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Marc Jacobson v. Dennis Browne and Frank Conte

December 29, 2011

MARC JACOBSON, PLAINTIFF,
v.
DENNIS BROWNE AND FRANK CONTE, DEFENDANTS.



The opinion of the court was delivered by: Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Before the Court is Plaintiff Marc Jacobson's (hereinafter, "Jacobson") Motion to Remand [14] this case to the Circuit Court of Cook County. For the reasons that follow, the Motion is granted. Defendants' pending Motion to Dismiss for Lack of Jurisdiction [6] is denied as moot in light of this ruling.

I. BACKGROUND

The following facts are taken from Jacobson's Complaint and the parties' submissions. Jacobson is an insurance provider operating as a sole proprietorship under the name Marc Jacobson & Associates, with his principal place of business in Northbrook in Cook County, Illinois. Defendants Dennis Brown and Frank Conte (collectively, the "Defendants") are insurance providers and residents of Pennsylvania who do business in Cook County as The Conte-Browne Group, LLC.

Jacobson entered into separate, but identical, consultant agreements with Defendants on July 1, 2003. The agreements provided for a commission split between Jacobson and Defendants for all business derived from participation in the Coldwell Banker Sales Associates Flexible Benefit Program of Pennsylvania, including the sale of variable annuity contracts. The contracts provided that the parties would divide insurance commissions, with Jacobson keeping 25 percent and Defendants keeping 75 percent.

On June 3, 2011, Jacobson filed a two-count Complaint in the Municipal Department of the Cook County Circuit Court alleging that Defendants had failed to pay Jacobson the commissions to which he was entitled in breach of those agreements. Against each Defendant, he sought "an amount not less than $30,000, plus statutory interest to be proved up at trial or hearing of this cause and for such other and further relief as this Court deems just and equitable."

Defendants removed the case to this Court on the basis of both federal question and diversity jurisdiction. Attached to the removal notice was an August 9, 2010, letter from Wendy Rosen, Director of Operations for Marc Jacobson & Associates (hereinafter, the "Rosen Letter"), stating that Jacobson had not received the commission split to which he was entitled for accounts worth $751,000. Based on a 25 percent share, Jacobson's portion of those commissions would amount to $187,750. Defendants characterize this as a demand letter. Defendants additionally contended in their notice of removal that federal question jurisdiction is present because the contracts covered the sale of variable annuity contracts which are deemed securities under the Securities Exchange Act of 1934.

Plaintiff now seeks to remand the case, arguing that removal was improper because the amount in controversy fails to satisfy the jurisdictional requirement of more than $75,000 for diversity jurisdiction, and because federal question jurisdiction does not exist. Included with the Motion to Remand is an affidavit from Jacobson in which he asserts that the total amounts owed by both Defendants will not exceed $30,000.

II. LEGAL STANDARD

Pursuant to 28 U.S.C. § 1441(a), removal is proper if the case originally could have been brought in federal court either on the basis of diversity jurisdiction or federal question jurisdiction. This Court must remand the case to state court if it is apparent that this Court lacks subject-matter jurisdiction. 28 U.S.C. § 1447(c).

Here, diversity of citizenship is undisputed, but the parties contest whether the amount-in-controversy requirement is met. In a removal case, the amount in controversy is the amount required to satisfy the plaintiff's demands in full on the date the suit was removed. Oshana v. Coca-Cola Co., 472 F.3d 506, 510--511 (7th Cir. 2006). Because Defendants are the proponents of jurisdiction, they must show by a preponderance of the evidence facts that suggest the amount in controversy requirement is met. Id. at 511. Once the Defendants have established the requisite amount in controversy, Jacobson can defeat jurisdiction only if it appears to a legal certainty that the claim is really for less than the jurisdictional amount. Id.

Additionally, a case can be removed from state to federal court if it is within the original jurisdiction of the federal courts. Vivas v. Boeing Co., 486 F.Supp.2d 726, 729 (N.D. Ill. 2007). Typically, this requires the court to apply the well--pleaded complaint rule to determine whether a federal question is presented on the face of the complaint. Id. But in some situations, the court can determine whether the plaintiff has artfully pleaded his claim in order to avoid federal jurisdiction. Id. Regardless of the jurisdictional basis asserted, "[t]he burden of establishing federal jurisdiction falls on the party seeking removal, and any doubt regarding jurisdiction should be resolved in favor of remand." XL Specialty Co. v. Vill. of Schaumburg, 06 C 2299, 2006 WL 2054386, at *1 (N.D. Ill. July 20, 2006) (citing Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993)).

III. ANALYSIS

The Court will first address whether the amount in controversy requirement has been met so as to allow this Court to ...


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