First Union Corp. v. American Cas. Co. of Reading
Citation | 222 F.Supp.2d 767 |
Decision Date | 10 January 2001 |
Docket Number | No. 3:00CV538-V.,3:00CV538-V. |
Court | U.S. District Court — Western District of North Carolina |
Parties | FIRST UNION CORPORATION and First Union National Bank, Plaintiffs, v. AMERICAN CASUALTY COMPANY OF READING, PA, Defendant. |
Robert J. Morris, Mark A. Ash, Smith, Anderson, Blunt, Dorsett, Mitchell & Jernigan, Raleigh, NC, for plaintiffs.
Kenneth H. Boyer, Jones, Hewson & Woolard, Charlotte, NC, Daniel J. Standish, Leslie A. Platt, Jodi L. Feldman, Wiley Rein & Fielding, Washington, DC, for defendant.
THIS MATTER is before the Court on the Plaintiffs' "Motion to Remand" (document # 8) and "Memorandum ... in Support ..." (document # 9), both filed December 6, 2000, and the Defendant's "Opposition ..." (document # 15) filed December 27, 2000. The Plaintiff's "Reply Memorandum ..." (document # 16) was filed January 5, 2001.
This motion was referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1)(B), and is now ripe for the Court's consideration.
Having carefully considered the parties' arguments, the record, and the applicable authority, the undersigned will grant the Plaintiffs' motion and remand the matter to state court.
This is a contract action seeking damages in excess of $8.5 million for breach of an insurance policy. The Plaintiff First Union Corporation ("FUC") is a North Carolina corporation with its principal place of business in Charlotte, North Carolina. Plaintiff First Union National Bank ("FUNB"), a subsidiary of FUC, is a federally chartered national bank with its principal place of business in Charlotte, North Carolina, but also operating branch offices in Pennsylvania. The Defendant, American Casualty Company of Reading, Pa. ("American Casualty"), is a Pennsylvania corporation with its principal place of business in Illinois.
On October 6, 2000, the Plaintiffs filed the instant Complaint in the Superior Court of Mecklenburg County, North Carolina. On November 6, 2000, the Defendant removed the state court action to the United States District Court for the Western District of North Carolina, alleging diversity jurisdiction pursuant to 28 U.S.C. § 1332.
On December 6, 2000, the Plaintiffs filed a Motion to Remand, alleging a lack of complete diversity between the Plaintiffs and the Defendant, which has been fully briefed as set forth above and is now ripe for determination.
A case falls within a federal district court's diversity jurisdiction only if the amount in issue exceeds $75,000.00 and diversity of citizenship among the parties is complete—that is, only if no plaintiff and defendant are citizens of the same State. See, e.g., 28 U.S.C. § 1332 (2000); Wisconsin Dept. of Corrections v. Schacht, 524 U.S. 381, 388, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998); Carden v. Arkoma Associates, 494 U.S. 185, 187, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990); and Strawbridge v. Curtiss, 7 U.S. 267, 3 Cranch 267, 2 L.Ed. 435 (1806). The requirements are so absolute that Wisconsin, 524 U.S. at 389, 118 S.Ct. 2047 (internal citations omitted). Accord Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982).
Therefore, this Court may exercise diversity jurisdiction in this matter only if American Casualty's citizenship is diverse from both FUC and FUNB. The citizenship of American Casualty and FUC are clear and undisputed, that is—FUC is a citizen of North Carolina and American Casualty is a citizen of both Pennsylvania and Illinois. See 28 U.S.C. § 1332(c)(1) (2000) (); Athena Automotive, Inc. v. DiGregorio, 166 F.3d 288, 290 (1999) ( ); and Peterson v. Cooley, 142 F.3d 181, 184 (4th Cir.1998).
Further, it is also undisputed that because its principal place of business is in North Carolina, FUNB is a North Carolina citizen. See 28 U.S.C. § 1348.
The single question presented in this instant motion is whether, by virtue of operating branch offices in Pennsylvania, the federally chartered FUNB is also a citizen of Pennsylvania and therefore non-diverse from American Casualty. More exactly, the issue is whether a federally chartered bank is "located" only in the state where it is "established" as those terms are used in 28 U.S.C. § 1348 which provides:
The district courts shall have original jurisdiction of any civil action commenced by the United States, or by direction of any officer thereof, against any national banking association, any civil action to wind up the affairs of any such association, and any action by a banking association established in the district for which the court is held, under chapter 2 of Title 12, to enjoin the Comptroller of the Currency, or any receiver acting under his direction, as provided by such chapter. All national banking associations shall, for the purposes of all other actions by or against them, be deemed citizens of the States in which they are respectively located.
(Emphasis added).
Unlike a corporation, which is a citizen of the state issuing its charter as well as the state where it maintains its principal place of business, a federally chartered bank is "established" only where it maintains its principal place of business. Citizens & Southern Nat'l Bank v. Bougas, 434 U.S. 35, 44, 98 S.Ct. 88, 54 L.Ed.2d 218 (1977) ( ).
In Bougas, the Supreme Court further ruled that, for venue purposes, "established" and "located" have separate and distinct meanings, that is—while a federally chartered bank is "established" only in the state where it maintains its principal place of business, it is also "located" in any state where it maintains a branch office. Id at 44, 98 S.Ct. 88. Although jurisdiction was not at issue in Bougas, the Court did note that 28 U.S.C. § 1348 contains "established" regarding suits brought by the United States against a federally chartered bank, but utilized "located" to define a federally chartered bank's citizenship for diversity purposes.1 Id. at 36, n. 1, 98 S.Ct. 88.
Although there is no authority from any Federal Circuit on point,2 a majority of district courts have followed the Supreme Court's reasoning in Bougas and concluded that a federally chartered bank is "located" in any state where it maintains a branch office and is therefore a citizen of that state for diversity purposes. Accord Firstar Bank, N.A. v. Faul, 2000 WL 1724669, *2 (N.D.Ill. Oct 23, 2000) ( ); Roozenboom v. U.S. Bank, 2000 WL 249403, 3 (D.Or. Feb 22, 2000) (); Frontier Ins. Co. v. MTN Owner Trust, 111 F.Supp.2d 376, 379 (S.D.N.Y.2000) (); Schmidt v. Fleet Bank, 16 F.Supp.2d 340, 354-55 (S.D.N.Y.1998) ( ); Ferraiolo Const., Inc. v. Keybank, 978 F.Supp. 23, 25 (D.Me.1997) ( ); Norwest Bank Minnesota, N.A. v. Patton, 924 F.Supp. 114, 115 (D.Colo.1996) ( ); and Connecticut Nat. Bank v. Iacono, 785 F.Supp. 30, 33-34 (D.R.I.1992) ( ). See also Southland Mobile Homes of South Carolina, Inc. v. Associates Financial Services Co., Inc., 270 S.C. 527, 244 S.E.2d 212, cert denied, 439 U.S. 900, 99 S.Ct. 266, 58 L.Ed.2d 248 (1978) ( ). But see Financial Software Sys. v. First Union Nat'l Bank, 84 F.Supp2d 594, 598 (E.D.Pa.1999) ( ).
While it is doubly ironic that the only...
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