatories on April 26, 2004, which indicated that his

damages were likely to exceed $75,000.       Specifically, Whitaker

stated that he had incurred lost wages of $57,031.11 and

future lost wages of $452,364.12.        The interrogatory answers

also indicated that his injuries would require continued

treatment and future surgery.     In supplemental answers served

on Heinrich on October 14, 2004, Whitaker stated that his

                                  6
claimed future and past medical expenses totaled $119,070.32.

Although Heinrich received “other papers” indicating the

damages claimed exceeded $75,000, it did not file a notice of

removal with the federal court until December 14, 2004, well

beyond the 30-day limitations period available to him under 28

U.S.C. § 1446(b).    Furthermore, Heinrich’s counsel signed an

agreed consent order remanding the case to the Circuit Court

of the City of Portsmouth and stated to that court and to this

Court in oral argument that, although he had notice of the

increased damage claim, he failed to timely file the notice of

removal in federal court.

     This record demonstrates that Whitaker’s actions did not

cause Heinrich’s right to remove the case to federal court to

“evaporate” as stated by the trial court.    Rather, Heinrich’s

inability to remove the case to the federal court resulted

from its failure to timely file a notice of removal.

Therefore, the trial court’s finding of prejudice was based on

an incorrect factual premise and denying Whitaker’s motion to

amend the ad damnum clause on this basis was an abuse of

discretion. 2   Nothing in this record indicates any other

     2
       In resolving this issue we need not consider whether
precluding the ability to remove a case to federal court would
constitute prejudice to the defendant under Peterson, 260 Va.
at 303, 534 S.E.2d at 738.

                                 7
prejudice that Heinrich would have suffered if Whitaker’s

motion to amend the ad damnum clause had been granted.

     Accordingly, the judgment of the trial court must be

reversed and the case remanded for further proceedings. 3   The

further proceedings, however, will be limited to the issue of

damages, as the trial court’s decision on liability has not

been challenged by either party.

                                   Reversed in part and remanded.

     3
       In light of our decision we need not consider Whitaker’s
remaining claim that the denial of his motion to amend denied
his right to have the amount of damage determined by a jury.

                               8