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Byler Management Co, LLC v. Bulletproof Enterprises

June 14, 2010



I. Introduction

We are considering the motion to remand filed by plaintiff, Byler Management Co., LLC. Plaintiff filed this suit in the Court of Common Pleas of Lebanon County, Pennsylvania, alleging that defendant, Bulletproof Enterprises, Inc., breached a lease agreement. The complaint sought payment of a certain portion of the unpaid rent as well as ejectment of Defendant from the property.

Defendant removed the action here on the basis of diversity jurisdiction, asserting that Plaintiff is a citizen of Pennsylvania and that Defendant is a Florida corporation with its principal place of business outside Pennsylvania. Defendant also asserts the amount in controversy exceeds $75,000, the threshold amount for diversity jurisdiction.

In moving to remand, Plaintiff argues that neither jurisdictional requirement is satisfied. We agree that Defendant has not shown that the amount in controversy exceeds $75,000 and will therefore remand to state court.

II. Background

Plaintiff's complaint alleges the following. Plaintiff is a Pennsylvania corporation with its principal offices located in Lancaster, Pennsylvania. (Doc. 1-4, Compl. ¶ 1). Defendant is a New York corporation with a New York City address, conducting business in Pennsylvania with offices in Annville, Pennsylvania. (Id. ¶ 2). On or about December 1, 2008, the parties entered into a lease agreement whereby Plaintiff agreed to lease property to Defendant for an initial term of one year, beginning December 1, 2008, and ending on November 30, 2009. (Id. ¶¶ 3 and 4; doc. 6-2, Lease Agreement). The Lease Agreement described the premises as being two distinct areas: Area 1, the house and barn, and Area 2, vacant land. (Doc. 6-2, Lease Agreement ¶ 1).

For the initial term of the lease, Defendant immediately owed $10,000 for rent on Area 1, and was to pay additional sums for the rent of Area 2. (Id. ¶ 3). The rental for the second year for both areas was $15,450, payable on December 1, 2009. (Id.). The lease would automatically renew for successive additional terms of one year unless one party gave notice at least two months before the end of the initial or renewal term of its intent to terminate the lease. (Id. ¶ 4).

The lease authorized Defendant to make "reasonable alterations and improvements" to the premises at its expense and that these would be considered fixtures belonging to Plaintiff. (Id. ¶ 5(a)). According to the lease, Defendant contemplated installing "considerable fencing" for its "horse operations" on the property and could ask Plaintiff to reimburse it for any such expense. (Id. ¶ 5(b)). If the property were sold, and Defendant was not allowed to remain as a tenant, Defendant was to be reimbursed on the following schedule: (1) "75% of Eligible Expenses" if the sale was in the first year of the lease; (2) 50% in the second year; and (3) 25% in the third year. (Id.). If Plaintiff found a buyer, Defendant had the right to purchase the property at the price offered. (Id. ¶ 9). Plaintiff is entitled to recover all costs and attorney's fees if Plaintiff files suit to enforce the lease. (Id. ¶ 15).

Plaintiff's complaint alleges that neither party gave notice that the lease would be terminated, so the lease renewed for the second year, and Defendant was obligated to pay $15,450 on December 1, 2009. (Doc. 1-4, Compl. ¶¶ 7-9). Defendant has failed to make any lease payments, (id. ¶ 13), and Plaintiff gave Defendant notice of its default. (Id. ¶ 15). Defendant failed to cure its default. (Id. ¶ 16). Plaintiff seeks damages in the amount of $15,450 for the second-year rent, plus costs and attorney's fees. Plaintiff is also seeking eviction (id. page 1), as it alleges it "is entitled to possession of the premises." (Id. ¶ 20).

III. Discussion

Defendant removed the state-court action here pursuant to 28 U.S.C. § 1441(a), invoking our diversity jurisdiction under 28 U.S.C. § 1332(a) for "all civil cases where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs," id., between "citizens of different states." Id., § 1332(a)(1).

The party removing the case to federal court has the burden of demonstrating jurisdiction. Kaufman v. Allstate New Jersey Ins. Co., 561 F.3d 144, 151 (3d Cir. 2009). "In removal cases, we begin evaluating jurisdiction by reviewing the allegations in the complaint and in the notice of removal. Id. In a case where there are disputes over factual matters related to jurisdiction, the party asserting jurisdiction has to show jurisdiction by a preponderance of the evidence. Frederico v. Home Depot, 507 F.3d 188, 194 (3d Cir. 2007). When the parties do not dispute the jurisdictional facts, or where the court makes factual findings on jurisdiction, the legal certainty test applies. Id. Under the legal certainty test, when it appears to a legal certainty that the plaintiff was never entitled to recover the jurisdictional amount, the case must be remanded. Id. Otherwise, the court retains jurisdiction.*fn1

In the instant case, Plaintiff argues neither requirement of diversity jurisdiction has been satisfied. We begin with its contention that Defendant has not shown the parties are "citizens of different states." Plaintiff admits it is a citizen of Pennsylvania for diversity purposes, but argues it has not been established that Defendant is not a citizen of Pennsylvania.

For the purpose of diversity jurisdiction, "a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business...." 28 U.S.C. § 1332(c)(1). In the notice of removal, Defendant avers it "is a Florida corporation with its principal place of business outside of Pennsylvania." (Doc. 1, Notice of Removal ¶ 5). Defendant has also submitted the affidavit of one of its owners affirming that it has not "established any central operation or principal place of business" in Pennsylvania and that its "central operations" are "temporarily" in New York City. (Doc. 22, Jeffrey Brooks Aff. ¶ 6). Plaintiff has submitted no evidence to the contrary, only its "belie[f]" that the principal place of business is at the leased Pennsylvania premises. (Doc. 26, Reply Br. at p. 7). Defendant's averments ...

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