Medlin v. Legacy Housing Corporation
| Susan Medlin |
| Legacy Housing Corporation |
| 6:2023cv05198 |
| October 18, 2023 |
| US District Court for the District of South Carolina |
| Timothy M Cain |
| Contract: Other |
| 28 U.S.C. ยง 1332 Diversity-Tort/Non-Motor Vehicle |
| Plaintiff |
Docket Report
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| Filing 13 ***DOCUMENT MAILED 11 Certified Order placed in U.S. Mail from Greenville Clerks Office to Michelle Simmons, Clerk of Laurens County, P.O. Box 287, 100 Hillcrest Square, Suite B, Laurens, SC 29360. (jens) |
| Filing 12 ***DOCUMENT E-MAILED 11 Certified Order to Michelle Simmons, Clerk of Laurens County. (jens) |
| Filing 11 TEXT ORDER: On October 18, 2023, Defendant filed a Notice of Removal from Laurens County Court of Common Pleas, asserting that the court has diversity jurisdiction over this action and indicating that it "has only now become apparent that the amount in controversy sought by Plaintiff exceeds $75,000 with receipt of the settlement demand for $97,405." (ECF No. #1 at 2). Attached to the Notice of Removal were the state court documents, including the Complaint, which was filed on March 1, 2023; the state court's order granting default judgment for the Plaintiff, which was filed May 9, 2023; the state court's order denying Defendant's motion for relief from entry of default, which was filed August 7, 2023; and the state court's order denying reconsideration of the denial of the motion for relief from entry of default, which was filed August 31, 2023. (ECF No. #1 -1). Additionally, Defendant attached Plaintiff's written settlement demand dated October 11, 2023, which requested $97,405 in damages. Generally, pursuant to 28 U.S.C. 1446, a notice of removal must be filed within 30 days after receipt of a copy of the "initial pleading setting forth the claim for relief upon which such action or proceeding is based." However, "if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. 1446(b)(3) (emphasis added). The procedural requirements regarding removal are strictly construed, and, therefore, failure to comply with the removal statute's jurisdictional and/or procedural requirements constitutes grounds for remand. See 28 U.S.C. 1447(c) (specifying two grounds for remand: lack of subject matter jurisdiction and defect in removal procedure); see also McKinney v. Bd. Of Trustees of Md. Cmty. Coll., 955 F.2d 924, 92526 (4th Cir. 1992) (discussing 1446's procedural requirements and stating that a case may not be removed if the defendant fails to act within 30 days of receiving service of process). Defendant contends, despite having failed to appear in the state court action for several months and only after judgment was entered against it, that it was unascertainable in the original compliant that the amount in controversy in this case could foreseeably exceed the statutory threshold of $75,000 to support a basis of diversity jurisdiction under 28 U.S.C. 1332. Defendant argues that the first time it became aware that this case could foreseeably reach the threshold amount in controversy to support this court's exercise of diversity jurisdiction was on October 11, 2023, when the Plaintiff, at Defendant's bequest, sent a written settlement demand. See (ECF No. #1 -2).However, a careful reading of the complaint does not support that notion. In the original complaint, Plaintiff requests Defendant "be required to repair" the alleged defects with the home "and/or be financially responsible for the corrections of these items, together with payment for loss of use of her house and such other further relief as the jury may deem just and proper, and attorney costs and fees" as well as "damages for loss of use and loss of expectancy." (ECF No. #1 -1 at 5). Additionally, Plaintiff alleges "gross negligence, willfulness and wantonness" and requests both "compensatory and punitive damages" from Defendant. Id. at 6. It is well-settled that in determining the amount in controversy, a prayer for punitive damages may be factored into the calculus if the facts alleged support such relief. Miller v. Southern Bell Telephone & Telegraph Co., 279 F. 806 (4th Cir. 1922). In South Carolina, "an award of punitive damages may not exceed the greater of three times the amount of compensatory damages awarded to each claimant entitled thereto or the sum of five hundred thousand dollars." S.C. Code Ann. 15-32-520. Here, Plaintiff's allegations in the complaint support a claim for relief for punitive damages under South Carolina law. See Palmetto Pointe at Peas Island Condominium Property Owners Association, Inc. v. Island Pointe, LLC et al., 890 S.E.2d 603, 608 (S.C. 2023) (discussing award of punitive damages in a case where the allegations included claims of negligence, gross negligence, and breach of implied warranty regarding the building of condominiums). Defendant argues in its Notice of Removal that Plaintiff previously requested only $15,000 to repair the home both in 2021 and 2022, and that, therefore, it had "no reason to believe" that Plaintiff was seeking damages in excess of $75,000. (ECF No. #1 at 3). However, the complaint in the underlying action goes far beyond seeking only the repair costs for the home which notably themselves were subject to change in the several years that Plaintiff has been seeking relief from Defendant. Here, the complaint further alleges loss of use of the home as well as punitive damages for the "gross negligence" and "willful and wantonness" of Defendants. Accordingly, the Defendant's sole reliance on Plaintiff's initial demand from years past that were not pled in this action is nonsensical given the additional claims and damages alleged in the instant complaint. Furthermore, the state court entered judgment as to all claims against Defendant in May 2023 including such claims that alleged the applicability of punitive damages. Only the amount of such damages was left to be ascertained. Accordingly, the court concludes Defendant could have ascertained that damages could foreseeably surpass the jurisdictional threshold of $75,000 before October 2023. District courts must construe the removal statute strictly against removal because removing a case from state court implicates "significant federalism concerns." Mulcahey v. Columbia Organic Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994) (citing Shamrock, 313 U.S.at 10809); see also Spillers v. Tillman, 959 F.Supp. 364, 368 69 (S.D. Miss. 1997) (stating that the unanimity requirement "advances, among other things, the congressional purpose of giving deference to a plaintiff's choice of a state forum and of resolving doubts against removal and in favor of remand" (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108 (1941))). Additional federalism and comity concerns are at play here, as the court notes that the state court has already entered default judgment against Defendant in the underlying action. All that is at issue is the amount of damages to be paid to Plaintiff. This court refuses to allow Defendant to circumvent the orders of the state court by attempting to remove this action on the eve of the damages hearing in state court based on the written demand that it asked for this late in the proceedings. Accordingly, given this court's duty to strictly construe the removal statute and its procedural requirements, as well as its duty to promote comity and respect principles of federalism, this case is hereby REMANDED to the Court of Common Pleas for Laurens County. See Ellenburg v. Spartan Motors Chassis, Inc., 519 F.3d 192, 198 (4th Cir. 2009) (noting that a District Court can remand a case sua sponte for jurisdictional concerns). IT IS SO ORDERED. Signed by Honorable Timothy M Cain on 11/08/2023. (jens) |
| Filing 10 DELETION OF DOCKET ENTRY NUMBER #8 Local Rule 26.01 Answers to Interrogatories. Reason: re-filed by attorney to correct filing (scanned vs converted pdf). Corrected Filing Document Number #9 Local Rule 26.01 Answers to Interrogatories. Modified filing date to that of original filing: 11/3/23. (kmca) |
| Filing 9 Local Rule 26.01 Answers to Interrogatories by Susan Medlin.(Brown, Rodney) Modified on 11/6/2023: to correct date filed (kmca). |
| Filing 6 CERTIFICATE OF SERVICE by Legacy Housing Corporation re #1 Notice of Removal, #3 Local Rule 26.01 Answers to Interrogatories (Green, Tracey) |
| Filing 4 CLERK'S NOTICE: Plaintiff's Local Rule 26.01 Interrogatories (including section H) are due fourteen (14) days after removal. (kmca) |
| Filing 3 Local Rule 26.01 Answers to Interrogatories by Legacy Housing Corporation.(kmca) |
| Filing 1 NOTICE OF REMOVAL from Laurens County Court of Common Pleas, case number 2023-CP-30-00168. (Filing fee $402 receipt number ASCDC-11379261), filed by Legacy Housing Corporation. (Attachments: #1 State Court Documents including order of default, #2 Exhibit B - Settlement Demand, #3 Exhibit C - Moroz Declaration with Exhibits 1 and 2)(kmca) |
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| Plaintiff: Susan Medlin | |
| Represented By: | Rodney M Brown |
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| Defendant: Legacy Housing Corporation | |
| Represented By: | Randy Lowell |
| Represented By: | Tracey Colton Green |
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