The U.S. District Court for the Western District of Louisiana recently remanded a case back to the state court’s jurisdiction. The parties to the suit, a home purchaser and title underwriter, disagreed about whether the case met the jurisdictional threshold to be moved to federal court.
The case is David & Sheri Elter LLC v. Stewart Title Guarantee Co. (U.S. District Court for the Western District of Louisiana, No. 6:16 cv 1036).
David & Sheri Elter LLC filed suit in Louisiana state court May 13, 2016, against Stewart Title Guarantee Co. It alleged that it purchased 8.653 acres of property for $200,000 and that Stewart issued title insurance on the property. Elter alleged that the seller maintained possession of a portion of the property. It made a claim with Stewart on Jan. 21, 2016. On Feb. 11, 2016, Stewart requested a plat of the property identifying the portion of property that was disputed between Elter and the seller. The plat was provided Feb. 17, 2016, and on April 25, 2016, Stewart denied the claim, finding the policy did not provide coverage.
In the suit, Elter sought a declaratory judgement that the policy provided coverage for the loss and damage arising from the claims or encumbrances against its title to the property. It also sought damages under the policy for its damages and losses, in addition to statutory penalties and attorney’s fees for untimely adjusting its claim after receiving satisfactory proof of loss and misinterpreting the title policy.
Stewart removed the action July 13, 2016, alleging that the matter exceeded $75,000 and that the federal court had diversity jurisdiction. It specifically argued that it was facially apparent that Elter’s claim exceeded the $75,000 jurisdictional minimum because the property was purchased for $200,000 and the policy had a $200,000 limit. The case was removed July 25, 2016.
On Aug. 11, 2016, Elter filed a motion to remand. It alleged that the federal court lacked jurisdiction because the amount in controversy did not meet or exceed the requisite jurisdictional amount of $75,000. It also argued that Stewart Title failed to demonstrate that the jurisdictional minimum of the court was met and therefore the case improperly was removed. It also sought all costs and attorneys fees incurred as a result of the improper removal of the action.
It supported its motion by submitting the claim against the title policy, which noted that although the property included 8.653 acres, the seller was still claiming ownership over 1.5 acres. Elter also submitted a copy of the plat which shows two portions, Tract A consisting of 1.427 acres and Tract B consisting of 7.216 acres. It also submitted a letter its counsel wrote to Stewart noting that the loss of the 1.427 acres was approximately $35,895.06.
U.S. Magistrate Judge Patrick Hanna recommended that Elter’s motion to remand be granted but that its request for costs, expenses and attorney’s fees be denied.
“In this case, the removing defendant, Stewart Title, has not met its burden of establishing federal subject matter jurisdiction. Stewart Title has not demonstrated that it is facially apparent that Elter’s claims are likely above $75,000, and Stewart Title has presented no facts in controversy that could support a finding that the jurisdictional amount exists in this case,” Hanna stated.
“Initially, Stewart Title argues that this court should not consider the submissions of Elter in support of the instant motion, arguing that this information constitutes ‘new facts’ which are being submitted by Elter, post-removal, to defeat jurisdiction. That argument is without merit as the submissions merely clarify the amount in controversy at the time of removal which was previously ambiguous. Elter’s petition alleges that the claim is limited to the portion of the property over which the seller maintained possession, the tract of land identified by Elter when it sent the adjuster the plat requested by her. Indeed, Elter’s submissions are merely hard copies of original documents referenced in the petition, from which Elter derived the factual allegations set forth in the petition. Likewise, counsel’s calculation of the loss is merely a mathematical calculation based on the facts alleged, not a ‘stipulation of settlement offer’ made after the filing of suit as characterized by Stewart Title. The documents are therefore properly considered by this court as this court is examining the jurisdictional facts as of the time the case was removed, even though the documents have been submitted for this court’s review after removal.”
Turning to Elter’s request for costs expenses and attorney’s fees, Hanna noted that courts may award attorney’s fees under Section 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal.
“Under the unusual legal and factual circumstances presented in this case, the undersigned cannot find that the removal in this case was objectively unreasonable,” he said. “Accordingly, it is recommended that Elter’s request for costs, expenses and attorney fees be denied.”