Virginia Lawyers Weekly VA Lawyers Weekly
Where a suit sought a declaratory judgment that the plaintiffs could use a directional drill, and there was no showing that the value of possession or use of the drill exceeded $75,000, the suit was remanded to the circuit court.
Background
This action stems from a dispute related to the ownership of a business entity, FS2 Industries Incorporated, and the right to use a directional drill owned by FS2. Plaintiffs Richard P. Franklin Jr. and Larry Woods Jr. purport to be the sole shareholders of FS2. On behalf of FS2, Mr. Franklin and Mr. Woods originally filed suit in the circuit court, seeking a declaration of the right to use the directional drill. Defendant Jennifer Franklin, also purporting to act on behalf of FS2, removed the case to federal court. Currently pending before the court is plaintiffs’ motion to remand.
The parties agree that the amount in controversy is measured by the “value of the object of the litigation” because the petition seeks declaratory and injunctive relief. The parties disagree, however, regarding whether the object of the litigation is ownership or use of the drill.
Ms. Franklin acknowledges that the drill was “solely purchased” in FS2’s name and that the petition seeks a declaration allowing Mr. Franklin and Mr. Woods to use — not own — the drill. Nevertheless, Ms. Franklin maintains that disposition of the petition requires a court to determine whether Mr. Franklin and Mr. Woods or Ms. Franklin, “has the rightful claim of ownership of and, thus, a superior claim of right to, the Drill.”
According to Ms. Franklin, the drill is the object of the litigation, its value is equivalent to its purchase price of $212,051 and the amount in controversy therefore exceeds $75,000. Mr. Franklin and Mr. Woods disagree, asserting that temporary possession is the right in controversy and that Ms. Franklin has failed to prove the amount in controversy exceeds $75,000.
Analysis
Clearly, the parties’ ultimate goal appears to be control and ownership of FS2. While Mr. Franklin and Mr. Woods contemplate further litigation in Texas “wherein a Texas court would distribute ownership of corporate assets in accordance with Texas law,” Ms. Franklin insists that ownership of the drill must be determined within the pending action in part because neither side has initiated litigation to resolve ownership of FS2 in Texas.
This conclusion does not follow. A lack of litigation elsewhere does not expand the scope of pending litigation or the rights to be determined by the petition. The object of the litigation here does not reach ownership of the drill or entail global resolution of the parties’ dispute over FS2. A judgment in favor of either party would not change the fact that FS2 owns the drill, nor would it establish who, in turn, owns and controls FS2. Thus, the object of the litigation and the amount in controversy is not the value of the drill but the value of plaintiffs’ requested relief.
Plaintiffs’ requested relief in the present litigation is the right to use the drill until ownership of FS2 is determined by a court of competent jurisdiction. In determining the value of this requested relief, the court must ascertain the value of the injunction sought by considering “the benefit it confers” on plaintiff or the “detriment it imposes” on defendant.
Mr. Franklin and Mr. Woods submit that the amount in controversy is the amount of the monthly payment Mr. Franklin currently makes on FS2’s behalf towards the principal amount owed on the drill, or $3,284.28 per month and less than $9,000.00 as of removal. Ms. Franklin argues only that the amount in controversy is equivalent to the new purchase price of the drill. She offers no information as to the value of possession or use of the drill, the benefit an injunction awarding continued use of the drill would confer on Mr. Franklin and Mr. Woods or the detriment it would impose upon her. Because the opportunity to meet her burden has expired, Ms. Franklin has not shown the amount in controversy exceeds $75,000.
Plaintiffs’ motion to remand granted.
Franklin v. Franklin, Case No. 2:22-cv-00507, Feb. 10, 2023. EDVA at Norfolk (Hanes). VLW 023-3-062. 8 pp.
