Drywall Elements, LLC v. Edward Wolff & Associates, LLC

CourtDistrict Court, E.D. Texas
DecidedMarch 30, 2022
Docket4:21-cv-00537
StatusUnknown

This text of Drywall Elements, LLC v. Edward Wolff & Associates, LLC (Drywall Elements, LLC v. Edward Wolff & Associates, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Drywall Elements, LLC v. Edward Wolff & Associates, LLC, (E.D. Tex. 2022).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

DRYWALL ELEMENTS, LLC, § § Plaintiff, § CIVIL ACTION NO. 4:21-CV-00537-CAN v. § § EDWARD WOLFF & ASSOCIATES, § LLC, ET AL., § § Defendants. §

MEMORANDUM OPINION AND ORDER Pending before the Court is Defendants Edward Wolff & Associates, LLC, and Mark Wolff’s Motion to Dismiss Plaintiff’s Third Amended Complaint for Lack of Jurisdiction Due to the Amount of Controversy [Dkt. 25]. Having considered Defendants’ Motion, Plaintiff’s Response [Dkt. 27], Defendants’ Reply [Dkt. 28], and Plaintiff’s Sur-reply [Dkt. 29], and all other relevant filings, the Court finds Defendants’ Motion to Dismiss [Dkt. 25] should be DENIED. The Court finds the amount in controversy has been met. BACKGROUND Relevant Procedural History On July 13, 2021, Plaintiff Drywall Elements, LLC (“Plaintiff” or “Drywall”) filed its original complaint against Defendants Edward Wolff & Associates, LLC, and Mark Wolff (collectively “Defendants”) [Dkt. 1]. Citing diversity jurisdiction, the original complaint pleaded only that Drywall is a “Florida corporation” with its principal place of business in Florida, and that Edward Wolff & Associates, LLC, is a “Texas corporation” with its principal place of business in Collin County, Texas; no amount in controversy was stated [Dkt. 1 at 1-2]. United States District Judge Sean D. Jordan ordered Plaintiff to file an amended complaint alleging facts sufficient to plead complete diversity [Dkt. 2 at 1-2]. On July 20, 2021, Plaintiff filed its First Amended Complaint again referring to the LLC parties as “corporations” [Dkt. 3]. Judge Jordan ordered a further amended complaint that clearly stated the correct corporate form for both Drywall and Edward Wolff & Associates [Dkt. 4]. Plaintiff filed a Second Amended Complaint, pleading that Drywall is a Florida limited liability company with two members: Kevin Cormier, who is

“domiciled in, a citizen of, and residing in[] the State of Florida,” and Gino Bernard, who is “domiciled in, a citizen of, and residing in[] the State of New Hampshire” [Dkt. 5 at 1]. Plaintiff pleads Edward Wolff & Associates is a Texas limited liability company with one member, Mark Wolff, who “is domiciled in, a citizen of, and residing in[] the State of Texas,” and it further pleads “the damages sought by Plaintiff exceed $75,000” [Dkt. 5 at 1]. After the filing of Defendants’ initial Motion to Dismiss, on October 6, 2021, Plaintiff filed its Third Amended Complaint – the live pleading – which restates its diversity and amount in controversy allegations [Dkt. 13 at 3]. On September 2, 2021, this cause was referred to the undersigned for all pretrial proceedings [Dkt. 7]. On November 3, 2021, Judge Jordan entered an Order of Reference,

referring this case to the undersigned for all further proceedings, including trial, entry of final judgment, and all post-judgment hearings, in accordance with 28 U.S.C. § 636(c) and the consent of the Parties [Dkt. 20]. After entry of the Order of Reference, on November 23, 2021, the undersigned conducted a Rule 16 Management Conference, during which Defendants’ challenge to the amount in controversy, raised by the Joint Rule 26(f) Report, was discussed [Dkt. 17]. Defendants dispute whether Plaintiff has sufficiently pleaded diversity jurisdiction because “the true amount in controversy is less than $75,000.00,” citing a pre-suit demand letter from Plaintiff requesting $28,000 [Dkt. 17 at 3]. The Court directed the Parties to proceed in filing jurisdictional briefing addressing the amount in controversy [Dkt. 24]. Defendants’ Motion to Dismiss Under Rule 12(b)(1) – Amount in Controversy On December 3, 2021, Defendants filed the pending Motion to Dismiss [Dkt. 25].1 The pending Motion centers entirely on the amount in controversy; complete diversity of citizenship between the Parties is not challenged. Defendants primarily argue that Plaintiff cannot reach $75,000.00 because each of Plaintiff’s claims at their heart are all for breach of contract, for which

the maximum amount of economic damages available is $24,000.00, and because Plaintiff cannot recover attorney’s fees under Chapter 38 of the Texas Civil Practice and Remedies Code, the Texas Deceptive Trade Practices Act (“DTPA”), the Texas Theft Liability Act (“TTLA”), or for fraud under Texas law [Dkt. 25 at 3, 5, 8-9]. Plaintiff filed a Response [Dkts. 26; 27],2 Defendants filed a Reply [Dkt. 28], and Plaintiff filed a Sur-reply [Dkt. 29]. APPLICABLE LEGAL STANDARDS

Federal Rule of Civil Procedure 12(b)(1) A Rule 12(b)(1) motion to dismiss allows a party to challenge the exercise of the Court’s subject matter jurisdiction. FED. R. CIV. P. 12(b)(1). Federal courts have subject matter jurisdiction to entertain causes of action only where a question of federal law is involved, or where there is diversity of citizenship between the parties and the amount in controversy exceeds $75,000.00, exclusive of interest and costs. 28 U.S.C. §§ 1331, 1332; see Shiloh Enters., Inc. v. Cleveland Imaging & Surgical Hosp., LLC, No. 1:07-CV-588, 2007 WL 9724995, at *1 (E.D. Tex. Dec. 13, 2007). “The ‘amount-in-controversy threshold’ is a necessary ‘ingredient of subject-

1 Defendants’ earlier filed Motion to Dismiss does not seek dismissal for lack of subject matter jurisdiction under Rule 12(b)(1) [Dkt. 15]. “A motion to dismiss for lack of subject matter jurisdiction must be considered before any other challenge because the court must find jurisdiction before determining the validity of a claim.” Hereford v. Carlton, No. 9:15-CV-26, 2016 WL 7042231, at *2 (E.D. Tex. May 26, 2016) (citing Moran v. Kingdom of Saudi Arabia, 27 F.3d 169, 172 (5th Cir. 1994)). 2 Plaintiff appears to have filed the same or a substantially similar response twice; as such, the Court refers to Plaintiff’s most recent response [Dkt. 27]. matter jurisdiction.’” Jouett Invs. Inc. v. Intuit Inc., No. 3:14-CV-1803-L, 2015 WL 3770715, at *7 (N.D. Tex. June 15, 2015) (quoting Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006)). Amount-in-Controversy Requirement Determining the amount in controversy looks to the “value of the object of the litigation.” Leininger v. Leininger, 705 F.2d 727, 729 (5th Cir. 1983). “Generally, penalties, statutory

damages, punitive damages, and attorney’s fees are included in the amount in controversy.” Theriot v. Transamerica Life Ins. Co., 354 F. Supp. 3d 713, 719 (E.D. Tex. 2017). Exemplary damages allowed by state statute are also encompassed in the amount in controversy. U.S. Fire Ins. Co. v. Villegas, 242 F.3d 279, 283 (5th Cir. 2001). However, costs are excluded from calculating the amount in controversy, as is most interest. See 28 U.S.C. § 1332; Primerica Life Ins. Co. v. Martinez, No. CV SA-10-CA-660-FB, 2011 WL 13324194, at *9 (W.D. Tex. Apr. 7, 2011), report and recommendation adopted, No. CV SA-10-CA-660-FB, 2011 WL 13324203 (W.D. Tex. Apr. 25, 2011). “It has long been recognized that ‘unless the law gives a different rule, the sum claimed by

the plaintiff controls if the claim is apparently made in good faith.’” St. Paul Reinsurance Co. v.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Moran v. Kingdom of Saudi Arabia
27 F.3d 169 (Fifth Circuit, 1994)
United States Fire Insurance v. Villegas
242 F.3d 279 (Fifth Circuit, 2001)
Manguno v. Prudential Property & Casualty Insurance
276 F.3d 720 (Fifth Circuit, 2002)
Hartford Insurance Group v. Lou-Con Inc.
293 F.3d 908 (Fifth Circuit, 2002)
Garcia v. Koch Oil Co. of Texas Inc.
351 F.3d 636 (Fifth Circuit, 2003)
Saint Paul Mercury Indemnity Co. v. Red Cab Co.
303 U.S. 283 (Supreme Court, 1938)
Bell v. Hood
327 U.S. 678 (Supreme Court, 1946)
Arbaugh v. Y & H Corp.
546 U.S. 500 (Supreme Court, 2006)
Melissa Berniard v. Dow Chemical Co.
481 F. App'x 859 (Fifth Circuit, 2010)
Dale J. Leininger v. Sue Ann Leininger
705 F.2d 727 (Fifth Circuit, 1983)
Mitchell v. Metropolitan Life Ins.
993 F.2d 1544 (Fifth Circuit, 1993)
Spivey v. Vertrue, Inc.
528 F.3d 982 (Seventh Circuit, 2008)
Munawar v. Cadle Co.
2 S.W.3d 12 (Court of Appeals of Texas, 1999)
Sorensen v. Ashmore
4 F. Supp. 2d 669 (E.D. Texas, 1998)
Maley v. Design Benefits Plan, Inc.
125 F. Supp. 2d 197 (E.D. Texas, 2000)
Payne v. Progressive Financial Services, Inc.
748 F.3d 605 (Fifth Circuit, 2014)
Tony Gullo Motors I, L.P. and Brien Garcia v. Nury Chapa
212 S.W.3d 299 (Texas Supreme Court, 2006)

Cite This Page — Counsel Stack

Bluebook (online)
Drywall Elements, LLC v. Edward Wolff & Associates, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/drywall-elements-llc-v-edward-wolff-associates-llc-txed-2022.