Bank of Hawaii v. Plimpton

Filing 22

ORDER ADOPTING FINDINGS AND RECOMMENDATION TO DENY WITHOUT PREJUDICE PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AGAINST DARREL PLIMPTON re 19 - Signed by JUDGE JILL A. OTAKE on 11/17/2022. For the reasons stated herein , the Court ADOPTS Magistrate Judge Porter's Findings and Recommendation to Deny Without Prejudice Plaintiff's Motion for Default Judgment Against Defendant Darrel Plimpton. ECF No. 19.Plaintiff is granted leave to file an amended complaint by no later than December 19, 2022.(jni)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
BANK OF HAWAII,
Plaintiff,
vs.
DARREL PLIMPTON,
Defendant.

CIVIL NO. 22-00220 JAO-WRP
ORDER ADOPTING FINDINGS
AND RECOMMENDATION TO
DENY WITHOUT PREJUDICE
PLAINTIFF’S MOTION FOR
DEFAULT JUDGMENT AGAINST
DARREL PLIMPTON

ORDER ADOPTING FINDINGS AND RECOMMENDATION TO
DENY WITHOUT PREJUDICE PLAINTIFF’S MOTION FOR DEFAULT
JUDGMENT AGAINST DARREL PLIMPTON
Before the Court is Plaintiff Bank of Hawaii’s (“Plaintiff”) Objection to the
Magistrate Judge’s Findings and Recommendation to Deny Without Prejudice
Plaintiff’s Motion for Default Judgment Against Defendant Darrel Plimpton
(“Objection”). ECF No. 20. This matter shall be decided without a hearing
pursuant to Local Rule 7.1(d). For the reasons articulated below, the Court rejects
Plaintiff’s objections and ADOPTS Magistrate Judge Porter’s Findings and
Recommendation to Deny Without Prejudice Plaintiff’s Motion for Default
Judgment Against Defendant Darrel Plimpton (“F&R”). ECF No. 19.

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BACKGROUND
Plaintiff commenced this action on May 13, 2022 against Defendant Darrel
Plimpton (“Defendant”). ECF No. 1. According to the Complaint, Plaintiff
extended a revolving line of credit to non-party Maui Seafoods LLC (Seafoods).
Id. ¶¶ 8-10. Defendant executed a Commercial Guaranty, thereby guaranteeing all
of Seafood’s payments due to Plaintiff. Id. ¶ 11. Plaintiff alleges Seafoods is in
default and, as of January 31, 2022, owes a total of $222,278.78, with interest
continuing to accrue. Id. ¶¶ 15-17. Plaintiff contends it made a demand on
Defendant, as the guarantor, for all outstanding sums, but that Defendant has failed
to pay the outstanding balance. Id. ¶¶ 18-20. Based on these allegations, Plaintiff
brought a single claim against Defendant for breach of contract. Id. ¶¶ 6-21.
Relevant here, the Complaint alleges the Court has jurisdiction over this
action based on diversity jurisdiction, 28 U.S.C. § 1332(a)(1), because the matter
in controversy exceeds $75,000 and is between citizens of different States. Id. ¶ 4.
In support of its allegation that diversity of citizenship exists, Plaintiff alleges it is
a citizen of Hawai‘i (by alleging it is a Hawai‘i corporation with its principal place
of business in Honolulu, Hawai‘i), but states only that Defendant “is a resident of
the State of Massachusetts per his testimony given at the May 27, 2021 first
meeting of creditors in the bankruptcy case of Maui Seafoods LLC [.]” Id. ¶¶ 1-2.

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Plaintiff served the Complaint on Defendant by leaving the summons and
Complaint with someone identified as the “sister/co-resident of Defendant” at an
address in Massachusetts. ECF No. 9. After Defendant failed to respond to the
Complaint, Plaintiff sought entry of default, and default was entered against
Defendant. ECF Nos. 12, 13. Plaintiff then moved for default judgment pursuant
to Federal Rule of Civil Procedure Rule 55(b). ECF No. 16. On October 14, 2022,
Magistrate Judge Porter issued the F&R denying Plaintiff’s motion for default
judgment without prejudice, recommending that Plaintiff be granted leave to file
an amended complaint to address certain deficiencies related to Plaintiff’s
jurisdictional allegations. ECF No. 19. Plaintiff filed its Objection to that F&R on
October 28, 2022. ECF No. 20.
STANDARD OF REVIEW
When a party objects to a magistrate judge’s findings or recommendations,
the district court must review de novo those portions to which the objections are
made and “may accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1); United
States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (“[T]he
district judge must review the magistrate judge’s findings and recommendations de
novo if objection is made, but not otherwise.”). Under a de novo standard, there is
no deference to the lower court’s ruling; rather, the Court “freely consider[s] the
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matter anew, as if no decision had been rendered below.” Dawson v. Marshall,
561 F.3d 930, 933 (9th Cir. 2009) (alteration in original) (quotations omitted);
Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006).
ANALYSIS
“The party seeking to invoke the district court’s diversity jurisdiction always
bears the burden of both pleading and proving diversity jurisdiction.” NewGen,
LLC v. Safe Cig, LLC, 840 F.3d 606, 613-14 (9th Cir. 2016). Defendant objects to
Magistrate Judge Porter’s F&R, specifically challenging his determination that the
allegations in the Complaint were insufficient for Plaintiff to carry its burden of
establishing subject matter jurisdiction based on diversity where Plaintiff alleged
only Defendant’s residency, and not his citizenship or domicile, and evidence in
the record indicated Defendant may not be domiciled in Massachusetts. The F&R
also raised other concerns with Plaintiff’s interest calculations, to which Plaintiff
has not objected. Upon de novo review, the Court rejects Plaintiff’s objections and
adopts the F&R.
The only allegation in the Complaint regarding Defendant’s citizenship
concerns his place of residence. ECF No. 1 ¶ 2. As the F&R correctly noted, “the
diversity jurisdiction statute, 28 U.S.C. § 1332, speaks of citizenship, not of
residency.” Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001).
State citizenship is determined by a party’s state of domicile, not residence. Id.
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“A person’s domicile is [his] permanent home, where [he] resides with the
intention to remain or to which [he] intends to return. Id. “A person residing in a
given state is not necessarily domiciled there, and thus is not necessarily a citizen
of that state.” Id. (citing Weible v. United States, 244 F.2d 158, 163 (9th Cir. 1957)
(“Residence is physical, whereas domicile is generally a compound of physical
presence plus an intention to make a certain definite place one’s permanent
abode[.]”)). The Court therefore agrees that Plaintiff’s allegation of residency
alone is fatal to Plaintiff’s assertion of diversity jurisdiction. See Kanter, 265 F.3d
at 857-58 (concluding defendants’ failure to specify plaintiffs’ citizenship, where
complaint and notice of removal identified only their place of residence, was fatal
to assertion of diversity jurisdiction).
In doing so, the Court rejects Plaintiff’s request to reconsider the F&R based
on decisions indicating that residency may be prima facie evidence of domicile or
based on the argument that it is reasonable to presume “that the Defendant has
abandoned Hawaii as his place of domicile and is now domiciled in Massachusetts
because he lives there with his family.” ECF No. 20 at 3.
Plaintiff concedes that the Ninth Circuit has not expressly held that an
allegation of residency alone is sufficient to allege citizenship for the purpose of
carrying one’s burden of establishing jurisdiction. ECF No. 20 at 3-4; see also,
e.g., Adams v. W. Marine Prod., Inc., 958 F.3d 1216, 1221 (9th Cir. 2020) (“At
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minimum, a person’s residence constitutes some evidence of domicile.”); Ehrman
v. Cox Commc’ns, Inc., 932 F.3d 1223, 1228 (9th Cir. 2019) (declining to address
whether residency constitutes prima facie evidence of domicile) (citing Mondragon
v. Capital One Auto Fin., 736 F.3d 880, 886 (9th Cir. 2013) (citing the statement in
Anderson v. Watts, 138 U.S. 694, 706 (1891) that “[t]he place where a person lives
is taken to be his domicile until facts adduced establish the contrary,” but not
reaching the issue of whether residence is prima facie evidence of domicile and
noting instead that a court should consider the entire record to determine whether
evidence of residency can establish citizenship)); see also Kanter, 265 F.3d at 85758. Plaintiff acknowledges, instead, that the Ninth Circuit directs courts to
consider a number of factors, with no single factor controlling, when determining
an individual’s domicile, including
current residence, voting registration and voting practices, location of
personal and real property, location of brokerage and bank accounts,
location of spouse and family, membership in unions and other
organizations, place of employment or business, driver’s license and
automobile registration, and payment of taxes.
Lew v. Moss, 797 F.2d 747, 750 (9th Cir. 1986). Based on this authority, the Court
declines to adopt a bright line rule in this case that Plaintiff’s single allegation of
Defendant’s residency in Massachusetts was sufficient to meet its jurisdictional
burden—particularly given the record here which, at present, at least suggests facts
to the contrary regarding Defendant’s domicile.
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In response to Magistrate Judge Porter’s concerns with that record, see ECF
No. 19 at 6-7, Plaintiff’s Objection relies heavily on evidence not contained within
the Complaint and that does not yet appear to be part of the record. For example,
although Plaintiff did attach Defendant’s testimony to the Complaint, in that
testimony he stated: “Current address – I’m not there right now, but it’s [in]
Millbury, Massachusetts.” ECF No. 1 at 10 (emphasis added). At the time of that
testimony, Defendant presented a Hawai‘i driver’s license. Id. at 9. And as
Magistrate Judge Porter also noted, someone accepted service on Defendant’s
behalf in Massachusetts. ECF No. 9. Thus, while Plaintiff asks this Court to
conclude that Defendant abandoned Hawai‘i as his place of domicile, it has not
adequately responded to the concern that Plaintiff has not sufficiently alleged
Defendant’s domicile or physical presence in Massachusetts, particularly when
considering the portions of the record cited above. See Lew, 797 F.2d at 749-50
(noting that change in domicile requires (1) physical presence at a new location
and (2) an intention to remain there indefinitely).
In addition, in its Objection, and apparently in response to Magistrate Judge
Porter’s concern that Defendant listed a Hawai‘i address on certain other forms
attached to the Complaint, ECF No. 1 at 19-22, Plaintiff contends that Defendant
“sold his property on Maui and abandoned any intent to return to Hawaii,” ECF
No. 20 at 6. However, Plaintiff cites no evidence in support of this contention—let
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alone evidence that would have been before Magistrate Judge Porter. Other
information—like that Plaintiff’s loan officer “was informed [Defendant] had left
Maui” or that Defendant “abandoned his business in Maui”—is similarly offered
without citation to any evidence and again appears to be included for the first time
in Plaintiff’s Objection. ECF No. 20 at 3, 6.
Because it is Plaintiff’s burden to establish jurisdiction, see Thompson v.
McCombe, 99 F.3d 352, 353 (9th Cir. 1996), and a plaintiff relying on diversity
jurisdiction is “required to specify affirmatively the citizenship of all relevant
parties,” Hydroelec., L.P. v. Pac. Gas & Elec. Co., 981 F.2d 429, 438 (9th Cir.
1992), the Court rejects Plaintiff’s Objection that its allegation of residency alone
here was sufficient and therefore adopts the F&R. See Kanter, 265 F.3d at 857-58.
As recommended in the F&R, and requested by Plaintiff in its Objection, Plaintiff
is granted leave to file an amended complaint by December 19, 2022 to add
additional allegations regarding Defendant’s citizenship and to address Magistrate
Judge Porter’s other concerns regarding calculation of interest.
CONCLUSION
For the reasons stated herein, the Court ADOPTS Magistrate Judge Porter’s
Findings and Recommendation to Deny Without Prejudice Plaintiff’s Motion for
Default Judgment Against Defendant Darrel Plimpton. ECF No. 19.

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Plaintiff is granted leave to file an amended complaint by no later than
December 19, 2022.
IT IS SO ORDERED.
DATED:

Honolulu, Hawai‘i, November 17, 2022.

Civil No. 22-00220 JAO-WRP; Bank of Hawaii v. Plimpton; ORDER ADOPTING FINDINGS AND
RECOMMENDATION TO DENY WITHOUT PREJUDICE PLAINTIFF’S MOTION FOR DEFAULT
JUDGMENT AGAINST DEFENDANT DARREL PLIMPTON

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