Smallwood v. Ayer

• Court: District Court, D. New Hampshire
• Decided: October 9, 1996
• Docket: CV-96-285-M
• Status: Published

Opinion

Smallwood v . Ayer CV-96-285-M 10/09/96 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

David Smallwood v. Civil N o . 96-285-M

Paul F. Ayer and Dover Point Sea Charters, Inc.

O R D E R

David Smallwood purchased a used fishing boat from the

defendants, Paul F. Ayer and Dover Point Sea Charters, Inc.,

which Smallwood alleges is defective and unusable. Smallwood

seeks to recover his losses related to the transaction. The

defendants move to dismiss Smallwood's suit for lack of subject

matter jurisdiction asserting that Smallwood has incorrectly

invoked admiralty jurisdiction, 28 U.S.C.A. § 1333, and that he

cannot meet the amount in controversy requirement for diversity

jurisdiction under 28 U.S.C.A. § 1332.

When considering a motion to dismiss for lack of subject

matter jurisdiction, the court must "construe the Complaint

liberally and treat all well-pleaded facts as true, according the

plaintiff the benefit of all reasonable inferences." Murphy v .

United States, 45 F.3d 5 2 0 , 522 (1st C i r . ) , cert. denied, 115

S.Ct. 2581 (1995). The party who invokes jurisdiction, the plaintiff in this case, bears the burden of proving its

existence. Id.

Smallwood addresses only diversity jurisdiction in his

objection to the defendants' motion to dismiss, apparently

abandoning his reliance on admiralty jurisdiction. It is also

unlikely that admiralty jurisdiction would exist in this case

because Smallwood's claims concerning the sale of the boat do not

involve purely maritime circumstances or separable maritime

claims. See MacDougall's Cape Cod Marine v . One Christina 40

Foot Vessel, 721 F. Supp. 3 7 4 , 375-76 (D. Mass. 1989), aff'd 900

F.2d 408 (1st Cir. 1990); Chi Shun Hua Steel C o . v . Crest

Tankers, Inc., 708 F. Supp. 1 8 , 21-24 (D.N.H. 1989).

Accordingly, the defendants' motion is granted as to jurisdiction

based on 28 U.S.C.A. § 1333.

To determine whether the plaintiff can meet the amount in

controversy requirement for diversity jurisdiction, $50,000.00,

the court first looks at the amount claimed in the complaint at

the time of filing. Coventry Sewage Assoc. v . Dworkin Realty

Co., 71 F.3d 1 , 4 (1st Cir. 1995). The amount claimed determines

the amount in controversy for jurisdictional purposes unless it

appears "to a legal certainty" that the plaintiff cannot recover

2 an amount in excess of the jurisdictional prerequisite. Id. at

6. In that event, the action must be dismissed. Id.

In his complaint, Smallwood alleges that the amount in

controversy exceeds $50,000.00. Smallwood alleges that defendant

Ayer advertised a fishing boat for sale and told him that the

boat was in "great shape," that he inspected the boat and found

no problems, and then obtained a loan and paid the defendants

$42,000.00 for the boat. After the sale, Smallwood discovered

that an area in the boat's hull had begun to delaminate, allowing

water to soak the hull's balsa core, and that the defendants had

concealed the damaged area by making surface repairs. Smallwood

alleges that he also learned that the boat was uninsurable

because of the problem with the hull. He further alleges that he

learned that necessary repairs would be "quite expensive." He

says that he cannot use the boat because he cannot obtain

insurance for i t .

Smallwood claims that the defendants made material

misrepresentations about the condition of the boat and asks for

rescission. He also asks for damages to compensate him for his

interest payments on the loan he obtained to purchase the boat,

for his lost earnings due to not being able to use the boat, and

3 for his emotional distress.1 Smallwood also asserts a separate

claim under New Hampshire's consumer protection statute, New

Hampshire Revised Statutes Annotated § 358-A:10, seeking treble

damages and attorneys' fees.

Reading Smallwood's complaint liberally and taking his

allegations as true, as is required under the applicable

standard, it is not apparent, to a legal certainty, that he

cannot recover an amount in excess of $50,000.00. If he were

successful under his rescission theory, he would recoup the

purchase price of $42,000.00. Then, under the consumer

protection statute, Smallwood might recover actual damages,

including interest due on the loan of about $6,000 and attorneys'

fees, and he might be entitled to recover treble damages under

the statute. Because it is not apparent to a legal certainty

that the total value of the "amount in controversy" could exceed

$50,000.00, he has, barely, met the jurisdictional amount in

controversy requirement.

1 Smallwood seems to claim both rescission and damages for breach of contract. The equitable remedy of rescission is available only if the parties can be returned to their status quo at the time of sale and may be elected only as an alternative to a claim for damages. See Mertens v . Wolfeboro National Bank, 119 N.H. 453, 455-56 (1979). 4 CONCLUSION

For the foregoing reasons, the defendants' motion to dismiss

(document n o . 10) is granted in part: admiralty jurisdiction does

not exist here; and denied in part: the plaintiff meets the

amount in controversy requirement for diversity jurisdiction. The action is not dismissed.

SO ORDERED.

Steven J. McAuliffe United States District Judge

October 9, 1996

cc: Carol L . Hess, Esq. Michael X . Savasuk, Esq. Paul R. Cox, Esq.