First Guaranty Bank & Trust Co. v. Reeves

86 F. Supp. 2d 1147, 2000 U.S. Dist. LEXIS 2878, 2000 WL 267921
CourtDistrict Court, M.D. Florida
DecidedFebruary 11, 2000
Docket3:98-cv-01251
StatusPublished
Cited by3 cases

This text of 86 F. Supp. 2d 1147 (First Guaranty Bank & Trust Co. v. Reeves) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First Guaranty Bank & Trust Co. v. Reeves, 86 F. Supp. 2d 1147, 2000 U.S. Dist. LEXIS 2878, 2000 WL 267921 (M.D. Fla. 2000).

Opinion

ORDER

NIMMONS, District Judge.

This cause comes before the Court sua sponte. The court has studied the parties’ briefs addressing subject matter jurisdiction and has heard oral arguments. Upon due consideration, the Court determines, for the reasons set forth below, that it lacks subject matter jurisdiction over this case and remands the case to the state court from whence it came.

I. Procedural History

The controversies surrounding the present case have a long and painful history in the state courts. First Guaranty Bank and Trust Company (“First Guaranty”) is the trustee of a trust established by the late Mildred Frances McQueen, who died in 1993. During the probate of Mildred McQueen’s estate, questions arose concerning the billing of an attorney for the personal representatives and the trust. First Guaranty filed an objection to the fees and thus began years of litigation in the Florida State courts, both at the trial and appellate court levels. The probate estate has now been closed.

When the dust of litigation had settled, First Guaranty sought to terminate the trust under Florida law because its value is under $50,000.00. Fla.Stat. § 737.407(2) (1999). When First Guaranty could not reach a settlement with the beneficiaries of the trust, it filed a complaint in the Circuit Court, Fourth Judicial Circuit, in and for Duval County, Florida for approval of the accounts and termination of the trust.

On December 22, 1998, the Defendant and the third party intervenors filed a Notice of Removal (Dkt.l) to this Court. They simultaneously filed the Defendant’s answer and counterclaim (Dkt.4) and the *1149 Intervenors’ Motion to Intervene (Dkt.5). The Notice of Removal alleges jurisdiction based on diversity of citizenship. The Notice of Removal also states that the Defendant Reeves “incorporates her counterclaim which is in excess of $75,000.00 as against Plaintiff, Guaranty.” The Notice further states, “That said action is a civil action for the distribution of a trust in an alleged amount less than $75,000.00, but Defendant, Reeves, claims is (sic) an amount in interest in excess of $75,000.00 prior to incorporation of Reeves (sic) counterclaim.” (Dkt.l, ¶ 2).

Upon review of the parties’ pretrial stipulation (Dkt.52), the Court became concerned that the amount in controversy in the Plaintiffs complaint was actually under $75,000,000 and that, consequently, the Court would not have subject matter jurisdiction over this case. See 28 U.S.C. § 1332(a). The Court questioned counsel regarding said issue during the pretrial conference held on February 2, 2000. (Transcript, Dkt.58). During the pretrial conference, Defendant and Intervenors admitted that the amount in controversy for the case was solely dependent on the amount stated in the Counterclaim (Dkt.4) and the Intervenors’ Third Party Counterclaim (Dkt.26). The Court then ordered the parties to brief “the issue of whether a counterclaim can be considered by the Court in calculating the amount in controversy requirement of 28 U.S.C. § 1332.” (Dkt.57). Defendant’s and Intervenors’ Brief Regarding Issue of Jurisdiction of Federal Court (Dkt.59) admits that Plaintiffs claim “does not exceed the jurisdictional requirements of 28 U.S.C.A. § 1332(a).” (Def. brief at 1).

II. Subject Matter Jurisdiction

A. Introduction

There is no Supreme Court 1 or Eleventh Circuit case addressing the issue of whether a counterclaim may be used by a court in calculating the amount in controversy for purposes of determining subject matter jurisdiction where a case has been removed from a state court. Likewise, there is no such case law in the other circuits. 2 There is, however, some circuit case law dealing with the issue of considering the counterclaim for determining the amount in controversy when the plaintiff has originally filed in the federal court.

Substantial case law also exists from district courts around the country dealing with the current issue. Apparently, this controversy has been present since before the Federal Rules of Civil Procedure. 14B Charles Alan Wright, Arthur R. Miller, *1150 Edward H. Cooper, Federal Practice and Procedure § 3706 (3d ed.1998). Through the years, the district courts have decided both ways on the issue — either allowing or disallowing consideration of the counterclaim. See id. (collecting cases). The majority of courts, however, have held that the counterclaim may not be used to calculate the jurisdictional amount in controversy when a defendant removes a case from a state court. See id. See also Spectator Management Group v. Brown, 131 F.3d 120, 125 (3d Cir.1997) (“[T]he cases to which Brown points appear to present the majority view that inclusion of counterclaims should not be permitted in the removal context”). Since opinions from the other district courts are persuasive — and not binding — the Court will look to established Eleventh Circuit precedent of jurisdictional principles in its determination of which is the proper view.

B. Established Principles of Subject Matter Jurisdiction

Federal courts have limited jurisdiction. Bur ns v. Windsor Ins. Co., 31 F.3d 1092 (11th Cir.1994). “They are ‘empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution,’ and which have been entrusted to them by a jurisdictional grant authorized by Congress.” University of South Ala. v. American Tobacco Co., 168 F.3d 405, 409 (11th Cir.1999). A district court which exercises jurisdiction it does not have “unconstitutionally invades the powers reserved to the states to determine controversies in their own courts” and “offends fundamental principles of separation of powers.” Id. at 410.

Because the subject matter jurisdiction of a federal court is constitutional and statutory in nature, it cannot be waived or otherwise conferred upon the court by the parties. University of South Ala., 168 F.3d at 410. See also Hurt v. Dow Chemical Co., 963 F.2d 1142, 1146 (8th Cir.1992) (“subject-matter jurisdiction is not a mere procedural irregularity capable of being waived”). Even if neither of the parties objects to a court’s subject matter jurisdiction, the court may — indeed

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

Related

Cite This Page — Counsel Stack

Bluebook (online)
86 F. Supp. 2d 1147, 2000 U.S. Dist. LEXIS 2878, 2000 WL 267921, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-guaranty-bank-trust-co-v-reeves-flmd-2000.