jurisdictional grounds. Paine Webber has moved to dismiss
those two counts under Rule 12(b)(1) because Lichter could not
conceivably prove in excess of $10,000 in damages.
For Rule 12(b)(1) purposes, the amount claimed by a
plaintiff in good faith is determinative unless it appears to
a legal certainty that the claim is for less than the
jurisdictional amount. When that issue is disputed factually,
the court is not limited to the complaint's allegations and
the plaintiff has the burden of proof on the matter.
Grafon Corp. v. Hausermann, 602 F.2d 781, 783 (7th Cir. 1979).
To that end the plaintiff is entitled to the benefit of any
facts he could conceivably prove in support of his allegations.
Farmilant v. Singapore Airlines, Ltd., 561 F. Supp. 1148, 1151
Thus far the parties (and this Court) are together in
dealing with the problem. Where Lichter goes astray is in
viewing the issue as one involving mitigation of damages — a
matter of defense — rather than proof of damages — a matter
of Lichter's own burden in establishing his claim. Brief
further analysis will highlight the difference.
Suppose Paine Webber had (and exercised) access to a bank
account of Lichter's, rather than his securities, in meeting
the margin call. Clearly Lichter would have suffered
no damages at all. After all he owed the money: His duty to
provide the funds is undisputed. Thus the fact he would have
been deprived of the use of that money could not be the
occasion for complaint; it is irrelevant.
Suppose instead Paine Webber simply attached Lichter's IH
bonds — exercised dominion over them by holding them as
security until Lichter came up with the money he owed to
satisfy margin requirements. When Lichter then paid the
necessary funds (whether obtained by liquidating other
securities or in any other way) the IH bonds would have been
restored to him. Again the analysis would be the same: No harm,
no foul — no damages.
Thus Lichter's only demonstrable harm lay in the fact of
liquidation of the IH bonds by Paine Webber. That event
triggered his damages if any, and that event defines when any
damages were sustained. Because full market price was realized
for the bonds, Lichter must look elsewhere for any damages. And
on that "elsewhere" score, it is not as though Paine Webber had
converted an irreplaceable Van Gogh. Replacement IH bonds were
readily available on the market if Lichter wanted them and had
the price. If he did not have the price he cannot
complain, for by definition he would have been unable to meet
his cash margin obligation and could have been sold out by
Paine Webber as a matter of right.
All Lichter can conceivably cavil about, then, is any time
lag in his ability to replace the bonds caused by the lack of
notice. Though his Complaint does not specify when he learned
of the October 8, 1982 liquidation, by October 18 his lawyer
wrote Paine Webber (Mem. Ex. 3) complaining of the "wrongful
sale" and demanding a return of the bonds within ten days. So
part of Lichter's proof of damages sustained — and not merely
an element of the need to mitigate damages — would have to be
a showing he had been deprived of value by being deprived of
the IH bonds during that period.
Paine Webber has been more generous in terms of time. It
adduces the market prices of IH bonds for the period beginning
October 8, and it shows the spread between the liquidation
proceeds and the market replacement cost — Lichter's only
possible damages — could not have reached the $10,000 mark at
any time during the next four months!
That plainly shows to a legal certainty Lichter was not
damaged in excess of $10,000. Cf. Ross v. Inter-Ocean Insurance
Company, 693 F.2d 659, 662-63 (7th Cir. 1982); Farmilant, 561
F. Supp. at 1152. And that legal certainty means this Court
lacks jurisdiction over Counts I and II as well.
Counts I, II and III are dismissed for lack of subject
matter jurisdiction. Count IV, having been withdrawn for
obvious want of merit, is also dismissed. Consequently this
action is dismissed in its entirety.*fn5