UNITED STATES DISTRICT COURT FOR ONLINE PUBLICATION ONLY EASTERN DISTRICT OF NEW YORK
January 23, 2012
LOUISE FONG, AS GUARDIAN FOR LILA LANZIESAR AND AS GUARDIAN FOR ALFRED LANZIESAR, PLAINTIFF,
ELDER LIFE MANAGEMENT, INC., DEFENDANT.
The opinion of the court was delivered by: John Gleeson, United States District Judge:
MEMORANDUM AND ORDER
Plaintiff Louise Fong, as guardian for Lila Lanziesar and Alfred Lanziesar, commenced this action against Elder Life Management, Inc. ("Elder Life") in the Supreme Court of the State of New York, Queens County. On December 5, 2011, Elder Life removed the action to this Court, asserting federal subject-matter jurisdiction on the basis of diversity of citizenship. Fong moves to remand the action to state court on the grounds that the amount in controversy is below the statutory minimum for diversity jurisdiction. For the reasons set forth below, the motion to remand is granted.
Fong is the daughter of Lila and Alfred Lanziesar. In 2008, acting as her parents' guardian, Fong entered into an agreement with Elder Life. Compl. ¶ 6. Pursuant to the agreement, Elder Life would provide services to the Lanziesars including "elder care management and account management" in exchange for payments that would be determined by the type and frequency of the particular services provided. Id.; see also id. Ex. A. Fong alleges that Elder Life breached the agreement by billing the Lanziesars for services that were either unnecessary or not actually rendered. See, e.g., id. ¶ 8.
With respect to Lila Lanziesar, Fong alleges that Elder Life overbilled by approximately $64,000, but not more than $74,000. See id. ¶ 14. With respect to Alfred Lanziesar, Fong claims Elder Life overbilled by approximately $35,000, but not more than $74,000. See id. ¶ 19. Fong seeks total damages of approximately $99,000.
Fong, in her capacity as the Lanziesars' guardian, originally commenced a state-court action against Elder Life in October 2011. In that first action, she alleged a total amount of overbilling in the approximate amount of $100,000. The complaint did not break down this total into the separate amounts by which Lila and Alfred were individually overbilled.
Elder Life removed that action to this Court, asserting that there was federal subject-matter jurisdiction pursuant to 28 U.S.C. § 1332(a)(1) due to the purportedly diverse citizenship of the parties and an amount in controversy that exceeded $75,000. See Notice of Removal, Fong v. Elder Life Mgmt., Inc., No. 11-CV-5429 (KAM) (ALC) (E.D.N.Y. filed Nov. 7, 2011). The removed action was voluntarily dismissed on November 16, 2011.
That same day, Fong commenced the present action in state court. Her complaint here is virtually identical to that in the voluntarily dismissed action, except that she has now broken out the damages claimed into the separate amounts by which Lila and Alfred were each allegedly overbilled. See Compl. ¶¶ 14, 19.
Elder Life removed the action to this Court on December 5, 2011, again asserting federal subject-matter jurisdiction pursuant to § 1332(a)(1). On December 22, 2011, Fong moved to remand the action to state court asserting that this Court lacks subject-matter jurisdiction. The Court heard oral argument on January 20, 2012.
DISCUSSION A. Whether the Action Should Be Remanded
A party generally may remove an action from state court to federal court if the action could have been brought in federal court, i.e., there is federal subject-matter jurisdiction. See 28 U.S.C. § 1441(a); Sygenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 33 (2002); Brown v. Eli Lilly & Co., 654 F.3d 347, 356 (2d Cir. 2011). If federal subject-matter jurisdiction is lacking at the time of removal, the case must be remanded to state court. 28 U.S.C. § 1447(c); Brown, 654 F.3d at 356.
Federal district courts "have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States." 28 U.S.C. § 1332(a)(1). The party invoking federal jurisdiction -- here, Elder Life -- "has the burden of establishing the existence of the jurisdictional amount in controversy." Lupo v. Human Affairs Int'l, Inc., 28 F.3d 269, 273 (2d Cir. 1994); see also Cal. Pub. Emps.' Ret. Sys. v. WorldCom, Inc., 368 F.3d 86, 100 (2d Cir. 2004).
There is no dispute that there is complete diversity of the parties. The sole issue in the present motion is whether the amount-in-controversy requirement is satisfied. As apparent from the face of the complaint, Fong seeks to recover total damages in excess of $75,000.
However, these damages are sought on behalf of two different people -- Lila and Alfred -- for whom Fong is acting as guardian. Neither Alfred's nor Lila's claimed damages exceed $75,000 on their own. Thus, the existence of subject-matter jurisdiction turns on whether the claims may be aggregated for purposes of establishing the threshold amount in controversy.
The permissibility of such aggregation generally turns on whether the
claims are brought by a single plaintiff or multiple plaintiffs.
Except in certain class actions, see 28 U.S.C. § 1332(d)(6), "separate
and distinct claims raised by different plaintiffs may not be
aggregated to satisfy the jurisdictional amount in controversy."
Mehlenbacher v. Akzo Nobel Salt, Inc., 216
F.3d 291, 296 (2d Cir. 2000) (emphasis added); see also Shady Grove
Orthopedic Assocs., P.A.
v. Allstate Ins. Co., 130 S. Ct. 1431, 1437 n.3 (2010).*fn1
On the other hand, "[d]ifferent state claims brought by a
single plaintiff may be aggregated for purposes of satisfying the
amount-in-controversy requirement." Colavito v. N.Y. Organ Donor
Network, Inc., 438 F.3d 214, 221 (2d Cir. 2006) (emphasis added); see
also Wolde-Meskel v. Vocational Instruction Project Cmty. Servs.,
Inc., 166 F.3d 59, 62 (2d Cir. 1999).
In cases where a plaintiff is acting in a representative capacity for multiple beneficiaries, the question of aggregation may be more complex. Although there is a single named plaintiff, the claims belong to more than one person. When assessing jurisdiction under these circumstances, courts should disregard parties that are acting only in a representative capacity and instead identify the "real parties to the controversy." Navarro Savings Ass'n v. Lee, 446 U.S. 458, 461 (1980); see also, e.g., Airlines Reporting Corp. v. S & N Travel, Inc., 58 F.3d 857, 861--62 (2d Cir. 1995); N. Trust Co. v. Bunge Corp., 899 F.2d 591, 596--97 (7th Cir. 1990); Rock Drilling Local Union No. 17 v. George M. Brewster & Son, Inc., 217 F.2d 687, 695 (2d Cir. 1954).*fn2 This requires courts to look at the substance of the lawsuit rather than the form in which it is brought in order to determine if it is within the limited class of cases for which Congress has authorized federal jurisdiction.
In a case brought by a guardian, the ward is the relevant party for jurisdictional purposes. By statute, it is the ward's citizenship, rather than the guardian's, that is considered when determining whether there is diversity of citizenship. See 28 U.S.C. § 1332(c)(2) ("[T]he legal representative of an infant or incompetent shall be deemed to be a citizen only of the same State as the infant or incompetent."). The ward is the real party to the controversy, and only because the ward lacks the capacity to sue is there a need for the guardian to pursue the claims. The existence of federal jurisdiction should not turn on whether the appointed guardian's citizenship happens to be the same as, or different from, a defendant's.
The analogous conclusion should apply to determining whether claims may be aggregated to satisfy the amount-in-controversy requirement. Claims of a single ward may be aggregated, but separate and distinct claims of multiple wards cannot be aggregated even if there is a common guardian. See Baker v. Abrams, 929 F. Supp. 617, 620--21 (D. Conn. 1996); cf. Martinez v. J.C. Penney Corp., No. 08-20803-CIV, 2008 WL 2225663, at *2--4 (S.D. Fla. May 29, 2008) (plaintiff could not aggregate claims she brought individually with those she brought on behalf of her minor daughter); Bruno v. Martin, No. 4:07cv451, 2008 WL 2148466, at *2 (E.D. Tex. May 20, 2008) (same); Oxman v. Hellene Pessl Inc., 279 F. Supp. 65, 66--67 (S.D.N.Y. 1968) (same).
Applying these principles here, I conclude that aggregation cannot be used to satisfy the amount-in-controversy requirement. The substance of this lawsuit consists of separate, albeit factually related, claims that Elder Life overbilled for its services to Lila and to Alfred. If Lila and Alfred had the capacity to sue Elder Life themselves, it would be beyond reasonable dispute that their claims could not be aggregated.*fn3 Similarly, had they been appointed different guardians, aggregation would clearly be unavailable. The happenstance that they have both been appointed the same guardian should not alter this result.
Elder Life argues that Fong's voluntary dismissal of her first action and subsequent filing of a complaint with separate damages claims is an improper attempt to avoid federal jurisdiction. It argues that Fong should be held to the allegations in her first action that she is seeking $100,000 in total damages, which clearly satisfies the amount-in-controversy requirement.
This case, however, is not comparable to one in which a "plaintiff after removal, by stipulation, by affidavit, or by amendment of his pleadings, reduces the claim below the requisite amount." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 292 (1938).
Under such circumstances, the federal court retains jurisdiction because the requisite amount in controversy existed at the time of removal. See id.; see also Katzman v. Am. Airlines, Inc., No. 97 Civ. 8321 (JSM), 1997 WL 752730, at *2 (S.D.N.Y. Dec. 4, 1997). Here, by contrast, Fong has not materially reduced the total amount of damages she seeks. She has simply modified her prior complaint to make it clear that the damages are attributable to two different persons, who are the real parties to the controversy. And neither of those person's claims separately satisfies the amount-in-controversy requirement.
Indeed, it is possible that Fong's first case would have been remanded had she not voluntarily dismissed it. Even though it was not apparent from the face of her complaint, she could have established, through affidavits or otherwise, that the separate claims of Lila and Alfred were insufficient on their own to establish diversity jurisdiction. See United Food & Commercial Workers Union, Local 919 v. CenterMark Props. Meriden Square, Inc., 30 F.3d 298, 305 (2d Cir. 1994).
In any event, Fong did voluntarily dismiss her first case, as was her right, see Katzman, 1997 WL 752730, at *1--2, and has now filed a complaint that eliminates ambiguity regarding the amount in controversy. Since neither of the real parties to the controversy has claims in excess of $75,000, this Court lacks jurisdiction and must remand the case.
B. Whether an Award of Attorney's Fees and Costs Is Warranted
An order remanding an action to state court may award attorney's fees and costs to the non-removing party. See 28 U.S.C. § 1447(c). However, a fee award should not accompany every decision to grant a motion to remand. See Martin v. Franklin Capital Corp., 546 U.S. 132, 136 (2005). Rather, "[a]bsent unusual circumstances, courts may award attorney's fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal." Id. at 141; see also Calabro v. Aniqa Halal Live Poultry Corp., 650 F.3d 163, 166 (2d Cir. 2011).
Although the general principle against non-aggregation of claims for jurisdictional purposes is well-established, there is a dearth of cases applying them to the circumstances here, i.e., claims on behalf of different persons asserted by a single guardian. Since the existence of federal subject-matter jurisdiction was not clearly foreclosed by existing law, I conclude that it was objectively reasonable for Elder Life to remove the case. I therefore decline to award attorney's fees or costs. See, e.g., Little Rest Twelve, Inc. v. Visan, --- F. Supp. 2d ----, No. 11 Civ. 2306 (JGK), 2011 WL 5979541, at *2 (S.D.N.Y. Nov. 29, 2011) ("If a defendant's grounds for removal are not clearly barred by established federal law, then an award of attorney's fees and costs is improper."); Cary v. TIAA-CREF, No. 06-CV-6421 CJS, 2006 WL 4070768, at *4 (W.D.N.Y. Dec. 18, 2006).
For the reasons stated above, the motion to remand is granted. Fong's request for attorney's fees and costs is denied. The Clerk of Court is respectfully directed to remand this action to the Supreme Court of the State of New York, Queens County.
John Gleeson, U.S.D.J.