Sheehan v. Gustafson

• Decision Date: 23 June 1992
• Docket Number: No. 91-3078,91-3078
• Citation: 967 F.2d 1214
• Parties: John D. SHEEHAN, Sr., Appellant, v. Deil O. GUSTAFSON, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1214

967 F.2d 1214

John D. SHEEHAN, Sr., Appellant, v. Deil O. GUSTAFSON, Appellee.

No. 91-3078.

United States Court of Appeals Eighth Circuit.

Submitted May 15, 1992.

Decided June 23, 1992.

Timothy D. Kelly, Minneapolis, Minn., argued, for appellant.

Alan L. Kildow, Bloomington, Minn., argued, for appellee.

Before ARNOLD, Chief Judge, LAY, Senior Circuit Judge, and BOWMAN, Circuit Judge.

BOWMAN, Circuit Judge.

John D. Sheehan, Sr., appeals the order of the District Court ¹ dismissing his action for lack of subject matter jurisdiction. We affirm.

Sheehan, a Nevada citizen, commenced an action in February 1991 against Deil O. Gustafson alleging breach of an oral contract involving the proceeds of the sale of the Tropicana Hotel and Casino in Las Vegas, Nevada. Sheehan brought his action in federal court in Minnesota, asserting that diversity jurisdiction was proper under 28 U.S.C. § 1332(a) (1988), because Gustafson, according to the complaint, was a citizen of Minnesota. Gustafson moved to dismiss the complaint for lack of subject matter jurisdiction. The District Court granted that motion in July 1991, holding that Gustafson, like Sheehan, was a citizen of Nevada and thus there was no diversity of the parties. Sheehan appeals.

A district court's conclusion as to citizenship for purposes of federal diversity jurisdiction is a mixed question of law and fact (albeit primarily fact). Blakemore v. Missouri Pac. R.R., 789 F.2d 616, 618 (8th Cir.1986). The findings of fact upon which the legal conclusion of citizenship is based thus are subject to review by this Court under the clearly erroneous standard. Id.

The statute conferring diversity jurisdiction in federal court requires that the parties be citizens of different states. 28 U.S.C. § 1332(a)(1). Section 1332(a) must be strictly construed, in view "of the constitutional limitations upon the judicial power of the federal courts, and of the Judiciary Acts in defining the authority of the federal courts when they sit, in effect, as state courts." Indianapolis v. Chase Nat'l Bank, 314 U.S. 63, 76, 62 S.Ct. 15, 20, 86 L.Ed. 47 (1941) (footnote omitted); accord Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 377, 98 S.Ct. 2396, 2404, 57 L.Ed.2d 274 (1978). Thus the burden falls upon the party seeking the federal forum, if challenged, to demonstrate by a preponderance of the evidence that the parties are citizens of different states. Blakemore, 789 F.2d at 618. The District Court found facts that are not clearly erroneous and determined that Sheehan failed to carry his burden. We cannot say the court erred as a matter of law.

Courts look to the facts as of the date an action is filed to determine whether or not diversity of citizenship exists between the parties. Yeldell v. Tutt, 913 F.2d 533, 537 (8th Cir.1990). "For purposes of diversity jurisdiction, the terms 'domicile' and 'citizenship' are synonymous." Id. Therefore, to determine if Gustafson is a citizen of a state other than Nevada, the proper analysis is the two-part test for domicile: Gustafson's presence in the purported state of domicile and his intention to remain there indefinitely. See id.

The facts of this case, as found by the District Court, indicate that in February 1991 Gustafson had a presence in both Nevada and Minnesota (as well as California and Florida). Gustafson was a citizen of Minnesota until 1973 when he moved to Las Vegas, Nevada, to manage the Tropicana Hotel, which he had purchased in 1972. In 1975, he sold eighty percent of his interest in the hotel. In 1983, Gustafson was convicted in federal court in Minnesota of misappropriation of bank funds and was incarcerated from 1984 to 1987.

The facts found by ...