United States District Court, D. New Mexico
ORDER DENYING MOTION TO REMAND
MATTER comes before the Court on Plaintiff’s Motion to
Remand (Doc. 11). Plaintiff contends that
Defendant B&B Consultants, Inc. d/b/a Sonic
America’s Drive-In (“Defendant”) has not
met its burden to establish diversity jurisdiction.
Specifically, Plaintiff avers that Defendant has not made a
sufficient showing that the amount in controversy exceeds
$75, 000 as required by 28 U.S.C. Â§ 1332(a). The Court
disagrees and finds that Defendant has set forth sufficient
jurisdictional facts to establish diversity jurisdiction.
Accordingly, for the reasons set forth below, Plaintiffâs
Motion is DENIED.
a slip-and-fall case wherein Plaintiff alleges that he
slipped on puddle of oil located on Defendant’s
property. (See Doc. 1-1 at 2.) Prior to filing his
Complaint, Plaintiff submitted a demand letter to Defendant,
outlining what Plaintiff (or more, perhaps more accurately,
Plaintiff’s counsel) believed to be both the low- and
high-end of Plaintiff’s estimated damages, which
amounted to $37, 659.00 and $157, 659.00, respectively.
(See Doc. 14-1 at 6.) Plaintiff’s demand
detailed his injuries and his alleged damages, including past
and future medical expenses, pain and suffering and loss of
enjoyment of life. (Id. at 6–7.)
letter also referenced the fact that his counsel had
undertaken an investigation of Defendant’s premises and
found a pattern of conduct that “expose[d] [Defendant]
to exemplary damages.” (Id. at 3.) Plaintiff
further explained that he was “confident” that
the question of exemplary damages would be presented to the
jury in light of Defendant’s alleged “reckless
disregard for its patrons.” (Id.) Indeed, both
Plaintiff’s low- and high-end estimates included
amounts for exemplary damages. (Id. at 6.) Plaintiff
ultimately demanded $75, 000 to settle his claims.
(Id.) Defendant countered with an offer of $5, 000.
(Doc. 14-2 at 1.) Plaintiff subsequently filed a Complaint
which included references to punitive damages. (Doc. 1-1 at
¶¶ 25, 35, Prayer.) Defendant timely removed to
U.S. District Court. Plaintiff contends that removal was
improper and asks that this case be remanded to New Mexico
state court. He now contends that only $20, 000 is in play.
(Doc. 11 at 7.)
courts are courts of limited jurisdiction, Kokkonen v.
Guardian Life Ins. Co. of America, 511 U.S. 375, 377
(1994), with the requirements for federal jurisdiction found
at 28 U.S.C. §1331 (federal question jurisdiction) and
§1332 (diversity jurisdiction). The procedure for
removal is found at 28 U.S.C. §1446. Due to the
exceptional nature of federal jurisdiction, all doubt should
be resolved against removal. Fajen v. Found. Reserve Ins.
Co., 683 F.2d 331, 333 (10th Cir. 1982) (citations
omitted). Where a defendant seeks to invoke the diversity
jurisdiction of the Court, the burden is on the defendant to
establish by a preponderance of the evidence that complete
diversity of citizenship exists between the parties and that
the amount in controversy exceeds $75, 000. See
§ 1446(c)(2); Tellez-Giron v. Conn’s
Appliances, Inc., No. 1:17-cv-01074, 2017 WL 611361, at
*2 (D.N.M. January 29, 2018) (citing McShares, Inc. v.
Barry, 979 F.Supp. 1338, 1342 (D. Kan. 1997). In the
instant case, there is no dispute as to
citizenship–Plaintiff is a citizen of California,
Defendant is a citizen of New Mexico. (See Doc. 1 at
3.) The only issue before the Court then is whether Defendant
has presented sufficient jurisdictional facts to establish
that the amount in controversy exceeds $75, 000.
(See Doc. 15 at 1.)
a defendant’s assertion that the amount in controversy
meets the jurisdictional requirement is accepted by the court
unless it is challenged by the plaintiff. See Dart v.
Cherokee Basin Operating Co., LLC, v. Owens, 135 S.Ct.
547, 550 (2015). As a threshold matter, the Court notes that
under the New Mexico Rules of Civil Procedure, a plaintiff is
not permitted to include an ad damnum clause
requesting a specific amount of monetary damages in his
complaint. See Rule 1-008(A)(3) NMRA. Even if such a
clause was allowed, a plaintiff could easily avoid federal
jurisdiction by declining to allege the jurisdictional amount
and, in so doing, frustrate the purpose of diversity
jurisdiction. See McPhail v. Deere & Co., 529
F.3d 947, 955 (10th Cir. 2008). Accordingly, a defendant is
permitted to show how much is in controversy through other
means, including estimates of damages derived from
allegations in the Complaint, Plaintiff’s answers to
interrogatories, and “other documents that demonstrate
plaintiff’s own estimation of [his] claim.”
See Id . at 956. A defendant need only show that it is
possible that more than $75, 000 is “in play” to
satisfy its burden. See Id . at 955. Once a
defendant proves sufficient jurisdictional facts by a
preponderance of the evidence, that defendant is
“entitled to stay in federal court unless it is legally
certain that less than $75, 000 is at stake.”
Id. at 954; see also Back Doctors Ltd. v.
Metropolitan Property & Cas. Ins. Co., 637 F.3d 827,
830 (7th Cir. 2011) (“[U]nless recovery of an amount
exceeding the jurisdictional minimum is legally impossible,
the case belongs in federal court.”).
punitive damages may be used to establish an amount in
controversy which meets jurisdictional requirements.
Woodmen of World Life Ins. Soc’y v. Manganaro,
342 F.3d 1213, 1218 (10th Cir. 2003). While a “mere
assertion that punitive damages may be possible is
insufficient, ” if the defendant can establish
“jurisdictional facts that make it possible that
punitive damages are in play, ” the Court can consider
the availability of those damages in its amount in
controversy analysis. Frederick v. Hartford Underwriters
Ins. Co., 683 F.3d 1242, 1248 (10th Cir. 2012). The
defendant can establish such facts by referring to
“facts alleged in the complaint, the nature of the
claims, or evidence in the record to demonstrate that an
award of punitive damages is possible.” Id.
Thus, it is not necessary that Defendant show that it is more
likely than not that punitive damages will be awarded, but
rather whether there are facts that tend to show punitive
damages could potentially be awarded. Id.
case, the Defendant has established sufficient jurisdictional
facts to show that more than $75, 000 is at play. While
Plaintiff argues that the Court should consider only his
compensatory damages estimates in its analysis, (Doc. 15 at
2–3), he points to no authority which so dictates.
Plaintiff himself demanded $75, 000 to settle this case, and
alleged that his damages could be as high as $157, 659. The
Court agrees with Defendant that, as the estimate and demand
are based on a range of future medical bills and related
hedonic damages, they appear to be reasonable estimates of
as Defendant rightly concedes, punitive damages are normally
unavailable in ordinary negligence cases. See UJI
13-1827 NMRA. However, where a defendant engages in culpable
conduct amounting to malicious, willful, reckless, or wanton
conduct, punitive damages may be awarded. See Id .
Here, Plaintiff has not only asserted an entitlement to
punitive damages (Doc. 1-1, ¶¶ 25, 35), but has
also requested the same in his prayer for relief to
“punish” and “deter” Defendant and
others in the future. (Id. at 5, ¶ B.)
Additionally, in his demand letter Plaintiff accused
Defendant of “reckless disregard” of its
customers and contended that Defendant has “exposed
itself to exemplary damages” through its alleged
“pattern” of not cleaning up oil spills. (Doc.
14-1 at 3.) Moreover, Plaintiff alleges that Defendant had
knowledge of a “persistent risk, ” yet failed to
address it. (Id.) These allegations suggest that
Defendant had the kind of culpable mental state that would
warrant an award of punitive damages under New Mexico law. At
the very least, they show that punitive damages are
potentially in play.
relies heavily on Tellez-Giron v. Conn’s
Appliances, Inc., 2017 WL 611361, an opinion authored by
this Court regarding remand, and attempts to distinguish his
case from the facts of Tellez-Giron. Those efforts
are unpersuasive. Plaintiff argues that there is a
significant difference between “affirmatively”
pleading that the defendant’s actions are
culpable conduct rising to the level to warrant punitive
damages, as the plaintiff did in Tellez-Giron, and
simply including a “placeholder” (see
Doc. No. 11 at 7) to the effect that if
Defendant’s actions warrant punitive damages, Plaintiff
is entitled them, as Plaintiff did here. (See Doc.
1-1 at Â¶Â¶ 25, 35.) The Court sees no appreciable difference.
What is more, Plaintiff concedes that he âalleged the
possibility of [punitive damages] depending on what was found
throughout the course of litigation.â (Doc. 11 at 9.)
Accordingly, it is clear to the Court that Plaintiff believes
there is a possibility that punitive damages could be in
play. The fact that he now seeks to avoid federal
jurisdiction by attempting to distance himself from that
contention on the basis that it was not âaffirmativelyâ made
does not change the amount of damages at stake.
Plaintiff misapprehends Tellez-Giron. This Court
simply explained that punitive damages could be considered in
the amount in controversy analysis if the defendant could
present facts demonstrating that punitive damages were
possible. 2017 WL 611361, at * 3. There is nothing in
Tellez-Giron, or McPhail, the controlling
authority to which Tellez-Giron cites, which
suggests that a plaintiff must affirmatively plead the
elements of punitive damages in his complaint in order for
the court to consider the possibility of such damages in its
amount in controversy analysis. As such, even assuming
arguendo that Plaintiff has not affirmatively
pleaded punitive damages, it makes no difference to the
without citation to any authority, would also have this Court
consider whether there is any potential for reduction of
damages based on comparative fault. (See Doc. 15 at
3.) But the amount in controversy requirement contemplates
the potential damages–the amount that will be at issue
in the course of the litigation–not the case’s
settlement value or the amount a plaintiff is likely to
actually recover. McPhail, 529 F.3d at 956. As such,
the amount in controversy analysis does not include any
potential for reduction based on comparative fault, as
Plaintiff suggests. (See Doc. 15 at 3.)
Plaintiff relies on the fact that Defendant’s
counteroffer to Plaintiff’s demand was significantly
less than $75, 000 as support for his assertion that
Defendant cannot meet its burden. Considering that Plaintiff
is suggesting that the Court view his high-end estimate of
damages as mere “puffery, ” (see Doc. 11
at 6–7), it strikes the Court as a little unfair that
Defendant’s $5, 000 counteroffer not be viewed in the
same manner as opposed to a realistic–and outcome