Hall v. Triad Financial Services, Inc., NO. 07-CV-0184-MJR, 2007 WL 2948405 (S.D. Ill. Oct 10, 2007).

In stark juxtaposition to his presidential namesake, Judge Reagan of the Southern District of Illinois rejected Voodoo Economics, and, in so doing, took defendant Triad Financial Services behind one of its repo’d trailers for a good ole CAFA butt whoopin’.

How’d this happen? Ask Mike Hall. There he was drinkin’ a cold one, livin’ the American dream in his double-wide somewhere in a field in Southern Illinois, when, just because ole Mike fell behind on his trailer payment, Triad came a callin’ and plum took that trailer and his dream with it.

Now Mike lives in Southern Illinois, and those folks down yonder like their class actions. So Mike found his-self one of them trial lawyers and decided Triad needed to pay.

The class action, filed in Illinois state court in Marion County, alleged Triad (1) wrongfully repossessed manufactured homes without notice, (2) wrongfully resold repossessed manufactured homes without notice, and (3) wrongfully resold repossessed manufactured homes below their fair market value to favored dealers in order to drive up the deficiency. Mike sought to enjoin Triad from such conduct in the future. Mike also thought someone should pay, so he sought some of them compensatory and punitive damages everyone likes so much – like Vern down at the lodge … he got some of them when his combine went haywire and dumped him in a ditch of fertilizer and it caught fire.

Triad removed pursuant to the CAFA. Well Mike didn’t cotton to such tactics and had his trial lawyer move to remand that sucker back to state court ‘cause Traid hadn’t met one of them burdens of proof. And what do ya know? Judge Reagan agreed.

According to Judge Reagan, Triad had the burden of establishing that all requirements of CAFA jurisdiction were met. Since Ole Mike was goin’ for the gusto and wanted the jury to decide, he had not set out his damages in his complaint. As a result, Judge Reagan said Triad could not use Voodoo Economics of some sort to cook up a sufficient amount in controversy ($5,000,000.00 for CAFA purposes). Instead, Triad had to come up with a good faith estimate of the stakes that were plausible and supported by a preponderance of the evidence.

In trying to meet this burden, Triad noted that Mike had a $40,000.00 deficiency and that Triad had repossessed 251 manufactured homes in Illinois over the last ten years. So there were 251 potential members in the three classes. If each had a $40,000.00 deficiency judgment, then the amount in controversy would be over $10 million. This sounded pretty good. ‘Cept Triad’s own figures reflected that the deficiency on all 251 repossessions combined over ten years was only $2.5 million. 

Moreover, Mike and Triad had agreed that the statute of limitations on Mike’s claims was four years on allegations 1, 2 and 3 (above). Reagan rejected all this Voodoo and estimated that damages were not plausibly close to $5,000,000.00, even if the ten-year period was applicable – and things just trickled down hill from there when the four-year period was applied. As a result, Triad failed to meet its jurisdictional burden.

As for the request for punitive damages, Triad contended the potential for punitive damages pushed the amount in controversy over the $5 million threshold. Reagan acknowledged that punies could be included in determining jurisdiction, but only when applicable state law permitted the recovery of such damages. Reagan then noted that punies were not usually available under the law of contracts or the UCC. He then turned back to the applicable statute of limitations, which Mike and Triad had agreed was three years on this issue, and concluded once again that Triad’s estimates based on a ten-year period were worthless.

As for the claim for injunctive relief, Reagan stated that the amount in controversy here was determined by the “either viewpoint” rule, which assesses the jurisdictional amount attributable to injunctive relief by looking at either the benefit to the plaintiff or the cost to the defendant of the requested relief. Triad probably put forth its most persuasive argument on this issue – it made no argument.

So Mike’s quest for a place to once again store his Pabst and catch the latest UFC event was sent back to the hallowed courts of Southern Illinois where he will most assuredly become a rich man.