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Brouwer v. Wyndham Vacation Resorts, Inc.

United States District Court, W.D. Missouri, Central Division

August 4, 2014

GERRIT H. BROUWER, JR., et al., Plaintiffs,
v.
WYNDHAM VACATION RESORTS, INC., et al., Defendants.

ORDER

NANETTE K. LAUGHREY, District Judge.

Plaintiffs Gerrit and Joan Brouwer filed this lawsuit in Missouri state court against Wyndham Vacation Resorts and Wyndham Vacation Ownership alleging several counts arising out of the Brouwers' purchase of "timeshare points" that they planned to "rent" to others for financial gain. Wyndham timely removed to this Court. Before the Court is the Brouwers' Motion to Remand, [Doc. 14], and Wyndham's Motion to Dismiss, [Doc. 4]. For the reasons set forth below, the Brouwers' Motion to Remand is DENIED, and Wyndham's Motion to Dismiss is GRANTED.

I. Background

This case does not represent the commencement of litigation between the Brouwers and Wyndham. In November 2011, the Brouwers initially filed suit in the United States District Court for the Northern District of Alabama. The case was consolidated with similar cases and was eventually transferred to the United States District Court for the Middle District of Florida. A Federal Magistrate questioned whether the Brouwers adequately pleaded the amount-in-controversy jurisdictional requirement and ultimately recommended that the case be dismissed without prejudice for lack of jurisdiction. The Florida District Court adopted the recommendation, concluding that the Brouwers failed to show how they suffered more than $75, 000 in damages. [Doc. 21-5, at p. 10]. The Brouwers, residents of Missouri, then filed this case in the Circuit Court for Camden County, and Defendants timely removed.

This dispute arises out of the Brouwers' purchase of "timeshare points" from Wyndham. Wyndham Vacation Ownership (WVO) is the world's largest vacation ownership business, and Wyndham Vacation Resorts (WVR) is part of WVO. [Doc. 1-1, p. 45, ¶¶ 9-10]. Both WVO and WVR are Delaware corporations with their principal places of business in the State of Florida, and they "conduct business" in Camden County, Missouri. Id. at ¶¶ 5-6. The "timeshare points" represent a person's ownership interest in a vacation unit. With encouragement and knowledge from Wyndham, the Brouwers purchased more than eight million points, at an investment value "in excess of $500, 000" with the plan to "rent" their points to others for financial gain. Id. at p. 46, ¶ 13. After encouraging the Brouwers' plan and advertising benefits to "megarenters"[1] such as the Brouwers, "Wyndham systematically eliminated benefits making it increasingly difficult for [the Brouwers] to use/rent their points." Id. The Brouwers are now responsible for approximately $7, 000 per month in maintenance and other fees. Id. at p. 66, ¶ 105.

The Complaint contains eight counts against Wyndham: (I) Breach of Contract; (II) Fraudulent Inducement; (III) Fraudulent Concealment; (IV) Negligence; (V) Negligent Hiring, Training, Supervision, and Retention; (VI) Wanton or Reckless Hiring, Training, Supervision, and Retention; (VII) Declaratory Judgment; and (VIII) Injunctive Relief. The Brouwers seek "in excess of $25, 000.00" for their "costs and fees" for damages including "loss of their investment, lost profits, dimunition in value of timeshare points, continuing obligation to pay monthly maintenance fees, and mental anguish." Id. at p. 67 ¶¶ 110, 112. Arguing that res judicata bars this Court from adjudicating their case, the Brouwers seek remand to state court. Wyndham argues res judicata does not apply and that this case should be dismissed for lack of personal jurisdiction.

II. Discussion

A. The Brouwers' Motion to Remand

It is undisputed that the parties to this case are diverse. Consequently, the question presented is whether the amount in controversy exceeds the jurisdictional minimum of $75, 000. See 28 U.S.C. § 1332(a). "The party invoking federal jurisdiction has the burden to prove the requisite amount by a preponderance of the evidence." Advance Am. Servicing of Ark., Inc. v. McGinnis, 526 F.3d 1170, 1173 (8th Cir. 2008). If the removing party meets its burden, "remand is only appropriate if the plaintiff can establish to a legal certainty that the claim is for less than the requisite amount." Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009).

The Brouwers argue this case must be remanded because the Middle District of Florida previously determined that the requisite amount in controversy had not been sufficiently pleaded, and therefore res judicata applies. [Doc. 15, at p. 5]. They argue that the Complaint filed initially in the Circuit Court for Camden County and removed to this Court (the Missouri Complaint) is "almost identical" to the Complaint before the Middle District of Florida (the Florida Complaint). While it is true, as the Brouwers argue, that dismissal of a complaint for lack of jurisdiction adjudicates the court's jurisdiction, and a second complaint cannot command a second consideration of the same jurisdictional claims, Boone v. Kurtz, 617 F.2d 435 (5th Cir. 1980), there is an exception to this rule. Dismissal based on lack of subject-matter jurisdiction does not preclude a second action on the same claim if "the justiciability problem can be overcome." Oglala Sioux Tribe of the Pine Ridge Indian Reservation v. Homestake Mining Co., 722 F.2d 1407, 1411 (8th Cir. 1983).

At the outset, it should be noted that the Middle District of Florida did not conclude that the Brouwers failed to meet the jurisdictional amount in controversy; rather the Florida court concluded that the Brouwers "failed to sufficiently plead the requisite jurisdictional amount in controversy." [Doc. 21-5, at p. 6] (emphasis added). A review of both Complaints reveals material differences, and the amendments made to the Missouri Complaint overcome the "justiciability problem" found by the Middle District of Florida.

In the Florida Complaint, the only reference to any monetary damages amount was in the jurisdictional statement. The Brouwers alleged that they had "invested well in excess of $75, 000, exclusive of interest and costs, for a total investment in excess of $500, 000." [Doc. 21-4, at p. 3, ¶ 8]. Each count included a claim for compensatory and punitive damages plus interest and costs. The Middle District of Florida concluded that the pleading was "entirely insufficient" because the Brouwers failed to set forth factual allegations to show how they suffered more than $75, 000 in damages. [Doc. 21-5, at pp. 6, 8].

However, unlike the Florida Complaint, in the Missouri Complaint the Brouwers allege in Count II that they "invested in excess of $500, 000 in Wyndham timeshare points." [Doc. 1-1, at p. 66, ¶ 105]. They then allege that as a result of Wyndham's actions, they suffered damages including "loss of their investment." Id. at p. 67, ¶ 110. The Brouwers' claim of "loss of investment" combined with their allegation that they "invested in excess of $500, 000" makes it clear that the Brouwers have specifically alleged damages in excess of $75, 000. The specificity of damages in the Missouri Complaint makes the Missouri Complaint sufficiently different from the Florida Complaint so that the conclusion reached by the Middle District of Florida does not foreclose inquiry by this Court as to the existence of subject-matter jurisdiction.

In addition to alleging damages in the form of "loss of investment, " which could alone establish the amount-in-controversy requirement, Wyndham also points to other changes made to the Missouri Complaint. For instance the Brouwers added a mental anguish claim, e.g., [Doc. 1-1, at p. 67, ¶ 110], have alleged that they are obligated to pay $7, 000 in monthly maintenance fees, id. at 66, ¶ 105, and have added a request for attorney's fees, e.g., id. at p. 65 ("Wherefore" clause). See Crawford v. F. Hoffman-La Roche Ltd., 267 F.3d 760, 766 (8th Cir. 2001) (concluding that an attorney's fees count toward the jurisdictional minimum for diversity jurisdiction); Kopp v. Kopp, 280 F.3d 883, 885-85 (8th Cir. 2002) (concluding that claims for emotional distress could be used to establish amount in controversy). These additions, too, provide specificity to the amount in controversy alleged by the Brouwers and provide support for the conclusion that the ...


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