Von Dunser v. Aronoff

• Decision Date: 05 October 1990
• Docket Number: No. 89-1364,89-1364
• Parties: Wolfgang VON DUNSER, Plaintiff-Appellee, v. Arnold Y. ARONOFF, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1071

915 F.2d 1071

Wolfgang VON DUNSER, Plaintiff-Appellee, v. Arnold Y. ARONOFF, Defendant-Appellant.

No. 89-1364.

United States Court of Appeals Sixth Circuit.

Argued Dec. 8, 1989.

Decided Oct. 5, 1990.

Barry M. Rosenbaum (argued) and Joel H. Serlin, Goldstein, Serlin, Eserow, Rosenbaum

& Baker, Southfield, Mich., for plaintiff-appellee.

Abraham Singer (argued), Pepper, Hamilton & Scheetz, Detroit, Mich., for defendant-appellant.

Before MILBURN and BOGGS, Circuit Judges, and ENGEL, Senior Circuit Judge.

BOGGS, Circuit Judge.

Wolfgang Von Dunser sued Arnold Y. Aronoff in July 1984 to enforce payment on a contract arising out of Von Dunser's role in finding a parcel of land in Florida for Aronoff to buy. The stated basis for federal jurisdiction was the diversity and alienage statute. 28 U.S.C. Sec. 1332. The district court rendered a decision for Von Dunser on November 30, 1988, awarding him $877,170. It later reduced the award to $727,170. Aronoff then brought this appeal.

Von Dunser claims to be dual citizen. Austrian-born, he is a naturalized American. His most recent American domicile was in Florida, where he maintained a residence, voted, and conducted business. In 1976, Von Dunser removed to Europe and has resided in various places there ever since. At the time of his action against Aronoff, Von Dunser lived in Switzerland. Aronoff admitted in his answer to the complaint that he was a resident of Michigan.

Von Dunser's complaint did not specify whether federal jurisdiction was based on his Austrian citizenship (alienage) or on his citizenship in Florida (diversity). Aronoff did not challenge the existence of federal jurisdiction and the district court did not address it. It is therefore impossible to say at this point whether the district court based its jurisdiction on any precise theory.

On appeal, for the first time, Aronoff challenges the existence of federal subject-matter jurisdiction. First, he argues that Von Dunser, because he has lived several years in Europe, is not a citizen of Florida (or any other state), and therefore he cannot sue or be sued in federal court on the basis of diversity jurisdiction. Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, ----, 109 S.Ct. 2218, 2221, 104 L.Ed.2d 893 (1989); Sadat v. Mertes, 615 F.2d 1176, 1180 (7th Cir.1980). Further, because Von Dunser is a citizen of the United States, there can be no alienage jurisdiction under 28 U.S.C. Sec. 1332(a)(2), notwithstanding his Austrian citizenship. Id. at 1185-86. On the other hand, Aronoff contends that even if Von Dunser is still a citizen of Florida, he too is actually a Florida citizen, having moved his principal residence there from Michigan prior to Von Dunser's filing suit.

In his brief, Von Dunser takes the position that federal jurisdiction exists on the basis of diversity of state citizenship. He argues that at the time he brought his action he was still a citizen of Florida, never having established a different domicile during his years in Europe. State citizenship for the purpose of the diversity requirement is equated with domicile. Sadat, 615 F.2d at 1180; Rodriguez-Diaz v. Sierra-Martinez, 853 F.2d 1027 (1st Cir.1988); Valedon Martinez v. Hospital Presbiteriano de la Comunidad, 806 F.2d 1128 (1st Cir.1986). A person's previous domicile is not lost until a new one is acquired. Kaiser v. Loomis, 391 F.2d 1007 (6th Cir.1968); Lew v. Moss, 797 F.2d 747 (9th Cir.1986); Maple Island Farm, Inc. v. Bitterling, 196 F.2d 55 (8th Cir.1952). Establishment of a new domicile is determined by two factors: residence in the new domicile, and the intention to remain there. Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30, ----, 109 S.Ct. 1597, 1608, 104 L.Ed.2d 29 (1989); 13 Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d Sec. 3612.

The parties have presented this court with assertions of fact that support their respective positions. Aronoff contends that Von Dunser has established a residence in Europe and shown an intention to remain there. Von Dunser claims he went to Europe because of his mother's illness, that he considered the relocation to be temporary, that he always intended to return to Florida, and that he frequently returns to Florida for business and to visit his son in school. Aronoff maintains, in turn, that by 1983 he had filed a Declaration of Domicile in Florida, established his principal residence in Naples, and paid Florida income taxes.

None of these arguments was raised below. Consequently no finder of fact has examined any evidence that would tend to support or refute them. This court, sitting on the appeal of the district court's ruling on the merits, is not in a position to determine the truth of the parties' assertions regarding their domiciliary status.

The question arises whether we must resolve the jurisdictional dispute and whether a factual determination is necessary to the resolution of this case. We reluctantly conclude that it is. The diversity and alienage statute, 28 U.S.C. Sec. 1332(a), states that the federal district courts shall have original jurisdiction of all civil actions where the amount of controversy exceeds $50,000 ¹ and is between:

(1) citizens of different States;

(2) citizens of a State and citizens or subjects of a foreign state....

Ibid.

The dual citizen has been a troublesome creature for the courts in construing the diversity and alienage statute. In general, American law abhors the status of dual citizenship. Naturalization as a United States citizen includes by law the renunciation of allegiance to foreign powers. 8 U.S.C. Sec. 1448. Presumably, Von Dunser made such a renunciation upon his naturalization. That renunciation can sometimes form the basis for a court's rejection of the claim of dual citizenship. Raphael v. Hertzberg, 470 F.Supp. 984, 986 (C.D.Cal.1979), appeal dismissed, 636 F.2d 1227 (9th Cir.1980). Nevertheless, dual citizenship exists, largely as a result of conflicts in nations' ideas of citizenship. Following the rule that each nation is permitted to determine who its citizens are, ² American law reluctantly recognizes the existence of dual citizenship in certain cases, even where the party has renounced allegiance to foreign powers. Sadat v. Mertes, 615 F.2d at 1183.

At first blush, Von Dunser's Austrian citizenship (which Aronoff does not challenge) would seem to bestow alienage jurisdiction in a dispute between him and a citizen of one of the United States, despite his also being an American citizen. That was the position taken in Aguirre v. Nagel, 270 F.Supp. 535 (E.D.Mich.1967), where the court held that alienage jurisdiction existed in a case between a Michigan plaintiff with dual United States and Mexican citizenship and another Michigan citizen.

The finding of jurisdiction in Aguirre, however, has been criticized on two grounds. The first is that since the plaintiff and the defendant were citizens of the same state, there was little chance of bias and the finding was inconsistent with the doctrine of complete diversity. 13 Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d Sec. 3621. If Aronoff and Von Dunser are not both citizens of Florida, that criticism is not relevant to this case.

The second criticism of Aguirre is that finding alienage jurisdiction in a case where a dual citizen is a party is inconsistent with the policy underlying the creation of alienage jurisdiction. That policy is described in Blair Holdings Corporation v. Rubinstein, 133 F.Supp. 496 (S.D.N.Y.1955) as an attempt to avoid the danger of giving offense to foreign nations by denying their nationals a federal forum in suits against United States citizens. In Sadat v. Mertes, 615 F.2d 1176 (7th Cir.1980), the court concluded that the danger did not exist where the alien was also an American citizen. The plaintiff in Sadat was born Egyptian and was a naturalized American. He was domiciled in Egypt at the time of the action. He claimed dual citizenship and presented some evidence to that effect. The court accepted the plaintiff's dual citizenship, but rejected his claim that it entitled him to alienage jurisdiction. The court reasoned that the policy underlying alienage jurisdiction did not apply where the alien party was also an American citizen, because there was little risk that the foreign nation would be affronted by a requirement that prevented one of its citizens who was also an American from having a federal forum. It criticized Aguirre for failing to consider the policies supporting alienage jurisdiction. ³

The same policy considerations underlying alienage jurisdiction were cited to deny federal jurisdiction in Raphael v. Hertzberg, 470 F.Supp. 984 (C.D.Cal.1979), appeal dismissed, 636 F.2d 1227 (9th Cir.1980). The plaintiff in Raphael claimed to be a dual citizen of the United States and the United Kingdom and wanted to sue a citizen of his own state. After initially finding that the plaintiff was not a United Kingdom citizen, the court stated that even if he were a dual citizen, there was no jurisdiction on the basis of alienage because there was no danger of bias in suing a citizen of one's own state in state court and there was no danger of causing an affront to the United Kingdom by denying the plaintiff access to a federal court. Raphael criticized Aguirre on various grounds, including that Aguirre would give preferential treatment to naturalized citizens over native-born citizens in access to federal courts.

We could distinguish Raphael and Aguirre and satisfy the concerns about complete diversity by noting that Von Dunser, unlike the plaintiffs in those cases, is not a citizen of the same state as the opposing party. However, even that would require a factual finding that Von Dunser and Aronoff are not both citizens of Florida, as each claims to be. Moreover, to hold that alienage jurisdiction exists in this case, we would have to reject the holding...