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Diversified Mortgage, Inc. v. Merscorp

May 5, 2010

DIVERSIFIED MORTGAGE, INC., PLAINTIFF,
v.
MERSCORP, INC., AND MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., DEFENDANT.



ORDER

This cause is before the Court pursuant to Plaintiff Diversified Mortgage, Inc.'s Motion for Remand (the "Motion" Doc. 6), filed on January 11, 2010. On January 25, 2010, Defendants Merscorp, Inc. and Mortgage Electronic Registration Systems, Inc. filed a response in opposition to the Motion. (Doc. 8). For the reasons that follow, the Motion is due to be denied.

I. Procedural History

Plaintiff filed suit against Defendants in the Sixth Judicial Circuit Court in and for Pinellas County, Florida, on November 10, 2009, seeking declaratory and injunctive relief, as well as an accounting. Particularly, Plaintiff's complaint seeks:

(i) a declaratory judgment as to whether Diversified Mortgage has an interest in certain mortgage loans registered by Diversified in the MERS system and previously identified by MERS as belonging to Diversified; (ii) injunctive relief enjoining MERS from initiating or completing any transactions in relation to the mortgage loans at issue, and from acting as agent, nominee, and/or fiduciary on behalf of Diversified; and (iii) an accounting in connection with the mortgage loans registered by Diversified in the MERS system. (Doc. # 2 at 1).

On December 10, 2009, Defendants removed the case to federal court, alleging complete diversity of citizenship between the parties and an amount in controversy exceeding $75,000. (Doc. 1). Plaintiff filed the Motion seeking remand on January 11, 2010. Plaintiff does not dispute that complete diversity exists in this case; however, Plaintiff contends that the amount in controversy has not been met.

II. Legal Standard

A defendant may remove a case filed in state court to federal court if "the district courts of the United States have original jurisdiction." Pease v. Medtronic, Inc., 6 F.Supp.2d 1354, 1356 (S.D. Fla. 1998) (citing 28 U.S.C. § 1441(a)). Original jurisdiction may be established if there is complete diversity of citizenship among the parties and the amount in controversy exceeds $75,000. Id. (citing 28 U.S.C. § 1332(a)(1)). In removal cases, the burden of proving any jurisdictional fact rests upon the defendant. Id.

"Federal courts are directed to construe removal statutes strictly, resolve all doubts about jurisdiction in favor of remand, and employ a presumption in favor of remand to state courts." Total Fleet Solutions, Inc. v. Nat'l Crime Ins. Bureau, 612 F.Supp.2d 1232, 1234 (M.D. Fla. 2009). Furthermore, a plaintiff's right to choose his forum carries more weight than a defendant's right to remove. Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). "[W]here plaintiff and defendant clash about jurisdiction, uncertainties are resolved in favor of remand." Id. (citations omitted). A defendant's burden of proof is therefore a heavy one. Id.

In determining whether the jurisdictional minimum has been met, the court must review the amount in controversy at the time of removal. Pease, 6 F.Supp.2d at 1356. If the plaintiff claims damages beneath this threshold, the defendant "must prove to 'a legal certainty' that the amount in controversy actually exceeds $75,000." Id. at 1356-1357.

If the plaintiff does not specify damages, a lower burden of proof applies. Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1356 (11th Cir. 1996) (overruled on other grounds by Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir. 2000)). In such a case, the preponderance of the evidence standard applies. Id. at 1356-57.

III. Analysis

Plaintiff's complaint does not specify an amount in controversy, therefore, a preponderance of the evidence standard applies. Plaintiff argues that it is not requesting monetary damages in the complaint, and instead seeks only declaratory and injunctive relief.

Defendants counter that, "[f]or equitable claims such as ones for declaratory and injunctive relief, the amount in controversy is determined by the object of the litigation that will flow to Plaintiff, not the damages sought." (Doc. # 2 at 2). Defendants' position is supported by binding authority. See Cohen, 204 F.3d at 1077 ("When a plaintiff seeks injunctive or declaratory relief, the amount in controversy is the monetary value of the object of the litigation from the Plaintiff's perspective.")

Plaintiff's complaint seeks a declaration as to whether Plaintiff has an ownership in sixty-five to one-hundred and thirty-five mortgage loans registered with MERS. Thus, the amount in controversy is determined by "the monetary value of the benefit that would flow to Plaintiff" if the ...


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