Kozel v. Kozel et al
Filing
46
Plaintiff's Motion to Remand to State Divorce Court 13 and Motion to Remand to State Divorce Court Directed to the "Amended Notice of Removal" and Incorporated Memorandum of Law 24 are GRANTED in part. Implead Defendant's M otion for Leave to Amend June 1, 2016 Notice of Removal 35 is GRANTED. This case is remanded to the Twelfth Judicial Circuit in and for Sarasota County, Florida. The Clerk is directed to send a certified copy of this Order to the Clerk of Court for the Twelfth Judicial Circuit in and for Sarasota County, Florida. The Clerk is further directed to terminate all pending motions and deadlines and CLOSE this case. Signed by Judge Charlene Edwards Honeywell on 8/4/2016. (JJH)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
ASHLEY KOZEL,
Plaintiff,
v.
Case No: 8:16-cv-1384-T-36TGW
INGA KOZEL, 212 WEST 18 LLC,
3601 SETAI LLC and GOKANA
TRUST,
Impleader Defendants.
/
ORDER
This cause comes before the Court upon the Plaintiff's Motion to Remand to
State Divorce Court (Doc. 13) (“Motion to Remand”), filed on June 8, 2016,
Impleader Defendant Inga Kozel’s Amended Notice of Removal (Doc.
22),
Plaintiff’s Motion to Remand to State Divorce Court Directed to the “Amended
Notice of Removal” and Incorporated Memorandum of Law (“Second Motion to
Remand”) (Doc. 24), Defendant Inga Kozel’s Motion for Leave to Amend June 1,
2016 Notice of Removal (Doc. 35) and Plaintiff’s Opposition to Inga Kozel’s
Motion for Leave to Amend June 1, 2016 Notice of Removal (Doc. 38).
In the motions to remand, Plaintiff argues the following: (1) Defendant’s
notices of removal are procedurally deficient and otherwise insufficient to establish
jurisdiction; (2) the Court should abstain from hearing the case because the
supplementary proceeding is not removable, and comity and judicial economy favor
remand; (3) the removal is untimely; (4) Defendant waived her right to remove by
actively participating in the state court proceedings. Plaintiff further argues that the
Court should prohibit further amendment to the Notice of Removal and grant her
attorney’s fees. The Court, having reviewed the pleadings and otherwise being fully
advised of the premises, grants leave to the Defendant to amend her June 1, 2016
Notice of Removal. However, the Court concludes that remand to state court is
appropriate in this case on the following grounds: untimeliness, waiver, and
insufficient allegations regarding the citizenship of the parties.
I.
Background
Plaintiff Ashley Kozel received a final judgment in the amount of $34 million
dollars from her former husband, Todd Kozel, whom she divorced in 2012 in the
case styled Kozel v. Kozel, Case No. 10-8976, in the Circuit Court of the Twelfth
Judicial Circuit in and for Sarasota County, Florida (“State Court Action”). Plaintiff
accused her former husband of hiding various assets by transferring money to his
current wife, Inga Kozel, (the “Defendant”), and to various entities, including 212
West 18, LLC, 3601 Setai, LLC, and the Gokana Trust.
On or about November 24, 2015, Plaintiff filed a Motion for Proceedings
Supplementary and/or to Implead Third Parties and for Other Relief (“Motion for
Proceedings”) pursuant to Florida Statutes §56.29 in the State Court Action. Doc.
2
13, Ex. 4. On January 13, 2016, Plaintiff filed an Amended Motion for Proceedings
Supplementary and/or to Implead Third Parties and for Other Relief (“Amended
Motion for Proceedings”) alleging that her former husband made fraudulent transfers
to the Defendant. Id., Ex. 5. Plaintiff alleged in both motions that Defendant was
assisting Todd Kozel in defrauding her as a judgment creditor and received “[r]eal
property in Lithuania worth millions of dollars; $1.5 million in jewelry from Graff’s
in New York; over $1 million in jewelry and personal effects from other vendors;
[and cash] in excess of $1 million….” Id., Ex. 4, 5. Plaintiff further demanded in
both motions that “[a]ll transfers to Defendant should be set aside as void ab initio
and/or a money judgment should be entered against her…” along with “further
injunctive relief and/or the appointment of a receiver.” Id. The state court entered an
order on the motions (“Order of Impleader”) on January 15, 2016. Id., Ex. 6. The
Order of Impleader made Defendant a party to the State Court Action as an
impleader defendant, “subject to any lawful defenses [she] may raise by way of
motion or responsive pleading….” Id. It further stated that “[f]ollowing the service
of the order and motion to implead, the impleader defendants shall have twenty (20)
days to respond to the allegations in the former wife’s motion to implead[.].” Id.
On February 8, 2016, Plaintiff served Defendant with the Order of Impleader,
along with its accompanying motions by mail in London pursuant to the Hague
Convention. See id., Ex. 7. On February 16, 2016, Defendant filed a motion to quash
3
service, id., Ex. 8, which was set for hearing on March 30, 2016. See id., Ex. 9. On
March 14, 2016, she filed a motion to strike. Id., Ex. 30. On March 23, 2016,
Defendant was personally served in New York. See id., Ex. 10. On the same day,
Plaintiff responded to the motion to quash and filed a cross motion for contempt
alleging in part that the former husband transferred over $1 million dollars to
Defendant. Id., Ex. 19. The state court entered the parties’ stipulated order denying
the motion to quash, and reserved jurisdiction regarding sanctions. Id., Ex. 13. On
April 12, 2016, Defendant filed a motion to dismiss for lack of personal jurisdiction.
Id., Ex. 15. On April 26, 2016, she filed requests for admissions, and the next day a
motion for a case management order. Id., Ex. 16, 17.
On April 27, 2016, Plaintiff filed a motion to compel Defendant’s deposition
that requested sanctions against Defendant, noting that the Defendant received over
$1 million in fraudulently transferred cash. Id., Ex. 18. On May 3, 2016, the Plaintiff
filed a motion for contempt against Defendant. Id., Ex. 19. Shortly thereafter,
Defendant retained new counsel, and on June 1, 2016 she removed the
supplementary proceeding of the State Court Action to federal court.
II.
Legal Standard
Removal jurisdiction is construed narrowly with all doubts resolved in favor
of remand. See Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 411 (11th Cir.
1999); Pacheco de Perez v. AT & T Co., 139 F.3d 1368, 1373 (11th Cir. 1998). “A
4
removing defendant bears the burden of proving proper federal jurisdiction.”
Leonard v. Enter. Rent a Car, 279 F.3d 967, 972 (11th Cir. 2002) (citing Williams
v. Best Buy Co., 269 F.3d 1316, 1319–20 (11th Cir. 2001)). In assessing whether
removal was proper, the district court considers “only the limited universe of
evidence available when the motion to remand is filed - i.e., the notice of removal
and accompanying documents [, and] if that evidence is insufficient to establish that
removal was proper or that jurisdiction was present, neither the defendants nor the
court may speculate in an attempt to make up for the notice's failings.” Lowery v.
Ala. Power Co., 483 F.3d 1184, 1213-15 (11th Cir. 2007), cert. denied, 553 U.S.
1080, 128 S.Ct. 2877, 171 L.Ed.2d 812 (2008).
Where the alleged basis for federal jurisdiction is diversity under § 1332, as it
is in this case, the removing defendant has the burden of demonstrating (1) complete
diversity of citizenship and (2) an amount in controversy greater than $75,000. See
28 U.S.C. § 1332(a). The parties do not dispute that the amount in controversy
exceeds $75,000. Rather, the issue is whether Defendant has established that
complete diversity of citizenship exists.
III.
Discussion
a. Amendment to Notice of Removal
At the outset, the Court addresses Defendant’s amendments to her Notice of
Removal. “Defective allegations of jurisdiction may be amended, upon terms, in the
5
trial or appellate courts.” 28 U.S.C. § 1653. “[L]eave to amend should be freely
granted when necessary to cure a failure to allege jurisdiction properly.” Majd–Pour
v. Georgiana Cmty. Hosp., Inc., 724 F.2d 901, 903 n. 1 (11th Cir. 1984). See also
Corporate Mgmt. Advisors, Inc. v. Artjen Complexus, Inc., 561 F.3d 1294, 1297
(11th Cir. 2009) (“If a party fails to specifically allege citizenship in their notice of
removal, the district court should allow that party ‘to cure the omission,’ as
authorized by § 1653.”); Cruz v. Lowe's Home Centers, Inc., No. 809-CV-1030-T30MAP, 2009 WL 2180489, at *3 (M.D. Fla. July 21, 2009) (“The Court agrees that
Lowery permits Defendant to amend its otherwise defective Notice of Removal upon
receipt of Plaintiff's Motion to Remand.”).
Although Defendant did not seek leave of court prior to filing her Amended
Notice of Removal in response to Plaintiff’s Motion to Remand, she has since filed
a Motion for Leave to Amend, and Plaintiff responded with a Second Motion to
Remand and opposition to the motion to amend. Given the case law permitting
amendment to notices of removal and the Court’s ultimate holding that Defendant
has not established that this court has subject matter jurisdiction, the Plaintiff will
suffer no prejudice. Therefore, the Court grants Defendant’s Motion for Leave to
Amend the June 1, 2016 Notice of Removal, and will consider it accordingly in its
analysis.
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b. Supplementary Proceedings under §56.29, Fla. Stat.
Generally, the Eleventh Circuit has held that a judgment creditor's
supplementary proceeding in Florida state court to void a judgment debtor's
allegedly fraudulent conveyances to transferees is a “civil action” (as described in
28 U.S.C. § 1441(a)) subject to removal to federal district court. Jackson-Platts v.
Gen. Elec. Capital Corp., 727 F.3d 1127 (11th Cir. 2013). In Jackson-Platts the
court reasoned that the supplementary proceeding in that case sought to impose
liability against new parties that had never been sued in the underlying action and
based liability on a new substantive legal theory of fraudulent conveyance. Id. at
1134-1135. But see Nat'l Mar. Servs., Inc. v. Straub, 776 F.3d 783, 788 (11th Cir.
2015) (clarifying Jackson-Platts by stating that not all supplementary proceedings
are new actions imposing new liabilities on third parties, since that case involved
recovering one asset transferred to a third party as opposed to seeking the entire
judgment against new parties.) The Court concludes that this case is similar to
Jackson-Platts. All of the parties are new to the action and the Plaintiff is seeking to
enforce the entire judgment against them based on alleged fraudulent transfers.
Plaintiff also makes various arguments regarding judicial economy, comity,
and abstention that the Court need not address at this time. The Court notes that this
case appears particularly contentious, and Defendant removed the case just prior to
a ruling on several pending motions. However, given the insufficient allegations
7
regarding citizenship of the parties, the Court sees no need to discuss those
arguments at this time.
c. Timeliness
Under § 1441(a), a defendant may remove to federal district court any civil
action brought in state court that could have originally been filed in federal court. 28
U.S.C. § 1441(a). The defendant has 30 days to file a notice of removal after it
receives or is served with the initial pleading. 28 U.S.C. § 1446(b)(2)(B). A
defendant's time to remove is triggered by service of the summons and complaint,
or receipt of the complaint through service or otherwise, and not by receipt of the
complaint “unattended by any formal service.” Murphy Bros. v. Michetti Pipe
Stringing, Inc., 526 U.S. 344, 347–48, 119 S.Ct. 1322, 1325, 143 L.Ed.2d 448
(1999). Further, if the case as stated in the initial pleading is not removable, a
defendant may file a notice of removal within “30 days after receipt by the defendant,
through service or otherwise, of a copy of an amended pleading, motion, order or
other paper from which it may first be ascertained that the case is one which is or
has become removable.” 28 U.S.C. § 1446 (b)(3).
For purposes of supplementary proceedings pursuant to § 56.29, the document
that impleads the third party into the case and requires that party to answer the claims
of the judgment creditor is the “initial pleading.” See Jackson-Platts, 727 F.3d at
1130 (noting that the defendant timely removed the action when defendant’s Notice
8
of Removal was filed on December 30, 2010, and Defendant alleged in the Notice
of Removal that it was filed “within thirty days of receipt by GECC of the Motion
to Implead and the Order.”) 1 In cases involving writs of garnishment, which like a
supplementary proceeding seeks recovery of funds from a third party to satisfy the
judgment in the underlying action, courts have found that the writ of garnishment
was the “initial pleading” because it set forth the claim of relief upon which the
action is based and triggers liability. See, e.g., Hamptons at Metrowest Condo. Ass'n,
Inc. v. Nationwide Prop. & Cas. Ins. Co., No. 6:15-CV-753-ORL-22, 2015 WL
5021684, at *3 (M.D. Fla. Aug. 24, 2015).
Plaintiff argues that Defendant’s removal is untimely because it occurred
more than thirty days after she was served with the Order of Impleader and its
accompanying motions. Defendant was initially served by mail with the Order of
Impleader and the accompanying motions. She responded with a motion to quash
service. Defendant was then personally served with the same documents on March
23, 2016. Defendant argues that the Order of Impleader and accompanying motions
did not trigger removal because she could not yet ascertain whether the claim
satisfied the jurisdictional threshold required for removal. Instead, Defendant argues
1
The facts pertaining to the removal period in Jackson-Platts are set forth in the underlying opinion
and court docket. See Jackson-Platts v. Trans Health Mgmt., Inc., No. 8:10-CV-2937-T-33TGW,
2011 WL 1985796 (M.D. Fla. May 23, 2011), on reconsideration, sub nom. Jackson-Platts v.
Trans Health Mgmt., Inc., No. 8:10-CV-2937-T-33TGW, 2011 WL 4345315 (M.D. Fla. Sept. 16,
2011, Jackson-Platts v. Trans Health Mgmt., Inc., No. 8:10-CV-2937-T-33TGW Doc. 1.
9
she is entitled to removal under § 1446(b)(3). She relies on the May 3, 2016 Motion
for Contempt as the “other paper” which alerted her of her ability to remove. The
Court disagrees.
The Order of Impleader and accompanying motions clearly put the amount in
controversy in the millions, far exceeding the jurisdictional threshold. The
documents made it clear that Plaintiff sought, among other relief, a money judgment
against Defendant for the fraudulent transfers. Further, the May 3, 2016 Motion for
Contempt does not contain any additional information regarding amount in
controversy or citizenship of the parties. See id., Ex. 19. The Defendant argues that
the motion “clarified” that Plaintiff sought monetary damages against Defendant and
that “the value of the claim whether equitable or monetary was above the
jurisdictional limit.” Doc. 36. However, the motion for contempt merely reiterated
Plaintiff’s prior claims.
Therefore, the Court concludes that the original service on Defendant of the
Order of Impleader and the accompanying motions on February 8, 2016, triggered
the thirty day period for removal. See DC Liquidators, LLC v. Warehouse Equip.
Specialists, LLC, 66 F. Supp. 3d 1138 (N.D. Ill. 2014) (in granting motion to remand,
court held that the denial of defendants’ motion to quash service prior to removal
was binding on them in federal court). Even if the Court started the thirty day period
10
on March 23, 2016, when Defendant was personally served, it is clear that Defendant
filed her initial Notice of Removal in an untimely manner.
d. Waiver
Plaintiff argues that Defendant waived her right to remove by actively
participating in the supplementary proceeding in state court. Defendant filed four
motions in state court prior to removing to this court. This issue is “commonly
referred to as litigating on the merits, [and it] effectively waives the defendant's right
to remove a state court action to federal court.” Yusefzadeh v. Nelson, Mullins, Riley
& Scarborough, LLP, 365 F.3d 1244, 1246 (11th Cir. 2004). The Eleventh Circuit
noted:
A state court defendant may lose or waive the right to remove a case to
a federal court by taking some substantial offensive or defensive action
in the state court action indicating a willingness to litigate in that
tribunal before filing a notice of removal with the federal court ...
[w]aiver will not occur, however, when the defendant's participation in
the state action has not been substantial or was dictated by the rules of
that court....
Yusefzadeh, 365 F.3d at 1246 (quoting 14B Charles A. Wright, et al., Federal
Practice & Procedure § 3721 (4th ed. 2003)). The court’s determination that a
defendant waived its right to remove based on active participation is made on a caseby-case basis. Id.
Two factors that may guide the court's determination of whether a defendant
has waived the right to remove a case to federal court are: “1) whether the actions
11
taken by the [d]efendants in the state court were for the purpose of preserving the
status quo, or did they manifest an intent to litigate on the merits in state court and
2) whether the removal can be characterized as an appeal from an adverse judgment
of the state court.” Fain v. Biltmore Sec., Inc., 166 F.R.D. 39, 40-41 (M.D. Ala.
1996).
In Yusefzadeh, the Eleventh Circuit reversed a district court's sua sponte
remand, finding that the defendant's single act of filing a motion to dismiss in state
court prior to removal did not result in a waiver of its right to remove to federal
court. 365 F.3d at 1246–1247. The Court reasoned that it could not find that the
defendant “took substantial offensive or defensive actions in state court” by filing a
responsive brief in state court and then seeking removal to federal court where the
defendant “did not schedule a hearing on [its] motions to dismiss prior to seeking
removal and the state court had not ruled on [the] motions to dismiss prior to
[defendant] removing the case.” Id. at 1247. Under those circumstances, the
Eleventh Circuit found that a defendant had not waived its right to remove the action
to federal court. Id.
In this case, Defendant waited to file her Notice of Removal in this Court until
after she filed a motion to quash service, set it for hearing, and received an order
denying the motion, which reserved jurisdiction to decide whether to impose
12
sanctions against her. Further, she served discovery, and filed a motion for a case
management order and a motion to strike.
Additionally, the state court entered an order on May 9, 2016, which was
adverse to Todd Kozel and Defendant. The state court stated, among other things,
that the “evidence established that there have been concentrated efforts by [Todd
Kozel] and his business attorneys to weave a sophisticated international scheme to
hide his assets.” Doc. 13, Ex. 20. It further stated “that the evidence is clear that
[Todd Kozel] is not broke, that the [financial] affidavit contained material omissions
and/or misrepresentation[;]” and as to Defendant that “[Todd Kozel] and his Florida
and Swiss attorneys [] manufactured a falsified lease for the New York apartment
for Inga Kozel to sign in October of 2015 after copies of leases were requested in
discovery.” Id.
Defendant argues that all of her litigation took place prior to the case
becoming removable, and therefore none of it could act as a waiver. She further
argues that challenging personal and subject matter jurisdiction in state court does
not act as a waiver; and her actions to defend herself “are not antithetical to federalstate court comity.” Doc. 36. As the Court already noted, the case became removable
upon service of the Order of Impleader on February 8, 2016. Therefore, the
Defendant engaged in substantial litigation prior to removal.
13
Defendant’s motion to dismiss and motion to quash, on their own may not
have constituted waiver, particularly if they were time sensitive. See Phillips v.
Manufacturers Trust Co., 101 F.2d 723 (9th Cir. 1939) (Defendant corporation did
not waive right to removal of cause from court of state, of which it was not resident,
to federal court, by filing motion in state court to quash service of summons on it.)
But removal does not waive any defenses. See Kiro v. Moore, 229 F.R.D. 228, 231
(D.N.M. 2005) (“Moreover, removing an action from state to federal court does not
waive a defendant's defense of lack of process or lack of service of process”).
Therefore, a removing defendant need not necessarily litigate several issues in the
state court prior to removal to retain its defenses.
The Court concludes that the amount of litigation conducted by Defendant
after being served with the Order of Impleader and accompanying motions,
combined with the adverse ruling on her motion to quash, and the statements made
by the state court in its May 9, 2016 Order regarding her participation in fraudulent
transfers and manufacturing of evidence are sufficient to show that she “test[ed] the
waters in state court and, finding the temperature not to [her] liking, beat a swift
retreat to federal court.” See Daniels v. Am. Serv. Grp., Inc., No.
805CV1392T30TBM, 2005 WL 2614667, at *2 (M.D. Fla. Oct. 14, 2005) (quoting
Estate of Krasnow v. Texaco, Inc., 773 F. Supp. 806 (E.D. Va. 1991)). See also Bank
of New York Mellon v. United States, No. 615CV1507ORL37GJK, 2016 WL
14
3000889, at *3 n.2 (M.D. Fla. May 25, 2016) (“…jurisdictional forum selection
gamesmanship is unwelcome.”). Therefore, the Court concludes that Defendant’s
litigation in state court is sufficient to constitute a waiver by participation.
e. Diversity of Citizenship and Amount in Controversy
The parties do not dispute the amount in controversy. However, Plaintiff
argues that the citizenships of the Defendants are unclear, and therefore fail to meet
the threshold showing for removal. The Court agrees.
It is undisputed that Plaintiff is a citizen of Florida. Defendant asserts the
following in the Amended Notice of Removal regarding citizenship of the
Defendants:2
b. Citizenship of Implead Defendant Inga Kozel. Impleader Defendant
Inga Kozel is not a citizen of the State of Florida, and at all relevant
times has been, a citizen of the Republic of Lithuania.
c. Citizenship of Implead Defendant The Gokana Trust
(“Gokana”). Gokana is not a citizen of Florida. Gokana is a trust settled
under the laws of the Island of Jersey, administered by Emeralp Trust
Limited, the Original Trustee, a limited company organized under
the laws of Ireland, doing business at 21 Priory Hall, Stillorgan,
Co Dublin, Ireland.
d. Citizenship of Implead Defendant 3601 Setai LLC (“Setai”). Setai
is not a citizen of Florida. Although Setai is a Florida limited liability
company, the citizenship of Setai is based upon the citizenship of its
members. The sole member of Setai is Deepdene Ltd., which is a
2
Plaintiff argues that the former husband is a party to the supplementary proceedings and therefore
his citizenship is at issue. The Court disagrees. See Jackson-Platts v. Gen. Elec. Capital Corp.,
727 F.3d at 1134-1135 (discussing removable supplementary proceedings as suits involving new
parties under a new theory of liability).
15
foreign corporation incorporated under the laws of St. Vincent and the
Grenadines.
e. Citizenship of Implead Defendant 212 West 18 LLC (“212 West”).
212 West is not a citizen of Florida. 212 West is a New York limited
liability company, whose sole member is Capella Investments, Inc., a
Belize corporation. Capella Investments, Inc. is owned by Cristos
Georgiou, a citizen of Cypress.
Doc. 22.
Plaintiff argues that all of the allegations do not meet the so-called “double
designation” requirement which requires the removing defendant to assert the
defendants’ citizenship at the time of the initial filing of the action and at the time of
removal. Further, Plaintiff argues that Defendant did not state her domicile, and the
trust and limited liability companies provide insufficient information regarding their
membership, and principal places of business.
For Defendant to assert diversity regarding the three entity defendants, she
must have identified whether the entity is incorporated or unincorporated. If it is to
be treated as a corporation, she must allege “every State and foreign state by which
it has been incorporated and [ ]the State or foreign state where it has its principal
place of business ...” § 1332(c)(1). If the entity is to be treated as an unincorporated
entity, she had to allege the citizenships of each of its members. See Rolling Greens
XHP, L.P. v. Comcast SCH Holdings, L.L.C., 374 F.3d 1020 (11th Cir. 2004)
(holding that like a limited partnership, a limited liability company is a citizen of any
state of which a member of the company is a citizen). However, a court should not
16
“assume[ ] that [a foreign state] has business entities that enjoy corporate status as
the United States understands it[,]” as “not even the United Kingdom has a business
form that is exactly equal to that of a corporation.” White Pearl Inversiones S.A.
(Uruguay) v. Cemusa, Inc., 647 F.3d 684, 686 (7th Cir. 2011).
To the extent that Defendant asserts that the Defendants are “not citizens of
Florida,” and that the alleged citizenships existed at “all relevant times,” these
allegations are insufficient. A defendant must distinctly and affirmatively allege
citizenship. See Toms v. Country Quality Meats, Inc., 610 F.2d 313, 316 (5th Cir.
1980). See also D.B. Zwirn Special Opportunities Fund, L.P. v. Mehrotra, 661 F.3d
124, 126 (1st Cir. 2011) (quoting Cameron v. Hodges, 127 U.S. 322, 324–25, 8 S.Ct.
1154, 32 L.Ed. 132 (1888)) (explaining that an allegation that a party is “not” a
citizen of a particular state is not sufficient to establish diversity jurisdiction);
Tomasini v. Stryker Corp. of Michigan, No. 09-60 344-CIV, 2009 WL 595932, at
*1 (S.D. Fla. Mar. 6, 2009) (“[T]he facts showing the existence of jurisdiction must
be affirmatively alleged.”).
i. Inga Kozel
Defendant asserts that she is a citizen of Lithuania and not a permanent
resident, but is present in the United States on a tourist visa. Therefore 28 U.S.C.
1332(a), which deems permanent resident aliens citizens of the state in which they
are domiciled is inapplicable. She does not therefore appear to be a citizen of Florida.
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ii. The Gokana Trust
Defendant lists the name of Gokana Trust’s sole trustee which is insufficient
to establish diversity. The Eleventh Circuit recently held that a trustee constitutes
the real party in interest and can “sue in [its] own right, without regard to the
citizenship of the trust beneficiaries.” Wells Fargo Bank, N.A. v. Mitchell's Park,
LLC, 615 F. App’x 561, 563 (11th Cir. 2015)(citing Navarro Sav. Ass'n v. Lee, 446
U.S. 458, 100 S.Ct. 1779, 1783–84, 64 L.Ed.2d 425 (1980) (“a trustee is a real party
to the controversy for purposes of diversity jurisdiction when he possesses certain
customary powers to hold, manage, and dispose of assets for the benefit of others.”)).
However, the “mere designation of an entity as a trust rather than an unincorporated
association is not controlling for purposes of determining diversity of citizenship.”
Bearse v. Main St. Investments, 220 F. Supp. 2d 1338, 1344 (M.D. Fla. 2002) (citing
Xaros v. U.S. Fidelity and Guaranty Company, 820 F.2d 1176, 1181 (11th Cir.
1987)). See also Americold Realty Trust v. Conagra Foods, Inc., 136 S. Ct. 1012,
1016, 194 L. Ed. 2d 71 (2016) (concluding that for purposes of diversity jurisdiction,
real estate investment trust’s members determined its citizenship and its members
included its shareholders).
In Wells Fargo Bank and Navarro, the trustee was the Plaintiff bringing the
action, and the court had to decide whether the trustee was the real party in interest
that could bring the claim on behalf of the trust. In contrast, when cases involved
18
trusts as removing defendants, the Eleventh Circuit has held that the trust’s
citizenship was determined by the citizenship of all of its members. See e.g. Carden
v. Arkoma Assoc., 494 U.S. 185, 195 (1990); Riley v. Merrill Lynch, Pierce, Fenner,
& Smith, Inc., 292 F.3d 1334, 1339 (11th Cir. 2002), abrogated on other grounds by
Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, 547 U.S. 71, 89 (2006) (noting
that “the citizenship of trust fund members is determinative of the existence of
diversity of citizenship” and treating a business trust “as a citizen of each state in
which one of its shareholders is a citizen”) (internal quotations and citations
omitted). See also Fuzzell v. DRC Emergency Servs., LLC, No. 2:14-CV-2202WMA, 2015 WL 412889, at *4 (N.D. Ala. Jan. 30, 2015) (holding that merely
naming the trustees for diversity purposes is insufficient); First Mut. Grp., LP v.
Melton, No. 6:14-CV-1758-ORL-41, 2015 WL 892369, at *4 (M.D. Fla. Mar. 2,
2015) (reviewing Carden, Navarro, and Riley and noting that the requirement to
name all of the beneficiaries of the trust has a narrow exception: where the trustee is
a plaintiff, bringing the action as the real party in interest.)
The Supreme Court recently noted that the “confusion regarding the
citizenship of a trust is understandable and widely shared[,]” and clarified that the
Navarro rule coexists with the rule that “when an artificial entity is sued in its name,
it takes the citizenship of each of its members.” Americold Realty Trust, 136 S. Ct.
at 1016.
19
To the extent that identifying the trustee’s citizenship is sufficient, in this case
it is a “limited company.” As an unincorporated entity, Defendant must have listed
all of its members, and the citizenship of those members, which she failed to do.
Therefore, the Court concludes that Defendant has not sufficiently alleged Gokana
Trust’s citizenship. 3 See Azzo v. Jetro Rest. Depot, LLC, 2011 WL 1357557, at *2 n.
2 (M.D. Fla. Apr. 11, 2011) (in pleading the citizenships of the members, “each
member's citizenship must [also] be properly alleged, be it an individual,
corporation, LLC, or other entity”).
iii. 3601 Setai, LLC and 212 West, LLC
As for 3601 Setai, LLC and 212 West, LLC, Defendant does not list their
principal places of business. Additionally, the citizenship remains unclear since the
members of these limited liability companies are foreign corporate entities. The
Court has no information to determine whether these foreign entities should be
treated as a limited liability company or a corporation. See Keshock v. Metabowerke
GMBH, No. CIV.A. 15-00345-N, 2015 WL 4458858, at *4 (S.D. Ala. July 21, 2015)
(requiring amendment to notice of removal to clarify foreign entity’s status as
corporation or otherwise to determine standard for proper diversity determination).
3
To the extent that Defendant argues that a business trust is subject to different rules than other
kinds of trusts for diversity purposes, the Court is not persuaded that Defendant has demonstrated
sufficient cause to distinguish them in this case. See Emerald Investors Trust v. Gaunt Parsippany
Partners, 492 F. 3d 192, 202 n. 14 (3rd Cir. 2007) (expressing “unwillingness to distinguish
between business trusts and express trusts for citizenship purposes.”).
20
Therefore, the Defendant has not met her burden to establish diversity of citizenship
of all of the parties, and this case is due to be remanded.
IV.
No Further Amendment Permitted
Untimeliness is a defect that the Defendant cannot cure with amendment. See
William v. Litton Loan Servicing, LP, 2:10-cv-951-WKW, 2011 WL 521624, at *7
(M.D. Fla. Feb. 15, 2011). Further, the Court considered the merits of Defendant’s
Amended Notice of Removal and it did not cure the defects in the original. Thus,
remand is required. See Trutie v. Republic Nat. Distrib. Co., LLC, 718 F. Supp. 2d
1350, 1350 (S.D. Fla. 2010) (noting that remand was required after defendants’
amended notice of removal was insufficient to establish the court’s jurisdiction).
V.
Attorney’s Fees
“Absent unusual circumstances, courts may award attorney’s fees under 28
U.S.C. § 1447(c) only where the removing party lacked an objectively reasonable
basis for seeking removal.” Martin v. Franklin Capital Corp., 546 U.S. 132, 141,
126 S.Ct. 704, 163 L.Ed.2d 547 (2005). Given the status of case law in the Eleventh
Circuit dealing with removal of supplementary proceedings, and the apparent
confusion regarding the citizenship of trusts for diversity purposes as recognized by
the U.S. Supreme Court, the Court cannot conclude that the Defendant lacked an
objectively reasonable basis for seeking removal. Thus, the Court denies Plaintiff's
request for attorney's fees and costs.
21
Accordingly, it is ORDERED AND ADJUDGED:
1. Plaintiff's Motion to Remand to State Divorce Court (Doc. 13) and Motion
to Remand to State Divorce Court Directed to the “Amended Notice of
Removal” and Incorporated Memorandum of Law (Doc. 24) are
GRANTED in part.
2. Implead Defendant’s Motion for Leave to Amend June 1, 2016 Notice of
Removal (Doc. 35) is GRANTED.
3. This case is remanded to the Twelfth Judicial Circuit in and for Sarasota
County, Florida.
4. The Clerk is directed to send a certified copy of this Order to the Clerk of
Court for the Twelfth Judicial Circuit in and for Sarasota County, Florida.
5. The Clerk is further directed to terminate all pending motions and
deadlines and CLOSE this case.
DONE AND ORDERED in Tampa, Florida on August 4, 2016.
COPIES TO:
COUNSEL OF RECORD AND PARTIES
Clerk of Court for the Twelfth Judicial Circuit in and for Sarasota County, Florida
22
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