Coventry Sewage Associates v. Dworkin Realty Co

71 F.3d 1 (1st Cir. 1995)

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Nature of the Case

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Facts

P owns and operates a private sewer line and sewage pumping station servicing, among others, a supermarket run by Stop & Shop, located on property owned by D, a wholly-owned subsidiary of Stop & Shop. P and D entered into a 'Sewer Connection Agreement' whereby D agreed to pay a service fee for sewer-main usage. The service fee was based, in part, upon the number of cubic feet of water consumed on the property. To determine the amount of water consumed, the parties' contract relied on invoices from the Kent County Water Authority ('KCWA'). The KCWA sent these invoices to D and D, in turn, forwarded them to Coventry. A dispute erupted over the reasonableness of an increase in the service fee, and D refused to pay P's bills which accumulated beginning in early 1994. P filed this action seeking recovery of $74,953.00, the amount it claimed to be due based upon water-usage numbers obtained from the KCWA invoices and what P claimed was the correct new service fee rate. It is undisputed that, at the time P commenced the action, it alleged the amount in controversy in the belief that it exceeded the jurisdictional minimum, and not as a ruse to invoke federal jurisdiction. Before D filed its answer, D contacted the KCWA about the invoices underlying P's fee calculations. The KCWA then sent an employee to the property who discovered that there had been a misreading of D's water meters, essentially caused by the adding of an extra zero to the number of cubic meters actually consumed. By letter dated November 18, 1994, the KCWA notified D that it was correcting the billing error by changing the amounts of the invoices. Based upon the KCWA's corrected invoices, P reduced the sum of its bills to D to only $18,667.88, an amount that included the disputed fee increase. D then paid the undisputed portion of the fee, $10,182.48, initially withholding the disputed balance of $8,485.40. D remaining sum as well, reserving the right to recoup the amount should it prevail in its challenge to the reasonableness of the service fee. D then moved to dismiss the action under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction. The district court granted the motion, finding that, 'to a legal certainty,' the amount in controversy did not exceed $50,000 as required by 28 U.S.C. § 1332(a). Notwithstanding the small amount actually in controversy, P appeals the dismissal of the action.