Pavlovic et al v. Galiso, Inc. et al

Filing 71

ORDER granting Plaintiff's 52 Motion to Strike and denying 32 Motion to Dismiss. Defendants' Reply to Plaintiffs' Response to Defendants' Motion to Dismiss for Lack of Subject Matter Jurisdiction 51 is STRICKEN, by Judge William J. Martinez on 8/17/12.(lygsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 11-cv-01418-WJM-KMT
MARK PAVLOVIC, and
KRISTIN PAVLOVIC,
Plaintiffs,
v.
GALISO, INC., a Colorado Corporation, and
CHARLES GRENCI,
Defendants.

ORDER GRANTING PLAINTIFFS’ MOTION TO STRIKE AND DENYING
DEFENDANTS’ MOTION TO DISMISS

Mark and Kristin Pavlovic (“Plaintiffs”) bring this action against Galiso, Inc. and
Charles Grenci (“Defendants”) arising out of Plaintiffs’ former employment with
Defendants. (ECF No. 1.) Before the Court are the following motions: (1) Defendants’
Motion to Dismiss for Lack of Subject Matter Jurisdiction (ECF No. 32); and (2)
Plaintiffs’ Motion to Strike Defendants’ Reply (ECF No. 52). For the reasons set forth
below, Defendants’ Motion to Dismiss is denied and Plaintiffs’ Motion to Strike is
granted.
I. MOTION TO STRIKE
Plaintiffs move to strike Defendants’ Reply brief to the Motion to Dismiss. (ECF
No. 52.) Local Rule 7.1(C) allows a moving party to file a reply within fourteen days
after the date of the response brief. Plaintiffs filed their opposition to the Motion to

Dismiss on January 9, 2012. (ECF No. 41.) Defendants did not file their Reply until
February 10, 2012. (ECF No. 51.) Therefore, the Reply brief was untimely by more
than two weeks.
In their Response to the Motion to Strike, Defendants state that they waited to
file their reply until after they received the discovery they requested regarding Plaintiffs’
residency. (ECF No. 56.) According to Defendants, they did not receive such discovery
until February 7, 2012. (Id.)
The Court finds that Defendants’ explanation for their late filing does not
establish good cause to excuse the untimeliness of their Reply to the Motion to Dismiss.
Defendants could have requested an extension of time to file their Reply, in advance of
the deadline, and explained that they were waiting on Plaintiffs’ discovery responses.
They also could have sought to stay briefing on the Motion to Dismiss until after the
discovery had been received. Defendants also could have filed a motion requesting
that the Court accept the late filing at the time it was filed. They did none of these
things. Defendants simply filed their reply brief more than two weeks after the deadline
and forced Plaintiffs to file this Motion to Strike.
The Court cannot permit counsel to ignore deadlines in this manner.
Accordingly, Plaintiffs’ Motion to Strike (ECF No. 52) is granted. Defendants’ Reply to
Plaintiffs’ Response to Defendants’ Motion to Dismiss for Lack of Subject Matter
Jurisdiction (ECF No. 51) is stricken. The Court will not consider the Reply brief or the
evidence attached thereto in evaluating the merits of the Motion to Dismiss.

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II. MOTION TO DISMISS
A.

Legal Standard
Defendants’ Motion to Dismiss is brought pursuant to Federal Rule of Civil

Procedure 12(b)(1), which empowers the Court to dismiss a complaint for lack of
subject-matter jurisdiction. Fed. R. Civ. P. 12(b)(1). Dismissal under Rule 12(b)(1) is
not a judgment on the merits of a plaintiff’s case; rather, it calls for a determination of
whether the court has authority to adjudicate the matter. See Castaneda v. INS, 23
F.3d 1576, 1580 (10th Cir. 1994) (recognizing federal courts are courts of limited
jurisdiction and may only exercise jurisdiction when specifically authorized to do so).
A Rule 12(b)(1) motion to dismiss “must be determined from the allegations of
fact in the complaint, without regard to mere conclusory allegations of jurisdiction.”
Groundhog v. Keeler, 442 F.2d 674, 677 (10th Cir. 1971). When considering a Rule
12(b)(1) motion, however, the court may consider matters outside the pleadings without
transforming the motion into one for summary judgment. Holt v. United States, 46 F.3d
1000, 1003 (10th Cir. 1995). Where a party challenges the facts upon which subject
matter jurisdiction depends, a district court may not presume the truthfulness of the
complaint’s “factual allegations . . . [and] has wide discretion to allow affidavits, other
documents, and [may even hold] a limited evidentiary hearing to resolve disputed
jurisdictional facts under Rule 12(b)(1).” Id. A court lacking jurisdiction “must dismiss
the cause at any stage of the proceeding in which it becomes apparent that jurisdiction
is lacking.” Id.

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B.

Analysis
A federal court has original jurisdiction over any action where the amount in

controversy exceeds $75,000 and is between citizens of different states. 28 U.S.C. §
1332. Plaintiffs’ Complaint states:
This Court has subject matter jurisdiction over this action
pursuant to 28 U.S.C. § 1332. There is complete diversity of
citizenship. The Pavlovics are citizens of the state of
California. Galiso is a corporation organized under the laws
of the State of Colorado and it is in Colorado where Galiso’s
officers direct, control and coordinate the company’s
activities. Grenci is a citizen of the State of Colorado. The
amount in controversy exceeds $75,000.
(Compl. ¶ 2.) In the Motion, Defendants do not dispute Plaintiffs’ contentions as to the
amount in controversy or the fact that both Defendants are both citizens of Colorado.
Defendants only challenge Plaintiffs’ contention that they (the PavloAugust 17,
2012vics) were citizens of California at the relevant time. (ECF No. 32 at 2.)
The Supreme Court’s “well-established rule” is that “diversity of citizenship is
assessed at the time the action is filed.” Freeport-McMoRan, Inc. v. K N Energy, Inc.,
498 U.S. 426, 428 (1991). This action was filed on June 3, 2011. (ECF No. 1.) The
burden of establishing subject matter jurisdiction is on the party asserting jurisdiction.
See Basso, 495 F.2d at 909. Thus, Plaintiffs bear the burden of showing that they were
domiciled in California as of June 3, 2011.
“For purposes of diversity jurisdiction under 28 U.S.C. § 1332(a)(1), state
citizenship is the equivalent of domicile.” Crowley v. Glaze, 710 F.2d 676, 678 (10th
Cir. 1983). “To effect a change in domicile, two things are indispensable: First,
residence in a new domicile, and second, the intention to remain there indefinitely.” Id.
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The parties do not dispute that, at the time this action was commenced, Plaintiffs
resided in California. The only dispute is to whether Plaintiffs have met their burden of
showing that they intended to remain in California indefinitely.
A district court may, but is not required to, give credence to statements by a
party about his intentions to remain in one state as opposed to another. Crowley, 710
F.2d at 678 (“Such statements are of course self-serving, but such does not mean that
they must be discarded by the trier of the facts, who, on the contrary, may choose to
give credence to them.”); see also Johnston v. Cordell Nat’l Bank, 421 F.2d 1310, 1312
(10th Cir. 1970) (“[D]eclarations of intention to establish residence in a particular place
are entitled to great weight, but should be viewed in light of any motive.”). In opposition
to the Motion, Plaintiffs submitted sworn affidavits stating that they left Colorado in
March 2011 and moved to California with the intent to remain there. (ECF No. 43-1 ¶ 4;
43-4 ¶ 4.) However, the “[m]ere mental fixing of citizenship is not sufficient. What is in
another man’s mind must be determined by what he does as well as by what he says.”
See Walden v. Broce Constr. Co., 357 F.2d 242, 245 (10th Cir. 1966). Therefore, the
Court must review the objective evidence submitted by the parties to determine whether
it supports or undermines Plaintiffs’ assertion that they intended to remain in California
indefinitely.
In March 2011, Plaintiffs opened bank accounts in California and had their mail
forwarded to California. (ECF No. 43-1 ¶ 7; ECF No. 43-4 ¶ 9.) Plaintiffs obtained new
wireless phones with California phone numbers in April 2011. (Id. ¶ 8.) On May 22,
2011, Plaintiffs entered into a year-long lease to rent a house in California. (ECF No.
43-2.) Perhaps most significantly, in April 2011, Plaintiffs established a wine exporting
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business that works with California wineries and is based in California. (ECF No. 43-4 ¶
10.) Plaintiffs have not returned to Colorado since they left in March 2011. (ECF No.
43-1 ¶ 14; 43-4 ¶ 14.) The Court finds that this evidence supports Plaintiffs’ assertion
that they intended to remain in California indefinitely.
Defendants contend that, at the time this action was filed, Plaintiffs’ vehicle was
still registered and insured in Colorado and that Plaintiffs were still registered to vote in
Colorado. (ECF No. 32 at 2-3.) Plaintiffs explain that their Colorado vehicle registration
did not expire until the end of June 2011 and that, upon their arrival in California, they
did not have the money to have their vehicle smog-checked, which is a prerequisite to
registering it in California. (ECF No. 43-4 ¶ 15.) Plaintiffs state that they registered to
vote when they obtained their California driver’s licenses and/or identification cards and
that there was no reason to do so earlier because there was no upcoming election. (Id.
¶ 16.) The Court finds that Plaintiffs have adequately explained the reasons for their
actions, and the evidence offered by Defendants does not rebut Plaintiffs’ assertion that
they resided in and intended to remain in California.
Defendants also contend that Plaintiffs’ vehicle insurance, unemployment
benefits, and tax filings show that Plaintiffs had not established their domicile in
California at the time this action was commenced. (ECF No. 32 at 3-4.) The Court
notes that there is nothing unusual or improper about receiving unemployment benefits
from the state in which one was last employed. The Court is also unsurprised that
Plaintiffs filed a 2011 tax return in Colorado because they resided in Colorado during
part of 2011.
Overall, the Court finds that Plaintiffs have offered a sufficient explanation for still
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having some connections with Colorado at the time this action was commenced.
Defendants would have the Court find that Plaintiffs were still domiciled in Colorado
simply because Plaintiffs had not yet completed all of the administrative hurdles that
accompany relocating. The Court declines to do so.
The key inquiry here is where—as of June 3, 2011—Plaintiffs’ resided and had
an intent to remain. Crowley, 710 F.2d at 678. Having reviewed the totality of the
evidence submitted by the parties in conjunction with the Motion, the Court finds that
Plaintiffs have met their burden of showing that they were domiciled in California as of
June 3, 2011.
III. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.

Plaintiffs’ Motion to Strike (ECF No. 52) is GRANTED;

2.

Defendants’ Reply to Plaintiffs’ Response to Defendants’ Motion to Dismiss for
Lack of Subject Matter Jurisdiction (ECF No. 51) is STRICKEN; and

3.

Defendants’ Motion to Dismiss for Lack of Subject Matter Jurisdiction (ECF No.
32) is DENIED.

Dated this 17th day of August, 2012.
BY THE COURT:

William J. Martínez
United States District Judge

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