Summa Engineering Inc v. Hurd

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF OKLAHOMA

SUMMA ENGINEERING, INC., )

)

Plaintiff, )

)

v. ) Case No. CIV-19-227-G

)

TODD HURD et al., )

)

Defendants. )

ORDER

Now before the Court is Plaintiff’s Motion to Remand (Doc. No. 2). Defendants

have responded in opposition to the Motion (Doc. No. 4), and Plaintiff has replied (Doc.

No. 6). Based on the case record, the parties’ arguments, and the governing law, Plaintiff’s

Motion will be granted.

I. Background

Plaintiff initially filed this action on November 8, 2017, in the District Court of

Grant County, Oklahoma, seeking to pierce the corporate veil of two limited liability

companies (Venus Energy, LLC, or “Venus,” and Blue Mesa Properties, LLC, or “Blue

Mesa”). Specifically, Plaintiff—invoking two prior judgments entered against those

companies—seeks to enforce the judgments against, and collect monies from, Defendant

Todd Hurd as an alter ego of Venus and Defendants Leon Goble and Shannon Goble as

alter egos of Blue Mesa. See Pet. (Doc. No. 1-2).

On March 8, 2019, Defendants removed this action to this Court on the basis of

diversity jurisdiction, contending that Plaintiff is a citizen of Oklahoma and all Defendants

are citizens of Texas for diversity purposes. See Defs.’ Notice of Removal (Doc. No. 1).

On April 3, 2019, Plaintiff filed its Motion to Remand, alleging that the statutory amount-

in-controversy requirement is not met.1

II. Removal and Diversity Jurisdiction Under 28 U.S.C. § 1332(a)

If a civil action filed in state court satisfies the requirements for original federal

jurisdiction, 28 U.S.C. § 1441(a) authorizes a defendant to remove the action “to the district

court of the United States for the district and division embracing the place where such

action is pending.” 28 U.S.C. § 1441(a). “It is well-established that statutes conferring

jurisdiction upon the federal courts, and particularly removal statutes, are to be narrowly

construed in light of [the federal courts’] constitutional role as limited tribunals.” Pritchett

v. Office Depot, Inc., 420 F.3d 1090, 1094-95 (10th Cir. 2005). “[A]ll doubts are to be

resolved against removal.” Fajen v. Fndn. Res. Ins. Co., Inc., 683 F.2d 331, 333 10th Cir.

1982).

The party invoking diversity jurisdiction—here, Defendants—“bears the burden of

proving its existence by a preponderance of the evidence.” Middleton v. Stephenson, 749

F.3d 1197, 1200 (10th Cir. 2014); see also McPhail v. Deere & Co., 529 F.3d 947, 955

(10th Cir. 2008) (“It is only the jurisdictional facts that must be proven by a

preponderance—not the legal conclusion that the statutory threshold amount is in

controversy.”). Subject-matter jurisdiction under 28 U.S.C. § 1332(a) requires, in addition

1 Because the Court finds that it lacks subject-matter jurisdiction over this case, it need not

address Plaintiff’s alternative argument that the removal was defective due to being

untimely under 28 U.S.C. § 1446(c)(1).

to diversity of citizenship, that “the matter in controversy exceed[] the sum or value of

$75,000, exclusive of interest and costs.” 28 U.S.C. § 1332(a). Where removal is sought

on the basis of diversity jurisdiction, “the sum demanded in good faith in the initial pleading

shall be deemed to be the amount in controversy,” subject to certain statutory exceptions.

28 U.S.C. § 1446(c)(2).

III. Discussion

In the state-court Petition, Plaintiff seeks judgment against Defendant Hurd in the

amount of $144,933.23, plus interest, and judgment against Defendants Leon Goble and

Shannon Goble in the amount of $43,171.59, plus interest. Pet. at 5. The parties agree that

these claims, which seek to recover on prior judgments that were several in nature, may not

be aggregated to meet the amount-in-controversy requirement. See Watson v. Blankinship,

20 F.3d 383, 386 (10th Cir. 1994) (“Every separate and distinct claim must individually meet

the amount in controversy.”); see also Elliott Ind. Ltd. P’ship v. BP Am. Prod. Co., 407 F.3d

1091, 1105 (10th Cir. 2005). The parties also agree that Plaintiff’s claim against Defendant

Hurd satisfies the amount-in-controversy requirement.

The parties disagree as to Plaintiff’s claim against the Goble Defendants, however.

Plaintiff seeks remand on the basis that “the sum demanded in good faith” against the Goble

Defendants in the Petition was only $43,171.59, and so the § 1332(a) requirement of an

amount in controversy exceeding $75,000 is not met. Defendants resist remand for several

reasons. The Court addresses each of Defendants’ objections in turn.

First, Defendants argue that the amount sought by Plaintiff includes the interest that

was awarded and is accruing on the underlying state-court judgments (although not the

interest that might be awarded in this federal-court proceeding, see 28 U.S.C. § 1332(a)).

Plaintiff does not dispute this contention but correctly points out that, even assuming

Defendants’ interest calculations are accurate, the total judgment up to the date of removal is

only $50,820.88, or possibly $58,273.64—either of which is still considerably below the

$75,000 jurisdictional minimum. See Defs.’ Resp. at 5; id. Ex. 1 (Doc. No. 4-1).

Next, Defendants point to Plaintiff’s expert costs as increasing the amount in

controversy by $10,000 to $15,000, but they offer no evidence for this proposition, and neither

the Oklahoma nor the federal statute specifically provides for an award of such costs. Defs.’

Resp. at 5, 6-7; Okla. Stat. tit. 12, § 942; 28 U.S.C. § 920.

Finally, Defendants contend, based on Defendant Shannon Goble’s own testimony,

that Plaintiff’s attorney’s fees will amount to $24,000 or more in this action. They assert that

such fees are part of the amount in controversy because, “Plaintiff is setting up its case for

statutory recovery under 12 O.S. § 936, which allows for recovery of attorney fees in a

collection action based on a contract for services.” Defs.’ Resp. at 5; see id. Ex. 2 (Doc. No.

4-2); Okla. Stat. tit. 12, § 936 (allowing attorney’s fees to the prevailing party “in any civil

action to recover for labor or services rendered”). Plaintiff disputes that this is so, stating it

“has no intention of trying to recover attorney fees pursuant to [section 936] or any other

[statute].” Pl.’s Reply at 3.

The Court agrees with Plaintiff that no matter what amount Plaintiff may ultimately

incur in attorney’s fees, Defendants have not shown that such fees should be counted in

determining whether jurisdiction existed at the time of removal. This Court has explained

that attorney’s fees are not included in calculating the amount in controversy unless “the

plaintiff has a right to them because it has claimed them under an applicable statute in its

complaint.” Smith v. Brown, No. CIV-17-631-R, 2017 WL 2964824, at *2 (W.D. Okla. July

12, 2017) (internal quotation marks omitted). Here, Plaintiff’s Petition nominally prays for

recovery of attorney’s fees but does not cite to any specific statute, including section 936. See

Pet. at 5 (prayer for “[j]udgment for Summa’s attorney fees and costs incurred in prosecuting

its claims”). Moreover, while the underlying judgments Plaintiff is seeking to enforce may

have been “for labor or services rendered,” the present lawsuit is seeking to enforce existing

judgments and does not appear to fit within the scope of section 936. See Pet. at 2-5; cf.

Puckett v. Cornelson, 897 P.2d 1154, 1157 (Okla. Civ. App. 1995) (holding that an action to

recover on a corporate debt is equitable in nature and “find[ing] no authority authorizing an

equitable award of attorney fees” absent egregious conduct).

CONCLUSION

For the reasons set forth above, Defendants have not proven the relevant facts to

show that greater than $75,000 is in controversy as to the Goble Defendants as required for

diversity jurisdiction under 28 U.S.C. § 1332(a). The Court therefore:

(1) concludes that it lacks subject-matter jurisdiction over this matter and GRANTS

Plaintiff’s Motion to Remand (Doc. No. 2);

(2) finds that Defendants had an “objectively reasonable basis for seeking removal,”

see Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005), and, therefore,

DENIES Plaintiff’s request for attorney’s fees and costs under 28 U.S.C. §

1447(c);

(3) REMANDS this matter to the District Court for Grant County, Oklahoma; and

(4) DIRECTS the Clerk of this Court to send a certified copy of this Order to the

Clerk of the state court to which this matter is remanded.

IT IS SO ORDERED this 16th day of July, 2019.

CHARLES B. GOODWIN

United States District Judge