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B.E.T. Construction, Inc. v. Carbon Silica Partners, LP

United States District Court, E.D. Louisiana

January 4, 2018


         SECTION A(3)



         Before the Court is a Motion to Remand (Rec. Doc. 5) filed by Plaintiff B.E.T. Construction, Inc. (“B.E.T.”). Defendant Carbon Silica Partners, LP d/b/a Diamond Fiberglass (“Diamond”) opposes this motion. (Rec. Doc. 6). The motion, set for submission on November 29, 2017, is before the Court on the briefs without oral argument. Having considered the motion and memoranda of counsel, the record, and the applicable law, the Court finds that the Plaintiff's motion should be GRANTED for the reasons set forth below.

         I. Background

         Plaintiff B.E.T. filed this motion to remand pursuant to 28 U.S.C. § 1447(c) on the basis that the amount in controversy is less than the statutorily required $75, 000.00. B.E.T. originally filed suit in the 17th Judicial District Court for the Parish of Lafourche, Louisiana seeking declaratory judgment against Defendant Diamond. The suit arose out of an agreement between B.E.T. and Halliburton Entergy Services, Inc. (“Halliburton”) to construct a facility for Halliburton in Fourchon, Louisiana. (Rec. Doc. 5-1, p. 1). Halliburton hired B.E.T. as construction manager with the authority to purchase materials and hire subcontractors as needed to complete the project. Id. Thereafter, B.E.T. entered into an agreement with Diamond regarding the purchase and installation of storage tanks for the Halliburton Facility.

         B.E.T. alleges that due to Diamond's defective design, construction fabrication, and/or installation of the storage tanks, the tanks improperly retained surface water on the tank tops. Id. at p. 2. While Diamond ultimately made the necessary repairs to the tanks, the repair operations took place for approximately fifty-two days past the date on which B.E.T. closed its contract with Halliburton. Id. However, pursuant to B.E.T.'s obligations to Halliburton, B.E.T. was required to maintain a project manager on the site to oversee the completion of Diamond's repairs and modifications to the defective tanks. Id.

         Because B.E.T. was forced to maintain personnel on site to oversee Diamond's repair work, B.E.T. alleges to have incurred approximately $33, 089.42 of extraordinary expenses for which it could not invoice Halliburton. Id. After completing the repair work, Diamond sent B.E.T. an invoice for $161, 863.87, which B.E.T. alleges represented the purported balance of the agreed upon price for the tanks. However, in response to Diamond's invoice, B.E.T. faxed a lien waiver for Diamond to sign prior to B.E.T. delivering final payment. The lien waiver notes the withholding of $33, 089.42 in back charges for the additional expenses B.E.T. incurred as a result of having to oversee Diamond's repair work. According to B.E.T., Diamond refused to execute the lien waiver necessary for B.E.T. to send the final payment.

         While not refuting any particular facts provided by B.E.T., Diamond presents additional facts in support of its position that the statutorily required amount in controversy exceeds $75, 000.00. Diamond contends that due to B.E.T.'s unpaid invoice and the outstanding interest on numerous other untimely paid invoices, Diamond filed an arbitration demand with the American Arbitration Association on August 17, 2017. (Rec. Doc. 6-1, p. 1). Diamond argues that because B.E.T. has failed to make any payments to Diamond, the total amount in controversy is $161, 863.67. Id. at p. 2. Diamond additionally contends that B.E.T. paid at least nine prior invoices late, which resulted in the accrual of $58, 236.71 in interest spanning from February of 2015 to January of 2016. Id. Therefore, Diamond alleges that the total amount B.E.T. owes as of August 17, 2017-the date Diamond filed an arbitration demand-is $228, 247.02, excluding the interest that accrued on the unpaid invoice at issue in this current matter. Id. Further, Diamond argues that the actual total owed by B.E.T. to Diamond as of the filing of Diamond's Opposition to B.E.T.'s Motion to Remand is $273, 022.09, which includes the interest accruing on the unpaid invoice. Id.

         On September 28, 2017, Diamond removed the action from Louisiana's 17th Judicial District Court for the Parish of Lafourche to this Court pursuant to 28 U.S.C. § 1332-diversity jurisdiction. (Rec. Doc. 1). In its Notice of Removal, Diamond asserts that “[B.E.T.] has admitted in its Petition for Declaratory Judgment, that the unpaid balance of the contract is $161, 863.95, which exceeds the sum of $75, 000.00, exclusive of interest and costs.” (Rec. Doc. 1, p. 2, ¶ 4). In its Motion to Remand, B.E.T. asserts that the only actual amount in controversy is $33, 089.42, which warrants remand to state court as that amount does not satisfy complete diversity requirements.

         II. Legal Standard

         It is well established that the party invoking the jurisdiction of a federal court has the burden of proving that the exercise of such jurisdiction is proper. Stafford v. Mobil Oil Corp., 945 F.2d 803, 804 (5th Cir. 1991) (quoting Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1259 (5th Cir. 1988)). Any doubt regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction and in favor of remand. Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000) (citing Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988)).

         III. Law and Analysis

         The dispute between the parties centers on the amount in controversy. Federal district courts have original jurisdiction over civil actions where the amount in controversy exceeds $75, 000.00 exclusive of interests and costs and there is diversity between all of the parties. 28 U.S.C. § 1332; Taylor v. Murphy, No. 00-1655, 2000 WL 1023421 (E.D. La. July 24, 2000).

         According to B.E.T., there is no controversy between the parties as to the fact that B.E.T. owes Diamond $128, 774.45. (Rec. Doc. 5-1. P. 3). This amount represents the balance of the agreed upon price of the tanks ($161, 863.87) minus the back charges for extraordinary expenses incurred by B.E.T. ($33, 089.42). Therefore, B.E.T. contends that the only actual controversy between ...

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