Fuzzell v. DRC Emergency Services LLC et al

Filing 21

MEMORANDUM OPINION Signed by Judge William M Acker, Jr on 1/30/15. (SAC )

FILED
2015 Jan-30 PM 03:43
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
STEWART “BUDDY” FUZZELL, JR., }
et al.,
}
}
Plaintiffs,
}
}
v.
}
}
DRC EMERGENCY SERVICES, LLC, }
et al.,
}
}
Defendants.
}

CIVIL ACTION NO.
2:14-CV-2202-WMA

MEMORANDUM OPINION
Before the court is a motion to remand (Doc. 12) filed by
plaintiffs

Stewart

“Buddy”

Fuzzell,

Jr.,

and

Cahaba

Disaster

Recovery, LLC (“Cahaba”), on December 12, 2014. For the reasons
stated below, the motion will be granted.
BACKGROUND
Plaintiffs initiated this action in the Circuit Court of
Jefferson County, Alabama, on October 7, 2014. (Doc. 1-1 at 3). The
complaint names DRC Emergency Services, LLC (“DRC”), BNY MellonAlcentra Mezzanine III, L.P. (“Alcentra”), Scott B. Gold, and five
fictitious parties as defendants. The plaintiffs present six causes
of action or theories of liability, primarily focusing on the
breach of an alleged oral promise made by Alcentra and Gold to
convey to Fuzzell an equity interest in DRC. (Doc. 1-1 at 20).
On November 13, 2014, Alcentra and Gold timely filed a notice
of removal with this court, alleging diversity jurisdiction under

1

28 U.S.C. § 1332. (Doc. 1). DRC did not join in the notice of
removal but consented to removal. (Doc. 1-6). Plaintiffs moved to
remand the action on December 3, 2014. (Doc. 12). Plaintiffs do not
challenge the timeliness of removal or defendants’ satisfaction of
the amount-in-controversy requirement. Instead, they only claim a
lack of complete diversity among the parties.
DISCUSSION
“[A]ny civil action brought in a State court of which the
district courts of the United States have original jurisdiction,
may be removed by the defendant or the defendants, to the district
court of the United States for the district and division embracing
the place where such action is pending.” 28 U.S.C. § 1441(a)
(2012). “Federal courts are courts of limited jurisdiction, and
there

is

a

jurisdiction,

presumption

against

such

all

that

the

exercise

uncertainties

as

of

federal

to

removal

jurisdiction are to be resolved in favor of remand.” Russell Corp.
v. American Home Assur. Co., 264 F.3d 1040, 1050 (11th Cir. 2001).
To

establish

the

propriety

of

removal

via

diversity

jurisdiction under 28 U.S.C. § 1332, every plaintiff must be
diverse from every defendant — no plaintiff’s citizenship may
overlap with any defendant’s citizenship. Triggs v. John Crump
Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998). An individual
is considered a citizen of the state of his domicile — that is, the
last state in which he lived with an intention to remain there

2

indefinitely. Mas v. Perry, 489 F.2d 1396, 1399 (5th Cir. 1974).1
“[A] corporation shall be deemed to be a citizen of every State and
foreign state by which it has been incorporated and of the State or
foreign state where it has its principal place of business . . . .”
28 U.S.C. § 1332(c)(1). All other entities are deemed citizens
wherever a member of that entity is a citizen. Carden v. Arkoma
Assoc., 494 U.S. 185, 195 (1990). If a member of such an entity is
itself a non-corporate entity, the court must continue to drill
down

through the member entities until only individuals and

corporations remain. See Meyerson v. Harrah’s E. Chicago Casino,
299 F.3d 616, 617 (7th Cir. 2002).
Plaintiff Fuzzell is an Alabama citizen. (Doc. 1-1 at 21, ¶
1). Fuzzell is also the sole member of plaintiff Cahaba Disaster
Recovery, LLC. (Doc 1-2 at 3, ¶ 5). Because LLC citizenship is
determined by the citizenship of each of its members, Rolling
Greens MHP, L.P., v. Comcast SCH Holdings L.L.C., 374 F.3d 1020,
1022 (11th

Cir.

2004),

Cahaba

is

also

considered

an

Alabama

citizen.
Defendant Gold is a citizen of New York. (Doc. 1-5). Defendant
DRC is an LLC. Its sole member is Seven Continents Holdings, LLLP.
(Doc. 1-3). A limited partnership is deemed a citizen wherever any
one of its partners, general or limited, is a citizen. Carden, 494

1

Decisions of the United States Court of Appeals for the Fifth Circuit
decided prior to September 30, 1981, are binding precedent in the Eleventh
Circuit. Bonner v. Pritchard, 661 F.2d 1206, 1207 (11th Cir.1981) (en banc).

3

U.S. at 195. Seven Continents Holdings, LLLP, has three partners:
7CGP, LLC (“7CGP”); Alcentra BDC Equity Holdings, LLC (“Alcentra
BDC”); and United Insurance Company of America (“United”). (Doc. 14 at 2-3, ¶ 8). 7CGP is wholly owned by Alcentra BDC. Alcentra BDC
is

wholly

owned

by

Alcentra

Capital

Corporation,

which

is

incorporated in Maryland and principally does business in New York.
(Doc. 1-4 at 3, ¶ 9). United is incorporated in Illinois and
principally does business in Illinois. (Doc. 1-4 at 3, ¶ 10).
Therefore, defendant DRC is a citizen of Illinois, Maryland, and
New York.
Plaintiffs
citizenship.

do

None

not
of

the

contest

any

parties

of

mention

the
the

above-alleged
status

of

the

fictitious parties, since they are to be ignored for purposes of
diversity. 28 U.S.C. § 1441(b)(1). Plaintiffs only challenge the
citizenship of defendant Alcentra. In its notice of removal,
Alcentra

alleges

that

it

is

a

limited

partnership

with

167

partners. (Docs. 1 at 4, ¶ 8; 1-4). Alcentra offers evidence of its
citizenship by a declaration from its managing partner, who states
that none of the partners are Alabama citizens. (Doc. 1-4 at 2).
Alcentra also lists all the partners, but the list only states the
type and location of each entity. (Doc. 1-4 at 5-9). No further
allegations or evidence of citizenship is included with the notice
of removal.
Plaintiffs argue that these allegations are insufficient to

4

demonstrate

Alcentra’s

diversity.

While

not

conceding

the

insufficiency of the notice of removal, Alcentra has presented
voluminous new evidence regarding its members’ citizenship in its
response to the motion to remand. Plaintiffs contend that this new
evidence is impermissible but even if considered still insufficient
to establish diversity jurisdiction. Thus, the court is presented
with three

questions:

(1)

Is

the

original

notice

of

removal

sufficient to establish this court’s jurisdiction? (2) Is Alcentra
permitted to supplement or amend the notice of removal with new
evidence?

(3)

Is

the

new

evidence

sufficient

to

establish

jurisdiction? Each will be discussed in turn.
A. Sufficiency of the Original Notice of Removal
In the notice of removal, Alcentra essentially offers two
types of evidence to demonstrate its citizenship: (1) a listing of
the entity type and location of each partner and (2) statements by
Alcentra’s managing partner that none of Alcentra’s partners are
Alabama citizens. Plaintiffs contend that neither of these is
sufficient.
Alcentra’s provided list is plainly incapable of demonstrating
diversity. To allege citizenship of a member corporation, Alcentra
must allege the corporation’s state of incorporation and principal
place of business. To allege citizenship of a member partnership,
LLC, or other non-corporate entity, the removing defendant must
state the citizenship of each and all of the entity’s members.

5

Merely listing one location for each of these entities, without
even stating the significance of the locations listed, does not
provide the court with the information necessary to ensure that it
possesses jurisdiction.
Alcentra’s general allegation that none of its partners are
Alabama citizens is similarly insufficient. This court and others
in the Eleventh Circuit have routinely rejected such conclusory
allegations, sometimes referred to as Mother Hubbard allegations.
See, e.g., Muscle Shoals Assoc., Ltd. v. MHF Ins. Agency, Inc., 792
F. Supp. 1224, 1227 (N.D. Ala. 1992) (“This Court, to fulfill its
duty, must be informed by the allegations of plaintiffs' complaint
of the exact citizenship of this partnership's general and limited
partners ... each one of them and not by a ‘Mother Hubbard’
allegation

.

.

.

.”);

Moreno

v.

Brietburn

Fla.,

LLC,

No.

2:09–cv–566–FtM–29DNF, 2011 WL 2293124, *1 (M.D. Fla. June 9, 2011)
(“A conclusory allegation that there is diverse citizenship is
insufficient . . . .”); see also Toms v. Country Quality Meats,
Inc., 610 F.2d 313 (5th Cir. 1980) (“[W]hen jurisdiction depends on
citizenship, citizenship should be ‘distinctly and affirmatively
alleged.’”) (quoting 2A James Wm. Moore et al., Moore’s Federal
Practice ¶ 8.10 (2d ed. 1961)). Without distinct and affirmative
allegations of citizenship, this court cannot fulfill its duty to
inquire into its jurisdiction. Thus, Alcentra’s notice of removal
facially fails to confer jurisdiction upon the court.

6

B. Alcentra’s Ability to Supplement or Amend the Notice of Removal
Plaintiffs contend that, because Alcentra’s original notice of
removal is insufficient, the action must be remanded because
Alcentra is not permitted to amend or supplement the notice. In
support, plaintiffs point to application by district courts around
the country of a standard that would allow amendment of removal
notices under 28 U.S.C. § 1653 if allegations of jurisdiction are
merely defective, but not if the allegations are missing entirely.
See, e.g., Winters Gov’t Sec. Corp. v. Cedar Point State Bank, 446
F. Supp. 1123 (S.D. Fla. 1978). The Eleventh Circuit, however, has
not applied this standard; instead, it has held that the district
court should consider all jurisdictional evidence, whether the
evidence is presented with the notice of removal or in response to
a motion to remand. Pretka v. Kolter City Plaza II, Inc., 608 F.3d
744, 773 (11th Cir. 2010). The Court there stated:
While it is undoubtedly best to include all relevant
evidence in the petition for removal and motion to
remand, there is no good reason to keep a district court
from eliciting or reviewing evidence outside the removal
petition. We . . . adopt[ ] a more flexible approach,
allowing the district court when necessary to consider
post-removal evidence in assessing removal jurisdiction.
Id. (quoting Sierminski v. Transouth Fin. Corp., 216 F.3d 945, 949
(11th Cir. 2000)). In dealing with the exact situation presented
here, the failure to establish a party’s citizenship in the removal
notice,

the

Eleventh

Circuit

found

the

failure

to

be

a

“‘procedural, rather than jurisdictional, defect,’” and the court

7

found error in the district court’s refusal to allow amendment of
the notice of removal under 28 U.S.C. § 1653. Corp. Mgmt. Advisors,
Inc. v. Artjen Complexus, Inc., 561 F.3d 1294, 1296 (11th Cir.
2009). This court will therefore consider the evidence included in
Alcentra’s response to the motion for remand. Whether the evidence
is deemed a mere supplementation, as Pretka would suggest, or a
formal amendment to the notice of removal, as Corporate Management
Advisors would suggest, is of no consequence.
C. Sufficiency of Alcentra’s Supplemented/Amended Notice
Even after Alcentra’s new evidence is considered, plaintiffs
claim that Alcentra’s allegations are defective in two respects:
(1) Alcentra has failed to allege the citizenship of all the
members of the trust partners and sub-partners; and (2) Alcentra
has failed

to

allege

the

citizenship

of

Stevenson

Co.,

LLP.

Regarding the second contention, plaintiffs are quite clearly
wrong.

Plaintiffs

claim

that

Alcentra

references

the

first

declaration by Christina Hudson to show Stevenson’s citizenship,
but such a declaration is not actually in the record. This is
plainly incorrect, as Declaration I of Christina Hudson appears in
the electronic record as Document 19-6. The document lists all of
Stevenson’s members in identical fashion to the other 16 filed
declarations; plaintiffs’ position on this ground is therefore
untenable.
As to the citizenship of the trusts, the parties dispute the
8

appropriate

standard

to

apply.

Plaintiffs

argue

that

trust

citizenship is determined by the citizenship of all the trust
members, while Alcentra contends that only the citizenship of the
trustees and not cestuis que trust should be considered. The
Supreme Court clarified the general rule for all non-human, noncorporate entities in Carden: they are deemed to be citizens in any
state or country in which a member of the entity is a citizen. 494
U.S. at 195.
Attempting
Savings

to

Association

avoid
v.

this
Lee,

result,
446

Alcentra

U.S.

458

cites

(1980),

Navarro
for

the

proposition that trustee citizenship controls. In Navarro, the
Court held that the trustees of a trust were the real parties in
interest to the controversy at hand, so they could invoke their own
citizenship for diversity purposes when suing in their own names.
According to Alcentra, this allows trusts to look to trustee
citizenship for purposes of diversity.
The Supreme Court, however, squarely rejected this argument in
Carden. The Court stated that Navarro “did not involve the question
whether

a

party

that

is

an

artificial

entity

other

than

a

corporation can be considered a ‘citizen’ of a State, but the quite
separate question whether parties that were undoubted ‘citizens’
(viz., natural persons) were the real parties to the controversy.”
494

U.S.

at

191.

The

Eleventh

Circuit,

recognizing

this

distinction, relied on Carden and held that a trust’s citizenship

9

is to be determined by the citizenship of all its members. Riley v.
Merrill Lynch, Pierce, Fenner, & Smith, Inc., 292 F.3d 1334, 1339
(11th Cir. 2002), abrogated on other grounds by Merrill Lynch,
Pierce, Fenner & Smith, Inc. v. Dabit, 547 U.S. 71, 89 (2006). Even
pre-Carden, the Eleventh Circuit held that a trust must “‘allege
facts . . . negativing its being [a] voluntary unincorporated
association or facts as to the residence or citizenship of its
members.’” Xaros v. U.S. Fidelity & Guar. Co., 820 F.2d 1176, 1181
(11th Cir. 1987) (quoting Int’l Ass’n of Machinists v. Eastern
Airlines, Inc., 320 F.2d 451, 455 (5th Cir. 1963)). Merely naming
the trustees for diversity purposes is insufficient. Id. at 1182.
Therefore, Alcentra must allege what it has not alleged, the
citizenship of all the members of its trust partners and subpartners. The court is aware that such a burden is onerous, but, as
recognized by the Eleventh Circuit in a case imposing a much more
onerous burden, “The rule of Carden, however, is ‘technical,
precedent-bound, and unresponsive to policy considerations raised
by the changing realities of business organization,’ and does not
admit

of

exceptions

based

on

convenience

or

practicality.”

Underwriters at Lloyd’s of London v. Osting-Schwinn, 613 F.3d 1079,
1090

(11th

Cir.

2010)

(quoting

Carden,

494

U.S.

at

196).

Accordingly, plaintiffs’ motion to remand is due to be granted.
CONCLUSION
For the reasons stated above, plaintiffs’ motion to remand
10

will be granted. A separate order to that effect will be entered.

DONE this 30th day of January, 2015.

_____________________________
WILLIAM M. ACKER, JR.
UNITED STATES DISTRICT JUDGE

11