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Beery Advisors, LLC v. Strategic Aviation, LLC

United States District Court, E.D. Louisiana

July 1, 2019


         SECTION M (5)

          ORDER & REASONS


         Before the Court is a motion by plaintiff Beery Advisors, LLC (“Beery”) to remand this case to Civil District Court for Orleans Parish (“CDC”).[1] Defendants Strategic Aviation LLC (“Strategic Aviation”) and Airworthy Assets, LLC (“Airworthy”) (collectively, “Defendants”) respond in opposition, [2] and Beery replies in further support of the motion.[3] Having considered the parties' memoranda and the applicable law, the Court issues this Order & Reasons remanding the case for lack of subject-matter jurisdiction as amounts in controversy for distinct claims against separate defendants may not be aggregated to confer jurisdiction under 28 U.S.C. § 1332 absent solidary liability.

         I. BACKGROUND

         This case involves contract disputes. Beery is a limited liability company comprised of two individual members, who are both domiciled in Louisiana, and hence a citizen of Louisiana.[4]Strategic Aviation is a limited liability company with two individual members, who are both domiciled in California, and hence a citizen of California.[5] Strategic Aviation provides “expeditionary airlift and life-support services in rigorous and harsh foreign environments.”[6]Airworthy is also a limited liability company with two individual members: one member domiciled in California and the other in Texas.[7] Thus, Airworthy is a citizen of both California and Texas. Airworthy supplies an aircraft used in connection with Strategic Aviation's services.[8] Ryan Robinson is a member of both Strategic Aviation and Airworthy.[9]

         In 2015, Beery allegedly contracted with Strategic Aviation to provide “financial, contract management, and other professional services, ” including finance strategy advice and oversight of Strategic Aviation's accounting operations and negotiations.[10] Under the agreement, Beery was to receive payments of five percent of Strategic Aviation's annual profits as well as a monthly fee and reimbursement of expenses.[11] In 2016, Airworthy was established to acquire and possess an aircraft for use in Strategic Aviation's services.[12] At that time, Beery allegedly entered into a separate agreement with Airworthy to provide financial services for Airworthy, in exchange for five percent of Airworthy's annual profits.[13] Beery alleges that it performed services for each company under the contracts from the time each was formed through July 2018.[14] As of the commencement of this case, Strategic Aviation had paid Beery in accordance with their agreement in 2015 and 2016, but had not paid five percent of profits for 2017 and January to July 2018, nor the monthly fees owed for May and June 2018.[15] Beery claims that Strategic Aviation owes a sum of $325, 916.43, per the terms of their agreement.[16] Beery also alleges that, although Airworthy says it did not make a profit before 2018, Airworthy owes five percent of the profits earned from January through July 2018, totaling $30, 000, per the terms of their agreement.[17] Beery filed this action in CDC alleging open accounts, breach of contracts, and unjust enrichment against Defendants for their separate and respective contracts seeking distinct amounts from Strategic Aviation ($325, 916.43) and Airworthy ($30, 000), but prayed for a judgment against Defendants “independently and/or in solido.[18]

         Defendants timely removed the case on August 29, 2018, pursuant to 28 U.S.C. §§ 1441 and 1446, contending that there is complete diversity and that Beery's prayer for relief alleges solidary liability, which justifies aggregation of Defendants' amounts in controversy (a total sum of $355, 916.43), which exceeds the jurisdictional threshold, and thus confers federal subject-matter jurisdiction under 28 U.S.C. § 1332.[19]


         On November 20, 2018, Beery filed a motion to remand for lack of diversity subject-matter jurisdiction contending that the amount in controversy for Airworthy does not exceed $75, 000.[20]Beery asserts that Defendants' amounts in controversy should not be aggregated to confer diversity subject-matter jurisdiction because Beery did not factually allege solidary liability, regardless of the phrase in the complaint's prayer for relief seeking a judgment against Defendants “independently and/or in solido.”[21] Beery contends that the inclusion of “in solido” in the prayer was “inadvertent” and is unsupported by the complaint's factual allegations which set forth separate agreements between separate companies seeking separate debt amounts.[22]

         Defendants argue that the amounts in controversy should be aggregated because solidary liability in contract is plausible and such allegations can be inferred from Beery's repeated joint references to Defendants in the complaint, as well as the prayer's “in solido” phrase.[23]

         II. LAW & ANALYSIS

         A. Removal Standard

         Under 28 U.S.C. § 1332, a federal district court has original jurisdiction of civil actions where the parties are diverse and the amount in controversy exceeds $75, 000. A defendant may remove from state court to the proper United States district court “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). Because federal courts have limited jurisdiction, the removal statute is strictly construed, and any ambiguities are construed against removal and in favor of remand. Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). The party seeking removal has the burden of establishing that federal jurisdiction exists and that removal was proper. Id.

         Where the removal is based on diversity of citizenship, the sum demanded in good faith in the initial pleading is deemed to be the amount in controversy. 28 U.S.C. § 1446(c)(2). If the plaintiff seeks nonmonetary relief, or, if the plaintiff seeks monetary relief, but state law prohibits the amount from being pleaded or permits recovery in excess of the amount demanded, the notice of removal may state the amount in controversy. Id. § 1446(c)(2)(A). If the federal court finds by a preponderance of the evidence that the amount in controversy at the time of removal did not exceed $75, 000, the federal court never had federal subject-matter jurisdiction, and the case must be remanded. Id. § 1446(c)(2)(B); see Simon v. Wal-Mart Stores, Inc., 193 F.3d 848, 850 (5th Cir. 1999).

         B. Diversity Subject-Matter Jurisdiction and Amount in Controversy

         It is facially apparent from the pleadings that this Court has diversity jurisdiction over Beery's claims against Strategic Aviation.[24] Diversity of citizenship exists as to Beery and Strategic Aviation. And Beery seeks $325, 916.43 in damages from Strategic Aviation under an alleged open account or contract - an amount significantly over the $75, 000 jurisdictional threshold.[25]

         However, 28 U.S.C. § 1441(a) only authorizes removal of cases which may have originally been filed in a federal court. Thus, this Court must also have subject-matter jurisdiction over claims against defendant Airworthy.[26] Generally, the amount-in-controversy threshold must be met as to a plaintiffs claims against each defendant. Jewell v. Grain Dealers Mut. Ins. Co., 290 F.2d 11, 13 (5th Cir. 1961); see also Martin v. D.R. Horton, Inc., 2008 WL 4693397, at *3 (M.D. La. Oct. 23, 2008). Where a plaintiff pleads separate and distinct claims against one or more defendants, “the test of jurisdiction is the amount of each claim, and not their aggregate.” Jewell, 290 F.2d at 13 (quoting Cornell v. Mabe, 206 F.2d 514, 516 (5th Cir. 1953)). However, claims against multiple defendants may be aggregated, for the purposes of jurisdiction, if they are liable in solido. Id.

         On the face of the complaint, Beery's claims against Airworthy do not meet the $75, 000 jurisdictional threshold. Beery alleges that Airworthy owes it $30, 000 under an open account or contract.[27] Defendants do not dispute the amount in controversy for Airworthy, but contend that Airworthy's amount in controversy should be aggregated with Strategic Aviation's amount in controversy under a theory of solidary liability to confer diversity jurisdiction over Beery's claims against Airworthy.[28]

         Under Louisiana law, [29] liability is solidary when each obligor is liable for the whole debt and performance by either obligor satisfies the obligation. La. Civ. Code art. 1794. “Solidarity of obligation shall not be presumed. A solidary obligation arises from a clear expression of the parties' intent or from the law.”[30] Id. art. 1796.

         Beery contends that the complaint alleges no facts supporting solidary liability, despite its “inadvertent” reference in the prayer for relief[31] Defendants argue that solidary liability “may be imposed by contract” and that legal plausibility of solidary liability is sufficient to aggregate claims for purposes of jurisdiction.[32] Because solidary liability may not be presumed, the possibility of solidary liability, without supporting factual allegations or proof, is not enough to confer federal jurisdiction. Id. Inadvertence in pleading, though inartful, cannot create a basis for federal jurisdiction unsupported by the factual allegations underlying the asserted claim or claims. See Ashley v. Sw. Bell Tel. Co.,410 F.Supp. 1389, 1392 (W.D. Tex. 1976) (‚ÄúNeither artful or inartful pleading, nor inadvertence, mistake, or fraud can keep the Federal Courts from their appointed task of ...

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