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Richmond v. National Gypsum Services Co.

United States District Court, E.D. Louisiana

October 3, 2018

CEDRIC RICHMOND and RAQUEL RICHMOND
v.
NATIONAL GYPSUM SERVICES COMPANY, ET AL.

         SECTION “F”

          ORDER AND REASONS

          MARTIN L. C. FELDMAN UNITED STATES DISTRICT JUDGE.

         Before the Court is the plaintiffs' motion to remand. For the following reasons, the motion is DENIED, and Louisiana Citizens is DISMISSED without prejudice.

         Background

          This lawsuit arises out of the purchase and installation of alleged Chinese drywall in a residence located in New Orleans, Louisiana following Hurricane Katrina.

         In October of 2006, Cedric and Raquel Richmond purchased a residence located at 7021 Cove Drive in New Orleans that had sustained water damage during the storm. At the time of the purchase, the water-damaged drywall had been removed, but new drywall had not yet been installed. The following year, the property underwent renovations, including the installation of new drywall. Cedric Richmond, acting as general contractor, purchased approximately 180-190 sheets of drywall from Lowe's stores located in New Orleans. During the renovation process, Mr. Richmond secured a Builder's Risk insurance policy from Louisiana Citizens Property Insurance Corporation, which expired in 2007.

         About ten years later, when the Richmonds attempted to sell the property, a home inspector alerted them to the possibility that it contained “Chinese drywall.” In response, they retained Driskill Environmental Consultants, LLC to conduct another inspection. On June 14, 2017, Driskill inspected the residence and issued a report stating that there was “extensive, advanced corrosion to copper ground wiring, copper pipe water supply lines, and the A/C evaporator coils.” The report concluded that a majority of the drywall installed in the property was defective and that removal was required. At the time this report was issued, the property was insured by a Homeowners' Policy issued by Louisiana Citizens. The Richmonds later determined that National Gypsum Services Company had manufactured the drywall.

         On June 14, 2018, the Richmonds, who are citizens of Louisiana, sued National Gypsum Services Company; Lowe's Home Center, Inc.; and Louisiana Citizens Property Insurance Corporation in the Civil District Court for the Parish of Orleans, asserting redhibition and negligence claims against National Gypsum and Lowes's, a products liability claim against National Gypsum, and insurance coverage claims against Louisiana Citizens. In particular, the Richmonds' petition seeks compensation for the “significant damages” that the property has sustained and alleges that the defendants are liable for:

sums paid . . . by the Petitioners for the remediation of the subject Property; all expenses occasioned by the remediation of the subject Property; all expenses incurred by Petitioners with respect to maintenance, repair, and preservation of the subject Property since purchase of the drywall; interest on all payments made in connection with remediation of the subject Property; general and special damages arising out of the defective drywall; diminution in value of the subject Property due to the Chinese drywall; and all of Petitioners' attorney's fees incurred with respect to the investigation and pursuit of this action.

         The petition contains neither a prayer for a specific amount of monetary relief, nor a general allegation that the amount in controversy is below the threshold for federal jurisdiction.

         National Gypsum timely removed the lawsuit to this Court on August 6, 2018; Lowe's consented, but Louisiana Citizens, a citizen of Louisiana, did not. The plaintiffs now move to remand the case on the ground that this Court lacks subject matter jurisdiction because the jurisdictional amount in controversy requirement is not satisfied and they share Louisiana citizenship with Louisiana Citizens.

         The plaintiffs reveal in their motion to remand that they had entered into a contract to sell the property for $190, 000 in April of 2017, which fell through after the discovery of the alleged defective drywall. They further relate that they eventually sold the property to another buyer in June of 2018 for $127, 000.[1] As such, the Richmonds each attach an affidavit to their motion, stipulating that the amount in controversy does not exceed $75, 000 and renouncing their right to recover in excess of this amount.

         I.

         Although the plaintiff challenges removal in this case, the removing defendant carries the burden of showing the propriety of this Court's removal jurisdiction. See Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002); see also Jernigan v. Ashland Oil, Inc., 989 F.2d 812, 815 (5th Cir. 1993). Remand is proper if at any time the Court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c). Given the significant federalism concerns implicated by removal, the removal statute is strictly construed “and any doubt about the propriety of removal must be resolved in favor of remand.” Gutierrez v. Flores, 543 F.3d 248, 251 (5th Cir. 2008)(citation omitted); Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281-82 (5th Cir. 2007)(citations omitted).

         Federal Courts are courts of limited jurisdiction, possessing only the authority granted by the United States Constitution and conferred by the United States Congress. Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). A defendant may generally remove a civil action filed in state court if the federal court has original jurisdiction over the case -- that is, if the plaintiff could have brought the action in federal court from the outset. See 28 U.S.C. § 1441(a). To exercise diversity jurisdiction, complete diversity must exist between the plaintiffs and all of the properly joined defendants, and the amount in controversy must exceed $75, 000. See § 1332(a)(1). To determine whether it has jurisdiction, the Court must consider the allegations in the state court petition as they existed at the time of removal. See Manguno, 276 F.3d at 723 (citing Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995)).

         II.

         The Court first considers whether the jurisdictional amount in controversy requirement is satisfied. Louisiana law requires that a plaintiff include “no specific amount of damages” in his prayer for relief. La. Code Civ. Proc. art. 893. However, it also provides that “if a specific amount of damages is necessary to establish . . . the lack of jurisdiction of federal courts due to insufficiency of damages . . . a general allegation that the claim exceeds or is less than the requisite amount is required.” Id. “Petitions that do not explicitly declare that the federal amount in controversy requirements are not met create a strong presumption in favor of federal jurisdiction.” Lewis v. Valero Refining-New Orleans, No. 16-16590, 2017 U.S. Dist. LEXIS 35142, at *7 (E.D. La. Mar. 13, 2017); see also Worner v. Christian Home Health Care, Inc., No. 13-6416, 2014 U.S. Dist. LEXIS 4405, at *9 (E.D. La. Jan. 14, 2014) (“Plaintiff has effectively conceded that the jurisdictional amount is met by failing to limit the amount of damages in her state court petition.”). When the plaintiff has alleged an indeterminate amount of damages, the removing party must prove by a preponderance of the evidence that the amount in controversy exceeds $75, 000. Simon v. Wal-Mart Stores, 193 F.3d 848, 850 (5th Cir. 1999); see also De Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th Cir. 1995). This showing may be made by either (1) showing that it is facially apparent that the plaintiff's claims likely exceed $75, 000 or (2) setting forth “summary judgment type evidence” of facts in controversy that support a finding of the jurisdictional amount. Manguno, 276 F.3d at 723; Luckett v. Delta Airlines, Inc., 171 F.3d 295, 298 (5th Cir. 1999). In examining the petition, courts are permitted to “make common-sense inferences about the amount put at stake by the injuries the plaintiffs claim.” Robertson v. Exxon Mobil Corp., 814 F.3d 236, 240 (5th Cir. 2015). “[I]f it is facially apparent from the petition that the amount in controversy exceeds $75, 000 at the time of removal, post-removal affidavits, stipulations, and amendments reducing the amount do not deprive the district court of jurisdiction.” Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 883 (5th Cir. 2000). If the removing defendant cannot show that the amount in controversy is facially apparent, it may be able to “set[] forth the facts in controversy - preferably in the removal petition, but sometimes by affidavit - that support a finding of the requisite amount.” Luckett, 171 F.3d at 298. If the petition is ambiguous as to whether the alleged damages surpass the jurisdictional amount in controversy, the Court may consider a post-removal affidavit that clarifies the original complaint. Asociación Nacional de Pescadores a Pequeña Escala o Artesanales de Colombia (ANPAC) v. Dow Química de Colombia, 988 F.2d 559, 565 (5th Cir. 1993), abrogated on other grounds by Marathon Oil Co. v. Ruhgras, 145 F.3d 211, 214 (5th Cir. 1998), rev'd on other grounds, 526 U.S. 574 (1999).

         If the removing party satisfies its burden, the plaintiff can only defeat removal by showing that it is “legally certain that his recovery will not exceed the amount stated in the state complaint.” De Aguilar, 47 F.3d at 1412; see St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938) (“It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.”). Absent a statute that restricts recovery, “[l]itigants who want to prevent removal must file a binding stipulation or affidavit with their complaints; once a defendant has removed the case, St. Paul makes later filings irrelevant.” De Aguilar, 47 F.3d at 1412 (quoting In re Shell Oil Co., 970 F.2d 355, 356 (7th Cir. 1992)(per curiam)).

         In this case, the plaintiffs seek compensation for damages caused by the alleged presence of Chinese Drywall in their property. Their state court petition describes those damages as “significant” and claims that there was “extensive, advanced corrosion to copper ground wiring, copper pipe water supply lines, and the A/C evaporator coils.” The petition further alleges that the defendants are liable for:

all sums paid to date by the [plaintiffs] for the remediation of the subject Property; all expenses occasioned by the remediation of the subject Property; all expenses incurred by [plaintiffs] with respect to maintenance, repair, and preservation of the subject Property since purchase of the drywall; interest on all payments made in connection with remediation of the subject Property; general and special damages arising out of the defective drywall; diminution in value of the subject Property due to the Chinese drywall; and all of [plaintiffs'] attorney's fees incurred with respect to the investigation and pursuit of this action.

         National Gypsum declares in its Notice of Removal that it is “readily apparent from the face of the Petition that the amount in controversy exceeds $75, 000.” The plaintiffs contend that this statement is too “conclusory.” And, they submit, because National Gypsum did not file an affidavit or present any other evidence regarding the amount in controversy, it failed to establish by a preponderance of the evidence that the amount in controversy exceeds $75, 000.

         Notably, defendants are not required to come forward with “summary judgment type evidence” to satisfy their removal burden where it is facially apparent from the petition “that the plaintiff's claims likely exceed $75, 000.” See Luckett, 171 F.3d at 298. In their opposition papers, National Gypsum and Lowe's contend that the plaintiffs' petition seeks a “vast” amount of damages, including all expenses relating to the remediation of the property. The removing defendants note that the damages alleged are ones that are facially likely to exceed the requisite jurisdictional amount. To support this contention, they invoke In re Chinese-Manufactured Drywall Prods. Liab. Litig., in which another Section of this Court determined that the cost to remediate a small home in the New Orleans area damaged by Chinese drywall exceeded $136, 000. MDL No. 2047, 2010 U.S. Dist. LEXIS 41190, at *58 (E.D. La. April 27, 2010). The removing defendants further submit that the amount in controversy calculation includes attorney's fees, when available by statute. See Manguno, 276 F.3d at 723. Here, plaintiffs seek attorney's fees incurred in this redhibition action; because these fees are mandatory under Louisiana's redhibtion statute, they are included in the amount in controversy calculation. See Pendleton v. Parke-Davis, No. 00- 2736, 2000 U.S. Dist. LEXIS 18410, at *13 (E.D. La. Dec. 11, 2000). Ultimately, the defendants aver, a common-sense review of the plaintiffs' petition supports a finding that the amount in controversy exceeds $75, 000, exclusive of interest and costs. The Court agrees.

         Moreover, where, as here, there is no ambiguity on the face of the petition as to the amount in controversy, “post-removal affidavits, stipulations, and amendments . . . do not deprive the district court of jurisdiction.” Gebbia, 233 F.3d at 883. As such, the Court may not consider the plaintiffs' post-removal affidavits, stipulating that their damages ...


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