Abbott v. United Venture Capital, Inc., CV-R-86-593-ECR

• Decision Date: 09 November 1988
• Docket Number: No. CV-R-86-593-ECR,CV-N-87-106-ECR.,CV-R-86-593-ECR
• Citation: 718 F. Supp. 823
• Parties: George W. ABBOTT, Plaintiff, v. UNITED VENTURE CAPITAL, INC., a Nevada corporation, Inn Management, Inc., a Nevada corporation, Seth L. Atwood, Robert J. Angres, and Mark H. Gunderson, Defendants.
• Court: U.S. District Court — District of Nevada

718 F. Supp. 823

George W. ABBOTT, Plaintiff, v. UNITED VENTURE CAPITAL, INC., a Nevada corporation, Inn Management, Inc., a Nevada corporation, Seth L. Atwood, Robert J. Angres, and Mark H. Gunderson, Defendants.

Nos. CV-R-86-593-ECR, CV-N-87-106-ECR.

United States District Court, D. Nevada.

November 9, 1988.

Thomas M. Kelly, Minden, Nev., for plaintiff.

George W. Abbott, Minden, Nev., pro se.

Mark H. Gunderson, Reno, Nev., Kim Hagerty, Incline Village, Nev., and Pinkerton & Polaha, Reno, Nev., for defendants.

ORDER

EDWARD C. REED, Jr., Chief Judge.

The matters before the Court involve two complaints brought by plaintiff Abbott against defendants United Venture Capital, Inc. ("UVC"), Inn Management, Inc. ("Inn"), Seth Atwood ("Atwood"), Robert Angres ("Angres"), and Mark Gunderson ("Gunderson"). The first complaint, CV-R-86-593-ECR, accuses the defendants of defamation. The second complaint, CV-N-87-106-ECR, alleges that the same defendants are liable to Abbott for malicious prosecution, abuse of process, intentional infliction of emotional distress, fraud, and related torts. Both of these complaints stem from the defendants' actions in filing a separate and distinct lawsuit against Abbott in May of 1985.

This lawsuit against Abbott also named many other individuals and corporations as defendants. It accused Abbott, who was and is an attorney, and the others of, inter alia, fraud, conspiracy, and numerous violations of both federal securities laws and federal racketeering statutes. See First Amended Complaint filed August 2, 1988, Exhibit 1. The origin of this lawsuit was a dispute between UVC and one of Abbott's clients, regarding the client's procurement and use of several millions of dollars of loans from UVC.

Soon after filing this complaint in federal court in the Northern Division of the District of Nevada, Gunderson, acting as an attorney on behalf of UVC, Inn, Atwood, and Angres, sent a letter to the Nevada Appeal, a local newspaper. In this letter, Gunderson announced that UVC had initiated a lawsuit against several persons and entities, including Abbott. The letter also summarized the factual basis underlying UVC's lawsuit and contained a copy of the complaint that UVC had filed. See Defendant's Motion to Dismiss filed May 5, 1987, Exhibit B.

On March 5, 1986, UVC voluntarily dismissed Abbott from its lawsuit pursuant to Fed.R.Civ.P. 41(a). Approximately two months later, on May 21, UVC's entire lawsuit was dismissed with prejudice.

Abbott's defamation complaint currently before this Court alleges that the defendants libeled him by sending the letter and a copy of the complaint to the Nevada Appeal and other print, radio, and television media in Nevada. First Amended Complaint filed August 2, 1988, at 4-7. As a result of the defendants' publication of these materials to the media, Abbott contends that approximately 300,000 people were informed of the charges against him. Id. at 5. Abbott alleges that the defendants publication of these materials to the media, not the media's republication of the charges to the public, constituted libel per se. Abbott asserts federal diversity jurisdiction under 28 U.S.C. § 1332(a)(1) on the ground that when he commenced this action, in December of 1986, he was a citizen of California and all the defendants were Nevada corporations or citizens. Id. at 1-2. Abbott's second complaint, alleging malicious prosecution, intentional infliction of emotional distress, and related torts, which was filed in March of 1987, also asserts diversity jurisdiction.

The Court referred all pretrial proceedings in both of these cases to the United States Magistrate. Minute Order of June 29, 1987. Pursuant to this Order, the Magistrate has recommended the denial of two of defendants' motions that seek to dismiss Abbott's complaint. See Order entered August 18, 1988; Report and Recommendation entered April 13, 1988. One of these motions argues that both of Abbott's complaints should be dismissed because Abbott's citizenship is not diverse from the defendants' citizenship.¹ The second motion attempts only to dismiss Abbott's defamation complaint on the grounds that the publications at issue either were not libelous per se or were privileged communications. Defendants have filed their objections to the Magistrate's recommendations of denial and these motions, therefore, are now ripe for consideration by this Court.² Since both of defendants' motions are dispositive in the sense that they seek to dismiss Abbott's complaints, this Court shall make a de novo determination of the merits of defendants' motions.³ See 28 U.S.C. § 636(b)(1); Local Rules of the District of Nevada, Rule 510-2.

I. JURISDICTIONAL ISSUE

Defendants first motion argues that this Court lacks subject matter jurisdiction over Abbott's complaints. Since the torts alleged by Abbott are not federal causes of action, Abbott's only basis for asserting federal jurisdiction is the diversity statute, 28 U.S.C. § 1332(a)(1). Abbott alleges that all of the defendants are Nevada citizens and that he is a California citizen. While the defendants concede that they are Nevada citizens, they maintain that when Abbott filed his complaints, between December, 1986, and March, 1987, he was also a Nevada citizen.

The Magistrate held an evidentiary hearing on this issue on August 9, 1988. On the basis of the testimony presented at this hearing, the Magistrate concluded that at the time Abbott filed his original complaints, he was a California citizen. The Magistrate explicitly found that Abbott had resided in Woodfords, California, during all of 1986 and through April of 1987. In May of 1987, the Internal Revenue Service seized and sold Abbott's Woodfords home on grounds which Abbott is currently challenging in court. Two months later, a fire destroyed this home. The Magistrate found that prior to the fire, Abbott had an intent to remain domiciled at his California residence indefinitely. Order entered August 18, 1988, at 2-3.

The defendants argue that the facts adduced at the evidentiary hearing do not support the Magistrate's findings. Defendants concede that from 1979 until mid-1987, Abbott's "primary residence" was in Woodfords, California, approximately fifteen miles from the Nevada state line. Defendants contend, however, that despite this primary residence in California, Abbott had a "more substantial relationship" with the State of Nevada. At the evidentiary hearing, Abbott testified that between 1979 and 1987, he was licensed to practice law in Nevada and not in California. Abbott added that his law practice had been based in Nevada since 1961. He also testified that he had long maintained a small apartment in Minden, Nevada, in the same building as his law office, at which he kept some business suits and occasionally slept overnight. In addition, he registered his cars in Nevada and possessed a Nevada Driver's License. Furthermore, Abbott did his banking in Nevada, listed a Nevada Post Office Box as his mailing address on his federal income tax returns, and never filed a California state income tax return. Finally, while Abbott stated that he had registered to vote in California, he admitted that he had never actually voted in that state. He also declared that he had voted in Nevada in the 1980 presidential election.

For the purposes of diversity jurisdiction, a United States citizen is considered a citizen of the state in which he is domiciled. Lew v. Moss, 797 F.2d 747, 749 (9th Cir.1986); Kantor v. Wellesley Galleries, Ltd., 704 F.2d 1088, 1090 (9th Cir.1983); Safeco Ins. Co. v. Mirczak, 662 F.Supp. 1155, 1157 (D.Nev.1987). A person is "domiciled" in a location when he "has established a `fixed habitation or abode in a particular place, and intends to remain there permanently or indefinitely.'" Lew, 797 F.2d at 749-50 (quoting Owens v. Huntling, 115 F.2d 160, 162 (9th Cir.1940)); see also Safeco Ins. Co., 662 F.Supp. at 1157. In determining diversity, the relevant domicile is the one at the time of the lawsuit's filing. Lew, 797 F.2d at 750; Hill v. Rolleri, 615 F.2d 886, 889 (9th Cir.1980). Furthermore, the burden of proof in establishing diversity of citizenships is on the party asserting diversity as a basis for federal jurisdiction. Lew, 797 F.2d at 749, Safeco Ins. Co., 662 F.Supp. at 1156.

In light of these principles, Abbott has the burden of proving that when he originally filed his complaints, his state of domicile was California. The Magistrate concluded that Abbott had met this burden by credibly testifying that for almost eight years prior to filing his complaint, he had lived with his wife and children at a large home in Woodfords, California. The defendants argue, however, that although Abbott did reside in California, he did not intend to remain there indefinitely. In support of their argument, defendants discount Abbott's testimony regarding his subjective intent and stress the objective factors that indicate Abbott's lack of meaningful ties to California. The defendants emphasize that in analyzing a resident's "intent to remain," many courts have considered such factors as the resident's place of employment, driver's license, automobile registration, bank accounts, tax payments, and voting practices. See, e.g., Lew, 797 F.2d at 750, 752; Noreiga v. Lever Bros. Co., 671 F.Supp. 991, 993-94 (S.D.N.Y. 1987); Knapp v. State Farm Ins., 584 F.Supp. 905, 907 (E.D.La.1984).

The Court notes, however, that cases which examine these "objective indicia" usually involve an individual who has recently relocated from one state to another without establishing ties to their new state or cutting their previous ties. See, e.g., Noreiga, 671 F.Supp. at 994-95; Willis v. Westin Hotel Co., 651 F.Supp. 598, 603-04 (S.D.N.Y.1986); Deckers v. Kenneth W. Rose, Inc., 592 F.Supp. 25, 27-28 (M.D.Fla. 1984); Avins v. Hannum, 497 F.Supp. 930, 936-38 (E.D.Pa.1980). In contrast, the case at bar involves an individual who...