Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Labby v. Labby Memorial Enterprises LLC

United States District Court, W.D. Louisiana, Lake Charles Division

June 10, 2019

FRANK L. LABBY, ET AL.
v.
LABBY MEMORIAL ENTERPRISES, LLC, ET AL.

          REPORT AND RECOMMENDATION

          KATHLEEN KAY UNITED STATES MAGISTRATE JUDGE

         Before the court is a Motion to Remand filed by plaintiffs, Frank L. Labby and Lisa J. Labby. Doc. 8. They also seek attorney fees pursuant to 28 U.S.C. § 1');">1447(c). Id. at 3. Defendants, Labby Memorial Enterprises, LLC (“LME”) and John W. Yopp, oppose remand. Doc. 1');">11');">1. This motion has been referred to the undersigned for review, report, and recommendation in accordance with the provisions of 28 U.S.C. § 636. For the reasons stated below, IT IS RECOMMENDED that the motion be DENIED.

         I. Background

         On March 2, 201');">17 [doc. 1');">11');">1, att. 1');">1, p. 1');">1], LME, Labby Memorial Funeral Homes, Inc., Frank L. Labby, Lisa J. Labby, and Margie W. Labby executed an “Asset Purchase Agreement” in which LME purchased all of Labby Memorial Funeral Homes, Inc.'s tangible and intangible assets, with the exception of any real property. Doc. 1');">11');">1, att. 2, pp. 1');">1-34. This agreement contained a provision limiting competition between Frank, Lisa, and Margie and LME. Id. at 1');">13-1');">14. In tandem with this agreement, Frank, Lisa and Margie executed a “Non-Competition Agreement” [id. at 62-74] with LME, Lisa entered into an “Employment Agreement” [id. at 75-82] with LME, and Frank entered into a “Management Agreement” [id. at 83-92] with LME. All of these agreements contained a provision that directly limited the competition of Frank, Lisa or Margie or contained a provision that conditioned the agreement on one of the siblings' compliance with the “Non-Competition Agreement.” See Doc. 1');">1, att. 1');">1, pp. 1');">11');">1-1');">12, 66, 68, 79-80, 82, 87-89, 92.

         On September 1');">11');">1, 201');">18, Frank L. Labby and Lisa J. Labby, Louisiana citizens, filed suit in the 36th Judicial District Court, Parish of Beauregard, Louisiana. Doc. 1');">1, att. 1');">1, pp. 2-4. Made defendants were John W. Yopp, a citizen of Georgia, and LME. Id. at 2. Plaintiffs allege there are inconsistencies in the noncompete agreements and seek declaratory judgement as to their rights and obligations under the agreements, the applicable substantive law, the validity of the terms of the noncompete agreements, the geographical limitations of the noncompete agreements, and “the obligation of the Defendants to pay the consideration for the agreements.” Id. at 3-4.

         On October 24, 201');">18, defendants removed the action to this court claiming we have original jurisdiction under the provisions of 28 U.S.C. § 1');">1332 in that there exists complete diversity between the parties and the amount in controversy exceeds $75, 000. Doc. 1');">1. On November 21');">1, 201');">18, plaintiffs filed the instant motion to remand. Doc. 8. Plaintiffs assert complete diversity does not exist [doc. 1');">16] and that defendants have not met their burden of showing the amount in controversy exceeds $75, 000. Doc. 8. They also seek attorney fees pursuant to 28 U.S.C. § 1');">1447(c). Doc. 8, p. 3; Doc. 1');">16, att. 1');">1, pp. 4-6. Defendants oppose remand. Doc. 1');">11');">1.

         II. Law and analysis

         “‘Federal courts are courts of limited jurisdiction,' possessing ‘only that power authorized by Constitution and statute.'” Gunn v. Minton, 1');">133 S.Ct. 1');">1059');">1');">133 S.Ct. 1');">1059, 1');">1064 (201');">13) (citing Kokkonen v. Guardian Life Ins. Co. of America, 1');">11');">14 S.Ct. 1');">1673');">1');">11');">14 S.Ct. 1');">1673, 1');">1675 (1');">1994)). Generally, “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant.” 28 U.S.C. § 1');">1441');">1(a). The removing defendant bears the burden of showing that removal was procedurally proper and that federal jurisdiction exists. See De Aguilar v. Boeing Co., 1');">1404');">47 F.3d 1');">1404, 1');">1408 (5th Cir.1');">1995).

         This case has been removed pursuant to 28 U.S.C. § 1');">1332. Doc. 1');">1. Under this provision, district courts have original jurisdiction over all civil actions between citizens of different states where the amount in controversy exceeds $75, 000, exclusive of interest and costs. 28 U.S.C. § 1');">1332(a)(1');">1). Plaintiffs now seek remand asserting complete diversity does not exist [doc. 1');">16] and that defendants have not met their burden of showing the amount in controversy exceeds $75, 000. Doc. 8.

         A. Diversity

         When removing an action based on 28 U.S.C. § 1');">1332, there must be complete diversity [see Caterpillar Inc. v. Lewis, 1');">11');">17 S.Ct. 467');">1');">11');">17 S.Ct. 467, 468 (1');">1996)] and a suit “may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” 28 U.S.C. § 1');">1441');">1(b)(2). If one of the parties is a limited liability company, its citizenship “is determined by the citizenship of all of its members.” Harvey v. Grey Wolf Drilling Co., 1');">1077');">542 F.3d 1');">1077, 1');">1080 (5th Cir. 2008) (citations omitted).

         Defendant LME is “a limited liability company, formed and organized pursuant to the laws of the State of Louisiana.” Doc. 1');">1, p. 2. Plaintiffs, Louisiana citizens [id. at att. 1');">1, p. 2], assert that LME's presence in this suit destroys diversity because Frank Labby, a Louisiana citizen, owns an interest in LME. See Doc. 1');">16, att. 1');">1, pp. 3-4. Defendants argue that, in spite of this ownership interest, Frank Labby is not a member of LME. Doc. 1');">19, p. 7.

         We agree that Frank Labby's ownership interest [doc. 1');">16, att. 2] does not make him a member of LLE. Under the Louisiana laws governing limited liability companies, “[e]xcept as otherwise provided in the articles of organization or a written operating agreement . . . [a]n assignee of an interest in a limited liability company shall not become a member . . . unless the other members unanimously consent in writing.” La. R.S. § 1');">12:1');">1332(a). LME's articles of organization do not address adding new members and John Yopp is the only member listed. Doc. 1');">19, att. 2, pp. 2-3. In an affidavit executed by John Yopp, he indicates LME has never adopted a written operating agreement [doc. 1');">19, att. 1');">1, p. 1');">1] and that “as the sole member of LME, [he] never consented in writing (or otherwise) to Labby becoming a member of LME.” Doc. 1');">19, att. 1');">1, p. 2. Accordingly, John W. Yopp, Georgia citizen [doc. 1');">1, att. 1');">1, p. 2], is the sole member of LME, LME is a citizen of Georgia, and complete diversity exists between the parties.

         B. Amount ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.