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Smith v. American Advisors Group, Inc.

United States District Court, S.D. Mississippi, Northern Division

September 6, 2017



          David Bramlette, UNITED STATES DISTRICT JUDGE

         This cause is before the Court on plaintiff Betsy Pearl Smith, acting as executrix of the estate of Dessie R. Warren Wilson, (“Smith”)'s Motion to Remand (docket entry 7). Having carefully considered the motion, response, and applicable statutory and case law, and being otherwise fully informed in the premises, the Court finds and orders as follows:

         I. Background

         In 2008, Dessie Warren Wilson (“Wilson”) purchased a home and two lots located at 242 Western Hills Drive in Jackson, Mississippi, (“the property”) for approximately $157, 000.00. See Doc. 1-1, p. 10. Wilson's great nephew, Tommy Myers (“Myers”), subsequently obtained a Special Warranty Deed conveying one lot of Wilson's Western Hills property to him. Id. at 4. Myers then secured loans against the property, which authorized him to receive $231, 000.00. Id. at 7. After finding that Myers acquired Wilson's property through fraud and undue influence, the Chancery Court of Hinds County entered a Final Judgment on July 11, 2016, declaring the Special Warranty Deed void ab initio. See Id. at 9-22.

         On April 20, 2017, plaintiff Betsy Pearl Smith (“Smith”), acting as executrix of Wilson's estate, commenced the present action in the Chancery Court of Hinds County to rescind the deeds of trust executed by Myers and encumbering the Western Hills property. According to Smith, the defendant, American Advisors Group, Inc. (“AAG”), is the current holder and beneficiary seeking to enforce the deeds of trust executed by Myers, and “upon information and belief, [] Myers is in default as to the debt he owes . . . and [the defendant] has commenced, or is threatening to commence, foreclosure proceedings with intent to sell [the] property.” Id. at 5. AAG removed the action to federal court on May 22, 2017, and Smith filed her motion to remand shortly thereafter on June 19, 2017.

         II. Discussion

         Under 28 U.S.C. § 1441, “any civil action brought in a State court of which the district courts of the United States have original jurisdiction may be removed . . . 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). The defendant's removal is premised on the Court's diversity jurisdiction under 28 U.S.C. § 1332. See Doc. 1. AAG, as the removing party, bears the burden of proving that federal jurisdiction exists and that removal is proper. Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). When considered on a motion to remand, federal removal statutes are to be strictly construed against removal, and all ambiguities or doubts are resolved in favor of remand.

         In moving to remand, Smith claims that: (1) removal was untimely, (2) the Court lacks diversity jurisdiction, and (3) the Court should abstain from hearing the case. Alternatively, she asserts that the issues presented should be certified to the Mississippi Supreme Court. The Court shall address each argument in turn.

         A. Diversity Jurisdiction

         Federal courts have original diversity jurisdiction over civil actions between citizens of different states where the amount in controversy exceeds § 75, 000, exclusive of interest and costs. 28 U.S.C. § 1332(a). Diversity of citizenship between the parties in this case is undisputed.[1] Instead, Smith maintains that the Court lacks jurisdiction because AAG has failed establish an amount in controversy exceeding $75, 000. According to Smith, the lack of monetary damages, coupled with the defendant's failure to establish any claim in excess of $75, 000, requires remand.

         When a complaint fails to set forth a specific amount of damages, as in the case sub judice, the removing party must prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional minimum. De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993). The removing defendant may satisfy this burden by either (1) showing that it is “facially apparent” from the complaint that the plaintiff's claims exceed $75, 000 or (2) introducing “summary judgment-type” evidence to show that the amount in controversy requirement is met. Kirby v. Bank of America, 2010 WL 114201, at *4 (S.D.Miss. Jan. 7, 2010) (citing White v. FCI USA, Inc., 319 F.3d 672, 675 (5th Cir. 2003)). Jurisdiction is judged by the amount in controversy at the time of removal. Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 883 (5th Cir. 2000).

         From the face of the Complaint and the exhibits attached thereto, it is facially apparent that the amount in controversy exceeds the jurisdictional minimum in this case. In cases seeking equitable relief, the amount in controversy “is measured by the value of the object of the litigation, ” i.e. the value of the right to be protected or the extent of the injury to be prevented. Garcia v. Koch Oil Co. of Tex., Inc., 351 F.3d 636 (5th Cir. 2003) (quoting Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347 (1977)); Leininger v. Leininger, 7052d. 727, 729 (5th Cir. 1983)). “[W]here a plaintiff seeks to rescind or otherwise declare a contract to be unlawful, the amount in controversy is judged by the consequences of such rescission or declaration to all litigants.” Roberts v. Chandaleur Homes, Inc., 237 F.Supp.2d 696, 698 (S.D.Miss. 2002); see also Kirby, 2010 WL 114201, at *4 (the amount in controversy in an action seeking rescission of loan note and deed of trust was “based upon the pecuniary consequences to those involved in the litigation”). The state court's Opinion and Order, which is attached and incorporated in Smith's Complaint as Exhibit A, acknowledges that the property was purchased by Wilson for $157, 000.000, and that the deeds of trust executed by Myers were secured for a sum of $231, 000.00. Doc. 1-1, p. 7. While the parties disagree about which value represents the “object of the litigation, ” an amount in controversy exceeding the jurisdictional minimum is clearly apparent regardless of whether the property value or the value of the deeds of trust is controlling. Should Smith prevail, she will keep the home free from encumbrance; if she is unsuccessful, however, she will retain ownership subject to the encumbrance. Rescission of the deeds of trust would thus allow Smith to avoid a potential pecuniary consequence exceeding $75, 000.

         Even assuming that the requisite amount in controversy is not facially apparent from the initial pleadings, AAG has produced records from the Hinds County Tax Assessor assigning a value of $103, 920.00 to the property, along with a copy of the two deeds of trust Smith seeks to rescind, which confirm that the deeds secure a sum of $231, 000.00. See Docs. 12-1, 12-2, 12-3. The Court is therefore satisfied that AAG has, by a preponderance of the evidence, established an amount in controversy surpassing the jurisdictional threshold.[2] Finding that the jurisdictional requirements set forth in 18 U.S.C. § 1332(a) have been met, the Court shall deny Smith's motion to remand on this basis.

         B. ...

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