Opinion
No. 2:01CV218-P-B
August 26, 2002
MEMORANDUM OPINION
This cause is before the Court on the plaintiff's Motion to Remand. The Court, having considered the motion, the response thereto, and the briefs and authorities cited, is prepared to rule. The Court finds as follows, to-wit:
FACTUAL BACKGROUND
The plaintiffs, Barbara Ross and Deloris Daughrity, both Mississippi residents, filed this action in the Circuit Court of Bolivar County, Mississippi, on September 13, 2001, against several defendants alleging various theories of recovery arising out of alleged fraudulent loan transactions. The plaintiffs also named three individual agent defendants — Billy Hill, Alicia Daniels and Susan Therrell — all domiciliaries of Mississippi, alleging, inter alia., the illicit "packing" of credit life insurance and credit disability insurance as part of the loan transaction.
First Family and the other corporate defendants are foreign corporations for diversity purposes.
The plaintiffs mistakenly named "Billy" Hill. The agent involved is named Betty Hill. The plaintiffs have moved to amend their complaint in order to substitute Betty Hill for Billy Hill. That motion is granted.
On December 11, 1992, Barbara Ross entered into a loan transaction with First Family. Susan Therrell and Betty Hill, two of the non-diverse agents of First Family, assisted her with the loan. According to Ross, the defendant agents failed to disclose to her several aspects of the loan including, inter alia., the fact that credit life insurance and credit disability insurance were not required as part of the transaction; the fact that alternative credit life insurance was available at a lower price; the relationship between the defendant agents and defendant insurers; concealment of the interest rates and financing of the loan. Daughrity asserts identical claims based on the loan she obtained on from First Family on March 5, 1997, except Daugherty purchased credit disability insurance and property insurance in addition to credit life insurance whereas Ross did not.
Specific allegations are recounted in more detail infra.
Defendants timely removed the case to this Court pursuant to 28 U.S.C. § 1332 arguing that each of the Mississippi defendants were fraudulently joined. The plaintiff now seeks remand to the Circuit Court of Bolivar County contending that this Court lacks the complete diversity required to assert subject matter jurisdiction.
LEGAL ANALYSIS A.
Federal courts are courts of limited jurisdiction as defined by the Constitution and statute. See generally B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir. 1981). Indeed, this Court is well advised to "be certain of its jurisdiction before embarking upon a safari in search of a judgment on the merits." B, Inc., 663 F.2d at 548.
As the removing party, the defendants must bear the burden of demonstrating that this action is properly before the Court. Id. at 549; See also Village Fair Shopping Co. v. Sam Broadhead Trust, 588 F.2d 431 (5th Cir. 1978); Ray v. Bird and Son Asset Realization Co., Inc., 519 F.2d 1081 (5th Cir. 1975). Similarly, where "fraudulent joinder" is alleged, the burden rests upon the removing party to prove the fraud.B., Inc. 663 F.2d at 549; Yawn v. Southern Railway Co., 591 F.2d 312 (5th Cir. 1979). The removing party must do so by clear and convincing evidence. Rogers v. Modern Woodmen of America, 1997 WL 206757, *2 (N.D. Miss. 1997). The clear issue, then, is whether the defendants have carried their burden. For, if they can demonstrate that the agents were fraudulently joined, then their Mississippi citizenship will be disregarded for diversity purposes and the Court may retain jurisdiction. If not, however, diversity is destroyed and the case must be remanded.
Diversity actions are removable ". . . only if none of the parties in interest properly joined and served as defendants is a citizen of the state in which such action is brought." 28 U.S.C. § 1441(b). . . If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c).
In order to prove that a party has been fraudulently joined, the removing party must demonstrate either that: (1) there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court; or (2) there has been outright fraud in the plaintiff's pleadings of jurisdictional facts. B, Inc. 663 F.2d at 549; Keating v. Shell Chemical Co., 610 F.2d 328 (5th Cir. 1980); Bobby Jones Garden Apartments v. Suleski, 391 F.2d 172, 177 (5th Cir. 1968); Parks v. New York Times Co., 308 F.2d 474, 478 (5th Cir. 1964); cert. denied 376 U.S. 949, 84 S.Ct. 964, 11 L.Ed.2d 969 (1964).
The defendants have not alleged outright fraud in the pleadings with regard to jurisdictional facts or the citizenship status of the agents as a Mississippi domiciliaries for diversity purposes. Thus, the only question remaining is whether the defendants have demonstrated that there is no possibility that the plaintiff would be able to establish a cause of action against the agents in state court. This is a heavy burden indeed. For,
if there is even a possibility that a state court would find a cause of action stated against any one of the named in-state defendants on the facts alleged by the plaintiff, then the federal court must find that the in-state defendants have been properly joined, that there is incomplete diversity, and that the case must be remanded to the state courts.B, Inc. 663 F.2d at 550 (emphasis added) (other citations omitted). In analyzing whether such a possibility of a claim exists, all disputed questions of fact and all ambiguities in controlling state law are to be resolved in favor of the non-removing party. Carriere v. Sears Roebuck Co., 893 F.2d 98, 100 (5th Cir. 1990). It is not required of this Court to reach the merits of whether such a cause of action will actually, or even probably, prevail. Burden v. General Dynamics Corp., 60 F.3d 213, 217 (5th Cir. 1995). Rather, this Court need only decide whether it is possible that a state court find a cause of action. Id. The existence of such a cognizable claim is to be determined by reference to the allegations contained in the plaintiff's state court pleadings.Ironworks Unlimited v. Purvis, 798 F. Supp. 1261, 1263 (S.D. Miss. 1992).
However, it is well established in this circuit that a court is to "pierce the pleadings" to determine whether, under state law, the non-removing party can maintain a valid claim against the non-diverse party. Badon v. RJR Nabisco, 224 F.3d 381, 389 (5th Cir. 2000); Lejeune v. Shell Oil Co., 950 F.2d 267, 271 (5th Cir. 1992). "Thus, it is clear that although a state court complaint on its face may allege a state law claim against an in-state defendant that does not preclude it from being removable (by the non-resident defendant), when filed, if the plaintiff's pleading is pierced and it is shown that as a matter of law there is no reasonable basis for predicting that the plaintiff might establish liability on that claim against the in-state defendant." Badon, 224 F.3d at 390. Consequently, a motion to remand takes on the character of a motion for summary judgment and although the district courts are cautioned against "pre-trying a case to determine removal jurisdiction," summary judgment-type evidence such as affidavits and deposition testimony will be considered to ascertain whether a claim can be made out against the non-diverse party. Hart v. Bayer Corp., 199 F.3d 239, 246 (5th Cir. 2000).
B.
The specific allegations leveled against the agents are as follows: (a) Engaging in insurance "packing" and charging exorbitant rates on the amount financed; (b) Engaging in "flipping" or "churning" the loans; (c) Concealing the use of the "Rule of 78s" to calculate interest; (d) calculating credit insurance on the total of payments; (e) Selling single interest decreasing credit life and/or disability without explaining the impact thereof; (f) Failing to disclose the policies' provisions; (g) engaging in "reverse underwriting"; (h) Failing to inform Plaintiffs that alternative credit insurance was available less expensively; (i) Failing to advise Plaintiffs that the credit insurance was grossly overpriced; (j) Failing to inform Plaintiffs that the credit insurance would be financed at an excessive rate; (k) Failing to advise Plaintiffs that the credit insurance was wholly inadequate; (1) Failing to disclose to Plaintiffs that Defendants would benefit and share either directly or indirectly in the insurance premiums charge to Plaintiffs and that the agents had a pecuniary interest is selling such insurance; (m) Failing to disclose that Defendants were pre-computing the cost of insurance premiums for the entire loan; and (n) Failing to disclose the manner in which credit life insurance would be procured and charged to Plaintiffs. Based on these allegations, the plaintiffs assert the following litany of claims in their complaint: (1) breach of fiduciary duty; (2) civil conspiracy; (3) fraudulent misrepresentation and/or omission; (4) negligent misrepresentation and/or omission; (5) unjust enrichment; (6) gross negligence; (7) fraudulent concealment; (8) violation of the Mississippi Unfair or Deceptive Trade Practices Act; (9) breach of the implied covenants of good faith and fair dealing; (10) negligent training and supervision; and (11) unconscionability.
C.
As an initial matter, the Court notes that a cursory review of the above list reveals that several of these claims are not viable as against the resident agents. Implied covenants of good faith and fair dealing, for example, arise between parties of a contract. Indeed, "all contracts contain an implied covenant of good faith and fair dealing in performance and enforcement." American Bankers' Ins. Co. of Florida v. Wells, 819 So.2d 1196, 1206 (Miss. 2001) (quoting Cenac v. Murray, 609 So.2d 1257, 1272 (Miss. 1992)). See also Restatement (Second) of Contracts § 205 (1979). By the plain meaning of the rule, such a covenant does not apply to negotiation. As stated in the comments to the Restatement, "[t]his section. . . does not deal with good faith in the formation of a contract." Id., cmt. c. For, other remedies are available in that context. Id. Therefore, inasmuch as the agents were not parties to the contracts at issue here and only participated in the negotiation process, no action for breach of the implied covenant of good faith and fair dealing may lie against them. The agents in this case were not parties to the contracts at issue. Thus, they could not be held liable under such a theory.
Additionally, unconscionability under the U.C.C., under which the plaintiffs are proceeding for that claim, is applicable in Mississippi only within the context of a sale of goods. See Miss. Code Ann. § 75-2-102. The sale of insurance, however, does not fit within the ambit of what can be considered "goods" as defined in the U.C.C. See Howard v. Citifinancial, 195 F. Supp.2d 811, 826 (S.D. Miss. 2002) (internal citations omitted).
Miss. Code Ann. § 75-3-302 provides for the mechanism with which a court may refuse to enforce an unconscionable contract or clause in order to avoid injustice.
(Pl. Complaint at ¶ 64).
The U.C.C. defines goods as "all things (including specially manufactured goods) which are movable at the time of at the time of identification to the contract for sale. . ." Miss. Code Ann. § 75-2-105.
Moreover, civil conspiracy is not viable on these facts. By definition, in order to have a conspiracy, there must exist at least two legal entities who conspire together. This Court has held that an agent acting in the scope of employment is not considered a separate entity from the corporation for which the agent is working. Cooper v. Drexel Chemical Co., 949 F. Supp. 1275, 1285 (N.D. Miss. 1996) (when acting within the scope of employment, "the acts of the agent are the acts of the corporation"). There is no indication in the record to suggest the agents were acting outside the scope of their employment with regard to the loan transactions at issue. Thus, as a corporation cannot conspire with itself any more than an individual can, Hilliard v. Ferguson, 30 F.3d 649, 653 (5th Cir. 1994), there can be no liability against these agents under Mississippi law for civil conspiracy. Accord Howard, 195 F. Supp. at 825-26. Finally, negligent training and supervision claims are necessarily directed at the agents' employer, not the agents themselves.
There is no reasonable probability, therefore, that sate law might impose liability on the non-diverse agents based on the claims discussed above.
The Court does not intend Part A. to be an exhaustive recounting of the non-viable claims against the agents. Indeed, as will be seen, those claims do not stand alone. The Court merely eliminates these claims at the outset based on an initial review.
B.
The defendants assert that each of the plaintiff's claims against the in-state defendants are time-barred. The claims at issue are governed by the general three-year statute of limitations. Miss. Code Ann. § 15-1-49(1); see also Ross v. Citifinancial. Inc., 2002 WL 461567, slip op. at *3 (S.D. Miss. March 18, 2002) (finding that Mississippi's three-year statute of limitations applied to identical claims). The complaint was filed on September 13, 2001. Thus, as already stated, absent tolling of the statute for some reason, any claim which accrued prior to September 13, 1998, is time barred as a matter of law.Under Mississippi law, a cause of action for fraud or misrepresentation "accrues" for limitations purposes upon completion of the sale induced by the false representations or upon consummation of the fraud or misrepresentation. See Dunn v. Dent, 153 So. 798 (Miss. 1934). The plaintiffs, however, argue that the statute should be tolled under the doctrine of fraudulent concealment. Miss. Code Ann. § 15-1-67 provides:
If a person liable to any personal action shall fraudulently conceal the cause of action from the knowledge of the person entitled thereto, the cause shall be deemed to have first accrued at, and not before, the time at which such fraud shall be, or with reasonable diligence might have been, first known or discovered.
Thus, by the plain language of the statute, even if tolled, the statute of limitations commences to run at such time as the cause "with reasonable diligence might have been first known or discovered."
Both Ross and Daughrity testified that they received copies of their loan and insurance documents. Ross signed a disclosure statement which conspicuously states:
(Ross Depo. at 50); (Daughrity Depo. at 85)
CREDIT LIFE INSURANCE IS NOT REQUIRED TO OBTAIN THIS LOAN. If you desire Credit Life Insurance, the charge therefor stated below will be added to and included within the Amount Financed and the Insurance covers the Borrower(s) named in the certificate (s) of insurance delivered herewith. Credit Life Insurance is for the originally scheduled term of the loan.
Daughrity signed a similar notice with regard to Credit Life and Disability Insurance which provides:
CREDIT LIFE OR CREDIT DISABILITY INSURANCE IS NOT REQUIRED TO OBTAIN THIS LOAN. If you desire Credit Life or Credit Life and Disability Insurance, the charge therefor stated below will be added to and included within the Amount Financed and the Insurance covers the Borrower(s) named in the certificate (s) of insurance delivered herewith. Credit Life Insurance is for the originally scheduled term of the loan. Credit Disability Insurance is for the originally scheduled term of the loan or 60 months, whichever is less.
Additionally, Daughrity signed and initialed, as part of the same notice, the following statement regarding property insurance:
PERSONAL PROPERTY INSURANCE
PERSONAL PROPERTY INSURANCE IS REQUIRED BY LENDER IF THIS LOAN IS SECURED BY PERSONAL PROPERTY. You may obtain Personal Property Insurance from anyone you want, provided the insurance company is acceptable to the lender.
Following each of these statements on both Ross's and Daughrity's notices are provisions clearly delineating the premium charged for each insurance product. Each of the documents contain the following advisement at the top of the page — READ BEFORE SIGNING. The loan documents further reveal the type of credit life, disability and property insurance offered, the amount of coverage, as well as the applicable terms and premiums. Finally the following statement appears above the signature line:
I/WE HAVE READ THIS NOTICE AND HAVE MADE THE CHOICE ABOVE BEFORE SIGNING ANY NOTE OR OTHER PAPER REPRESENTING A LOAN.
"A person is under an obligation to read a contract before signing it, and will not as a general rule be heard to complain of an oral misrepresentation of error which would have been disclosed by reading the contract." Godfrey, Bassett Kuykendall Architects Ltd. v. Huntington Lumber Supply Co., Inc., 584 So.2d 1254, 1257 (Miss. 1991). Indeed, unambiguous provisions of a policy are "imputed" to the insured, even if they fail to read the policy. Cherry v. Anthony. Gibbs. Sage, 501 So.2d 416, 419 (Miss. 1987). Consequently, where the terms of a contract are made available to a contracting party, any reliance on alleged misrepresentations of those terms is per se unreasonable. See Carter v. Union Security Life Ins. Co., 148 F. Supp.2d 734 (S.D. Miss. 2001).
Each of the plaintiffs here signed the documents and received them at the time of execution. Neither plaintiff is illiterate or otherwise unable to read the provisions of the documents they signed. No doubt, lay persons, as a general matter, probably do not understand many of consequences of various provisions contained in lengthy loan documents and contracts. The Court, however, is Erie-bound to apply Mississippi law which does not permit a party to avoid a provision for failure to understand it. See Rainwater v. Lamar Life Insurance Co., 207 F. Supp.2d 561, 568 (S.D. Miss. 2002).
The plaintiffs argue that there is some question in Mississippi as to whether subsequent affirmative acts of concealment are required to toll the statute when the underlying claims are based on fraud. Indeed, some courts have held that a plaintiff need not show subsequent affirmative acts if the underlying wrong is "self concealing." See Texas v. Allan Constr. Co., Inc., 851 F.2d 1526, 1529 (1988); Phillips v. New England Mutual Life Ins. Co., 36 F. Supp.2d 345, 349 (S.D. Miss. 1998). While this may be true, in the Court's view, the issue is whether the plaintiffs could have discovered any alleged fraud or claim by exercising "reasonable diligence." Thus, the Fifth Circuit in Allan Constr. Co., heavily relied on by the plaintiffs, stated that the plaintiff "need only aver the underlying fraud in order to toll the statute of limitations until such time as the plaintiff had some notice of the wrong." Allen Constr. Co., 851 F.2d at 1529 (emphasis added). Under Mississippi law, the plaintiffs had notice of the alleged wrong at the time the contract was executed and were unreasonable as a matter of law in relying on alleged oral misrepresentations made by the agents. As a result, even if it could be said that any of the plaintiffs' allegations state a claim against the non-diverse agents based on their conduct in connection with the loans at issue — a dubious assumption on these facts — the doctrine of fraudulent concealment is inapplicable and the plaintiffs' claims are time-barred. Accord Howard, 195 F. Supp.2d at 821 (statute of limitations began running upon signing of the documents which clearly contained a disclosure statement even though the plaintiff claimed she never saw or read the statement). The Court finds, therefore, as Judge Lee noted in construing nearly identical facts within the context of a remand motion, that "the truth respecting the information which plaintiff[s] contend was misrepresented and the facts which [they] contend defendants failed to disclose could have been discovered by plaintiff through the exercise of reasonable diligence more than three years prior to the date on which [they] filed suit." Cooley v. Washington Mut. Fin. Group, LLC, 2002 WL 1768897, slip op. at *1 (S.D. Miss. July 29, 2002).
Cf. Barhonovich v. American National Insurance Co., 947 F.2d 775, 777-78 (5th Cir. 1991) (concluding that insured was unreasonable in relying on agent's misrepresentations due to the clear language to the contrary contained in the policy); Watson v. First Commonwealth Life Ins. Co., 686 F. Supp. 153 (S.D. Miss. 1988) (same); Foster v. Globe Life Accident Insurance Co., 808 F. Supp. 1281, 187-88 (N.D. Miss. 1992) (same).
Courts in Mississippi, in addressing nearly identical facts within the context of remand motions, have routinely held, aside from any statute of limitations issue, that the plaintiffs asserting identical claims have failed to state a viable cause of action under Mississippi law. See, e.g., Strong v. First Family Financial Services, Inc., 202 F. Supp.2d 536, 540 (S.D. Miss. 2002); Howard v. Citifinancial, 195 F. Supp.2d 811 (S.D. Miss. 2002); Harrison v. Commercial Credit Corp., 2002 WL 548281 (S.D. Miss. March 29, 2002); Ross v. Citifinancial, 2002 WL 461567 (S.D. Miss. March 18, 2002);
D.
The plaintiffs, conceding that much of the "non-disclosed" information they complain of was contained within the loan documents aver that at least some of the information that could have put them on notice of a cause of action was not contained in those documents. Specifically, the plaintiffs point to matters such as the defendants' use of the rule of 78s to calculate interest, the excessive premiums charged as compared to the market for similar type insurance, the use of the "total of payments" doctrine in pricing premiums, and the reverse underwriting aspects of the policies.
Most of these assertions are more properly directed to the insurance company itself rather than the agents. Presumably, then, the plaintiffs complain of the failure of the agents to volunteer this information to Ross and Daugherty.
The existence of a duty to disclose this information, however, depends on the existence of a fiduciary relationship. See Strong v. First Family Financial Services, Inc., 202 F. Supp.2d 536, 540 (S.D. Miss. 2002). Indeed, "since silence, in the absence of a duty to speak, is not actionable, plaintiffs' claims for misrepresentation by omission are dependent on the existence of a duty of disclosure, which would arise if a fiduciary relationship existed." Strong, 202 F. Supp.2d at 540 (citingChiarella v. U.S., 445 U.S. 222, 228 (1980) ("one who fails to disclose material information prior to the consummation of a transaction commits fraud only when he is under a duty to do so")). Under Mississippi law, as a general rule, debtors and creditors are not in a fiduciary relationship, absent limited circumstances. See General Motors Acceptance Corp. v. Baymon, 732 So.2d 262, 270 (Miss. 1999). Those circumstances include situations in which a fiduciary relationship may arise on the basis of "contract, agency, or the reposing of trust and confidence." Lowery v. Guaranty Bank Trust Co., 592 So.2d 79, 83 (Miss. 1991) (holding that a genuine issue of material fact existed as to whether a fiduciary relationship was established between the plaintiffs and their lender because evidence demonstrated that the plaintiffs were justified in relying on their lender based on past dealings between the parties). Thus, as the Fifth Circuit stated in construing Lowery:
See also, Merchants Planters Bank of Raymond v. Williamson, 691 So.2d 398, 404 (Miss. 1997), stating:
[a] classification of a given relationship as fiduciary as a matter of law is properly reserved for certain relationships such as that between a guardian and ward or between a trustee and a beneficiary of a trust. In these relationships, one party justifiably places trust and confidence in the other to act in a manner that is consistent with the interests of the party placing said trust and reliance. Clearly, the relationship between the [lender and borrower] is quite different from the aforementioned relationships and is properly entered into and carried out in a manner similar to other contractual relationships: with diligence, caution, and with knowledge of the subject matter of the contract.Accord Burley v. Homeowners Warranty Corp., 773 F. Supp. 844, 860 (S.D. Miss. 1990) ("[T]here is no fiduciary relationship between an insurer and insured in a first-party contract").
[R]elative to the creation of a confidential relationship, Lowery holds that there must be something about the relationship between the parties which would justifiably create an expectation on the part of one party that the other was protecting the first party from the occurrence of a particular risk; and, moreover, such justifiable reliance must have necessarily caused the first party to be lulled into a false sense of security so that the first party did not protect his own interest as he might have ordinarily.Deramus v. Jackson Nat. Life Ins. Co., 92 F.3d 274, 278 (5th Cir. 1996) (adopting district court's opinion). No such circumstances existed such that Ross or Daughrity were justified in placing such trust in their lender, nor does the record reveal any course of dealing between the parties which would bring the relationship within the scope of a fiduciary relationship such as in Lowery. Banks, finance, and insurance companies are not eleemosynary institutions. Ross and Daughrity should have been aware of as much at the outset, before blindly signing documents and failing to read them.
That the plaintiffs here placed special trust in their lender "is nothing more than an assertion that plaintiffs trusted their lender (and by inference, its employees) because it was their lender, which is plainly insufficient under the cited authorities to support finding that a fiduciary relationship existed." Strong, 202 F. Supp.2d at 542.
The, Court, therefore, views the loans as "arms-length business transactions." See Strong, 202 F. Supp.2d at 541 (internal citations omitted). As discussed, agents involved in such transactions are not under a duty to disclose the information about which the plaintiffs complain. Consequently, even assuming the plaintiffs here could not divine certain information by the plain reading of the policies at issue, their exists no arguable basis for predicting that state law might impose liability based on the allegations advanced. A necessary concomitant to the tolling of the statute of limitations is a claim that is capable of being tolled. In this case, the allegations with regard to which a review of the loan documents would not reveal, the plaintiffs fail to state such claim.
The Court further notes that many of the plaintiffs' allegations lack evidentiary support on the record. Such allegations are conclusory. As this Court has noted, "[m]ere conclusory allegations. . . are insufficient to deprive diverse defendants of a federal forum." James v. Chase Manhattan Bank, 173 F. Supp.2d 544, 552 (N.D. Miss. 2001) (Pepper, J.) (Internal citations omitted).
E.
Finally, the plaintiffs claim that the $75,000 jurisdictional threshold is not met on the face of their complaint. 28 U.S.C. § 1332 provides in part:
The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interests and costs, and is between. . . citizens of different states.
The only issue remaining for this Court's consideration bearing on its potential diversity jurisdiction, is whether the amount in controversy exceeds the requisite $75,000 value.
The plaintiff's complaint does not specify a damage amount. However, the plaintiffs also unambiguously seeks an unspecified amount of punitive damages. Where the complaint, as here with regard to exemplary damages, does not allege a specific amount, the removing party bears the burden of proving by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional minimum. DeAguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993) (other citations omitted).
It is well settled that, if Mississippi law permits punitive damages attendant to the particular claims the plaintiff is seeking redress for, then those damages are included in computation of the amount in controversy. See St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998); See also Ruhgras AG v. Marathon Oil Co., 526 U.S. 574, 585-86 (1999) (by implication). Indeed, federal courts sitting in Mississippi have routinely held that unspecified claims for punitive damage sufficiently serve to bring the amount in controversy over the requisite jurisdictional threshold set out in 28 U.S.C. § 1332. See, e.g., Marcel v. Pool Co., 5 F.3d 81, 84-85 (5th Cir. 1993); Myers v. Guardian Life Ins. Co. of Americs. Inc., 5 F. Supp.2d 423, 428-29 (N.D. Miss. 1998). See also Marley v. Capital One Services. Inc., Civil Action No. 2:02CV87-P-A (N.D. Miss. Aug. 14, 2002) (Pepper, J.); Liddell v. First Family Financial Services. Inc., 2002 WL 1774746 (S.D. Miss. July 18, 2002); Conseco Financing Servicing Corp. v. Kolb, 2002 WL 1013116, at *6 (N.D. Miss. April 15, 2002); Henley v. Pioneer Credit Co., 2002 WL 1013110 (N.D. Miss. April 10, 2002).
Under Mississippi law, punitive damages may be awarded where the defendant's conduct constitutes "intentional wrong, insult, or abuse as well as from such gross negligence as constitutes an independent tort."American Funeral Ins. Co. v. Hubbs, 700 So.2d 283, 286 (Miss. 1997). Moreover, punitive damages are available in Mississippi for a negligence action if the plaintiff proves by clear and convincing evidence "that the defendant, against whom punitive damages are sought, acted with actual malice, gross negligence which evidences a willful, wanton or reckless disregard for the safety of others, or committed actual fraud." Miss. Code Ann. § 11-1-65(a)(1) (Supp. 2001). Thus, a court could permit the issue of punitive damages to be considered by a jury if it was found that a reasonable juror could identify actual malice and disregard for the rights of others on the part of the defendant. Paraclesus Health Care Corp. v. Willard, 754 So.2d 437 (Miss. 1999).
The complaint in this action alleges "deliberate, willful, and malicious" conduct on the part of the defendants such that punitive damages are justified. Since any award of punitive damages based on such a claims when added to compensatory damages, if proven true, would clearly be greater than $75,000, the Court concludes that the amount in controversy threshold is met on the face of the plaintiffs' complaint. See Arnold v. State Farm Fire and Cas. Co., 277 F.3d 772, 775 n. 3 (5th Cir. 2001) (Speculating that a 6:1 compensatory to punitive ratio would be a conservative estimate, and one a Mississippi plaintiff would likely not be satisfied with).
(Pl. Complaint at ¶ 107).
A court should look to damage awards in similar cases to ascertain whether the bridge is gapped between the stated amount in controversy and the jurisdictional threshold by the unspecified damage claim. See Cross v. Bell Helmets, USA, 927 F. Supp. 209, 213 n. 8 (E.D. Tex. 1996). Jury awards in Mississippi for similar claims have regularly exceeded the $75,000 threshold for compensatory and punitive damages. See Chambley v. Employers Ins. of Wausau, 11 F. Supp.2d 693, 695 (S.D. Miss. 1998) (recognizing that fraud claims against insurance companies, when proven true, normally result in damages in excess of $75,000).
F.
In short, the Court concludes that the defendants have met their burden to demonstrate there is no reasonable basis for predicting that state law might impose liability upon the resident agents and that the jurisdictional amount in controversy is satisfied under 28 U.S.C. § 1332. The plaintiffs' motion to remand, therefore, is denied.
CONCLUSION
After careful consideration, the Court finds that the plaintiff's motion to remand is not well taken and should be denied. A separate order in accordance with this opinion will be so entered.
ORDER
In accordance with a Memorandum Opinion issued this day, It is hereby ORDERED that:
1. The plaintiffs' motion to remand [7-1] be DENIED;
2. The plaintiffs' motion for a protective order [15-1] be DENIED;
3. The plaintiffs' motion for leave to exceed the page limit [36-1] be DENIED;
4. The defendants' motion for leave to exceed the page limit [38-1] be DENIED;
5. The plaintiffs' motion for leave to file amended complaint for the sole purpose of substituting Betty Hill for Billy Hill [37-1] be GRANTED;
6. The non-diverse agent defendants be DISMISSED from this action WITH PREJUDICE; and
7. The Court warns all parties that Uniform Local Rule 7.2(E) pertaining to length of memoranda will hereafter be strictly enforced.