935 F.3d 49 (2nd Cir. 2019), 18-1469, Van Buskirk v. United Group of Companies, Inc.
|Citation:||935 F.3d 49|
|Opinion Judge:||Richard J. Sullivan, Circuit Judge|
|Party Name:||Bruce A. VAN BUSKIRK and Lori A. Van Buskirk, Plaintiffs-Appellants, v. The UNITED GROUP OF COMPANIES, INC., DCG Funds Management, LLC, DCG/UGOC Funds Management II, LLC, Michael J. Uccellini, Executor of the Estate of Walter F. Uccellini, MCM Securities, LLC, Millennium Credit Markets, LLC, Davis Capital Group, Inc., Jessica F. Steffensen, ...|
|Attorney:||Gary A. Gotto, Keller Rohrback L.L.P., Phoenix, Arizona and David J. Ko, Keller Rohrback L.L.P., Seattle, Washington, for Plaintiffs-Appellants. Michael B. de Leeuw & Tamar S. Wise, Cozen OConnor, New York, New York, for Defendants-Appellees.|
|Judge Panel:||Before: Calabresi, Lohier, Sullivan, Circuit Judges.|
|Case Date:||August 16, 2019|
|Court:||United States Courts of Appeals, Court of Appeals for the Second Circuit|
Submitted: April 11, 2019
[Copyrighted Material Omitted]
Appeal from the United States District Court for the Northern District of New York (Sharpe, J. )
Gary A. Gotto, Keller Rohrback L.L.P., Phoenix, Arizona and David J. Ko, Keller Rohrback L.L.P., Seattle, Washington, for Plaintiffs-Appellants.
Michael B. de Leeuw & Tamar S. Wise, Cozen OConnor, New York, New York, for Defendants-Appellees.
Before: Calabresi, Lohier, Sullivan, Circuit Judges.
Richard J. Sullivan, Circuit Judge
Plaintiffs-Appellants Bruce and Lori Van Buskirk ("Plaintiffs") appeal from a judgment entered by the United States District Court for the Northern District of New York (Gary L. Sharpe, J .) dismissing Plaintiffs claims for lack of subject matter jurisdiction and the district courts subsequent denial of a motion for reconsideration. Plaintiffs argue that, on de novo review, the entire record on appeal demonstrates that they were citizens of Florida — not New York — at the time they filed their suit, and therefore satisfied the complete diversity requirement of 28 U.S.C. § 1332, establishing
federal subject matter jurisdiction. As explained below, because an appellate court may freely permit jurisdictional amendments, we vacate the judgment of the district court and remand so that Plaintiffs may amend their complaint. At that time, the district court may also consider whether to impose costs — including attorneys fees — on Plaintiffs attributable to their failure to provide the district court with all relevant evidence at the time of the order to show cause.
In July 2016, Plaintiffs brought suit against Defendants-Appellees ("Defendants") — The United Group of Companies, Inc.; DCG Funds Management, LLC; DCG/UGOC Funds Management II, LLC; MCM Securities, LLC; Millennium Credit Markets, LLC; Davis Capital Group, Inc.; and individual officers of the various companies — alleging violations of state law including common law fraud, breach of fiduciary duty, negligent misrepresentation, unjust enrichment, and aiding and abetting fraud. Plaintiffs subsequently amended their complaint twice. In all three iterations of their complaint, Plaintiffs alleged that they were "resident[s] of Cobleskill, New York" and that Defendants were citizens of New York or North Carolina.
In February 2018, the district court ordered Plaintiffs to show cause as to why the action should not be dismissed sua sponte under Federal Rule of Civil Procedure 12(h)(3) for lack of subject matter jurisdiction. Plaintiffs submitted a two-paragraph response stating that the court had diversity jurisdiction because "Plaintiffs used to reside in Cobleskill, New York ... but sold their residence in New York and now reside" in Naples, Florida. J. Appx at 107. Plaintiffs argued that Defendants were aware of this "domicile" because they had sent mail to the Florida address. Plaintiffs also attached (1) blurry photocopies of their Florida drivers licenses — one visibly dated "12-28-2016" — and (2) a photocopy of a January 2018 piece of mail from one Defendant addressed to Plaintiffs at the Florida address. In a March 21, 2018 docket entry, the district court agreed with Defendants that "Plaintiffs ... failed to satisfy their burden of proving that they were citizens of states diverse from those of all defendants at the time of filing" and dismissed the complaint for lack of subject matter jurisdiction. J. Appx at 119. Judgment was entered that day.
Plaintiffs thereafter filed a motion for reconsideration, arguing that dismissal was improper and submitting "Declaration[s] of Domicile" — sworn statements signed by Plaintiffs on May 9, 2013 indicating that they then resided in Florida and intended Florida to be their permanent home. On April 13, 2018, the district court denied the motion because the affidavits were known to Plaintiffs at the time of the prior order to show cause and Plaintiffs had failed to invoke any of the strict grounds for reconsideration. Plaintiffs subsequently filed a timely notice of appeal from the district courts April 13, 2018 order denying Plaintiffs motion for reconsideration.
II. STANDARD OF REVIEW
We generally treat an appeal from a denial of a motion for reconsideration that largely renews arguments previously made in the underlying order as bringing up for review the underlying order or judgment. See "R" Best Produce, Inc. v. Disapio, 540 F.3d 115, 121-22 (2d Cir. 2008). "When reviewing the dismissal of a complaint for lack of subject matter jurisdiction, we review factual findings for clear error and legal conclusions de novo, accepting all material facts alleged in the
complaint as true and drawing all reasonable inferences in the plaintiffs favor." Liranzo v. United States, 690 F.3d 78, 84 (2d Cir. 2012). "Denials of motions for reconsideration are reviewed only for abuse of discretion." Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir. 2012).1
Plaintiffs argue on appeal that the district court failed to properly consider evidence proving they were citizens of Florida at the time they filed their complaint. Specifically, Plaintiffs argue that the district court did not attribute enough weight to the evidence submitted in response to the district courts order to show cause or the civil cover sheet they submitted when they filed their initial complaint; Plaintiffs further contend that the district court ought to have considered the declarations of domicile from 2013 that they submitted as part of their motion for reconsideration. In the alternative, Plaintiffs argue that we should invoke our authority under 28 U.S.C. § 1653 to find complete diversity based on the newly submitted evidence. While we essentially agree with the district courts rulings based on the record that existed at the time, we also agree with Plaintiffs that § 1653 affords them another opportunity to establish diversity jurisdiction.
The parties do not dispute that this case may only be properly entertained in federal court on the basis of diversity jurisdiction under 28 U.S.C. § 1332. As relevant to this appeal, "diversity jurisdiction is available only when all adverse parties to a litigation are completely diverse in their citizenships." Herrick Co. v. SCS Commcns, Inc., 251 F.3d 315, 322 (2d Cir. 2001). Complete diversity requires that "all plaintiffs ... be citizens of states diverse from those of all defendants." Pa. Pub. Sch. Emps. Ret. Sys. v. Morgan Stanley & Co., 772 F.3d 111, 118 (2d Cir. 2014). At issue here is whether Plaintiffs are in fact diverse; since it is undisputed that Defendants are citizens of New York and North Carolina, Plaintiffs may not share that citizenship and still satisfy the requirements of diversity jurisdiction.
"An individuals citizenship, within the meaning of the diversity statute, is determined by his domicile ... [in other words] the place where a person has his true fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning." Palazzo ex rel. Delmage v. Corio, 232 F.3d 38, 42 (2d Cir....
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