Mackason v. Diamond Financial LLC, 04 Civ. 9722(CSH).

• Decision Date: 15 December 2004
• Docket Number: No. 04 Civ. 9722(CSH).,04 Civ. 9722(CSH).
• Citation: 347 F.Supp.2d 53
• Parties: Charhond MACKASON and Kevin Roberts, Plaintiffs, v. DIAMOND FINANCIAL LLC and Diamond Hold, JV, Defendants.
• Court: U.S. District Court — Southern District of New York

347 F.Supp.2d 53

Charhond MACKASON and Kevin Roberts, Plaintiffs, v. DIAMOND FINANCIAL LLC and Diamond Hold, JV, Defendants.

No. 04 Civ. 9722(CSH).

United States District Court, S.D. New York.

December 15, 2004.

Howard R. Sanders, Howard R. Sanders, Esq., New York City, for Plaintiffs.

Marguerite D. Peck, Downing & Peck, P.C., New York City, for Defendants.

MEMORANDUM OPINION AND ORDER

HAIGHT, Senior District Judge.

This is an action for personal injuries allegedly suffered by the plaintiffs when an interior ceiling collapsed in a building in the Bronx owned and operated by the defendants. Plaintiffs commenced their action in the Supreme Court of the State of New York, Bronx County. Defendants removed the case to this Court on the ground of diversity of citizenship under 28 U.S.C. § 1332(a)(1). The case was assigned by lot to the undersigned.

Defendants state in their notice of removal dated December 9, 2004 at ¶ 3 that diversity is present because the plaintiffs "reside in New York, New York" and both defendants "have their principal place of business in Englewood Cliffs, New Jersey." With respect to the plaintiffs, these averments track the complaint, which alleges that plaintiff Charhond Mackason "was and still is a resident of the City of New York, County of Bronx, State of New York," ¶ 1, and that plaintiff Kevin Roberts "was and still is a resident of the City of New York, County of Kings, State of New York," ¶ 2. There are no allegations in the complaint about the defendants' principal places of business. Presumably counsel for defendants, in drafting the notice of removal, relied for these averments upon information supplied by the defendants themselves.

Federal district courts are courts of limited jurisdiction. A district court is required to raise sua sponte the question whether diversity of citizenship is adequately pleaded,¹ either by the complaint where a plaintiff commences an action in a federal court, or by the notice of removal where a defendant removes to a federal court an action commenced by a plaintiff in a state court. The case at bar presents the latter situation; and it is clear that defendants' notice of removal does not adequately allege diversity of citizenship.

As for the two plaintiffs, all that is alleged is their New York residences. But it is settled law that with respect to individual parties, citizenship for diversity purposes "depends upon their places of domicile. Even though a party may have several places of residence, he or she may have only one domicile at a given time." Chappelle v. Beacon Communications Corp., 863 F.Supp. 179, 181 (S.D.N.Y.1994) (citing cases). "[A]llegations of residence are insufficient to establish diversity jurisdiction. It is well-established that when the parties allege residence but not citizenship, the court must dismiss the suit." Held v. Held, 137 F.3d 998, 1000 (7th Cir.1998) (citation and internal quotation marks omitted). See also Automotive Finance Corp. v. Automax of Northern Illinois, Inc., 194 F.Supp.2d 796, 797 (N.D.Ill.2002) (complaint's jurisdictional allegations insufficient where plaintiff "identifies only his state of residence and not his state of citizenship, even though by definition the latter is the relevant fact.") (emphases in original). Accordingly the allegations in the complaint with respect to the plaintiffs' places of residence are insufficient to establish diversity jurisdiction.

As for the two defendants, the complaint alleges that defendant Diamond Financial L.L.C. "is a foreign limited liability company," ¶ 3, and defendant Diamond Hold, J.V. is "a foreign joint venture," ¶ 4. Defendants's notice of removal does not question those characterizations; it simply recites that both defendants have their principal places of business in New Jersey.

In the case at bar, the defendants' principal places of business are irrelevant to diversity analysis. Defendants may have in mind the provision in 28 U.S.C. § 1332(c)(1) that for diversity purposes "a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business" (emphasis added), but limited liability companies and joint ventures are not regarded as corporations within the meaning of the diversity statute.

For diversity purposes, the citizenship of a limited liability company ("LLC") depends upon the citizenship of its members. See Handelsman v. Bedford Village Assoc. Ltd. P'ship, 213 F.3d 48, 51 (2d Cir.2000) ("[D]efendants Bedford Partnership and Bedford LLC are, for diversity purposes, citizens of Florida because both entities have Florida members."), citing with approval Cosgrove v. Bartolotta, 150 F.3d 729, 731 (7th Cir.1998) (holding that because an LLC resembled a limited partnership and "members of associations are citizens for...