Smith v. American Advisors Group, Inc.
3:17-cv-00403
S.D. Miss.Sep 6, 2017Background
- In 2008 Dessie Warren Wilson bought residential property in Jackson, MS; one lot was later conveyed to his great-nephew Tommy Myers by Special Warranty Deed.
- Myers obtained loans secured by deeds of trust against the property that authorized him to receive $231,000; the Chancery Court later found Myers’ acquisition procured by fraud and undue influence and voided the deed ab initio.
- Executor Betsy Pearl Smith (as executrix of Wilson’s estate) filed suit in Hinds County Chancery Court seeking rescission of the deeds of trust to remove encumbrances and prevent foreclosure by the current deed-holder, American Advisors Group, Inc. (AAG).
- AAG removed the action to federal court based on diversity jurisdiction; Smith moved to remand arguing removal was untimely, amount-in-controversy was insufficient, the court should abstain, and (alternatively) that state-law questions be certified to the Mississippi Supreme Court.
- The district court found diversity of citizenship undisputed and determined the amount in controversy exceeded $75,000 (based on property tax valuation and the $231,000 secured by the deeds), so federal jurisdiction exists.
- The court also held removal was timely under 28 U.S.C. § 1446(b) (applying Fed. R. Civ. P. 6 computation), declined to abstain, and denied Smith’s request to certify state-law questions (district courts lack Rule 20 certification authority). Final order: Motion to Remand denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Amount in controversy / diversity | Amount in controversy not shown; case seeks equitable relief, no damages alleged | Object of litigation (value of property or encumbrance) exceeds $75,000; records show property value and $231,000 in secured loans | Court: Amount in controversy met (facially apparent and supported by tax assessor records and deeds) — diversity jurisdiction exists |
| Timeliness of removal (§ 1446(b)) | Removal filed more than 30 days after service (untimely) | Removal filed within 30 days when computing Rule 6(a) extensions; alternative proof of later service date supports timeliness | Court: Removal timely under any plausible service date scenario; remand denied on timeliness grounds |
| Abstention | Federal court should abstain because issues implicate unsettled state law | Federal courts have a strong duty to decide; plaintiff did not identify a supporting abstention doctrine | Court: Abstention not warranted; plaintiff failed to identify applicable abstention doctrine |
| Certification to Mississippi Supreme Court (Miss. R. App. P. 20) | If federal court should not decide, certify determinative state-law questions to MS Supreme Court | District courts lack authority to certify under Rule 20; only federal appellate courts can | Court: Denied—district court cannot certify under Rule 20; certification inappropriate |
Key Cases Cited
- Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720 (5th Cir. 2002) (burden on removing party to establish federal jurisdiction)
- De Aguilar v. Boeing Co., 11 F.3d 55 (5th Cir. 1993) (removing party must prove amount in controversy by preponderance when not pleaded)
- White v. FCI USA, Inc., 319 F.3d 672 (5th Cir. 2003) (methods for establishing amount in controversy)
- Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880 (5th Cir. 2000) (amount in controversy judged at time of removal)
- Garcia v. Koch Oil Co. of Tex., Inc., 351 F.3d 636 (5th Cir. 2003) (value of object of litigation measures amount in controversy for equitable relief)
- Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333 (U.S. 1977) (measure of relief value for jurisdictional purposes)
- Allen v. R. & H. Oil & Gas Co., 63 F.3d 1326 (5th Cir. 1995) (district courts may require summary-judgment-type proof if amount not facially apparent)
- Sprint Commc’ns, Inc. v. Jacobs, 134 S. Ct. 584 (U.S. 2013) (federal courts’ obligation to exercise jurisdiction; abstention is the exception)
- Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (U.S. 1976) (abstention doctrine principles)
- Bank One, N.A. v. Boyd, 288 F.3d 181 (5th Cir. 2002) (abstention is the exception)
- Roberts v. Chandaleur Homes, Inc., 237 F. Supp. 2d 696 (S.D. Miss. 2002) (pecuniary consequences govern amount in controversy for rescission actions)