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Weathers v. Circle K Stores, Inc.

United States District Court, D. New Mexico

January 9, 2020

TIMOTHY D. WEATHERS doing business as TRUSTIN TRANSPORTATION, LLC., Plaintiff,
v.
CIRCLE K STORES, INC., PROTECTIVE INSURANCE COMPANY, and 19th CAPITAL TITLING LIMITED, doing business as 19th CAPITAL, A DIVISION OF QUALITY COMPANIES, Defendants.

          MEMORANDUM OPINION AND ORDER

         This matter is before the Court on (i) the parties' responsive briefs to the Court's Order for Additional Briefing (ECF Nos. 38-42); (ii) Plaintiff Timothy Weathers d/b/a Trustin Transportation LLC.'s Motion for Remand to the State District Court (ECF No. 25); and (iii) 19th Capital Titling Limited d/b/a 19th Capital, a Division of Quality Companies' Motion to Dismiss without Prejudice for Improper Venue under Mandatory Forum Selection Clause (ECF No. 14).

         A. BACKGROUND

         According to Plaintiff's complaint, mislabeled gasoline from a Circle K Store caused about $19, 000 in repair damages to his truck that he drove as a FedEx independent contractor. On June 14, 2019, Plaintiff filed his original lawsuit in the Second Judicial District Court of New Mexico, bringing state-law claims for negligence, breach of contract and of the covenant of good faith and fair dealing, and for a statutory violation of the New Mexico Unfair Claims Practices Act. See Pl.'s Compl., ECF No. 1. On that same day, Plaintiff certified that his case was not subject to referral to arbitration under state-court local rules because he sought a damages award in excess of $25, 000. See id. at 22. About a month later, on July 19, 2019, Mr. Weathers certified that he served the complaint on Defendants Circle K and 19th Capital on June 20, 2019 and Defendant Protective on June 21. See id. at 23-25.

         On July 20, 2019, 19th Capital removed the lawsuit to federal court based on the diversity of the parties' citizenship under 28 U.S.C. § 1332(a). Only 19th Capital signed the removal notice. But 19th Capital represented that “[c]onsent to the removal has been obtained from Defendants Circle K and Protective. Circle K provided consent through counsel … via email July 9, 2019. Protective consented to removal through counsel … via email July 16, 2019.” Id. at 4. On July 22, 2019, Circle K filed a notice of consent to removal. See ECF No. 5. Although Protective filed no similar notice of consent to removal, it did file an answer on July 26, 2019. See ECF No. 9.

         On July 29, 2019, 19th Capital moved to dismiss, pointing to a forum selection clause indicating that disputes between it and Plaintiff would be referred to Indiana courts. See ECF No. 14. On August 19, 2019, Plaintiff in turn moved to remand, contending that his insurer, Protective, did not consent to removal jurisdiction in the correct form or time-frame. According to Plaintiff, Protective did not independently and unambiguously consent to removal, either by signing the notice of removal or by filing clear, separate consent within 30-days under 28 U.S.C. §§ 1446(b)(1), (b)(2)(A).

         On September 3, 2019 - 45-days after removal - Protective filed a motion opposing Plaintiff's remand motion and telling the Court that it wishes to litigate this case in federal court. See ECF No. 29. That same day, Protective also filed a notice of consent to removal. See ECF No. 30.

         On November 21, 2019, the Court told the parties that it questioned whether the amount in controversy exceeded $75, 000. Plaintiff's complaint did not specify his damages and the removed record showed only that Plaintiff sought a damage awarded in excess of $25, 000. The Court ordered the parties submit jurisdictional facts and evidence, noting that this could be done by submitting “evidence outside the complaint, including affidavits or declarations, or other summary-judgment-type evidence” id. at 7, and/or “by reference to plaintiff's informal estimates or settlement demands.” Id. 6-7 (citations omitted).

         Defendants responded by pointing to a June 6, 2019 demand letter from Plaintiff to Defendants in which Plaintiff estimated his damages at about $499, 500.00 and offered to settle the case for $250, 000. See ECF No. 38-1, 3. Plaintiff replied that, at the end of the day, these numbers are inexact estimates, and so “any ambiguities are construed against removal and in favor of remand to state court.” ECF No. 41, 3 (quoting Scarlott v. Nissan N. Am., Inc., 771 F.3d 883, 887 (5th Cir. 2014)).

         Amount in controversy aside, Plaintiff contends that the case should be remanded for two additional reasons. First, Plaintiff intends to amend his complaint to join a non-diverse fuel transporter whose presence will destroy diversity jurisdiction. Second, Protective's alleged technical errors in the removal process violated the so-called “unanimity rule, ” which requires all defendants to consent to removal. Zambrano v. New Mexico Corr. Dep't, 256 F.Supp.3d 1179, 1181 (D.N.M. 2017).

         B. DIVERSITY AND REMOVAL JURISDICTION

         The Court describes and analyzes: First, whether Defendants have carried their burden of proof to demonstrate that the amount in controversy component of 28 U.S.C. § 1332(a) is met. Second, the effect of Plaintiff's proposed amendment to add an in-state fuel transporter. Third, whether 19th Capital's indication of Protective's consent to removal, along with Protective's own filings in federal court, sufficiently establish unanimous and timely consent to removal.

         1. Amount in Controversy

         As noted earlier, Plaintiff's five-count complaint did not specify his damages. “In this situation, [the court] place[s] the burden on the party seeking to remove the case to federal court to show by a preponderance of the evidence that the amount in controversy requirement has been met.” Halsey v. AGCO Corp., 755 Fed.Appx. 524, 526-27 (6th Cir. 2018) (citing Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (2014)) (other citation omitted). “The party seeking removal does not need to establish what damages the plaintiff will recover, but only how much is in controversy between the parties.” Sabrina Roppo v. Travelers Commercial Ins. Co., 869 F.3d 568, 579 (7th Cir. 2017) (citation omitted) (emphases in original). There are several nonexclusive ways that a removing defendant can demonstrate the amount in controversy including, as relevant here, by calculation from the complaint's allegations and/or by reference to the plaintiff's informal estimates or settlement demands. See Frederick v. Hartford Underwriters Ins. Co., 683 F.3d 1242, 1247 (10th Cir. 2012) (citation omitted).

         The complaint's allegations and Plaintiff's estimates show that Plaintiff's damages may exceed $75, 000. As for the complaint's allegations, Plaintiff maintained that Defendants are liable for “harm and damages to himself and his property, including but not limited to: over $18, 927.61 in repair damages to his 2015 Kenworth Truck; diminution in value of the truck; loss of use - failure to provide a rental replacement for the truck; loss of contract with [FedEx]; business interruption losses; … loss of future contracts … emotional distress, anxiety and depression.” Pl.'s Compl., ¶¶ 53, 61, 68, 80, 90. Circle K and Protective are liable, Plaintiff says, for “the value of an undamaged truck, continuation of his contract with FedEx … payment of his missed lease payments, and the value of continuation of his business and future endeavors, ” id. at 19. Furthermore, against Protective Plaintiff seeks punitive damages and statutory attorneys' fees for Protective's alleged bad-faith failure to pay a valid claim for “downtime” coverage that Plaintiff presented to Protective. Against 19th Capital he seeks “compensatory damages and attorneys' fees.” Id. at 19.

         While Plaintiff's complaint did not quantify these damages, his demand letter did. In that letter, he told Defendant that they are responsible for the cost of a rental replacement truck at $45, 000; $104, 000 for the loss of Plaintiff's FedEx contract; $100, 000 in business interruption losses; and $500 for travel reimbursement. In addition, he estimated that other consequential and emotional damages total $150, 000 and seeks a combination of punitive damages and attorneys' fees totaling $100, 000. Plaintiff put his damages at $499, 500 and said he would settle the case for $250, 000. See ECF No. 38-1, 3. Plaintiff's own estimation of his claim is telling. See McPhail v. Deere & Co., 529 F.3d 947, 956 (10th Cir. 2008) (“documents that demonstrate plaintiff's own estimation of its claim are a proper means of supporting the allegations in the notice of removal ….”); Horn v. Guglielmo & Assocs. PLLC, No. 18-CV-1129-MV-SCY, 2019 WL 2272778, at *3 (D.N.M. May 28, 2019) (“The Court finds Plaintiff's settlement offers most compelling in determining the jurisdictional amount.”). Accordingly, the combination of Plaintiff's estimates and allegations sufficiently establish that it is more likely than not that Plaintiff seeks damages exceeding $75, 000.

         2. Adding an In-State Party

         Plaintiff tells the Court that he intends to amend his complaint to join a non-diverse fuel transporter whose presence will destroy diversity jurisdiction. Plaintiff has since learned that an in-state fuel transporter, Refined Fuels LLC, supplied the mislabeled fuel to Circle K. Refined Fuels is therefore a necessary party because it shoulders responsibility for his harm, Plaintiff says.

         Under the federal removal statutes, “[i]f after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court.” 28 U.S.C. § 1447(e). However, as the Tenth Circuit has explained, under ...


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