United States District Court, E.D. Kentucky, Central Division, Lexington
MEMORANDUM OPINION AND ORDER
C. Reeves, United States District Judge.
Lynn Reynolds has moved the Court to remand this action to
Montgomery Circuit Court. [Record No. 7] Reynolds does not
contest diversity jurisdiction, but argues that the
defendant39;s Notice of Removal was untimely. For the
reasons that follow, the motion to remand will be granted.
filed her Complaint in state court on November 3, 2017,
alleging that she was injured when she slipped and fell while
shopping at Defendant Wal-Mart Stores East, Limited
Partnership, doing business as Mount Sterling Wal-Mart
Supercenter #1140 (“Wal-Mart”).[1" name="FN1" id="FN1">1]Wal-Mart removed
the action to this Court on December 19, 2017, based on
diversity of citizenship under 28 U.S.C. § 1332. See
also 28 U.S.C. §§ 1441, 1446.
must be complete diversity under § 1332 such that no
plaintiff is a citizen of the same state as any defendant.
Reynolds is a citizen of Kentucky. [Record No. 1-4, p. 26]
Wal- Mart is a limited partnership, so the Court considers
the citizenship of each of its partners. V&M Star, LP
v. Centimark Corp., 3d 354');">596 F.3d 354 (6th Cir. 2010);
SHR Ltd. P39;ship v. Braun, 455');">888 F.2d 455, 459 (6th
Cir. 1989). The Defendant has a general partner (WSE
Management, LLC) and a limited partner (WSE Investment, LLC).
Wal-Mart Stores East, Inc., the sole member of both LLCs, is
incorporated under the laws of Arkansas with its principal
place of business in Arkansas. [Record No. 1, p. 1]
Accordingly, the Defendant is a citizen of Arkansas and the
parties are completely diverse for purposes of § 1332.
amount in controversy must exceed $75, 000.00, exclusive of
interest and costs. § 1332. The Plaintiff did not demand
a sum certain consistent with Kentucky39;s pleading
requirements. See Ky. R. Civ. P. 8.01(2). Instead,
she sought unspecified damages for mental pain and suffering,
lost wages, impaired earning capacity, and medical expenses.
These are not the kinds of allegations that establish from
the face of the pleading that the amount in controversy is
more likely than not to exceed $75, 000.00. See Burgett
v. Troy-Bilt LLC, No. 11-110-ART, 2011 WL 4715176, *2
(E.D. Ky. Oct. 5, 2011). Reynolds does not dispute this, but
argues that Wal-Mart had actual notice that she was seeking
more than $75, 000.00 in damages because she sent
Wal-Mart39;s insurance carrier a $100, 000.00 settlement
demand on August 11, 2017, nearly three months before she
filed suit in state court.
does not mention the August 2017 settlement demand in its
Notice of Removal or in its memorandum in support, which were
filed on December 19, 2017. [See Record Nos. 1, p.
2, 1-5, pp. 5-6.] Instead, it contends that Reynolds sent it
a $100, 000.00 settlement demand on November 21, 2017.
Id. Upon review of the record, it is clear that
Reynolds sent the same settlement demand to the defendant
before the suit was filed and again after it was filed.
[Record Nos. 1-3; 8-2] Reynolds39; position is that
Wal-Mart39;s 30-day removal period began running when the
Complaint was filed based on Wal-Mart39;s “actual
knowledge” of the amount in controversy as a result of
the pre-suit settlement demand.
defendant may only remove a case to federal court if it can
establish by a preponderance of the evidence that the case
satisfies the requirements for federal jurisdiction.
Gafford v. Gen. Elec. Co., 150');">997 F.2d 150, 158 (6th
Cir. 1993) (overruled on other grounds). This Court has
concluded that pre-suit demand letters may constitute some
evidence of the amount in controversy. But, standing alone,
they generally do not constitute a preponderance of the
evidence. See Smith v. Phillips & Jordan, Inc.,
No. 10-134-ART, 2011 WL 250435 (E.D. Ky. Jan. 24, 2011);
May v. Wal-Mart Stores, Inc., 1 F.Supp.2d 946');">751 F.Supp.2d 946, 949
(E.D. Ky. 2010). There is good reason for this, as pre-suit
settlement demands often high-ball the worth of the case or
significantly devalue it, to avoid the risks of going to
trial. Smith, 2011 WL 250435, at *5 (citing
Hollon v. Consumer Plumbing Recovery Ctr., 417
F.Supp.2d 849, 854 (E.D. Ky. 2006)).
pre-suit settlement demand lacks sufficient information to
corroborate the allegation that her claims actually are
valued at $100, 000.00. The demand letter indicates that her
medical bills totaled $23, 820.10 and she had sustained $8,
072.00 in lost wages. This is distinguishable from the cases
upon which the plaintiff relies, in which the defendants had
concurrent knowledge of facts indicating that the damages, in
fact, exceeded $75, 000.00. See Mozee v. Dugger, 616
F.Supp.2d 672 (W.D. Ky. 2014) (plaintiff demanded $200, 000
settlement defendant following serious automobile accident);
Whisman v. Perdue Farms, Inc., 5:07-55-JMH, 2007 WL
1150287 (Apr. 18, 2007) (pre-suit demand for $100, 000.00
included an allegation that the plaintiffs had incurred
veterinary bills and lost income in the amount of $195,
967.55); Bragg v. Ky. RSA #9-10, Inc., 126 F.Supp.2d
448 (E.D. Ky. 2001) (removal deemed untimely because
defendant had previously been provided professional report
indicating that property damage totaled $483, 000.00).
generally agreed in the Sixth Circuit that the amount in
controversy is determined from the perspective of the
plaintiff, with a focus on the economic value of the rights
she seeks to protect. Smith v. Nationwide Prop. &
Cas. Ins. Co., 3d 401');">505 F.3d 401 (6th Cir. 2007). But a
settlement demand is not determinative and is only
some evidence of the amount in controversy. Without
more, the defendant is not charged with “actual
notice” of the amount in controversy.
Court39;s inquiry does not end there, for there is an
independent obligation to determine whether subject matter
jurisdiction is proper. Ky. Press Assoc., Inc. v.
Com., 454 F.3d 505');">454 F.3d 505, 508 (6th Cir. 2006) (citing Mt.
Healthy City Sch. Bd. of Ed. v. Doyle, 429 U.S. 274');">429 U.S. 274, 278
(1977)). Accordingly, the Court must decide whether the
defendant has shown, by a preponderance of the evidence, that
the amount in controversy requirement has been satisfied.
After all, the fact remains that the only evidence concerning
the amount in controversy is the post-litigation settlement
courts within this circuit have held that a demand letter can
be “relevant evidence of the amount in
controversy” if the demand “reflect[s] a
reasonable estimate of the plaintiff39;s claim.”
Conder v. Best Value, Inc., No. 3:08-cv-411-M, 2008
WL 4601915, *2 (W.D. Ky. Oct. 15, 2008) (quoting Cohn v.
Petsmart, Inc., 1 F.3d 837');">281 F.3d 837, 840 (9th Cir. 2002)).
Although the plaintiff demanded $100, 000.00 to settle the
case, the damages quantified in the demand letter total
approximately $30, 000.00. [See Record No. 1-3, p.
4] In response to the plaintiff39;s motion to remand, the
defendant contends that, during a November 21, 2017 telephone
call, plaintiff39;s counsel advised that Reynolds39;
medical expenses had increased to $31, 722.40 and that she
still had been unable to return to work. [Record No. 14, pp.
1-2] However, informal oral communications between counsel do
not constitute an “other paper” for purposes of
§ 1446(b)(3). Regardless, applying the pay rate provided
in the demand letter, the damages still total only $45,
seeks an unspecified amount of damages for physical and
mental pain and suffering, but it is far from clear that the
additional damages would cause the total to reach the federal
amount-in-controversy requirement. Put simply, the defendant
has not shown that the demand letter reflects a reasonable
estimate of the plaintiffs claim and, accordingly, has not
shown by a preponderance of the evidence that the
amount-in-controversy exceeds $75, 000.00.
it is hereby
that the plaintiffs motion to remand [Record No. 7] is
GRANTED. This matter shall be