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J. Wilderman Autoplex Corp. v. Norton

July 22, 2010

J. WILDERMAN AUTOPLEX CORP., ET AL., PLAINTIFF/COUNTER-DEFENDANTS
v.
DERRICK SPENCER NORTON, ET AL., DEFENDANT/COUNTER-PLAINTIFF



The opinion of the court was delivered by: Frazier, Magistrate Judge

MEMORANDUM AND ORDER

Before the Court are pending motions. The first item considered is an argument advanced by plaintiff in the brief supporting its motion for summary judgment.*fn1 Plaintiff seeks summary judgment, remand, or dismissal for lack of jurisdiction (Doc. No. 79, pp. 17-19). Although the motion is opposed, the jurisdiction argument is not addressed by the defense (Doc. No. 88).

I. Reconsideration of Subject Matter Jurisdiction

Plaintiff's argument is evaluated as a motion to reconsider Judge Reagan's March, 2009, decision on subject matter jurisdiction. While a district court has considerable discretion to reconsider an earlier order, these requests serve a limited function: "to correct manifest errors of law or fact or to present newly discovered evidence." Caisse Nationale De Credit Agricole v. CBI Indus., Inc., 90 F.3d 1264, 1269 (7th Cir. 1996).

This Court has original jurisdiction over civil actions between citizens of different states "where the matter in controversy exceeds the sum or value of $75,000, exclusive of costs and interests." 28 U.S.C. § 1332(a)(1). Because this case was removed, the amount in controversy is the amount required to satisfy J. Wilderman's demands in full on the day the suit was removed.

BEM I, L.L.C. v. Anthropologie, Inc., 301 F.3d 548, 552 (7th Cir. 2002). The burden rested on Norton, who filed the removal notice. Norton's burden at the time was to show "to a reasonable probability that jurisdiction exists." Gould v. Artisoft, Inc., 1 F.3d 544, 547 (7th Cir. 1993).

This action was removed on February 27, 2009, when the parties had substantially different views regarding the terms of the employment contract. On March 2 and 9, 2009, Judge Reagan performed a sua sponte evaluation of the Court's jurisdiction and ruled that the defendant sufficiently alleged the amount in controversy in the removal notice (Doc. No. 5, 12). After the requisite amount in controversy was established to Judge Reagan's satisfaction, jurisdiction may be defeated if "it appears to a legal certainty that the claim is really for less than the jurisdictional amount." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938).

Plaintiff notes that correspondence exchanged between the parties in January and February, 2009, did not result in settlement. Plaintiff speculates that Judge Reagan gave too much weight to a settlement demand tendered by the defense, which it characterizes as "pure bluffing."

The argument lacks merit. Judge Reagan did not consider or rely on settlement negotiations preceding this lawsuit. Although the documents noted by plaintiff existed, they were not presented to Judge Reagan for review. Judge Reagan did evaluate the materials on file, including plaintiff's allegations and the employment contract attached to the Complaint. Those materials rationally support the conclusion that the parties were embroiled in a dispute regarding the amount of compensation due to Norton following a decision to terminate a 10-year employment contract at the end of the first year. Judge Reagan properly determined that the threshold amount in controversy was met, based on the contractual terms outlining Norton's level of compensation (stock options, real estate options, vehicle loans, and a 7% commission with a weekly draw against commission of $1500) and the unexpired term of the agreement (nine years remaining on a ten-year term).

Plaintiff also complains that defendant did not produce or disclose damages computations in discovery. This argument might support an oral request for a discovery order made in accordance with Rule 37 of the Federal Rules of Civil Procedure and the Order Regarding Discovery (Doc. No. 56). It lends no support for the request for reconsideration of Judge Reagan's ruling on jurisdiction. St. Paul Mercury Indemnity, 303 U.S. at 289-90 (jurisdiction depends on the state of affairs when the case begins -- what happens later is irrelevant).

In sum, the request for reconsideration of Judge Reagan's initial assessment of subject matter jurisdiction is not supported by information showing to a legal certainty that plaintiff's claim is for less than the jurisdictional amount. This motion (part of Doc. No. 79) is DENIED.

II. Lack of Civility

In this Court, legal practice is to be civil. In attempting to serve the interests of their respective clients, the attorneys for both parties have approached incivility. Their clients do not benefit from these tactics. The attorneys are WARNED that lack of civility will not be tolerated. If this warning is not heeded, the Court will not hesitate to strike documents and impose appropriate sanctions.

III. Motion to Strike

Defendant has moved to strike portions of the affidavit of James J. Wilderman and two of the supporting exhibits. Plaintiff opposes the motion, suggesting that these materials can be admitted to show lack of good faith and fair dealing, compliance with the contract terms, or prevailing party status.

Settlement discussions offered to establish liability and/or calculate damages are inadmissible under Rule 408. Fed. R. Evid. 408. The motion (Doc. No. 72) is GRANTED as follows. The evidence ...


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