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Nancy B. Nunn, Formerly Known As Nancy B. Duley, Individually and Ast Trustee of the Nancy B. Duley v. James S. Witherell

September 20, 2012

NANCY B. NUNN, FORMERLY KNOWN AS NANCY B. DULEY, INDIVIDUALLY AND AST TRUSTEE OF THE NANCY B. DULEY REVOCABLE TRUST,
PLAINTIFF,
v.
JAMES S. WITHERELL, INDIVIDUALLY AND AS TRUSTEE OF THE JAMES S. WITHERELL TRUST DATED JUNE 17, 1997, DEFENDANT.



The opinion of the court was delivered by: Judge Feinerman

MEMORANDUM OPINION AND ORDER

Nancy B. Nunn brought this suit against James S. Witherell, premising jurisdiction under the diversity statute, 28 U.S.C. § 1332(a). Doc. 1. Conceding that the parties are diverse, but arguing that the amount in controversy does not exceed $75,000, Witherell moves to dismiss the case under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. Doc. 20. The motion is denied.

Background

Witherell accepts as true the facts alleged in the complaint, Doc. 24 at 2-3, so his challenge to subject matter jurisdiction is facial rather than factual. See Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443-44 (7th Cir. 2009). On a facial challenge to subject matter jurisdiction, the complaint's well-pleaded factual allegations are assumed to be true, with all reasonable inferences drawn in the plaintiff's favor. See ibid.; Patel v. City of Chicago, 383 F.3d 569, 572 (7th Cir. 2004).

As with a Rule 12(b)(6) motion, the court also must consider documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information subject to proper judicial notice. See Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir. 2011); Palay v. United States, 349 F.3d 418, 425 n.5 (7th Cir. 2003). The following facts are stated as favorably to Nunn as permitted by the complaint and other materials that may be considered on a Rule 12(b)(1) motion.

In or around January 2006, Nunn and Witherell contributed equal sums to purchase property in Woodstock, Illinois, which they occupied together as their principal residence. Doc. 1 at ¶¶ 5, 7. Nunn and Witherell acquired ownership through the vehicle of a land trust that in turn was owned in equal shares by their respective revocable trusts. Id. at ¶ 5. On January 17, 2006, the parties entered into a written agreement entitled "Agreement to Own and Maintain Real Estate." Id. at ¶ 6. The Agreement provides in relevant part:

[I]n the event that either Co-Owner wishes to permanently move out of the Premises[,] . such Departing Co-Owner shall provide written notice to the remaining Co-Owner . of its intent to move out, making specific reference to this agreement ("withdrawal"), . and the following shall take place: Within sixty (60) days of the date of the Departing Co-Owner's . notice of moving out . the Remaining Co-Owner shall have the Premises appraised by a certified land appraiser . to ascertain the appraised value of the Premises ("Appraised Value"). The Remaining Co-Owner shall then subtract the amount of any outstanding mortgages, liens or other encumbrances on the property from the Appraised Value to determine the equity value of the property ("Equity Value"). From and after the Departure Date, the Remaining Co-Owner shall hold the entire beneficial interest in the Trust, and hold the sole power of direction in the trust, and shall be solely responsible for the payment of all costs and disbursements with regard to the upkeep of the Trust and Premises, including but not limited to mortgage payments, from and after the date of the Departing CoOwner's . moving out.

Id. at pp. 19-20.

On August 5, 2010, Nunn sent a letter to Witherell providing notification of her intent to move out permanently and to withdraw from the land trust immediately. Id. at ¶ 16 & pp. 25-26. In September 2010, Witherell told Nunn that he would not comply with the Agreement and would not pay the property's monthly carrying costs, and he demanded that Nunn continue to pay half of the mortgage, tax, and insurance obligations. Id. at ¶ 20. To avoid harm to her credit rating that would result from a default, Nunn has continued to make those payments. Id. at ¶ 26. The total monthly mortgage payments are $2,100, the total annual real estate tax obligations are $7,100, and the total annual homeowner's insurance premiums are $1,100. Id. at ¶ 34. Since August 2010, Nunn "has been forced to pay approximately $34,000 in mortgage and home equity loan payments, real estate tax payments, and insurance premiums." Id. at ¶ 53.

In this suit, Nunn seeks a declaratory judgment that Witherell is solely responsible for all future payments associated with the property-including the $472,000 balance of the mortgage, monthly mortgage payments of $2,100, the annual real estate taxes of $7,100, and the annual insurance premiums of $1,100. Id. at pp. 10-11. She also seeks $34,000 in damages for the amounts she already paid. Id. at pp. 12, 13, 15.

Discussion

"The rule governing dismissal for want of jurisdiction in cases brought in the federal courts is that . the sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938) (footnotes omitted). The Seventh Circuit has instructed:

[A] proponent of federal jurisdiction must, if material factual allegations are contested, prove those jurisdictional facts by a preponderance of the evidence. Once the facts have been established, uncertainty about whether the plaintiff can prove its substantive claim, and whether damages (if the plaintiff prevails on the merits) will exceed the threshold, does not justify dismissal. Only if it is "legally certain" that the recovery (from plaintiff's perspective) or cost of complying with the judgment (from defendant's) will be less than the jurisdictional floor may the case be dismissed.

Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006) (citation omitted); see also LM Ins. Corp. v. Spaulding Enters. Inc., 533 F.3d 542, 547 (7th Cir. 2008). "In suits seeking the equitable remedies of an injunction or a declaratory judgment, the amount in controversy is determined by the value to the plaintiff (or petitioner) of the object of the litigation." America's MoneyLine, Inc. v. Coleman, 360 F.3d 782, 786 (7th Cir. 2004). The Seventh Circuit "adhere[s] to the rule that the value of the object of the litigation is the 'pecuniary result' that would flow to the plaintiff . from the court's granting the injunction or declaratory judgment." Ibid. (quoting McCarty v. Amoco Pipeline Co., 595 F.2d 389, 393 (7th Cir. 1979)). The Seventh Circuit adheres as well to the "either viewpoint" rule, which provides that "the jurisdictional amount should be assessed looking at either the benefit to the plaintiff or the cost to the defendant of the requested relief." Uhl v. Thoroughbred Tech. and Telecomms., Inc., 309 F.3d ...


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