Halleran v. Hoffman
| Decision Date | 06 April 1992 |
| Docket Number | No. 91-2180,91-2180 |
| Parties | Arthur J. HALLERAN, Jr., etc., Plaintiff, Appellant, v. Harry M. HOFFMAN, etc., Defendant, Appellee. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
Barbara L. Moore with whom Robert S. Molloy and Cooley, Manion, Moore & Jones, P.C., Boston, Mass., were on brief for plaintiff, appellant.
Philip Fertik with whom Herbert Beigel, Beigel & Sandler, Ltd., Chicago, Ill., Peter A. Pease and Berman, Devalerio & Pease, Boston, Mass., were on brief, for defendant, appellee.
Before CYR, Circuit Judge, COFFIN and CAMPBELL, Senior Circuit Judges.
After appealing from the district court's dismissal of a declaratory judgment action, plaintiff, for the first time on appeal, challenges the existence of diversity jurisdiction. Because we cannot determine on the record before us whether diversity jurisdiction exists, we remand to the district court for further fact-finding.
The underlying legal dispute involves the management of the Park Towne Place Associates Limited Partnership ("Park Towne"), which operates an apartment complex in Pennsylvania. Attorney Herbert Beigel sent a letter to all of Park Towne's limited partners, inviting them to retain his law firm to file suit against Park Towne's general partner Winthrop Financial Associates ("WFA"), and its affiliates for misrepresentation and breach of fiduciary duty. Seeking to preempt such a suit, plaintiff filed a declaratory judgment action in a Massachusetts state court. Asserting the existence of federal subject matter jurisdiction based upon diversity of citizenship, defendant removed the action to the District Court for the District of Massachusetts. 1 The district court dismissed on the ground that declaratory relief was inappropriate, and plaintiff has appealed.
The parties named in the complaint are as follows:
ARTHUR J. HALLERAN, JR., as general partner of LINNAEUS ASSOCIATES LIMITED PARTNERSHIP as general partner of WINTHROP FINANCIAL ASSOCIATES, A LIMITED PARTNERSHIP, as general partner of PARK TOWNE PLACE ASSOCIATES LIMITED PARTNERSHIP,
Plaintiff
v.
HARRY M. HOFFMAN, as representative limited partner of PARK TOWNE PLACE ASSOCIATES LIMITED PARTNERSHIP,
In addition, Park Towne is named as a nominal defendant. Defendant Hoffman asserted diversity jurisdiction because Halleran is a resident of Massachusetts, and Hoffman a resident of Pennsylvania. Hoffman's assertion stood unchallenged until after briefs were filed in this court, when plaintiff-appellant, in a letter to the court and at oral argument, argued that diversity was lacking under the rule of Carden v. Arkoma Assoc., 494 U.S. 185, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990).
In Carden the Supreme Court held that, for purposes of diversity jurisdiction, a limited partnership is a citizen of every state of which its general or limited partners are citizens. Under this rule, plaintiff says that diversity is lacking here for two reasons. First, according to an affidavit in the record, several Park Towne limited partners are citizens of Pennsylvania. Second, plaintiff's counsel represents that several WFA limited partners are residents of Pennsylvania. Either way, plaintiff says, the resulting Pennsylvania citizenship of one (or both) of the limited partnerships destroys diversity because defendant Hoffman is also a citizen of Pennsylvania.
We agree with plaintiff's second theory, regarding WFA's citizenship. But because our only information as to that citizenship comes from a representation by counsel, we remand the case for further fact-finding.
A challenge to federal subject matter jurisdiction may be raised at any time, including for the first time on appeal. See Fed.R.Civ.P. 12(h)(3); Mansfield, Coldwater & Lake Michigan Ry. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 511, 28 L.Ed. 462 (1884) (). It follows that where the record on appeal does not contain facts supporting jurisdiction, a court of appeals must, at a minimum, remand for inquiry into jurisdictional facts. See Penteco Corp. v. Union Gas System, 929 F.2d 1519, 1522-23 (10th Cir.1991); Trent Realty Assoc. v. First Federal Savings & Loan Assoc., 657 F.2d 29, 36 (3d Cir.1981); Shahmoon Industries, Inc. v. Imperato, 338 F.2d 449, 452 (3d Cir.1964).
Diversity jurisdiction requires complete diversity between all the plaintiffs and all the defendants. Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806). In this case, if any of WFA's limited partners are citizens of Pennsylvania, then WFA itself is a citizen of Pennsylvania. Carden, 494 U.S. at 195-96, 110 S.Ct. at 1021. The only legal question at issue is whether WFA's citizenship matters for diversity purposes. Defendant argues that it does not, because the action was brought in the name of an individual, Arthur Halleran, and not in the name of WFA.
We find this argument unconvincing. It is true that the limited partnership in Carden brought suit in its own name, apparently under a state law rule allowing limited partnerships to sue in their own names. See 494 U.S. at 186, 110 S.Ct. at 1016. Many states, unlike Massachusetts, have adopted such a rule. See 7C Wright, Miller & Kane, Federal Practice and Procedure, § 1861. Massachusetts, however, adheres to the common law rule requiring that an action on behalf of a limited partnership be brought by the general partners or by a representative under class action procedures. See Gorovitz v. Planning Board of Nantucket, 394 Mass. 246, 249, 475 N.E.2d 377 (1985); Milton Commons Assoc. v. Board of Appeals, 14 Mass.App.Ct. 111, 111 n. 1, 436 N.E.2d 1236, app. denied, 387 Mass. 1101, 440 N.E.2d 21 (1982); Roberts-Haverhill Assoc. v. City Council of Haverhill, 2 Mass.App.Ct. 715, 721, 319 N.E.2d 916 (1974). Accordingly, this suit was originally brought by Halleran, in a Massachusetts court, in his capacity as general partner of a limited partnership that is in turn the general partner of WFA.
We do not think the above procedural differences render Carden toothless in states like Massachusetts where limited partnerships still must sue under the names of general partners or others. At least two courts of appeals, anticipating Carden, have considered the citizenship of limited partners for diversity purposes when suit was brought by a general partner on behalf of the limited partnership. Stouffer Corp. v. Breckenridge, 859 F.2d 75 (8th Cir.1988); Carlsberg Resources Corp. v. Cambria Savings and Loan Ass'n, 554 F.2d 1254 (3d Cir.1977). Similarly, the Supreme Court has held that the citizenship of all the members of a joint stock company must be considered even though, pursuant to a state statute, suit was brought on behalf of the company by its president. Chapman v. Barney, 129 U.S. 677, 9 S.Ct. 426, 32 L.Ed. 800 (1889).
In this case, there can be no doubt that suit was brought for and on behalf of WFA. The complaint...
To continue reading
Request your trial
-
South Port Marine, LLC v. Gulf Oil Limited, CIV. 98-20-P-H.
...partnership is a citizen of every state of which its general partner or any of its limited partners is a citizen. See Halleran v. Hoffman, 966 F.2d 45, 47 (1st Cir.1992) (citing Carden v. Arkoma Assocs., 494 U.S. 185, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990)).14 If the plaintiff were allowed ......
-
Irabor v. Lufthansa Airlines, Civil Action No. 19-12087-FDS
...9, 17 (1st Cir. 2008) (emphasis omitted) (citing Strawbridge v. Curtiss , 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806) ; Halleran v. Hoffman , 966 F.2d 45, 47 (1st Cir. 1992) ).1. Amount in Controversy Under 28 U.S.C. 1446(c)(2), the amount in controversy is the amount claimed in the plaintiff......
-
Bennett v. City of Holyoke
...this principle in finding nonwaivable objections that go to a federal court's power to adjudicate a case. See, e.g., Halleran v. Hoffman, 966 F.2d 45, 47 (1st Cir.1992); United States v. AVX Corp., 962 F.2d 108, 116 n. 7 (1st Cir.1992). But that principle has no application here: the notice......
-
Esso Standard Oil Co. v. Zayas, Civil No. 04-1711(SEC).
...challenge to federal subject matter jurisdiction may be raised at any time, including for the first time on appeal." Halleran v. Hoffman, 966 F.2d 45, 47 (1st Cir.1992). Therefore, we address Defendant's jurisdictional challenge despite his conspicuous timing.3 Esso filed the instant action......