Westchester Fire Insurance Co. v. Enviroguard, LLC et al

Filing 6

ORDER (see attached) directing Plaintiff to file and serve an affidavit regarding the citizenship of the defendant limited liability companies -- Enviroguard, Clean Air, and Silvermine -- for federal diversity purposes on or before December 17, 2013. The affidavit shall set forth the citizenship of each member of each of the three defendant limited liability companies on November 5, 2013, the date the action commenced. The Court will review the affidavit to determine whether it has diversity subject matter jurisdiction in this action, 28 U.S.C. § 1332(a). All case deadlines are stayed pending that review. If subject matter jurisdiction does not exist, the Court will dismiss the action without prejudice to Plaintiff filing in another, appropriate jurisdiction. Signed by Judge Charles S. Haight, Jr. on November 12, 2013. (Dorais, L.)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT

WESTCHESTER FIRE INSURANCE
COMPANY,
3:13 - CV - 1620 (CSH)
Plaintiff,
v.
ENVIROGUARD, LLC; CLEAN AIR
CONSULTANTS, LLC; SILVERMINE
EQUITIES, LLC; MARK COSTANTINI;
LISA COSTANTINI; MARIO MARINI; and
MICHELLE MARINI,

NOVEMBER 12, 2013

Defendants.

ORDER
HAIGHT, Senior District Judge:
I.

INTRODUCTION
Plaintiff Westchester Fire Ins. Co. ("Westchester") brings this action against three limited

liability companies – Enviroguard, LLC ("Enviroguard"); Clean Air Consultants, LLC ("Clean Air");
and Silvermine Equities, LLC ("Silvermine") – and four individual defendants – Mark Costantini,
Lisa Costantini, Mario Marini, and Michelle Marini – (collectively "Defendants") seeking to recover
amounts owed under an indemnity agreement dated October 15, 2010 ("Agreement"). Specifically,
Westchester alleges that Defendants entered into said Agreement as principals and indemnitors to
induce Westchester "to execute, as surety, performance and payment bonds" for construction
contracts to be performed by Enviroguard and Clean Air. Doc. 1, ¶¶ 13-15. Westchester asserts that

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it "received claims on the Bonds from payment bond obligees for amounts owed to the obligees by
Enviroguard and Clean Air and which they had failed to pay" and "[a]s a result, Westchester was
required to, and did, pay the payment bond obligees a total of $134,186.49." Id., ¶ 16. Furthermore,
Westchester alleges that it "has incurred legal and other expenses in the amount of $13,466.93 in
connection with Enviroguard's and Clean Air's failure to pay their bonded obligations, and
Westchester will continue to incur such expenses for the prosecution of this action." Id., ¶ 17.1
In its Complaint, Westchester has asserted that this Court has subject matter jurisdiction
based on diversity of citizenship. Doc. #1, ¶1 (Jurisdiction and Venue). See 28 U.S.C. § 1332(a)(1)
("The district courts shall have original jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between –
(1) citizens of different States").2 However, as set forth below, Westchester has failed to allege
sufficient facts to establish that such diversity of citizenship exists with respect to the limited liability
companies. Accordingly, the citizenship of the defendant limited liability companies must be
confirmed before this action may proceed.3

1

The Court notes that Westchester mis-numbered the paragraphs in its Complaint by
including two paragraphs numbered "16" and no paragraph numbered "19." The Court herein has
cited ¶ 17 for the text appearing in the second ¶ 16, which appears directly before ¶ 18.
2

The element of jurisdictional amount is satisfied in that Westchester has alleged
damages well in excess of $75,000. Doc. 1, ¶¶ 2, 16-17, 21-22 (seeking total damages of
$147,653.42, "plus any future loss, costs, fees or expenses incurred, plus interest and attorney's
fees").
3

Plaintiff's Complaint alleges no facts or circumstances that potentially give rise to a
federal claim arising under the Constitution or federal statute. Therefore, no "federal question"
subject matter jurisdiction may be found under 28 U.S.C. § 1331.
2

II.

DISCUSSION
It is incumbent on a federal court to determine with certainty whether it has subject matter

jurisdiction over a case pending before it. As the Second Circuit has observed, "[f]irst is the
obligation of a court, on its own motion, to inquire as to subject matter jurisdiction and satisfy itself
that such jurisdiction exists." Da Silva v. Kinsho Int'l Corp., 229 F.3d 358, 361-62 (2d Cir. 2000)
(citing Mt. Healthy City School District Bd. of Educ. v. Doyle, 429 U.S. 274, 278 (1977)). See also
Joseph v. Leavitt, 465 F.3d 87, 89 (2d Cir.2006) ("Although neither party has suggested that we lack
appellate jurisdiction, we have an independent obligation to consider the presence or absence of
subject matter jurisdiction sua sponte."), cert. denied, 549 U.S. 1282 (2007); accord Univ. of South
Alabama v. American Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999) ("a federal court is obligated
to inquire into subject matter jurisdiction sua sponte whenever it may be lacking"). The court must
therefore "review a plaintiff’s complaint at the earliest opportunity to determine whether [there is
in fact] subject matter jurisdiction." Licari v. Nutmeg Ins. Adjusters, Inc., No. 3:08mc245(WIG),
2008 WL 3891734, at * 1 (D. Conn. July 31, 2008) (citing Transatlantic Marine Claims Agency,
Inc. v. Ace Shipping Corp., 109 F.3d 105, 107-08 (2d Cir. 1997) (holding that district court may raise
issue of subject matter jurisdiction sua sponte at any time)).
In general, if subject matter jurisdiction is lacking, the action must be dismissed. Fed. R. Civ.
P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court
must dismiss the action."). See, e.g., Lovejoy v. Watson, 475 F. App'x 792, 792 (2d Cir. 2012)
("[w]here jurisdiction is lacking, . . . dismissal is mandatory") (internal quotations and citation
omitted); Manway Constr. Co. v. Housing Auth. of Hartford, 711 F.2d 501, 503 (2d Cir. 1983) ("It
is common ground that in our federal system of limited jurisdiction any party or the court sua sponte,
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at any stage of the proceedings, may raise the question of whether the court has subject matter
jurisdiction; and, if it does not, dismissal is mandatory.") (emphasis added).
In order for diversity of citizenship to exist, the plaintiff's citizenship must be diverse from
that of all defendants. See, e.g., St. Paul Fire and Marine Ins. Co. v. Universal Builders Supply, 409
F.3d 73, 80 (2d Cir. 2005) ("Diversity is not complete if any plaintiff is a citizen of the same state
as any defendant.") (citing Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373-74 (1978)).
Moreover, "[i]n an action in which jurisdiction is premised on diversity of citizenship, diversity must
exist at the time the action is commenced." Universal Licensing Corp. v. Paola del Lungo S.p.A.,
293 F.3d 579, 581 (2d Cir. 2002).
In the Complaint in suit, Westchester alleges that it is "a Pennsylvania corporation, with its
principal place of business at 436 Walnut Street, Philadelphia, Pennsylvania 19106 and is,
accordingly, a citizen of the Commonwealth of Pennsylvania." Doc. 1, ¶ 4. Pursuant to 28 U.S.C.
§ 1332(c)(1), "a corporation shall be deemed to be a citizen of any State by which it has been
incorporated and of the State where it has its principal place of business." From the allegations in
the Complaint, Westchester is indeed a citizen of Pennsylvania for diversity purposes.
As to the individual defendants, Plaintiff alleges that each "is domiciled" in Connecticut and
also provides their specific home addresses. See Doc. 1, ¶¶ 9-10 (Mark Costantini and Lisa
Costantini both "resid[e] at 43 Crescent Place, Monroe, Connecticut 06448" and are "domiciled in
the State of Connecticut"); ¶¶ 11-12 (Mario Marini and Michelle Marini both "resid[e] at 135
Governor Trumbull Way, Trumbull, Connecticut 06611" and are "domiciled in the State of
Connecticut").

"An individual's citizenship, within the meaning of the diversity statute, is

determined by his domicile." Johnson v. Smithsonian Inst., 4 F. App'x 69, 70 (2d Cir. 2001) (citing
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Palazzo v. Corio, 232 F.3d 38, 42 (2d Cir. 2000)). See also Martinez v. Bynum, 461 U.S. 321, 331
(1983) ("In general, the domicile of an individual is his true, fixed and permanent home and place
of habitation" – i.e., "the place to which, whenever he is absent, he has the intention of returning.").
Because the Costantini and Marini individual defendants are domiciled in Connecticut, they are all
citizens of Connecticut for diversity purposes.
Citizenship is less than clear, however, with respect to the defendant limited liability
companies. As to the citizenship of Enviroguard, Clean Air, and Silvermine, Plaintiff merely labels
these entities as "Connecticut limited liability compan[ies]" and then provides their "principal
place[s] of business" within Connecticut.4 However, "a limited liability company takes the
citizenship of each of its members." Bayerische Landesbank, New York Branch v. Aladdin Capital
Management, 692 F.3d 42, 49 (2d Cir. 2012) (emphasis added). See also Wise v. Wachovia
Securities, LLC, 450 F.3d 265, 267 (7th Cir. 2006)(emphasis added), cert. denied, 549 U.S. 1047

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With respect to the defendant limited liability companies, Plaintiff alleges as follows:

6.

Defendant ENVIROGUARD, LLC (hereinafter "Enviroguard") is a
Connecticut limited liability company, with its principal place of business at
81 Silvermine Road, Seymour, Connecticut 06483 and is, therefore, a citizen
of the State of Connecticut.

7.

Defendant CLEAN AIR CONSULTANTS, LLC (hereinafter, ["]Clean Air")
is a Connecticut limited liability company with its principal place of business
[at] 81 Silvermine Road, Seymour, Connecticut 06483 and is, therefore, a
citizen of the State of Connecticut.

8.

Defendant SILVERMINE EQUITIES, LLC, is a Connecticut limited liability
company with its principal place [of] business [at] 81 Silvermine Road,
Seymour, Connecticut 06483 and is, therefore, a citizen of the State of
Connecticut.

Doc. 1, ¶¶ 6-8.
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(2006) ("[t]he citizenship for diversity purposes of a limited liability company . . . is the citizenship
of each of its members"). Put simply, the "citizenship of a limited liability company is not the state
in which it is organized or has its principal place of business, but rather, each of the states in which
it has members." Lewis v. Allied Bronze LLC, No. 07 Civ. 1621(BMC), 2007 WL 1299251, at *1-2
(E.D.N.Y. May 2, 2007) (citing Handelsman v. Bedford Vill. Assocs. Ltd. P'ship, 213 F.3d 48, [5152] (2d Cir.2000) and remanding removed action for lack of diversity jurisdiction).5 Westchester
has failed to provide the identities and citizenship of each member of the three defendant limited
liability companies. Citizenship of each member must be known to insure that complete diversity
exists in this action between Westchester and all Defendants.

III.

CONCLUSION
Upon review of the Complaint, the Court has determined that Plaintiff's factual allegations

in support of subject matter jurisdiction are deficient. Plaintiff alleges that this Court "has
jurisdiction over this action based upon the diversity of citizenship pursuant to 28 U.S.C. [§] 1332,
in that Westchester Fire Insurance Company is a citizen of the Commonwealth of Pennsylvania and
Defendants are citizens of the State of Connecticut." Doc. 1, ¶ 1. Plaintiff then attempts to set forth
the citizenship of each of the parties. However, the allegations regarding the citizenship of the
defendant limited liability companies, Enviroguard, Clean Air, and Silvermine, fail to include the
identities and citizenship of each member of each limited liability company. Plaintiff has thus failed
to provide the facts necessary to determine the citizenship of these three entities.

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See also City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 127 n. 13 (2d
Cir. 2011) (citing Handelsman v. Bedford Vill. Assocs. Ltd. P'ship, 213 F.3d 48, 51–52 (2d
Cir.2000), as the appropriate "test for determining the citizenship of a limited-liability company").
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"[I]t is well established that [t]he party seeking to invoke jurisdiction under 28 U.S.C. § 1332
bears the burden of demonstrating that the grounds for diversity exist and that diversity is complete."
Herrick Co., Inc. v. SCS Commc'ns, Inc., 251 F.3d 315, 322-23 (2d Cir. 2001) (internal quotations
and citation omitted). Therefore, in order to determine whether it has subject matter jurisdiction in
this action, the Court hereby ORDERS Plaintiff to establish, by affidavit, the citizenship of each
defendant limited liability company for diversity purposes as of the date Plaintiff commenced the
action, November 5, 2013. That is, Plaintiff must demonstrate the citizenship of each member of
Enviroguard, Clean Air, and Silvermine by submitting an affidavit explicitly setting forth the
identities and state(s) of citizenship of each of their members as of November 5, 2013.
Plaintiff shall file and serve this affidavit on or before December 17, 2013.

All case

deadlines are hereby stayed pending the Court's review of the affidavit. If, upon review, the Court
determines that it possesses subject matter jurisdiction, the action may proceed. Otherwise, in the
absence of such jurisdiction, the Court will dismiss the action without prejudice to Westchester
filing, if so advised, in an appropriate jurisdiction.
It is SO ORDERED.
Dated: New Haven, Connecticut
November 12, 2013

/s/Charles S. Haight, Jr.
CHARLES S. HAIGHT, JR.
SENIOR UNITED STATES DISTRICT JUDGE

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