Stroh v. Colonial Bank, N.A, NO. 4:08-CV-73, 2008 WL 4831752 (M.D. Ga., Nov. 4, 2008).

Illustrating the timeless caution that “the better part of valor is discretion,” Colonial Bank must defend itself in state court in this case after not proving to a legal certainty that the amount in controversy exceeded $5,000,000. 

This may not be such a terrible result for Colonial Bank, since proving the case met CAFA’s amount in controversy requirement may have also required it to admit the very statutory violations that were the basis of the lawsuit. 

The plaintiff, seeking to represent a class of Colonial Bank’s Georgia customers who obtained home loans from Colonial Bank, paid off their loans, but whose security deeds were allegedly not timely cancelled under Georgia law, claimed entitlement to $500 statutory damages for himself and each class member. Colonial Bank removed under CAFA, and the plaintiff moved to remand. 

The plaintiff alleged that Colonial Bank failed to satisfy its statutory duty to direct the appropriate county clerk, within 60 days of full payment of home loans, to cancel security deeds granted to it “with respect to more than forty of its customers.” The plaintiff argued the controversy did not exceed $5,000,000 because the Complaint expressly limited damages in an ad damnum clause, stating ““total damages for the entire class . . . amount to $4,500,000.00 or less and that under no circumstances will the total amount in controversy exceed $4,500,000.00.”

Faced with the question “to prove or not to prove?” the true number of potential class members, Colonial Bank presented evidence that approximately 11,000 of its Georgia customers paid off their home loans during the relevant time period and argued the allegations put more than $5,000,000 in controversy.

The Court recognized 11th Circuit precedent holding that where the complaint contains an ad damnum clause limiting the amount of damages claimed, the removing party must prove “to a legal certainty” that the plaintiff’s putative class claims exceed the jurisdictional amount. The Court stated that Colonial Bank’s argument that the class size should be measured by the number of customers who paid off their loans during the relevant time period “completely misses the point.” Acknowledging that defining the class size by the allegations in the complaint put Colonial Bank in the difficult position of having to produce evidence of the number of times it violated the statute at issue, the Court nevertheless found the evidence presented by Colonial Bank too speculative to rise to the “legal certainty” required for establishment of jurisdiction. As a result, the Court granted the motion to remand (though to sweeten the sorrow of this parting, the Court denied the plaintiff’s request for attorney fees and costs).