Tanon v. Muniz

• Citation: 312 F.Supp.2d 143
• Decision Date: 31 March 2004
• Docket Number: No. CIV. 01-2624(SEC).,CIV. 01-2624(SEC).
• Parties: Olga TAÑON Plaintiff v. Rafo MUÑIZ, et al. Defendants
• Court: U.S. District Court — District of Puerto Rico

312 F.Supp.2d 143

Olga TAÑON Plaintiff v. Rafo MUÑIZ, et al. Defendants

No. CIV. 01-2624(SEC).

United States District Court, D. Puerto Rico.

March 31, 2004.

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Celina Romany-Siaca, Esq. and Juan M. Frontera-Suau, Esq., San Juan, PR, for Plaintiff.

Judith Berkan, Berkan & Méndez, San Juan, PR, for Defendants.

OPINION AND ORDER

CASELLAS, District Judge.

Pending before the Court is Defendants' motion to dismiss due to lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1) and request for attorney fees and costs (Docket # 56). Defendants' assert that there is absence of diversity among the parties and hence the Court lacks jurisdiction to entertain the above captioned claim. Plaintiff has filed an opposition to said motion (Docket # 57), Defendants have replied (Docket # 68) and Plaintiffs have in turn sur-replied (Docket # 71). After a lengthy and careful review of the parties' arguments, the submitted documents and the applicable law, Defendants' motion will be GRANTED as to the dismissal of the claim and costs and DENIED as to the attorneys' fees.

Background

This action was brought by Olga Tañón, a renowned Puerto Rican singer and composer, against her former manager, Rafo Muñiz, his wife, and his company, Promotores Latinos. Ms. Tañón, who is the owner of homes both in Orlando, Florida, and Puerto Rico, has alleged breach of contract, as well as general tort allegations. Subject matter jurisdiction was founded on 28 U.S.C. § 1332, based on the assertion that Ms. Tanon was a "resident" of Florida, and therefore purportedly "diverse" with respect to the Defendants, residents of Puerto Rico.

The original action was filed on November 28, 2001 (Docket # 1), with considerable publicity attendant thereto, in light of the public figures involved. Shortly thereafter, Ms. Tañón amended the complaint for the first time (Docket # 2). On December 19, 2001, she filed a Second Amended Complaint (Docket # 12), after which the Defendants were finally served with process. Ms. Tañón modified the complaint yet again on June 14,2002, when she filed a "Supplemental Pleading," eliminating the cause of action in tort, as well as all of the "defamation" language which had been asserted in the three previous versions of the complaint (Docket # 48).

Standard of Review

In general terms, a defendant may move to dismiss an action for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1). In this type of jurisdictional challenge, "the standard applied to a 12(b)(1) motion is similar to the standard applied to a 12(b)(6) motion, namely, the court must take all of plaintiff's allegations as true and must view them, along with all reasonable inferences therefrom, in the light most favorable to plaintiff." Pejepscot Indus. Park v. Maine Cent. R.R., 215 F.3d 195, 197 (1st Cir.2000); Freiburger v. Emery Air Charter, Inc., 795 F.Supp. 253, 257 (N.D.Ill., 1992). See also Hart v. Mazur, 903 F.Supp. 277 (D.R.I.1995) ("Motions under Rule 12(b)(1) and Rule 12(b)(6) are subject to the same standard of review.") However, once the jurisdictional challenge has been raised, the plaintiff carries the burden of demonstrating the existence of the Court's jurisdiction. Puerto Rico Tel. v. Telecom. Regulatory Bd., 189 F.3d 1, 7 (1st Cir.1999).

In assessing whether dismissal is appropriate, "the trial court, must accept as true the well-pleaded factual allegations of the complaint, draw all reasonable inferences therefrom in the plaintiff's favor, and determine whether the complaint, so read, limns facts sufficient to justify recovery on any cognizable theory." LaChapelle v. Berkshire Life Ins. Co., 142 F.3d 507, 508 (1st Cir.1998) (citations omitted). But "[a]lthough this standard is diaphanous, it is not a virtual mirage." Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir.1997) citing Gooley v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir.1988). In order to survive a motion to dismiss, "a complaint must set forth `factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory.' "Id. In judging the sufficiency of a complaint, courts must "differentiate between well-pleaded facts, on the one hand, and `bald assertions, unsupportable conclusions, periphrastic circumlocution, and the like,' on the other hand; the former must be credited, but the latter can safely be ignored." LaChapelle, 142 F.3d at 508 (quoting Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir.1996)). See also Rogan v. Menino, 175 F.3d 75, 77 (1st Cir.1999). Courts, moreover, "will not accept a complainant's unsupported conclusions or interpretations of law." Washington Legal Foundation v. Massachusetts Bar Foundation, 993 F.2d 962, 971 (1st Cir.1993).

Applicable Law and Analysis

Federal courts "are not at liberty to overlook limitations on their subject matter," Francis v. Goodman, 81 F.3d 5, 8 (1st Cir.1996), but rather are required to strictly construe those statutes which grant their jurisdiction, Garcia-Perez v. Santaella 208 F.Supp.2d 200, 203 (D.P.R.2002). See also Alicea-Rivera v. SIMED, 12 F.Supp.2d 243, 245 (D.P.R.1998). In cases in where diversity of citizenship is the sole basis for invoking subject matter jurisdiction, without a preponderance of the evidence establishing diversity, the district court would lack judicial power to adjudicate the controversy. Francis, 81 F.3d at 6.

In the case at hand, Plaintiff has invoked the Court's jurisdiction pursuant to the diversity statute, 28 U.S.C. § 1332. Diversity jurisdiction requires complete diversity between all plaintiffs and all defendants. See Casas Office Machines v. Mita Copystar America, Inc., 42 F.3d 668, 673 (1st Cir.1994). Defendants have challenged Plaintiff Tañón's jurisdictional allegations; accordingly, Plaintiff bears the burden of proving, by a preponderance of the evidence, the facts supporting jurisdiction. Bank One v. Montle, 964 F.2d 48, 50 (1st Cir.1992); O'Toole v. Arlington Trust Co., 681 F.2d 94, 98 (1st Cir.1982); Garcia-Perez, 208 F.Supp.2d 200; Palermo v. Abrams, 62 F.Supp.2d 408, 410 (D.P.R.1999) Casellas, J. ([t]he party invoking subject matter jurisdiction must support its allegation of jurisdiction by "competent proof").

The First Circuit has counseled district courts to give the parties a hearing and conduct discovery prior to its ruling on the existence of subject matter jurisdiction, or lack thereof. Bank One, 964 F.2d at 52 (citing Williamson v. Tucker, 645 F.2d 404, 414 (5th Cir.1981)). However, although a hearing may be appropriate, it is not necessarily required. Valentin v. Hospital Bella Vista, 254 F.3d 358, 364 (1st Cir.2001). In the instant case the parties have extensively discussed the jurisdictional issue through their respective motions, they have also conducted exhaustive discovery regarding the facts related to the alleged diversity of Plaintiff and they have presented the court with hard evidence such as tax returns, driver's license and depositions. Accordingly, the Court feels that it has been placed in a well informed position regarding the jurisdictional issue and that the holding of a hearing is not warranted since it would be a time consuming process that would add little to the discussion.

"For federal jurisdictional purposes, diversity of citizenship must be established as of the time of suit." Valentin, 254 F.3d at 361 (citing Bank One, 964 F.2d at 49). Accordingly, the critical date here is November 28, 2001, the date on which Plaintiff filed her complaint. Plaintiff's jurisdictional argument hinges on her contention that she was a resident of the state of Florida for diversity purposes when she filed suit. Defendants contend that, on the date the suit was filed, although Plaintiff had a residence in Orlando, Florida, she was still domiciled in Puerto Rico.

Diversity jurisdiction exists when the claims in the complaint are between citizens of different states and when the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs. 28 U.S.C. § 1322(a). It is hornbook law that when federal jurisdiction is based on diversity of citizenship, complete diversity must exist between the adverse parties in the action. That is, the citizenship of each plaintiff must be diverse from that of each defendant. See Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373-74, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978); Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 829, 109 S.Ct. 2218, 104 L.Ed.2d 893 (1989); Soler v. P.R. Telephone Co., 230 F.Supp.2d 232, 234 (D.P.R.2002) (citing Owen Equip. and Newman-Green). Moreover, the existence of diversity jurisdiction must be evident on the face of the complaint in order for a federal court to assume jurisdiction. Fifty Associates v. Prudential Insurance Co. of America, 446 F.2d 1187 (9th Cir.1970); Soler, 230 F.Supp.2d at 234.

For purposes of diversity jurisdiction, citizenship is usually equated with domicile. Valentin, 254 F.3d at 366. This concept, of course, is distinct from that of "residence." While a party may have more than one residence, he/she can only have one domicile. Bank One, 964 F.2d at 53; see also, Hawes v. Club Ecuestre El Comandante, 598 F.2d 698, 701 (1st Cir., 1979). Mere residence is insufficient to determine a party's jurisdictional status. Palermo, 62 F.Supp.2d at 409.

A person is a citizen of the state in which he is domiciled. Lundquist v. Precision Valley Aviation, Inc., 946 F.2d 8, 10 (1st Cir.1991). Domicile generally requires two elements: (1) physical presence in a state, and (2) the intent to remain there indefinitely (animus manendi) Kidd v. Hilton of San Juan, Inc., 251 F.Supp. 465 (D.P.R.1966). Valentin, 254 F.3d at 366. A person's domicile is the "place where he has his true, fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning."(animus revertendi) I...