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ALLEN v. REHMAN

December 8, 2000

CARLOS ALLEN, PLAINTIFF,
V.
MIKE REHMAN AND WILLIAM PANOS, DEFENDANTS.



The opinion of the court was delivered by: Urbina, District Judge.

MEMORANDUM OPINION

DISMISSING THE COMPLAINT FOR LACK OF JURISDICTION

I. INTRODUCTION

The plaintiff brings this breach-of-contract action based on an alleged investment he made in a nightclub owned by the defendants. The plaintiff; Carlos Allen ("the plaintiff" or "Mr. Allen"), proceeding pro se, alleges that the defendants, Mike Rehman and William Panos ("the defendants"), violated a verbal agreement to give the plaintiff a 10-percent equity share and a management role in a Washington, D.C. nightclub in exchange for the plaintiffs $30,000 investment. Because the amount in controversy is less than $75,000, the court lacks diversity jurisdiction. Accordingly, the court will dismiss the plaintiff's complaint sua sponte for lack of diversity jurisdiction under Title 28 U.S.C. § 1332 ("section 1332").

II. BACKGROUND

Carlos Allen, a Maryland resident, claims that on July 1, 2000 at 9:30 p.m., he entered into a verbal agreement with Washington, D.C. residents Mike Rehman and William Panos to invest in their nightclub called "Club Element." See Compl. at 1. Mr. Allen alleges that the deal called for him to invest $30,000 in Club Element in exchange for a 10-percent equity share and a management role. See id. According to the complaint:

The defendants were in desperate need for the cash flow and plaintiff Carlos Allen provided the funds they needed. Plaintiff Carlos Allen wrote out a blank check and did not write a check out to the night club on the advice of co defendant [sic] William Panos who suggested not to place the check into their club's name because the banks will deduct [sic] the funds because of all the bad checks they had written. . . . The check was post dated for 7/11/2000 and was cashed 5 days before it was officially supposed to be cashed on 7/6/2000. None of the defendants came back to the plaintiff and declined the verbal agreement, until all the funds were deplited [sic].

Id.

III. ANALYSIS

A. Legal Standard

A district court shall have original jurisdiction over a civil action "where the matter in controversy exceeds the sum or value of $75,000, exclusive of interests and costs," and is between, among other things, "citizens of different states." See 28 U.S.C. § 1332. The Supreme Court has held that a district court should dismiss a case for failure to meet the jurisdictional amount requirement only if it is a "legal certainty" that the plaintiff cannot recover more than the minimum jurisdictional amount. See St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938). The St Paul Court held:

The rule governing dismissal for want of jurisdiction in cases brought in the federal court is that, unless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim ...

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