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American General Financial Services of Alabama, Inc., etc. v. Witherspoon, 10-11790 (2011)

Court: Court of Appeals for the Eleventh Circuit Number: 10-11790 Visitors: 68
Filed: May 12, 2011
Latest Update: Feb. 22, 2020
Summary: [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT FILED _ U.S. COURT OF APPEALS ELEVENTH CIRCUIT No. 10-11790 MAY 12, 2011 JOHN LEY _ CLERK D.C. Docket No. 2:09-cv-00807-SLB AMERICAN GENERAL FINANCIAL SERVICES OF ALABAMA, INC., WILMINGTON FINANCE, INC., lllllllllllllllllllll Plaintiffs - Appellees, versus REGINA GRATTON WITHERSPOON, lllllllllllllllllllll Defendant - Appellant. _ Appeal from the United States District Court for the Northern District of Alabama _ (May
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                                                                   [DO NOT PUBLISH]

                        IN THE UNITED STATES COURT OF APPEALS

                               FOR THE ELEVENTH CIRCUIT           FILED
                                ________________________ U.S. COURT OF APPEALS
                                                                  ELEVENTH CIRCUIT
                                       No. 10-11790                  MAY 12, 2011
                                                                      JOHN LEY
                                 ________________________               CLERK

                             D.C. Docket No. 2:09-cv-00807-SLB

AMERICAN GENERAL FINANCIAL SERVICES OF ALABAMA, INC.,
WILMINGTON FINANCE, INC.,

lllllllllllllllllllll                                    Plaintiffs - Appellees,

    versus

REGINA GRATTON WITHERSPOON,

lllllllllllllllllllll                                    Defendant - Appellant.

                                ________________________

                          Appeal from the United States District Court
                             for the Northern District of Alabama
                                 ________________________

                                        (May 12, 2011)

Before DUBINA, Chief Judge, EDMONDSON and WILSON, Circuit Judges.

PER CURIAM:

         In May 2008, Sutton Funding, LLC (“Sutton”) filed an eviction action

against Regina Gratton Witherspoon in state court. In December 2008,
Witherspoon filed an “Answer, Counterclaim and Third Party Complaint,”

asserting third-party claims against various financial institutions that held

mortgages on the real property at issue. Of relevance to this appeal are her claims

against American General Financial Services, Inc., and Wilmington Finance, Inc.

(“Appellees”).1

       Appellees filed a petition in federal district court to compel arbitration

under section 4 of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 4. The district

court denied her 12(b)(1) motion to dismiss Appellees’ petition. It then granted

Appellees’ unopposed motion for summary judgment and dismissed the case

without prejudice. Witherspoon appeals, arguing only that the district court lacked

jurisdiction to entertain Appellants’ section 4 petition to compel arbitration.

                                        DISCUSSION

       Section 4 of the FAA provides that a party aggrieved by another party’s

refusal, failure, or neglect to conform with a written agreement to arbitrate a

dispute may petition a federal district court for an order compelling arbitration;

however, for the provision to apply, the court must otherwise be able to exercise

       1
         Witherspoon’s complaint included a claim brought under the Federal Debt Collection
Practices Act (“FDCPA”), see 15 U.S.C. § 1692 et. seq., that she later alleged to be a drafting
error by her counsel. After considering parol evidence, the district court concluded that
Witherspoon’s inclusion of the FDCPA claim was not a drafting error. Because we conclude on
other grounds that the district court had diversity jurisdiction over Appellees’ petition, we will
not address Witherspoon’s argument that the FDCPA claim cannot form the basis for federal-
question jurisdiction.

                                                 2
jurisdiction over “the subject matter of a suit arising out of the controversy

between the parties.” 9 U.S.C. § 4. Thus, the FAA does not itself bestow federal

jurisdiction, but “requires for access to a federal forum an independent

jurisdictional basis over the parties’ dispute.” Vaden v. Discover Bank, 
129 S. Ct. 1262
, 1271 (2009) (internal quotation marks omitted) (alterations omitted).

Ordinarily, federal jurisdiction may not be predicated upon an actual or anticipated

counterclaim, even where that counterclaim is compulsory. Holmes Grp., Inc. v.

Vornado Air Circulation Sys., Inc., 
535 U.S. 826
, 831–33 (2002). However, the

Supreme Court explained in Vaden that section 4 of the FAA allows a party access

to federal court if “the entire, actual ‘controversy between the parties,’ as they

have framed it, could be litigated in federal 
court.” 129 S. Ct. at 1275
.

      Unlike in Vaden, where the plaintiff’s complaint and the defendant’s

counterclaim constituted the entire “controversy between the parties,” see 
id. at 1268–69,
Witherspoon first asserted her claims against Appellees in her “Answer,

Counterclaim and Third Party Complaint,” to which Appellees filed no response.

Thus, the “entire, actual controversy” between Witherspoon and Appellees was

contained within Witherspoon’s complaint asserting claims against them.

Therefore, the only questioning remaining for this Court is whether that “entire,




                                           3
actual controversy” as Witherspoon and Appellees have framed it would otherwise

invoke federal-question or diversity jurisdiction.

       The parties do not dispute that there was complete diversity between them.

Thus, Appellees need only persuade this Court by a preponderance of the evidence

that the amount in controversy has been met. See Lowery v. Ala. Power Co., 
483 F.3d 1184
, 1208–09 (11th Cir. 2007) (explaining that where damages are

unspecified, the removing party bears the burden of establishing by a

preponderance of the evidence that the amount in controversy has been met).

Although Witherspoon does not appear to state a claim for a specific amount of

compensatory damages, she alleges that Appellees engaged in certain illegal

lending practices and wrongful foreclosure and sale of her property. Our review

of the record and the briefs reveals that her claims easily raise the inference of

liability greater than $75,000. Thus, we conclude that Appellees have met their

burden of establishing that the amount in controversy with Witherspoon has been

met.

       Because we conclude that the “entire, actual controversy” between

Witherspoon and Appellees invokes diversity jurisdiction for purposes of section 4

of the FAA, we need go no further; the district court properly denied

Witherspoon’s 12(b)(1) motion to dismiss.

AFFIRMED.
                                           4

Source:  CourtListener

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