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Fenlon v. Burch

United States District Court, E.D. Missouri, Eastern Division

March 4, 2015

MARY FENLON, Plaintiff,
PAULA BURCH, Defendant.


JEAN C. HAMILTON, District Judge.

This matter is before the Court on Defendant Paula Burch's Motion for Leave to Amend Notice of Removal, (ECF No. 11), and Plaintiff Mary Fenlon's Motion to Remand. (ECF No. 8). Both motions are ready for disposition.


Fenlon initiated this action on December 26, 2014 by filing a Petition in the Circuit Court of St. Louis County, Missouri. (Removal Notice, ECF No. 1, ¶ 1). According to the Petition, Fenlon was employed by Clearent, LLC ("Clearent") at all times relevant to this case. (Petition, ECF No. 4, ¶ 1). Burch was employed by Clearent in a supervisory capacity during the same time. Id. ¶¶ 2, 3. Sometime in 2014, Fenlon noticed that Burch and several of the employees she supervised were "being paid full time but only working part-time." Id. ¶¶ 5, 12, 13. After discovering this information, Fenlon "reported the situation to upper management." Id. ¶ 11. "Upon learning of plaintiff's disclosure, defendant Burch developed a scheme, plan and design to interfere with plaintiff's employment with Clearent by attempting to get her fired." Id. ¶ 15. Fenlon claims that Burch's actions amounted to intentional interference with the employment contract between Fenlon and Clearent. Id. ¶ 19. Fenlon seeks damages, including lost wages, based on that claim. Id. ¶ 21.

Burch timely removed the matter to this Court on January 26, 2015 on the basis of diversity jurisdiction. (Removal Notice ¶ 5). The removal notice states that Fenlon "is a citizen of the State of Missouri. Defendant Burch is a resident of the State of Illinois." Id. ¶ 6. It also states that the amount in controversy exceeds $75, 000 based on Fenlon's $90, 000 annual salary "plus stock options, additional benefits, and a year-end bonus." Id. ¶ 9. Fenlon seeks to have the matter remanded to the St. Louis County Circuit Court.


1. Motion for Leave to Amend Notice of Removal

The first basis on which Fenlon seeks remand is Burch's statement in her removal notice that Burch is a "resident" of Illinois. (Remand Support Memo, ECF No. 9, at 3-4). Fenlon contends, correctly, that an allegation of "residency" is irrelevant to the establishment of diversity of citizenship because the focus of the inquiry is the "citizenship" of each party. Id. at 4. Burch responds that this characterization "was an inadvertent oversight. Defendant Burch currently lives in the State of Illinois, has lived in Illinois her entire life, and intends to continue living in Illinois for the foreseeable future." (Motion to Amend ¶ 3). Burch supports this assertion with an affidavit, (Burch Affidavit, ECF No. 11-1), and Fenlon has not contested it. To avoid remand, Burch seeks leave to amend her removal notice.

"Allegations of jurisdiction which are defective should be discovered and corrected in the District Court." Texaco-Cities Serv. Pipe Line Co. v Aetna Cas. & Sur. Co., 283 F.2d 144, 145 (8th Cir. 1960) ( per curiam ). One statutory avenue for such a correction is 28 U.S.C. § 1653, under which "[d]efective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts." Id. Based on § 1653, the Eighth Circuit recently allowed amendment on appeal of a removal notice that initially alleged only the residency of the plaintiff after evidence was offered to show the plaintiff's citizenship at the time of filing and removal. Reece v. Bank of New York Mellon, 760 F.3d 771, 776-78 (8th Cir. 2014).

Amendment is a better approach than remand here. Burch has provided uncontested information to demonstrate that she simply made an error in characterizing herself as a resident of Illinois. She has corrected that error in her amended removal notice, which she attached to her motion for leave to amend. The Court therefore will allow Burch to file her amended removal notice, and there is no deficiency in her allegation of diversity on which to justify remand.

2. Motion to Remand

Still remaining as a potential basis for remand is Fenlon's contention that the amount in controversy does not exceed $75, 000. (Remand Support Memo at 4-7). Fenlon asserts that to determine the amount in controversy, her damages for lost wages should be measured from the date of her termination, December 22, 2014, to the time of removal, January 26, 2015. Id. at 6. Based on her $90, 000 annual salary, her damages would therefore amount to $8, 653.85 for lost wages and an additional $2, 000 in lost benefits. Id. To factor in any wages not yet accrued would be to engage in undue speculation. Id. at 6-7. In her Reply, Fenlon also seems to suggest that this amount will be reduced by wages she earned in a part-time job. (Fenlon Reply, ECF No. 13, at 2-3). Fenlon asserts that "[s]he has worked 30-40 hours per week in her field as an accountant in the first two weeks in February, 2015. She does not know how long that will continue." Id.

Burch responds that, contrary to Fenlon's contention, calculation of the amount in controversy based on damages for lost wages should take into account the time between the date of termination and the anticipated date of trial. (Burch Response, ECF No. 12, at 3). Because a trial likely would not occur until at least one year after the date of her termination, Fenlon's $90, 000 annual salary means her damages for lost wages alone will exceed $75, 000. Id. at 4. Moreover, while Fenlon claims "her damages would be reduced by the amount she has earned through part-time employment, ... her affidavit is silent with regard to the amount of money she has actually earned through her part-time employment." Id.

A civil action brought in state court may be removed to the proper district court if the district court has original jurisdiction over the action. 28 U.S.C. § 1441(a). Under 28 U.S.C. § 1332, federal courts have original jurisdiction over matters in which plaintiffs and defendants are citizens of different states and the amount in controversy exceeds $75, 000. When seeking removal on this basis, the defendant must make a "short and plain statement" of the grounds for diversity jurisdiction. See 28 U.S.C. § 1446(a). District courts should accept the defendant's statement "when not contested by the plaintiff or questioned by the court." Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. 547, 553 (2014). But a district court must make findings of jurisdictional fact when the defendant's allegations are contested or questioned. Id. at 553-54. "In such a case, both sides submit proof and the court decides, by a preponderance of the evidence, whether the ...

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