768 Fed.Appx. 308 (6th Cir. 2019), 18-1969, Can IV Packard Square, LLC v. Schubiner
|Citation:||768 Fed.Appx. 308|
|Opinion Judge:||RALPH B. GUY, JR., Circuit Judge.|
|Party Name:||CAN IV PACKARD SQUARE, LLC, Plaintiff-Appellee, v. Craig SCHUBINER, Defendant-Appellant.|
|Attorney:||Phillip J. DeRosier, Dickinson Wright, Detroit, MI, for Plaintiff - Appellee Mark Granzotto, Law Office, Berkley, MI, for Defendant - Appellant|
|Judge Panel:||Before: GUY, SUTTON, and NALBANDIAN, Circuit Judges.|
|Case Date:||March 29, 2019|
|Court:||United States Courts of Appeals, Court of Appeals for the Sixth Circuit|
Please Refer Federal Rule of Appellate Procedure Rule 32.1. See also U.S.Ct. of App. 6th Cir. Rule 32.1.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN
Phillip J. DeRosier, Dickinson Wright, Detroit, MI, for Plaintiff - Appellee
Mark Granzotto, Law Office, Berkley, MI, for Defendant - Appellant
Before: GUY, SUTTON, and NALBANDIAN, Circuit Judges.
RALPH B. GUY, JR., Circuit Judge.
Plaintiff Can IV Packard Square, LLC (Can IV) sued Defendant Craig Schubiner in federal district court. After brief motion practice, the district court dismissed the case without prejudice and declined to award costs and fees to Schubiner. He now appeals those decisions. For the reasons below, we affirm.
Schubiner endeavored to build an apartment complex in Ann Arbor, Michigan. To finance the project, his company, Packard Square, LLC, entered into a loan agreement with Can IV. Under the terms of the agreement, Packard Square could borrow almost $54 million dollars from Can IV. Schubiner personally guaranteed the loan.
Things did not go according to plan and Packard Square filed for bankruptcy. Can IV subsequently filed a complaint in federal district court alleging that Packard Squares bankruptcy filing constituted a breach of the guaranty, thus making Schubiner liable to Can IV "for the full amount of the loan, including all principal, interest, fees, advances, and charges." In the complaint, Can IV attested that the district court had jurisdiction based on diversity under 28 U.S.C. § 1332.
Soon after the complaint was filed, the district court issued a show-cause order on the matter of jurisdiction. Can IV is a limited liability company, and thus every one of its members must be diverse from Schubiner. See Delay v. Rosenthal Collins Grp., LLC, 585 F.3d 1003, 1005 (6th Cir. 2009) (recognizing that a limited liability company has the citizenship of each partner or member). But the complaint did not disclose Can IVs members, much less where they were domiciled. So the district court required Can IV to "show cause in writing why the case should not be remanded for want of jurisdiction, or file an amended complaint alleging facts to establish that complete diversity prevails between the parties."
On the day of the show-cause deadline, Can IV filed three things: a memorandum responding to the show-cause order, a motion for leave to file a document under seal, and the sealed exhibit referred to in the motion. The memorandum attested that Can IV is diverse from Schubiner and included a redacted organization chart of Can IV; the states of domicile were legible, but the constituent members names were blacked out. The motion explained why redaction and seal were purportedly necessary. According to Can IV, Schubiner had "embarked on a course of harassing, excessive, and burdensome conduct in separate litigation adverse to [Can IV]" and Schubiner had "sought to use the court system as a means to harass various third parties and otherwise seek improper discovery, sometimes resulting in the imposition of sanctions against [Schubiners] company." Can IV thus sought leave to file the unredacted organization chart under seal. Schubiner filed a six-page response opposing the motion.
One week later, the court denied the motion to seal. The court noted the presumption of...
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