PRMD Construction Services v. Champion Mortgage Co.

Filing 4

ORDER. By August 14, 2017, Defendant Champion Mortgage Co. shall file an Amended Notice of Removal that includes sufficient allegations to unequivocally establish diversity of citizenship of the parties in this case. Signed by Judge Darrin P. Gayles on 8/9/2017. (zvr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 17-cv-61466-GAYLES
PRMD CONSTRUCTION SERVICES,
Plaintiff,
v.
CHAMPION MORTGAGE CO.,
Defendant.
/
ORDER
THIS CAUSE comes before the Court sua sponte. The Court has reviewed the record in
this case and is otherwise fully advised in the premises.
In its Notice of Removal removing this action from the Circuit Court of the Seventeenth
Judicial Circuit in and for Broward County, Florida, filed July 24, 2017, Defendant Champion
Mortgage Co. (“Champion”) invokes this Court’s diversity jurisdiction. [ECF No. 1]. Champion
asserts that it is a registered fictitious name for Nationstar Mortgage LLC, a limited liability company whose sole members are wholly owned by a Delaware corporation with a principal place of
business in Texas. [Id. at 2-3]. It also asserts that Plaintiff PRMD Construction Services (“PRMD”)
“is a limited liability company with its principal place of business in the State of Florida.” [Id. at 2].
Federal courts “have an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party.” Arbaugh v. Y & H Corp., 546
U.S. 500, 501 (2006). To that end, a federal court may raise jurisdictional issues on its own initiative at any stage of litigation. Id. at 506; see also Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d
405, 410 (11th Cir. 1999) (“[A] court should inquire into whether it has subject matter jurisdiction
at the earliest possible stage in the proceedings. Indeed, it is well settled that a federal court is obligated to inquire into subject matter jurisdiction sua sponte whenever it may be lacking.”).

1

The statute governing removal, 28 U.S.C. § 1441, permits a defendant to remove a case
brought in state court to federal court if the federal court has federal question jurisdiction under
28 U.S.C. § 1331 or diversity jurisdiction under 28 U.S.C. § 1332. When a defendant removes a
case, it, as the removing party, bears the burden of proving that federal subject matter jurisdiction
exists. Mitchell v. Brown & Williamson Tobacco Corp., 294 F.3d 1309, 1314 (11th Cir. 2002).
Diversity jurisdiction requires fully diverse citizenship of all parties and an amount in controversy
over $75,000, 28 U.S.C. § 1332(a), which is determined at the time of removal. Ehlen Floor
Covering, Inc. v. Lamb, 660 F.3d 1283, 1287 (11th Cir. 2011).
As this Court has previously explained, it
continues to be confounded by the fact that, despite the Eleventh Circuit’s longstanding rule that “for diversity jurisdiction purposes . . . a limited liability company
is a citizen of a state of which a member of the company is a citizen,” Rolling
Greens MHP, L.P. v. Comcast SCH Holdings, L.L.C., 374 F.3d 1020, 1022 (11th
Cir. 2004), parties (be they plaintiffs drafting complaints or defendants drafting
notices of removal) in every district court in this Circuit habitually fail to properly
allege the citizenships of limited liability companies and other unincorporated
business entities. See, e.g., Griggs v. USAA Cas. Ins. Co., No. 17-0064, 2017 WL
106015 (N.D. Ga. Jan. 11, 2017); Gaston v. TAMCO Prop. Mgmt., LLC, 2017 WL
57342 (N.D. Ala. Jan. 5, 2017); Tradesmen Int’l, LLC v. JVC Coatings & Fabrication, LLC, No. 13-0590, 2016 WL 6997068 (S.D. Ala. Nov. 29, 2016); Prof’l
Rev. Recovery Solutions, LLC v. Pillars Recovery, LLC, No. 16-62656, 2016 WL
7188779 (S.D. Fla. Nov. 14, 2016); Le Macaron, LLC v. Le Macaron Dev. LLC,
No. 16-0918, 2016 WL 6211718 (M.D. Fla. Oct. 24, 2016); Those Certain Underwriters at Lloyd’s, London, Subscribing to Policy PGIARK02190-02 v. Scott Miller
Consulting Eng’r, Inc., No. 15-0481, 2016 WL 204478 (M.D. Ala. Jan. 15, 2016);
Bus. Loan Ctr., LLC v. Roland Garros, Inc., No. 14-0213, 2015 WL 7776927 (S.D.
Ga. Dec. 2, 2015); James River Ins. Co. v. Arlington Pebble Creek, LLC, 118 F.
Supp. 3d 1302 (N.D. Fla. July 30, 2015); Branch Banking & Trust Co. v. Greenbriar
Estates, LP, No. 13-0012, 2013 WL 432577 (M.D. Ga. Feb. 1, 2013).
Burillo Azcarraga v. J.P. Morgan (Suisse) S.A., No. 16-22046, 2017 WL 693954, at *3 (S.D. Fla.
Feb. 22, 2017). Here, Champion, despite citing the correct law on this issue (albeit from the incorrect circuit), see [ECF No. 1 at 2] (“As a limited liability company, Nationstar ‘is a citizen of
every state of which its owners/members are citizens.’” (quoting Johnson v. Columbia Props.
Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006))), joins that regrettably long list of parties by

2

making the blanket assertion that complete diversity exists between it and PRMD because PRMD
“is a limited liability company with its principal place of business in the State of Florida,” [Id.]
(emphasis added). As this Court has iterated and reiterated, to satisfy the rule in Rolling Greens
regarding the citizenships of unincorporated business entities, “the removing party must list the
citizenships of all members of the limited liability company.” S. Beach Grp. Hotels, Inc. v. James
River Ins. Co., No. 16-23265, 2016 WL 4157422, at *2 (S.D. Fla. Aug. 5, 2016) (emphasis added)
(citation omitted).
Considering this standard, the Notice of Removal’s bare allegation regarding PRMD’s citizenship is “fatally defective.” Travaglio v. Am. Express Co., 735 F.3d 1266, 1269 (11th Cir. 2013).
The Court therefore finds that Champion, as the removing party, has failed to establish that diversity
of citizenship exists in this case. That said, the Court is mindful of the Eleventh Circuit’s instruction that, prior to remanding a case for lack of subject matter jurisdiction upon the failure of a removing party to properly allege diversity, a district court must allow the removing party an opportunity to cure the deficiency by granting leave to amend its notice of removal to “‘unequivocally’
establish diversity of citizenship.” Corporate Mgmt. Advisors Inc. v. Artjen Complexus, Inc., 561
F.3d 1294, 1297-98 (11th Cir. 2009) (quoting Armada Coal Exp., Inc. v. Interbulk, Ltd., 726 F.2d
1566, 1569 (11th Cir. 1984)). Accordingly, it is
ORDERED AND ADJUDGED that by August 14, 2017, Champion shall file an Amended
Notice of Removal that includes sufficient allegations to unequivocally establish diversity of citizenship of the parties in this case. Failure to comply with this Order will result in remand without
further notice for want of federal jurisdiction.
DONE AND ORDERED in Chambers at Miami, Florida, this 9th day of August, 2017.

________________________________
DARRIN P. GAYLES
UNITED STATES DISTRICT JUDGE
3