Peeples v. Ditech Financial LLC
4:17-cv-01311
N.D. Ala.
Nov 7, 2017

Background

  • Plaintiff Peeples sued Ditech Financial LLC and MERS in Alabama state court asserting claims arising from a residential foreclosure, including quiet title and declaratory relief.
  • Complaint sought unspecified damages and asked to be declared rightful owner of the property; the recorded mortgage attached to the removal papers reflected a $220,000 principal.
  • Defendants removed to federal court on diversity grounds under 28 U.S.C. § 1446(b)(1) within 30 days of service; removal was challenged by Peeples via a Motion to Remand.
  • The central jurisdictional dispute: whether the amount in controversy exceeds the $75,000 threshold required for diversity jurisdiction.
  • The district court stayed the case pending resolution of pleading defects and ordered repleader for the shotgun pleading; Peeples did not amend before the court decided the remand motion.
  • The court evaluated whether the value of the property (quiet title and declaratory relief) put more than $75,000 in controversy and whether supplemental jurisdiction covered remaining claims.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether amount in controversy meets $75,000 for diversity jurisdiction Peeples argued defendants relied on speculation and that the mortgage amount may be irrelevant, so controversy does not exceed $75,000 Defendants argued the property value (as shown by mortgage) and the requested declaratory relief make it facially apparent that the amount in controversy exceeds $75,000 Held: Amount in controversy met by preponderance of the evidence; remand denied
Whether quiet title claim valuation is measured by property value Peeples implied mortgage amount irrelevant to controversy valuation Defendants argued quiet title value equals the value of the property (mortgage shows $220,000) Held: Quiet title measured by property value; mortgage supports exceeding $75,000
Whether declaratory relief valuation counts toward amount in controversy Peeples did not contest that declaratory relief could be valued by benefit to plaintiff Defendants argued declaratory relief’s object (ownership of property) has monetary value equal to property Held: Declaratory relief measured by value of the object (property); supports jurisdiction
Whether remaining state-law claims may remain in federal court Peeples inadvertently challenged federal jurisdiction for entire case Defendants noted § 1367 supplemental jurisdiction over related claims Held: Even if some claims individually fall short, all claims arise from same nucleus of operative fact and are within supplemental jurisdiction

Key Cases Cited

  • Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405 (11th Cir. 1999) (federal courts are courts of limited jurisdiction and must inquire into subject-matter jurisdiction early)
  • Taylor v. Appleton, 30 F.3d 1365 (11th Cir. 1994) (jurisdictional limits and requirements)
  • Victory Carriers, Inc. v. Law, 404 U.S. 202 (1971) (federal courts exceed constitutional power if they act beyond subject-matter jurisdiction)
  • Jackson v. Seaboard Coast Line R.R., 678 F.2d 992 (11th Cir. 1982) (subject-matter jurisdiction cannot be waived by parties)
  • Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941) (removal statutes construed strictly)
  • Kirchner v. Putnam Funds Trust, 547 U.S. 633 (2006) (orders remanding for lack of subject-matter jurisdiction are generally unreviewable)
  • Briscoe v. Bell, 432 U.S. 404 (1977) (remand orders based on enumerated grounds are not reviewable)
  • Roe v. Michelin N. Am., Inc., 613 F.3d 1058 (11th Cir. 2010) (standards for evaluating amount in controversy when plaintiff seeks unspecified damages in first-paragraph removal)
  • Tapscott v. MS Dealer Service Corp., 77 F.3d 1353 (11th Cir. 1996) (defendant must prove amount in controversy by preponderance when plaintiff demands unspecified damages)
  • Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744 (11th Cir. 2010) (defendant may need to supply additional evidence beyond the complaint to establish amount in controversy)
  • Williams v. Best Buy Co., 269 F.3d 1316 (11th Cir. 2001) (burden of proving federal jurisdiction rests on the removing defendant)
  • Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. 333 (1977) (value of injunctive or declaratory relief measured by value of the object of litigation)
  • United Mine Workers v. Gibbs, 383 U.S. 715 (1966) (supplemental jurisdiction requires common nucleus of operative fact)
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