Jordan v. Osmun
| Decision Date | 29 September 2016 |
| Docket Number | Civil Action No. 1:16-cv-501 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | ROBERT JORDAN, et al., Plaintiffs, v. SUSAN A. OSMUN, et al., Defendants. |
This matter comes before the Court on Defendant Susan Osmun's Motion to Dismiss for Lack of Jurisdiction, Dkt. No. 7, 8,1 Defendant Susan Osmun's Second Motion to Dismiss for Lack of Jurisdiction, Dkt. No. 20, and Defendant David Osmun's Motion to Dismiss for Lack of Subject Matter Jurisdiction. Dkt. No. 29. For the reasons discussed below, the Court ORDERS that the Motions to Dismiss are DENIED.
Robert Jordan and Cheryl Anacker (hereafter "Plaintiffs"), pursuant to their Durable Power of Attorney for Lucille Kelly dated April 1, 2016, filed a complaint against Susan Osmun, Ms. Kelly's former attorney-in-fact since September 2008, alleging breach of fiduciary duty, conversion, fraud and unjust enrichment. Plaintiffs filed the Complaint on May 3, 2016, and alleged federal jurisdiction based on diversity of citizenship and sufficient amount in controversy. The Complaint identifies Mr. Jordan as a "resident of New Jersey" and does not listhis citizenship. The Complaint identifies Ms. Anacker as a resident of Florida, Ms. Kelly as a citizen of Virginia and Ms. Osmun as a citizen of New Jersey. Plaintiffs allege that Ms. Osmun misappropriated Ms. Kelly's funds for personal gain through abuse of her powers as attorney-in-fact. Ms. Osmun moved to dismiss the Complaint for lack of diversity of citizenship on the grounds that Mr. Jordan and Ms. Osmun were both citizens of New Jersey. Plaintiffs obtained leave to amend the Complaint to remedy procedural defects and to add Ms. Osmun's husband as a co-defendant. Plaintiffs filed a first amended complaint ("FAC") on July 8, 2016. The FAC identifies Mr. Jordan as "an individual resident, citizen, and domiciliary of Maryland" and Ms. Anacker as "an individual resident, citizen, and domiciliary of Florida." Mr. Osmun is identified as a citizen of New Jersey. The FAC did not amend the citizenship of the remaining parties. Ms. Osmun and Mr. Osmun filed separate motions to dismiss this proceeding for lack of diversity jurisdiction raising different arguments in support of their claims. The matter has since been fully briefed and supplemented with affidavits by the Plaintiffs.
The parties do not dispute that at the time of filing the Complaint Mr. Jordan owned a home in New Jersey, lived there during the week with his seven year-old daughter and intended to remain there (on weekdays) until the completion of his daughter's school year. Plaintiffs also present the sworn affidavit of Mr. Jordan who avows that his wife has lived and worked in Maryland since March 2016, that Mr. Jordan has been approved to transfer to Maryland by his employer since March 2016, that Mr. Jordan signed a lease in April 2016 on a property in Maryland and lives there with his wife on the weekends, that Mr. Jordan's connection to New Jersey is limited to providing for his seven year old daughter to complete the school year in New Jersey, that his daughter will attend school in Maryland for the 2016/2017 school year and thereafter, and that at the time of the complaint Mr. Jordan lived part time in Maryland with anintent to remain there permanently and indefinitely. Mr. Jordan has not yet voted in or paid taxes to Maryland but intends to do so.
Congress "has granted district courts original jurisdiction in civil actions between citizens of different States, between U.S. citizens and foreign citizens, or by foreign states against U.S. citizens." Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552, 125 S. Ct. 2611, 2617, 162 L. Ed. 2d 502 (2005) (citing 28 U.S.C. § 1332). This so-called "diversity jurisdiction" has a "complete diversity" requirement. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373, 98 S. Ct. 2396, 2402, 57 L. Ed. 2d 274 (1978). Under this requirement, "diversity jurisdiction does not exist unless each defendant is a citizen of a different State from each plaintiff." Id. For the purposes of the diversity jurisdiction statute, an individual is considered to be a citizen of the state in which they are domiciled—"i.e. the state he considers his permanent home." See Gambelli v. United States, 904 F.Supp. 494 (E.D. Va. 1995), affirmed by 87 F.3d 1308 (4th Cir. 1996). Virginia law defines domicile as "residence or physical presence accompanied by an intention to remain for an unlimited time." Smith v. Wellberg (In re Wellberg), 12 B.R. 48 (Bankr. E.D. Va. 1981), citing Smith v. Smith, 122 Va. 341, 94 S.E. 777 (1918). Diversity of citizenship is determined at the time of the filing of the action. See Freeport-McMoRan, Inc. v. KN Energy, Inc., 498 U.S. 426 (1991).
Diversity jurisdiction is subject to an amount in controversy requirement. See Exxon Mobil Corp., 545 U.S. at 552. Currently, a district court does not have original jurisdiction over a diversity action unless the amount in controversy exceeds $75,000. Id.
There is no dispute between the parties that the amount in controversy in this disputeexceeds $75,000. Defendants move to dismiss for lack of complete diversity of the parties alleging that Mr. Jordan, one of Ms. Kelly's attorney-in-fact, is a domiciliary of New Jersey and that Defendants are also domiciliaries of New Jersey. Plaintiffs challenge this motion on two grounds: (1) that Mr. Jordan is not a party in interest so his domicile is not relevant to establishing party diversity; and (2) that even if Mr. Jordan is a party in interest, his proper domicile is Maryland rather than New Jersey.
The parties dispute whether Ms. Kelly's attorneys-in-fact, Mr. Jordan and Ms. Anacker, are parties in interest to this controversy and as such, whether their domicile should be considered for purposes of determining diversity jurisdiction.
Pursuant to Federal Rule of Civil Procedure 17(a), a party may sue in his own name with or without joining the party for whose benefit the action is brought. Fed.R.Civ.P. 17(a) (). Plaintiffs contend that they are authorized by statute to bring a suit in Ms. Kelly's name. Va. Code § 64.2-1633 provides that . Ms. Kelly granted Durable General Power of Attorney to Plaintiffs on April 1, 2016, more than a month before the filing of the original complaint. This grant conferred authority to bring a claim under Virginia law and similarly conferred authority to bring an action in federal court under Rule 17(a).
"In a diversity analysis...courts must take into account the citizenship of real parties ininterest, and not just the party under whose name the suit was initiated." Symeonidis ex rel. Symeonidis v. Hurley & Koort, P.L.C., No. CIVA 3:05CV762 JRS, 2006 WL 2375743, at *4 (E.D. Va. Aug. 15, 2006) (quoting Carden v. Arkoma Assocs., 494 U.S. 185, 200 (1990)). It is the citizenship of the real parties in interest which is determinative of diversity jurisdiction. See Roche v. Lincoln Prop. Co., 373 F.3d 610, 615 (4th Cir. 2004), rev'd on other grounds, Lincoln Prop. Co. v. Roche, 546 U.S. 81, 126 S. Ct. 606, 163 L. Ed. 2d 415 (2005). "[A] federal court must disregard nominal or formal parties and rest jurisdiction only upon the citizenship of real parties to the controversy." Navarro Sav. Ass'n v. Lee, 446 U.S. 458, 461 (1980).
Defendants advance a number of arguments in support of their claim that Plaintiffs are real parties in interest for purposes of determining diversity jurisdiction. Mr. Osmun raises only one argument2 in support of this claim. He argues that the parties identified in Rule 17(a) are considered real parties in interest for procedural purposes based on the Supreme Court's decision in Navarro. Defendant Susan Osmun raises three arguments. First, "it appears that the named Plaintiffs' and Kelly could all be separate parties to this lawsuit" because of Plaintiffs' interest in the disposition of Ms. Kelly's estate.3 Second, even if Ms. Kelly's citizenship should be imputed to Plaintiffs, this would not provide diversity because then Ms. Osmun, who has been sued in her former capacity as attorney-in-fact for Ms. Kelly, should be discounted as a party in interest in favor of Ms. Kelly. As a result, the only party in interest for the Plaintiffs and the Defendants would be Ms. Kelly and diversity of citizenship would be lacking. Third, while legal representatives of an infant or incompetent are deemed to be a citizen only of the same state as the infant or incompetent, because Ms. Kelley is not identified in the complaint as incompetent or an infant her legal representatives are citizens of their respective states of domicile.
Plaintiffs contend that Navarro does not control in this case because it concerned a trustee/beneficiary relationship and the present case concerns a principal/agent relationship. Furthermore, they argue that they are acting only on behalf of Ms. Kelly under a Durable General Power of Attorney, that neither Plaintiff stands to benefit in any way from the outcome of the litigation and that they are only before the court in a representative capacity as agents of Ms. Kelly. By contrast, Plaintiffs allege that because Ms. Osmun has enriched herself by converting funds from Ms. Kelly's estate, Ms. Osmun (and her husband because he received the benefit of her acts) does have a personal stake and is a real party in interest to the dispute....
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