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Eagles Nest, LLC v. Moy Toy, LLC

United States District Court, M.D. Tennessee, Northeastern Division

September 16, 2014

EAGLES NEST, LLC; BEVERLY BAUER; AND CORTEZ INVESTMENTS GROUP, INC., INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED Plaintiffs,
v.
MOY TOY, LLC, and STANDING ROCK, LLC, Defendants.

MEMORANDUM

KEVIN H. SHARP, District Judge.

In this action that was removed from state court pursuant to the Class Action Fairness Act, 28 U.S.C. §§ 1332(d)(2) & 1453, Plaintiffs have filed a Motion to Remand. That Motion has been fully briefed by the parties and, for the reasons that follow, will be granted.

I.

The relevant allegations from the Complaint are as follows:

Plaintiffs, Eagle Nest LLC, a Nevada corporation, Cortez Investments Group, Inc., a Florida corporation, and Beverly Bauer, a citizen and resident of Louisiana, own multiple lots in the Renegade Resort community in Cumberland County, Tennessee. Defendant, Moy Toy, Inc., a Tennessee limited liability company, is the "purported developer of Renegade Resort" (Docket No. 1-2, Complaint ¶ 9), Defendant Terra Mountain Holdings, LLC, a Georgia limited liability company, obtained a large tract of land adjacent to Renegade Resort from Moy Toy, and Defendant Standing Rock, LLC, also a Tennessee limited liability corporation, owns the golf course property in Renegade Resort.

The lots in Renegade Resort are subject to restrictions recorded in the Cumberland County Register of Deeds. The original restrictions ("1972 Restrictions") envisioned

the developer in Renegade Resort developing the lands as part of a common master plan of development intending to add other lands to the development and creating thereon a residential and commercial resort with streets, water and sewer systems, recreation facilities of various types, and other common facilities for the use and benefit of the owners of said properties.

(Id. ¶ 33). The 1972 Restrictions further "state[d] an intention to bind adjacent properties to the common scheme of development and to add them and protect them over time." (Id. ¶ 35).

The 1972 Restrictions also provided for amendment upon an affirmative vote of a majority of the owners' association members, and adoption by the developer. Nevertheless, amendments were made to the restrictions in 1987 and 2005 that "were improperly recorded and improperly executed without membership approval by vote and without valid developer approval as required" and were improperly recorded in an "attempt to increase the power for the purported developer while simultaneously taking vested property rights from existing property owners." (Id. ¶ 25).

Plaintiffs, on behalf of a class that "would include approximately 551 owners and 1, 351 lots and living units less those owned by Defendants[, ]... require clarification as to their property rights" and "a uniform decision as to which restrictions govern Renegade Resort inasmuch as multiple amended restrictions have been recorded under questionable circumstances" that "purport to bind all owners in Renegade Resort." (Id. ¶¶ 12 &15). They also request a decision as to how the lands adjacent to Renegade Resort may be utilized. (Id. ¶ 16).

Plaintiffs challenge Moy Toy's "claims to have developer control" by "virtue of purported superior voting rights in the Community Club" because "[d]eveloper rights were never properly and completely conveyed by and through Moy Toy, LLC's predecessors in title." (Id. at 28).[1] They also assert that Terra Mountain Holdings "is seeking to place a conservation easement on it property which forms part of the master planned community, " but that such "a conservation easement would be markedly inconsistent with and different from those uses contained in and provided for in the 1972 Restrictions, the master plan of development, and multiple repeated representations of Terra Mountain Holdings, LLC's predecessor in title." (Id. ¶ 30).[2] As to Defendant Standing Rock, Plaintiffs claim that it intends to "put a conservation easement" on the property where the golf course was located that contravenes the 1972 Restrictions, which provided that a golf course would be constructed as "common property for the use and benefit of those in Renegade Resort." (Id. ¶ 46).

Plaintiffs filed suit in the Chancery Court for Cumberland County seeking declaratory and injunctive relief. They make no specific claim for money damages.

II.

The CAFA "provides that a federal district court has jurisdiction in a civil action where there is diversity, 28 U.S.C. § 1332(d)(2)(A), the amount in controversy exceeds $5 million, § 1332(d), and the proposed class includes at least one hundred members, § 1332(d)(5)(B)." Salling v. Budget Rent-A-Car Systems, Inc. , 672 F.3d 442, 443 (6th Cir. 2012). "Such a class action may be removed to a federal district court as provided by section 1446 (except that the 1-year limitation under section 1446(b) shall not apply), without regard to whether any defendant is a citizen of the State in which the action is brought, except that such action may be removed by any defendant without the consent of all defendants.'" In re Mortgage Electronic Registration Sys., Inc. 680 F.3d 849 , 853 (6th Cir. 2012) (quoting 28 U.S.C. § 1453(b)). "[A] defendant seeking removal must prove, by a preponderance of the evidence, that jurisdictional requirements have been met." Salling , 672 F.3d at 443.

In seeking to remand this case, Plaintiffs argue Defendants have not established that removal was proper because (1) Defendants claim the jurisdictional threshold has been met, even though Plaintiffs seek only injunctive and declaratory relief their Complaint; (2) Defendants' assertion of the amount in controversy is based upon nothing but speculation and guesswork; and (3) Defendants' allegations as to the citizenship of the parties is deficient. Plaintiffs also argue that, even if Defendants have sufficiently established this Court's jurisdiction, the action should be remanded pursuant to ...


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