Ariel Syndicate 1910 v. Paramount Disaster Recovery, LLC

Filing 6

ORDER -- Plaintiff's Amended Complaint for Declaratory Judgment (Doc. 3) is DISMISSED WITHOUT PREJUDICE. On or before Friday, July 28, 2017, Plaintiff may file an amended complaint. Signed by Judge Roy B. Dalton, Jr. on 7/19/2017. (VMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
ARIEL SYNDICATE 1910,
Plaintiff,
v.

Case No. 6:17-cv-1279-Orl-37DCI

PARAMOUNT DISASTER RECOVERY,
LLC,
Defendant.
_____________________________________
ORDER
This cause is before the Court on its own motion. Upon review of Plaintiff’s
Complaint (Doc. 3), the Court is unable to determine whether it has subject matter
jurisdiction over this case.
The operative Complaint alleges that the Court has diversity jurisdiction over this
action pursuant to 28 U.S.C. § 1332(a). (Doc. 3, ¶ 6.) In diversity cases, district courts have
original jurisdiction over cases in which the parties are completely diverse and the
amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). Generally, complete
diversity requires that the citizenship of each plaintiff be diverse from the citizenship of
every defendant. Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005).
In determining the citizenship of business entities for purposes of diversity
jurisdiction, “federal law has drawn a sharp distinction between corporations and
virtually every other form of association.” Underwriters at Lloyd’s, London v.
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Osting-Schwinn, 613 F.3d 1079, 1086 (11th Cir. 2010). As set forth by federal statute, a
corporation is deemed 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). Cabining this treatment to corporations alone, federal case law
dictates that “an artificial, unincorporated entity generally depends on the citizenship of
all the members composing the organization.” See Rolling Greens MHP, L.P. v. Comcast
SCH Holdings L.L.C., 374 F.3d 1020, 1021–1022 (11th Cir. 2004) (emphasis added) (citing
Carden v. Arkoma Assocs., 494 U.S. 185, 195–96 (1990)). This “general rule for
unincorporated entities also applies to limited liability companies.” (Id. at 1022.) True
enough, “[n]o matter the particular features of an unincorporated entity, it has long been
the tradition of the common law to treat as legal persons only incorporated groups and
to assimilate all others to partnerships, which must plead the citizenship of each
member.” Osting-Schwinn, 613 F.3d at 1086 (quoting Puerto Rico v. Russel & Co.,
288 U.S. 476, 480 (1933)).
Here, Plaintiff fails to properly allege Defendant’s citizenship. As its name
suggests, Defendant is a limited liability company. So, to properly allege Defendant’s
citizenship, Plaintiff must identify each of Defendant’s members and allege their
citizenship individually. As presently pled, the Complaint alleges the principal place of
business and state of organization for Defendant. (Doc. 3, ¶¶ 5.) This is insufficient.
Second, the Court has doubts as to whether Plaintiff has properly alleged its own
citizenship. According to the Complaint, Plaintiff “is an insurance Syndicate located at
Lloyd’s Building” in London. (Doc. 3, ¶ 5.) The Society of Lloyd’s, London is “a British
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organization that provides infrastructure for the international insurance market.”
Osting-Schwinn, 613 F.3d at 1083. “Lloyd’s itself does not insure any risk”; rather,
“[i]ndividual underwriters known as ‘Names’ or ‘members,’ assume the risk of insurance
loss.” Id. “Names underwrite insurance through administrative entities called syndicates,
which cumulatively assume the risk of a particular policy.” Id. But “it is the individual
Names, not the syndicate, who are directly liable in the event of loss, as if each Name had
a contract with the insured.” Id. at 1084. Therefore, “Lloyd’s syndicates constitute an
unincorporated association for purposes of diversity jurisdiction, “and “must plead the
citizenship of each Name to establish diversity jurisdiction.” 1 Id. at 1088, 1091.
In alleging its own citizenship, Plaintiff identifies its sole member—Ariel
Corporate Member Limited (“Ariel”)—a private limited company. 2 (Doc. 3, ¶ 4.) The
Complaint alleges Ariel is a foreign national incorporated entity with a principle place of
business in London, England. The Court, however, it is unclear whether Ariel constitutes
an underwriting member or “Name” on the applicable insurance policy as those terms
are used in the Osting-Schwinn opinion. Hence the Court requires further information

Alternatively, “an individual Name that meets the amount in controversy
requirement may proceed in his individual capacity.” Osting-Schwinn, 613 F.3d at 1091.
2 In turn, Plaintiff asserts that Ariel is incorporated and registered in England and
Wales and has its principal place of business in London. (Doc. 3, ¶ 4). Through its own
research, the Court has located Ariel’s certificate of incorporation, which indicates that
Ariel was incorporated on April 13, 2007, by the Registrar of Companies for England and
Wales.
Ariel
Corporate
Member
Ltd.,
COMPANIES
HOUSE,
https://beta.companieshouse.gov.uk/company/06211755/filing-history?page=7 (last
visited July 19, 2017). Consistent with 28 U.S.C. § 1332(c)(1), because it is an incorporated
entity, Plaintiff has properly alleged Ariel’s citizenship.
1

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from Plaintiff on this point.
Accordingly, it is ORDERED AND ADJUDGED as follows:
1.

Plaintiff’s Amended Complaint for Declaratory Judgment (Doc. 3) is
DISMISSED WITHOUT PREJUDICE.

2.

On or before Friday, July 28, 2017, Plaintiff may file an amended complaint
that properly alleges Defendant’s citizenship. By this date, Plaintiff must
also submit a written response explaining whether Ariel is an underwriting
member or “Name” with respect to the applicable insurance policy. This
answer may either be included in the amended complaint or in a separate
filing.

3.

Failure to timely file these documents may result in this action being closed
without further notice.

DONE AND ORDERED in Chambers in Orlando, Florida, on July 19, 2017.

Copies to:
Counsel of Record
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