Wilhemina McMillian v. Sheraton Chicago Hotel & Tower ( 2009 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 07-3370
W ILHEMINA C. M C M ILLIAN, L ILLIE
T UCKER, C LARENCE P ENNYWELL, et al.,
Plaintiffs-Appellants,
v.
S HERATON C HICAGO H OTEL & T OWERS,
O TIS E LEVATOR C OMPANY and T ISHMAN H OTEL
C OMPANY,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 05 C 5118—Jeffrey N. Cole, Magistrate Judge.
A RGUED O CTOBER 30, 2008—D ECIDED M AY 29, 2009
Before E ASTERBROOK, Chief Judge, and R IPPLE and
T INDER, Circuit Judges.
R IPPLE, Circuit Judge. The plaintiffs, Wilhemina
McMillian, Lillie Tucker, Clarence Pennywell and Zerline
Pennywell, brought this action seeking damages for
injuries that they sustained when an escalator, located
2 No. 07-3370
in the Sheraton Chicago Hotel & Towers (“Sheraton”)1
and maintained by Otis Elevator Company (“Otis”),
allegedly malfunctioned. Prior to trial, the district court
granted the defendants’ motion in limine to exclude
evidence of injuries sustained by others on the escalators
at the Sheraton. The plaintiffs admitted that, without
this evidence, they could not survive a motion for judg-
ment as a matter of law, and, therefore, they agreed to a
dismissal of their claims. The district court then entered
final judgment on behalf of the defendants, and the
plaintiffs filed this appeal. Because we believe that the
plaintiffs have failed to establish that their claims meet
the threshold jurisdictional amount, we vacate the judg-
ment of the district court and remand the case with
instructions that the district court dismiss the action
for want of subject matter jurisdiction.
I
BACKGROUND
A. Facts
Wilhemina McMillian, Lillie Tucker, Clarence Pennywell
and Zerline Pennywell were guests at the Sheraton.
On September 2, 2003, the Pennywells were riding escala-
tor 12 when it “jerked,” R.57 at 1; the malfunction caused
Mr. Pennywell to fall and suffer a separated shoulder
1
Tishman Hotel Corporation (“Tishman”) partially owns the
Sheraton Chicago Hotel & Towers and, consequently, was
included as a defendant in this action.
No. 07-3370 3
and a laceration to the scalp. 2 Ms. Pennywell did not
fall and did not suffer any physical injuries. On Septem-
ber 4, 2003, Ms. McMillian and Ms. Tucker were riding
escalator 8 when that escalator “jerked.” R.57 at 1. As a
result, Ms. McMillian fell and incurred a laceration to
her leg and a sprained knee; Ms. Tucker suffered a menis-
cus tear in her knee, which did not require surgery.3
B. District Court Proceedings
The plaintiffs brought this diversity action against
Sheraton, Tishman and Otis, seeking to recover damages
for the injuries they sustained while riding the Sheraton
escalators. Sheraton and Tishman later filed a cross-claim
against Otis for indemnification and contribution based
on a maintenance agreement in effect at the time of the
plaintiffs’ injuries. During discovery, the plaintiffs sought
information about other escalator malfunctions; in re-
sponse, Sheraton produced two incident reports. The
first of these incidents occurred on September 1, 2003,
when a guest, Mary Kemper, fell while riding either
escalator 5 or 7; according to the report, Kemper was
riding on the escalator when it suddenly stopped, and
she tripped and fell. The other incident occurred on
September 2, 2003; on that day, Carrie Redd fell while
2
See Defendants’ Supplemental Jurisdictional Memorandum
at 7.
3
See Defendants’ Supplemental Jurisdictional Memorandum
at 7.
4 No. 07-3370
she was riding on escalator 7. According to witnesses,
Redd did not properly put her foot on the escalator step
and lost her balance.
Prior to trial, Otis moved in limine to exclude “any
evidence of accidents which occurred on an escalator
other than the subject escalators prior to the date of plain-
tiffs’ accidents.” R.57 at 5. Relying on Davlan v. Otis
Elevator Co., 816 F.2d 287 (7th Cir. 1987), the district court
granted the motion. Following this ruling, the Pennywells
made an “oral motion to dismiss defendant Otis
Elevator Company from [their] case with prejudice.” R.78.
The district court subsequently allowed Sheraton and
Tishman to adopt the motion in limine previously filed
by Otis, thus preventing the plaintiffs from introducing
evidence of other accidents against Sheraton and Tishman.4
In its final-judgment order, the district court recounted
the parties’ actions and its rulings following the grant
of the motion in limine:
6. The Pennywells’ counsel announced that without
the excluded evidence, he did not believe that he
could survive a Motion For Judgment As a Matter of
Law. Based on the above pre-trial rulings, and with-
out prejudice to the parties’ right to appeal those
rulings, Clarence Pennywell, Zerline Pennywell,
Sheraton and Tishman agreed that final judgment
4
The district court also granted the defendants’ motion to
sever the plaintiffs’ claims for trial. Specifically, the Pennywells’
claims were to be tried separately from those of Ms. Tucker
and Ms. McMillian.
No. 07-3370 5
should be entered in favor of Sheraton and Tishman
and against Clarence Pennywell and Zerline Pennywell
on their claims. Initially, the remaining plaintiffs did
not agree to pursue that course.
7. On May 15, 2007, I granted the joint motion of
Sheraton Chicago Hotel & Towers and Tishman Hotel
Company and Clarence Pennywell and Zerline
Pennywell for entry of a Stipulated Order of Final
Judgment on their claims. . . .
8. On August 8, 2007, I held a status conference at
which it was agreed by counsel for Ms. Tucker and
Ms. McMillian that the evidentiary sufficiency of
their case was dependent upon admissibility of the
separate, earlier incidents that allegedly resulted in
injury to the Pennywells. Although I thought my
earlier ruling barring evidence of other incidents in
the Pennywell trial pursuant to Davlan v. Otis Elevator
Company, supra, also barred introduction in the
Tucker/McMillian trial of the separate alleged injuries
to the Pennywells, I ruled from the bench that the
Pennywell ruling applied equally to the claims of
McMillian and Tucker.
9. In a telephone conference with all counsel on
8/10/07, Mr. King, who is counsel for all the plaintiffs,
then agreed that the case of Ms. McMillian and
Ms. Tucker against Sheraton and Tishman could not
survive a motion for judgment as a matter of law
without the evidence of the earlier Pennywell
incident, which occurred on a separate escalator.
6 No. 07-3370
9.[sic] All three counts of the cross-claim of Sheraton
Hotels against Otis are dependent upon a verdict
favorable to the plaintiffs. . . .
10. A final judgment in favor of Tishman Hotel
Corporation and Sheraton Chicago Hotel & Towers
and against all plaintiffs on all counts of the com-
plaint against them also resolves the cross-claim of
Sheraton Chicago Hotel & Towers against Otis
Elevator Company.
11. Accordingly, with the agreement of the parties,
I direct the entry of final judgment in favor of
Sheraton Chicago Hotel & Towers, Tishman Hotel
Corporation, and Otis Elevator Company on the
claims of all plaintiffs against them, and I direct the
entry of final judgment in favor of Otis Elevator
Company and against Sheraton Chicago Hotel &
Towers on its cross-claim against Otis Elevator Com-
pany.
R.109 at 2-4.
II
DISCUSSION
The plaintiffs raise the single issue of whether the
district court abused its discretion in excluding the evi-
dence of other escalator accidents. However, during oral
argument, we became concerned that the consensual
nature of the district court’s judgment may have deprived
us of jurisdiction to consider the plaintiffs’ appeal. We
No. 07-3370 7
also had concerns that the jurisdictional amount in con-
troversy had not been satisfied.5 We asked the parties to
file supplemental memoranda addressing these issues.
We turn first to these jurisdictional matters.
A.
In a case of this nature, our appellate jurisdiction must
be predicated on a final judgment in the district court. See
28 U.S.C. § 1291 (“The courts of appeals . . . shall have
jurisdiction of appeals from all final decisions of the
district courts of the United States . . . .”). A final judg-
ment, for purposes of section 1291, is one that “ends the
litigation on the merits and leaves nothing for the court
to do but execute the judgment.” Coopers & Lybrand v.
Livesay, 437 U.S. 463, 467 (1978).6 In addition to a final
5
Because the plaintiffs invoked the district court’s diversity
jurisdiction, “the matter in controversy” must “exceed[] the
sum or value of $75,000.” 28 U.S.C. § 1332.
6
We have explained the rationale behind the final-judgment
rule accordingly:
The final judgment rule promotes judicial efficiency, as
some issues a party seeks to appeal before a final decision
may be mooted when the case is finally determined on the
merits. Furthermore, the rule helps to avoid piecemeal
appeals that may threaten the independence of trial judges
and prevents the potential harassment and cost that a series
of separate appeals from various individual rulings could
create.
(continued...)
8 No. 07-3370
disposition in the district court, there also must be a
continuing, live controversy between the parties for us to
resolve on appeal. Timms on Behalf of Timms v. Metro. Sch.
Dist. of Wabash County, Ind., 722 F.2d 1310, 1315 (7th
Cir. 1983) (“It is settled that our jurisdiction requires ‘an
actual controversy . . . to exist at all stages of appellate
review.’ ” (quoting Cent. Soya Co. v. Consol. Rail Corp., 614
F.2d 684, 687 (7th Cir. 1980))).
We believe that the record makes clear that the district
court’s dismissal of the plaintiffs’ claims anticipated no
further proceedings and put an end to all matters before
the court. As recounted in the district court’s order, the
Pennywells moved to dismiss their claims against Otis
with prejudice following the district court’s grant of Otis’
motion in limine with respect to other escalator incidents.
After the district court extended this ruling to bar similar
evidence against Sheraton and Tishman, the Pennywells,
and later Ms. Tucker and Ms. McMillian, agreed that
they could not survive a motion for judgment as a matter
of law. Consequently, the court dismissed all of the
remaining claims and entered final judgment on behalf
of the defendants. Although the last order of the court
does not use the terms “with prejudice” explicitly, it is
clear that the parties’ desire to end the litigation was
based on the extension of the evidentiary ruling which
first prompted the Pennywells to move to dismiss Otis
6
(...continued)
ITOFCA, Inc. v. Mega Trans Logistics, Inc., 235 F.3d 360, 364 n.1
(7th Cir. 2000) (citations omitted).
No. 07-3370 9
“with prejudice.” This is sufficient to create a final judg-
ment for purposes of section 1291. See Mother & Father v.
Cassidy, 338 F.3d 704, 707 (7th Cir. 2003) (stating that, when
the parties “do not seriously contest the fact that the
district court has dismissed all claims of all parties, and
that the federal claims have now been dismissed with
prejudice[,] [t]hat is enough to create a final judgment
for purposes of appellate jurisdiction under 28 U.S.C.
§ 1291”). Thus, the district court’s judgment is final.
The district court’s final order not only makes clear
that the disposition was final, but also leaves no doubt
that the disposition was consensual. We previously have
observed that “[o]ne might think . . . that if a judgment
is not contested in the district court then the adversarial
process has ended and the court of appeals has no role to
play.” Downey v. State Farm Fire & Cas. Co., 266 F.3d 675,
682 (7th Cir. 2001). However, matters are not always
that simple. In Downey, we faced a situation, similar to
the present one, in which the parties had agreed to entry
of judgment. Regarding the jurisdictional issue, we stated:
[F]or jurisdictional purposes there is no distinction
between “consent” and “adversarial” judgments.
Judgments are judgments, and any party can appeal
as of right from a final decision adverse to his inter-
ests. So says 28 U.S.C. § 1291, which allows
appeal from “all final decisions of the district courts”.
Finality is the necessary and sufficient condition.
Distinguishing between final judgments entered with
the consent of both parties and final judgments entered
against one party’s wishes would create an ex-
10 No. 07-3370
tra-statutory condition on appeal. This has little to
recommend it, and the possibility has been rejected
by the Supreme Court. See Pacific R.R. v. Ketchum,
101 U.S. 289, 295, 25 L.Ed. 932 (1880). . . .
State Farm is not home free, however. Although the
Supreme Court has held that “consent judgments” are
final and appealable under § 1291 (so appellate juris-
diction is secure) the Court has added that the act of
giving consent usually waives the consenting party’s
right to review, leading to affirmance “without con-
sidering the merits of the cause.” Nashville, Chattanooga
& St. Louis Ry. v. United States, 113 U.S. 261, 266,
5 S. Ct. 460, 28 L.Ed. 971 (1885). . . . Waiver affects, not
a court’s power to hear the case, but whether as a
practical matter it has any job to do. So did State
Farm waive its right to appellate consideration?
Both the Offer of Judgment and the district court’s
judgment reserved State Farm’s right to challenge
the liability determination. A reservation of rights is
incompatible with waiver. See Cutting v. Jerome Foods,
Inc., 993 F.2d 1293 (7th Cir. 1993); Hudson v. Chicago
Teachers Union, 922 F.2d 1306 (7th Cir. 1991). Almost
every circuit that has considered the issue has held
that an express reservation of the right to appeal
avoids waiver of contested issues that had been re-
solved earlier in the litigation. . . . Only the fifth circuit
gives no effect to an express reservation of appellate
rights. See Amstar Corp. v. Southern Pacific Transport Co.,
607 F.2d 1100 (5th Cir. 1979). Amstar, however, offered
no explanation of its holding and so gives us no
No. 07-3370 11
reason to doubt our own conclusion: State Farm
preserved its rights, and we may reach the merits.
Downey, 266 F.3d at 682-83.
As in Downey, the plaintiffs clearly reserved their rights
to appeal the district court’s ruling on the motion in
limine, and the district court’s final order reflected that
reservation of rights. See R.109 at 5. We therefore have
appellate jurisdiction over the plaintiffs’ appeal.
B.
There remains the question of whether the jurisdictional
amount in controversy has been met. To meet the amount-
in-controversy requirement, “the separate claims of
multiple plaintiffs against a single defendant cannot be
aggregated.” Clark v. State Farm Mut. Auto. Ins. Co., 473
F.3d 708, 711 (7th Cir. 2007). We therefore must look to
the individual plaintiffs’ claims to determine whether
they exceed $75,000.
When the jurisdictional threshold is uncontested, we
generally “will accept the plaintiff’s good faith allegation
of the amount in controversy unless it ‘appear[s] to a
legal certainty that the claim is really for less than the
jurisdictional amount.’ ” Rexford Rand Corp. v. Ancel,
58 F.3d 1215, 1218 (7th Cir. 1995) (quoting St. Paul Mercury
Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)). How-
ever, “[w]here, as here, the defendant challenges
the plaintiff’s allegation of the amount in controversy,
the plaintiff must support its assertion with ‘competent
proof.’ ” Id. (quoting McNutt v. Gen. Motors Acceptance
12 No. 07-3370
Corp., 298 U.S. 178, 189 (1936)).7 The plaintiff must prove
the “jurisdictional facts by a preponderance of the evi-
dence.” Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543
(7th Cir. 2006). To satisfy this burden, a party must do
more than “point to the theoretical availability of certain
categories of damages.” Am. Bankers Life Assur. of Florida
v. Evans, 319 F.3d 907, 909 (7th Cir. 2003).
We do not believe that the plaintiffs have met their
burden. Each of the plaintiffs claims damages attributable
to his or her physical injuries in amounts significantly
less than the jurisdictional minimum: Ms. McMillian
claims past medical expenses in the amount of $6,279.42;
Ms. Tucker claims medical expenses in the amount of
$9,798.08; Mr. Pennywell claims medical expenses in the
amount of $9,400.36; and Ms. Pennywell claims no past
medical expenses.8 In their supplemental jurisdictional
memorandum, the plaintiffs maintain that their claims
7
There is no question that Otis challenged the plaintiffs’
allegation concerning the amount in controversy before the
district court and before us. See R.63 and Appellee’s (Otis) Br. 1.
The district court denied Otis’ motion to dismiss for failure
to meet the jurisdictional amount. See R.84. We review this
jurisdictional matter de novo. LM Ins. Corp. v. Spaulding
Enters. Inc., 533 F.3d 542, 547 (7th Cir. 2008).
8
The plaintiffs initially alleged medical expenses in the
amounts of $14,000 (Ms. McMillian), $7,000 (Ms. Tucker), and
$15,000 (Mr. Pennywell); however, the pre-trial order listed
the more detailed amounts set forth above. See Defendants’
(Sheraton & Tishman) Supplemental Jurisdictional Memoran-
dum at 7.
No. 07-3370 13
for future medical expenses and pain and suffering
account for the jurisdictional shortfall. However, none of
the plaintiffs points to any “competent proof” that he or
she could prove damages from these categories to
recover a total amount of damages that would reach
the jurisdictional threshold. They do not suggest that
there is any documentary or testimonial evidence that
would show the necessity for future medical treatment of
their injuries. Nor do they submit factual examples of their
post-accident experience or point us to cases in which the
plaintiffs had suffered similar injuries, and the jury
awarded pain and suffering damages in amounts that
would satisfy the jurisdictional requirements here. See
De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993)
(relying in part on amounts recovered by other plaintiffs,
who had suffered similar injuries, to sustain federal
jurisdiction).
Indeed, in their supplemental brief, the plaintiffs rest
their entire argument concerning amount in controversy
on the allegations contained in their complaint.9 However,
as we previously stated, when the amount in controversy
is contested, the parties asserting federal jurisdiction
must come forward with competent proof that they
have satisfied the jurisdictional threshold and not
9
See Plaintiffs’ Supplemental Jurisdictional Memorandum at
10 (“They demanded judgment in the amount of $750,000,
$500,000 and $1,000,000 respectively. They further alleged
suffering severe bodily and emotional injuries proximately
caused by the appellees’ negligence. They sought damages
for past, present and future medical expenses and pain and
suffering.” (citations omitted)).
14 No. 07-3370
simply point to the theoretical possibility of recovery for
certain categories of damages. The plaintiffs have failed
to meet this burden.1 0
Conclusion
The judgment of the district court is vacated and the
case is remanded with instructions to dismiss the action
for want of jurisdiction. The defendants may recover
their costs in this court.
V ACATED and R EMANDED
10
We note that, in addition to failing to meet their burden of
establishing the requisite amount in controversy, the plaintiffs
also have failed to properly allege diversity of citizenship.
Section 1332 of Title 28 states that a corporation “shall be
deemed to be a citizen of any State by which it has been incorpo-
rated and of the State where it has its principal place of busi-
ness.” 28 U.S.C. § 1332(c)(1). The state of incorporation and the
principal place of business must be alleged in the complaint.
See McCready v. eBay, Inc., 453 F.3d 882, 891 (7th Cir. 2006) (citing
Casio, Inc. v. S.M.&R. Co., Inc., 755 F.2d 528, 529-30 (7th Cir.
1985)). See also Wojan v. Gen. Motors Corp., 851 F.2d 969, 974
(7th Cir. 1988) (stating that party’s allegation that corporation
was “ ‘licensed’ or ‘authorized’ to do business in a state does not
necessarily make [it] a citizen of that state because besides the
state of incorporation, a corporation is only a citizen of the state
in which it has its principal place of business . . . not every state
in which it does business”).
5-29-09