MB REO-FL Church-2, LLC v. Tampa For Christ Church, Inc. et al

Filing 151

ORDER: MB Reo shall file a supplement, which is supported by substantial evidence, Travaglio, 735 F.3d at 1269-70, by June 14, 2017, addressing these jurisdictional defects. Failure to comply will result in dismissal for lack of subject matter jurisdiction without further notice. Signed by Judge Virginia M. Hernandez Covington on 6/9/2017. (DRW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
MB REO-FL CHURCH-2, LLC,
Plaintiff,
v.

Case No. 8:16-cv-276-T-33AEP

TAMPA FOR CHRIST CHURCH, INC.,
et al.,
Defendants.
_____________________________/
ORDER
This matter comes before the Court sua sponte. While
considering the record and relevant materials related to
Plaintiff

MB

Reo-FL

Church-2,

LLC’s

motion

for

summary

judgment, a question as to the existence of jurisdiction
arose. For the reasons below, the Court directs MB Reo to
file a supplement addressing the jurisdictional issues raised
herein.
Discussion
“Federal courts operate under a continuing obligation to
inquire into the existence of subject matter jurisdiction
whenever it may be lacking.” RES-GA Cobblestone, LLC v. Blake
Const. & Dev., LLC, 718 F.3d 1308, 1313 (11th Cir. 2013)
(citing Baltin v. Alaron Trading Corp., 128 F.3d 1466, 1468

(11th Cir. 1997)). “That obligation continues through every
stage of a case, even if no party raises the issue.” Id.
(citing Already, LLC v. Nike, Inc., 133 S. Ct. 721, 726
(2013)).
The Complaint asserts three causes of action; namely,
quiet title, slander of title, and declaratory judgment.
(Doc. # 1). In its jurisdictional allegations, MB Reo alleges
“[t]his Court has both diversity jurisdiction under 28 U.S.C.
§ 1332 and federal question jurisdiction under 28 U.S.C. §
1331, 12 U.S.C. § 1819 and 28 U.S.C. § 2201-2202.” (Id. at ¶
2).

Upon

closer

inspection,

however,

federal

question

jurisdiction is absent and diversity jurisdiction is not
sufficiently established by the allegations.
With respect to §§ 2201-2202, “it is well established
that the Declaratory Judgment Act does not, of itself, confer
jurisdiction upon federal courts.” Stuart Weitzman, LLC v.
Microcomputer Res., Inc., 542 F.3d 859, 861-62 (11th Cir.
2008); see also Goodin v. Fidelity Nat’l Title Ins. Co., 491
Fed.

Appx.

139,

143

(11th

Cir.

2012)

(“The

Declaratory

Judgment Act, 28 U.S.C. § 2201, does not confer jurisdiction
upon a federal court. . . . Thus, a suit brought under the
Declaratory Judgment Act must have an independent source of
jurisdiction such as diversity jurisdiction. . . .”).

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For its part, § 1819 addresses the corporate powers of
the FDIC. Regarding jurisdiction, in general, “all suits of
a civil nature at common law or in equity to which the
Corporation, in any capacity, is a party shall be deemed to
arise under the laws of the United States.” § 1819(b)(2)(A).
And while the FDIC is a derivative member of MB Reo via
Multibank 2009-1 CRE Venture, LLC (Doc. # 1 at ¶¶ 4-6), the
FDIC is not a party, in any capacity, to this action. Thus,
federal question jurisdiction does not exist.
MB Reo also asserts diversity jurisdiction under § 1332.
(Id. at ¶ 2). Section 1332 requires that the amount in
controversy exceeds $75,000 and that complete diversity of
citizenship exists. 28 U.S.C. § 1332; Univ. of S. Ala. v. Am.
Tobacco Co., 168 F.3d 405, 412 (11th Cir. 1999). “When a
plaintiff files suit in federal court, she must allege facts
that, if true, show federal subject matter jurisdiction over
her case exists.” Travaglio v. Am. Exp. Co., 735 F.3d 1266,
1268 (11th Cir. 2013).
As

to

the

amount-in-controversy

requirement,

“‘[i]n

actions seeking declaratory or injunctive relief, it is well
established that the amount in controversy is measured by the
value of the object of the litigation.’” Occidental Chem.
Corp. v. Bullard, 995 F.2d 1046, 1047 (11th Cir. 1993). Here,

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the Complaint seeks a declaratory judgment and thus the amount
in controversy is the fair market value of the property at
issue. Id. (holding amount in controversy to be fair market
value of subject property). The Complaint alleges that the
subject property was listed with a sale price of $799,000 and
Defendant Tampa for Christ Church, Inc.’s lowest offer was
$675,000. (Doc. # 1 at ¶¶ 10, 11). Even using the lowest offer
from Tampa for Christ Church, the fair market value of the
property far exceeds the jurisdictional threshold.
Turning to citizenship, citizenship of a natural person
is determined by his or her domicile. McCormick v. Aderholt,
239 F.3d 1254, 1257-58 (11th Cir. 2002). “Citizenship, not
residence, is the key fact that must be alleged in the
complaint to establish diversity of a natural person.” Taylor
v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994). However,
the Complaint merely alleges Defendant Frank M. Bafford is
“an individual who resides in Tampa, Florida.” (Doc. # 1 at
¶ 8) (emphasis added). As such, Bafford’s citizenship has not
been established.
A corporation, like Tampa for Christ Church, is deemed
to be a citizen of every state in which it is incorporated
and where it has its principal place of business. 28 U.S.C.
§ 1332(c)(1). The Complaint alleges Tampa for Christ Church

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is a Florida corporation with its principal place of business
in Florida. (Doc. # 1 at ¶ 7). Accordingly, Tampa for Christ
Church is a citizen of Florida.
Unlike a corporation, a limited liability company is
deemed a citizen of every state of which its members are
citizens. Rolling Greens MHP, L.P. v. Comcast SCH Holdings
L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004).
And it is common for an LLC to be a member of
another LLC. Consequently, citizenship of LLCs
often ends up looking like a factor tree that
exponentially expands every time a member turns out
to be another LLC, thereby restarting the process
of identifying the members of that LLC. The
simplest misstep has the potential to derail years
of litigation . . . .
Purchasing Power, LLC v. Bluestem Brands, Inc., 851 F.3d 1218,
1221 (11th Cir. 2017).
MB Reo—the sole plaintiff—is an LLC. (Doc. # 1 at ¶ 4).
The only member of MB Reo is Multibank 2009-1 CRE Venture,
LLC. (Id. at ¶ 5). Multibank 2009-1 has two members: the FDIC
and ColFin DB Funding LLC. (Id. at ¶ 6). The FDIC is a
federally charted corporation. 12 U.S.C. § 1811. A federal
corporation is “not . . . a citizen of any state for diversity
purposes . . . unless the corporation’s activities were
sufficiently ‘localized’ in one state.” Loyola Fed. Sav. Bank
v. Fickling, 58 F.3d 603, 606 (11th Cir. 1995). Because the

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FDIC

insures

associations”

“the

deposits

entitled

to

of

all

coverage,

banks
§

and

1811(a)

savings
(emphasis

added), its activities are not localized. So, for purposes of
tracing the citizenship for MB Reo, the FDIC is not a citizen
of one particular state and thus cannot destroy diversity of
citizenship. That then leaves ColFin DB. While the Complaint
alleges ColFin DB is a Delaware limited liability company
with its principal place of business in California, it does
not allege the citizenship of ColFin DB’s members. (Id. at ¶
6). Therefore, MB Reo failed to sufficiently demonstrate its
citizenship,

thereby

precluding

the

Court

from

ensuring

complete diversity exists.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
MB Reo shall file a supplement, which is supported by
substantial evidence, Travaglio, 735 F.3d at 1269-70, by June
14, 2017, addressing these jurisdictional defects. Failure to
comply will result in dismissal for lack of subject matter
jurisdiction without further notice.
DONE and ORDERED in Chambers in Tampa, Florida, this 9th
day of June, 2017.

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