Adam Thomas v. Barbara Thomas et al

Filing 85

MINUTES (IN CHAMBERS) ORDER by Judge Josephine L. Staton: Order Granting Defendant Cumberland Trust and Investment Company's 56 Motion to Dismiss for Lack of Jurisdiction and Denying as Moot 57 Defendant Santa Fe Trust Incorporated's Motion to Dismiss Case. Plaintiff may amend his complaint to properly allege the parties citizenship and amount in controversy, to the extent he can do so consistent with his obligation under Rule 11. Any amended complaint shall be filed within 21 days of this Order. (nbo)

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 14-1096-JLS (RNBx)
Title: Adam Thomas v. Barbara Thomas et al.

Date: January 20, 2015

Present: Honorable JOSEPHINE L. STATON, UNITED STATES DISTRICT JUDGE

Terry Guerrero
Deputy Clerk
ATTORNEYS PRESENT FOR PLAINTIFF:

N/A
Court Reporter
ATTORNEYS PRESENT FOR DEFENDANT:

Not Present

Not Present

PROCEEDINGS: (IN CHAMBERS) ORDER (1) GRANTING DEFENDANT
CUMBERLAND TRUST AND INVESTMENT COMPANY’S
MOTION TO DISMISS (Doc. 56), (2) DENYING AS MOOT
DEFENDANT SANTA FE TRUST INCORPORATED’S
MOTION TO DISMISS (Doc. 57)
Before the Court are separate Motions to Dismiss filed by Defendant Cumberland
Trust and Investment Company and Santa Fe Trust Incorporated. (Cumberland Mot.,
Doc. 56; Santa Fe Mot., Doc. 57.) Plaintiff Adam Thomas opposed, and Defendants
replied. (Cumberland Opp., Doc. 66; Santa Fe Opp., Doc. 68; Cumberland Reply, Doc.
73; Santa Fe Reply, Doc. 69.) Having read and considered the papers and taken the
matter under submission, the Court GRANTS Cumberland’s Motion and DENIES Santa
Fe’s Motion as moot.
I.

Cumberland’s Motion to Dismiss

Cumberland argues dismissal is appropriate because the First Amended Complaint
fails to properly invoke the Court’s diversity jurisdiction. (Cumberland Mot. at 18.) The
Court agrees.
First, the FAC fails to adequately allege the citizenship of any of the parties. It
describes Adam Thomas and Barbara Thomas as “residents” of California and Arizona,
respectively. (FAC, Doc. 34, ¶¶ 5-6.) The diversity jurisdiction statute, however, speaks
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____________________________________________________________________________
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 14-1096-JLS (RNBx)
Title: Adam Thomas v. Barbara Thomas et al.

Date: January 20, 2015

of citizenship, not residency. 28 U.S.C. § 1332(a); Kanter v. Warner-Lambert Co., 265
F.3d 853, 857 (9th Cir. 2001). These terms are not interchangeable. See Kanter, 265
F.3d at 857 (“A person residing in a given state is not necessarily domiciled there, and
thus is not necessarily a citizen of that state.”). Thus, the FAC does not adequately allege
Adam and Barbara Thomas’ citizenship. In addition, the FAC fails to properly allege the
citizenship of corporate co-Defendants Cumberland, Santa Fe, Citicorp North America,
Inc., and Fidelity Brokerage Services. It refers to Citicorp as a “corporation
headquartered in Delaware,” to Cumberland as a “trust company headquartered and doing
business in” Tennessee, to Santa Fe as “a trust company who does business in New
Mexico,” and to Fidelity as a “corporation registered in the state of Rhode Island.” (FAC
¶¶ 7-10.) A corporation, however, is a citizen of its state of incorporation and the state
where it has its “principal place of business.” 28 U.S.C. § 1332(c)(1). Where a
corporation “does business” is irrelevant. See Hertz Corp. v. Friend, 559 U.S. 77, 80-81
(2010) (holding that a corporation’s “principal place of business” is its “nerve center,”
place where a corporation’s high level officers direct, control and coordinate its activities
on a day-to-day basis). Because the FAC fails to allege both the state of incorporation
and principal place of business for each corporate co-Defendant, it fails to adequately
allege their citizenship.
Second, the FAC fails to properly allege an amount in controversy. (See
Cumberland Mot. at 18.) It alleges that Cumberland and Fidelity together
“misappropriated a minimum of $860,000.” (FAC ¶ 25.) It is unclear that this amount
can be aggregated against Cumberland and Fidelity, given that the only claim alleged
against Fidelity is for negligence, while Cumberland is charged with breach of fiduciary
duty and surcharge. See Libby, McNeill, & Libby v. City Nat. Bank, 592 F.2d 504, 510
(9th Cir. 1978) (“[T]he tests for aggregating claims of one plaintiff against multiple
defendants . . . are ‘essentially the same . . .: the plaintiff’s claims against the defendants
must be common and undivided so that the defendants’ liability is joint and not
several.’”). In any case, the FAC alleges no amount in controversy at all as to Santa Fe
and Citicorp. Thus, it fails to adequately allege the amount in controversy as required by
28 U.S.C. § 1332(a).
The party asserting diversity jurisdiction bears the burden of proving its existence.
Lew v. Moss, 797 F.2d 747, 749 (9th Cir. 1986) (citing Resnik v. La Paz Guest Ranch,
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____________________________________________________________________________
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 14-1096-JLS (RNBx)
Title: Adam Thomas v. Barbara Thomas et al.

Date: January 20, 2015

289 F.2d 814, 819 (9th Cir. 1961)). Plaintiff’s FAC fails to meet this burden, as he
appears to concede. (Cumberland Opp. at 5.) Accordingly, the Court GRANTS
Cumberland’s Motion and DISMISSES the FAC WITHOUT PREJUDICE. Plaintiff
may amend his complaint to properly allege the parties’ citizenship and amount in
controversy, to the extent he can do so consistent with his obligation under Rule 11. Any
amended complaint shall be filed within 21 days of this Order.
II.

Santa Fe’s Motion to Dismiss

Because the Court dismisses the FAC on jurisdictional grounds, Santa Fe’s Motion
to Dismiss for failure to state a claim is DENIED AS MOOT. Cf. Steel Co. v. Citizens
for a Better Environment, 523 U.S. 83, 94 (1998) (“Without jurisdiction the court cannot
proceed at all in any cause. . . . [W]hen it ceases to exist, the only function remaining to
the court is that of announcing the fact and dismissing the cause.”) (quoting Ex parte
McCardle, 74 U.S. 506, 514 (1868)).

Initials of Preparer: tg

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