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Windsor Surry Co. v. Gomez

United States District Court, D. Oregon

March 29, 2018

WINDSOR SURRY COMPANY, a Delaware corporation, and WINDSOR WILLITS COMPANY, a California Corporation, Plaintiffs,
v.
JESUS GOMEZ, Defendant.

          Jennifer K. Oetter and Michael T. Belisle, Lewis Brisbois Bisgaard & Smith LLP, Karl R. Loureiro and William E. Pallares, Lewis Brisbois Bisgaard & Smith LLP, Of Attorneys for Plaintiffs.

          Steve D. Larson, Stoll, Stoll, Berne Lokting & Shlachter P.C., Of Attorneys for Defendant.

          OPINION AND ORDER

          Michael H. Simon United States District Judge.

         Plaintiffs filed this action in the Circuit Court of the State of Oregon for the County of Multnomah. Plaintiffs allege breach of a settlement agreement by Gomez and seek injunctive and declaratory relief, including specific performance. Gomez removed the case to this Court, asserting jurisdiction under 28 U.S.C. § 1332 based on diversity of the citizenship. Plaintiffs filed a motion to remand, arguing that the amount in controversy does not exceed the $75, 000 threshold for diversity removal because Gomez improperly relied on speculative attorney's fees to reach the amount in controversy. In Plaintiffs' reply, Plaintiffs add the argument that because Gomez is a citizen of Oregon, he is precluded from removing this case under 28 U.S.C. § 1441(b)(2), referred to as the “forum defendant rule.”

         STANDARDS

         A civil action generally may be removed from state court to federal court if the federal district court would have had original, subject matter jurisdiction over the case. 28 U.S.C. § 1441(a). Subject matter jurisdiction may be based on either diversity jurisdiction or federal question jurisdiction. 28 U.S.C. §§ 1331, 1332. Diversity jurisdiction exists over civil actions when the amount in controversy exceeds $75, 000 and there is complete diversity among all plaintiffs and defendants. 28 U.S.C. § 1332(a)(1). “[D]iversity jurisdiction does not exist unless each defendant is a citizen of a different State from each plaintiff.” Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978) (emphasis in original). A motion to remand is the proper procedure for a plaintiff to use when challenging removal. 28 U.S.C. § 1447; see also Moore-Thomas v. Ala. Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009). The party seeking removal bears the burden of establishing by a preponderance of the evidence that removal is proper. Moore-Thomas, 553 F.3d at 1244.

         BACKGROUND

         On June 12, 2017, Robert Torch filed a putative class action in federal court in this district against Plaintiffs and the Windsor Holding Company (collectively, the “Torch Defendants”), Case No. 3:17-cv-0918-AA (the “Torch Class Action”). Torch alleges that the trim board sold by the Torch Defendants was defective because it rots and decays. On or about August 14, 2017, the Torch Defendants filed a motion to dismiss, arguing that Torch's claim for breach of implied warranty is barred because he purchased his home with the siding already installed. On or about September 15, 2017, counsel for Torch contacted the Torch Defendants to confer about adding Gomez as an additional named plaintiff in the Torch Class Action. After receiving a copy of the proposed amended complaint, counsel for the Torch Defendants informed Torch's counsel that Gomez had previously agreed to settle his claims against Plaintiffs and that they would not agree to the amendment adding Gomez as a plaintiff in the Torch Class Action.

         Before Torch's counsel could file a motion to amend to add Gomez as a plaintiff in the Torch Class Action, Plaintiffs filed the state court action in this case in Multnomah County on September 20, 2017, alleging that Gomez verbally accepted Plaintiffs' settlement offer. On September 22, 2017, Torch filed a motion to amend the complaint to add Gomez as an additional named plaintiff in the Torch Class Action. Judge Ann L. Aiken granted that motion on October 24, 2017, and denied a motion to dismiss and a motion to strike as moot. On November 7, 2017, Torch filed the amended complaint adding Gomez as a named plaintiff.

         On November 22, 2017, Gomez removed this case to federal court. On December 8, 2017, the plaintiffs in the Torch Class Action and Gomez in this action filed motions to consolidate this case with the Torch Class Action.

         DISCUSSION

         The Court first addresses whether Plaintiffs have waived their right to request remand based on the forum defendant rule. The Court then addresses Plaintiffs' original argument regarding the amount in controversy.[1]

         A. Forum Defendant Rule

         Because Plaintiffs did not raise their argument challenging removal under the forum defendant rule until their reply, the Court ordered two rounds of supplemental briefing. The Court requested that the parties brief whether Plaintiffs' waived their right to challenge removal based on the forum defendant rule by failing to raise the argument in Plaintiffs' opening brief. The Court ...


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