Onas, III v. Lennar Reno, LLC dba Lennar Homes ( 2021 )

2 3 UNITED STATES DISTRICT COURT 4 DISTRICT OF NEVADA 5 * * * 6 SALVADOR A. ONAS, III, et al., Case No. 3:21-cv-00283-MMD-CLB 7 Plaintiffs, ORDER v. 8 LENNAR RENO, LLC dba LENNAR 9 HOMES, 10 Defendants. 11 12 I. SUMMARY 13 Plaintiffs Salvador A. Onas, III, Heather R. Oneal-Onas, Latricia Lord, and Nicole 14 Papke aka Nichole Vanvalkenberg filed a lawsuit alleging breach of warranty and 15 negligence claims against Defendant Lennar Reno, LLC. (ECF No. 1-2 (“Complaint”).) 16 Defendant removed to this Court. (ECF No. 1.) Before the Court is Plaintiffs’ motion to 17 remand. (ECF No. 9 (“Motion”).) Because Defendant has demonstrated the Court has 18 subject-matter jurisdiction over this case, the Court will deny the Motion. 19 II. BACKGROUND 20 Plaintiffs are the owners of three single-family homes in the Casa Bella subdivision 21 Reno, NV. (ECF Nos. 1-2 at 3-5; 9 at 1.) Defendant was the developer and general 22 contractor during the construction of the homes in question. (ECF No. 9 at 1.) Plaintiffs 23 allege that the homes were defectively constructed (ECF No. 1-2 at 4) and seek damages 24 via various state-law claims (id. at 5-9). 25 III. LEGAL STANDARD 26 Federal courts are courts of limited jurisdiction, having subject-matter jurisdiction 27 only over matters authorized by the Constitution and Congress. See U.S. Const. art. III, 28 § 2, cl. 1; see also, e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 2 have had original jurisdiction over the suit. See 28 U.S.C. § 1441(a). However, courts 3 strictly construe the removal statute against removal jurisdiction, and “[f]ederal jurisdiction 4 must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus 5 v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (emphasis added, citation omitted). The 6 party seeking removal bears the burden of establishing federal jurisdiction. See Durham 7 v. Lockheed Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006). 8 Removal procedure of a civil action from a state to federal court is set forth in 28 9 U.S.C. § 1446. Courts look to the “four corners of the initial pleadings or subsequent 10 papers” when determining when the defendant had notice of grounds for removal. Harris 11 v. Bankers Life & Cas. Co., 425 F.3d 689, 691 (9th Cir. 2005) (quoting Lovern v. 12 GMC, 121 F.3d 160, 162 (4th Cir. 1997)). “[S]ubjective knowledge or a duty to make 13 further inquiry” is not required of a removing defendant. Id. at 694. 14 IV. DISCUSSION 15 Plaintiffs allege that the Court lacks subject-matter jurisdiction over this case. (ECF 16 No. 9.) Specifically, Plaintiffs assert that complete diversity is not met because Defendant 17 is a Nevada entity, and all Plaintiffs are residents of Nevada. (Id. at 9.) Plaintiffs further 18 allege the amount in controversy does not exceed more than $75,000 for any singular 19 plaintiff. (Id. at 4.) Defendants dispute both claims. (ECF No. 12) The Court agrees with 20 Defendants. 21 A. Complete Diversity 22 Plaintiffs argue that Defendant is a Nevada entity. (ECF No. 9 at 3.) To support 23 this assertion, Plaintiffs offer evidence that Lennar Reno, LLC’s vice president and 24 controller are citizens of Nevada. (Id. at 3; ECF Nos. 9-1, 9-3, 9-4, 9-5.) Defendant 25 responds that as a limited-liability company, its citizenship is determined by that of its 26 owners and members. (ECF No. 12 at 3.) Defendant further demonstrates that its sole 27 member is an LLC, whose sole member is an LLC, whose sole member is Lennar Homes 28 of California, Inc., a California corporation with its principal place of business in Florida. 2 employees, not the citizenship of its sole-member, and is therefore inapposite. (ECF No. 3 12 at 4.) The Court agrees. 4 “[A]n LLC is a citizen of every state of which its owners/members are citizens.” 5 Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). 6 Defendant has one member, Lennar Pacific Properties Management, LLC. (ECF No. 12- 7 2 at 2, 9.) Lennar Pacific Properties Management, LLC, has one member, Lennar Pacific 8 Properties, LLC. (Id. at 3.) Lennar Pacific Properties, LLC, has one member, Lennar 9 Homes of California, Inc. (Id.) Lennar Homes of California is incorporated in California 10 and has its principal place of business in Miami, Florida. (Id. at 3, 13-14.) Accordingly, 11 Defendant is a citizen of California and Florida. 12 Plaintiffs’ counterarguments do not respond to Defendants’ evidence of its 13 member’s citizenship. In their reply, Plaintiffs argue that in another case, Lennar Reno, 14 LLC’s members were relevant, but that here, Lennar is managed by individuals. (ECF No. 15 13 at 2.) But Defendant submits a sworn declaration from Mark Sustana, a managing 16 officer of Lennar Reno, LLC, detailing the nested LLCs that link Defendant back to Lennar 17 Homes of California, Inc. (ECF No. 12-2 at 2-2.) Sustana’s declaration was filed in this 18 case, with this case number as its caption, referencing these parties. (Id.) Moreover, as 19 Plaintiffs themselves point out in boldface, the citizenship of a manager of an LLC is not 20 relevant nor determinative of the citizenship of the LLC. (ECF No. 13 at 2.) 21 Because Plaintiffs are residents of Nevada, and Defendant is not a citizen of 22 Nevada, the Court finds there is complete diversity of parties. 23 B. Amount in Controversy 24 Plaintiffs next argue that the amount in controversy is not satisfied because their 25 complaint only alleges each claim exceeds $50,000. (ECF No. 9 at 4.) Defendants dispute 26 that the amount in controversy is not met, arguing that evaluations of similar alleged 27 defects in the same subdivision resulted in repair estimates averaging over $125,000 per 28 home. (ECF No. 12 at 5; 12-1 at 19.) In the Petition, Defendant references the estimated 2 amount in controversy exceeds $75,000” (ECF No. 1 at 3) and submits supporting 3 extrinsic evidence in its opposition to Plaintiffs’ Motion (ECF No. 12-2 at 9). Plaintiffs 4 assert this evidence is not relevant because it deals with different homes not at issue in 5 this litigation, and that Defendant can cite to nothing in the record to support an amount 6 in controversy greater than $75,000 per plaintiff. (ECF No. 13 at 3.) The Court agrees 7 with Defendant that the amount in controversy is likely greater than $75,000 per plaintiff. 8 Where a defendant removes a plaintiff’s state action on the basis of diversity 9 jurisdiction, the defendant must either: (1) demonstrate that it is facially evident from the 10 plaintiff’s complaint that the plaintiff seeks in excess of $75,000, or (2) prove, by a 11 preponderance of the evidence, that the amount in controversy meets the jurisdictional 12 limit. Valdez v. Allstate Ins. Co., 372 F.3d 1115 (9th Cir. 2004). Under a preponderance 13 of the evidence standard, a removing defendant must “provide evidence establishing that 14 it is ‘more likely than not’ that the amount in controversy exceeds” the jurisdictional 15 minimum. Id. at 1117 (citations omitted). In considering what evidence may be considered 16 under (2) above, the Ninth Circuit has adopted the “practice of considering facts 17 presented in the removal petition as well as any ‘summary-judgement-type evidence 18 relevant to the amount in controversy at the time of removal.’” Matheson v. Progressive 19 Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (quoting Singer v. State Farm 20 Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). 21 Plaintiffs never argue nor stipulate that their claims will not meet the amount in 22 controversy. Instead, they rely on the formalistic argument that their complaint alleges 23 damages only “in excess of $50,000.”1 (ECF No. 9 at 4.) Defendant has demonstrated 24 that each Plaintiff’s damages are, more likely than not, in excess of $75,000. The Court 25 1The Court notes that pleading damages “in excess of $50,000” is common 26 practice in Nevada state court, due to the jurisdictional cut-off for the state’s mandatory short-trial program. See Rules Governing Alternative Dispute Resolution, B. Nevada 27 Arbitration Rules, Rule 3(A) (“All civil cases commenced in the district courts that have a probable jury award value not in excess of $50,000 per plaintiff, exclusive of interests and 28 costs, and regardless of comparative liability, are subject to the program . . .”), available at https://www.leg.state.nv.us/courtrules/RGADR.html. 1 || is not persuaded that evidence of damages to seventeen homes within the same 2 || subdivision subject to the same alleged construction defects is not relevant to this suit. 3 || (ECF No. 12-1 at 19.) The estimate of cost to repair alone is greater than $75,000 for all 4 || but three of those homes. (/d.) While it is possible that each Plaintiff's recovery will be 5 || under $75,000, Plaintiffs ultimate recovery is not the question before the Court. 6 || Defendant has demonstrated by a preponderance of the evidence that the amount in 7 || controversy is met. 8 Accordingly, the Court finds that it does have subject-matter jurisdiction over this 9 || case. Plaintiff's Motion will therefore be denied. 10 || V. CONCLUSION 11 The Court notes that the parties made several arguments and cited to several 12 || cases not discussed above. The Court has reviewed these arguments and cases and 13 || determines that they do not warrant discussion as they do not affect the outcome of the 14 || motion before the Court. 15 It is therefore ordered that Plaintiffs’ motion to remand (ECF No. 9) is denied. 16 DATED THIS 10" Day of August 2021. 18 Z MIRANDA M. DU 19 CHIEF UNITED STATES DISTRICT JUDGE 20 21 22 23 24 25 26 27 28