Wabash Estates, LP et al v. Lancaster Pollard Mortgage Company et al

Filing 4

ORDER regarding Plaintiffs' complaint 2 : A review of Plaintiffs' complaint reveals mutliple flaws in the jurisdictional allegations. Plaintiffs are ORDERED to file an amended complaint on or before February 8, 2013. Signed by Judge G. Patrick Murphy on 1/25/2013. (mab)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS

WABASH ESTATES, LP, and
)
WASHINGTON VILLAGE ESTATES, LP, )
Plaintiffs,
)
)
vs.
)
)
LANCASTER POLLARD MORTGAGE
)
COMPANY, STEVEN W. KENNEDY, and )
U.S. BANK N.A.,
)
)
Defendants.
)

CIVIL NO. 13-66-GPM

MEMORANDUM AND ORDER
MURPHY, District Judge:
This matter is before the Court sua sponte on the issue of federal subject matter
jurisdiction. See Foster v. Hill, 497 F.3d 695, 696-97 (7th Cir. 2007) (“It is the responsibility of a
court to make an independent evaluation of whether subject matter jurisdiction exists in
every case.”); Johnson v. Wattenbarger, 361 F.3d 991, 992 (7th Cir. 2004) (a district court’s “first
duty in every suit” is “to determine the existence of subject-matter jurisdiction”).
Plaintiffs Wabash Estates, LP and Washington Village Estates have filed the instant action
for breach of fiduciary duty, breach of contract, negligence, negligent misrepresentation, and
declaratory judgment (See Doc. 2). Plaintiff brings this action on the basis of diversity jurisdiction
pursuant to 28 U.S.C. § 1332. (Doc. 2, ¶ 6). However, a review of Plaintiffs’ complaint reveals
numerous flaws in the jurisdictional allegations.
The exercise of federal subject matter jurisdiction in diversity requires generally, of course,
that the parties to a case be of diverse state citizenship and that an amount in excess of $75,000,
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exclusive of interest and costs, be in controversy. See 28 U.S.C. § 1332(a)(1); LM Ins. Corp. v.
Spaulding Enters. Inc., 533 F.3d 542, 547 (7th Cir. 2008). “For a case to be within the diversity
jurisdiction of the federal courts, diversity must be ‘complete,’ meaning that no plaintiff may be a
citizen of the same state as any defendant.” Fidelity & Deposit Co. of Md. v. City of Sheboygan
Falls, 713 F.2d 1261, 1264 (7th Cir. 1983).
First, Plaintiffs’ jurisdictional allegations with regard to the limited partnerships are
woefully deficient. The “identity and citizenship of the partners, [are] vital bits of information
because a limited partnership has the citizenships of each partner, general and limited.” Guaranty
Nat’l Title Co. v. J.E.G. Assocs., 101 F.3d 57, 58 (7th. Cir. 1996) (citing Carden v. Arkoma
Assocs., 494 U.S. 185 (1990)). “If even one investor in an LP or LLC has the same citizenship as
any party on the other side of the litigation, complete diversity is missing and the suit must be
dismissed.” White Pearl Inversiones S.A. (Uruguay) v. Cemusa, Inc., 647 F.3d 684, 686 (7th Cir.
2011).
Moreover, Plaintiffs have made jurisdictional allegations based upon information and
belief (See Doc. 2, ¶ 4). It is well settled in the Seventh Circuit that jurisdictional allegations
based upon information and belief is insufficient to establish federal subject matter jurisdiction.
America’s Best Inns, Inc. v. Best Inns of Abilene, L.P., 980 F.2d 1072, 1074 (7th Cir. 1992) (per
curiam). “[S]ubject matter jurisdiction must be a matter of certainty and not of probabilities
(however high).” Murphy v. Schering Corp., 878 F. Supp. 124, 125-26 (N.D. Ill. 1995).
Plaintiffs have also alleged “Defendant Kennedy was and is at all relevant times a resident
of the State of Ohio.” (Doc. 2, ¶ 4). A party’s residence is not relevant in establishing federal
subject matter jurisdiction in diversity. Rather, the party’s citizenship is the only relevant

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question under 28 U.S.C. § 1332. Pollution Control Industries of America, Inc. v. Van Gundy, 21
F.3d 152, 155 (7th Cir. 1994).
Finally, the Court must address Plaintiffs’ jurisdictional defects with respect to Defendant
U.S. Bank, N.A., a nationally chartered banking association (Doc. 2, ¶ 5). For purposes of federal
diversity jurisdiction, the citizenship of a national banking association is determined by reference
to both the national banking association’s principal place of business and “the state listed in its
organization certificate.” Firstar Bank, N.A. v. Faul, 253 F.3d 982, 994 (7th Cir. 2001) (citing 28
U.S.C. § 1348). See also Hicklin Eng’g, L.C. v. Bartell, 439 F.3d 346, 348 (7th Cir. 2006);
Deutsche Bank Nat’l Trust Co. v. King, Civil No. 10-331-GPM, 2010 WL 1874472, at *1
(S.D. Ill. May 7, 2010). The principal place of business of an organization means, in turn, the
state where the organization maintains its headquarters or “nerve center.” See Hertz Corp. v.
Friend, 130 S. Ct. 1181, 1192-95 (2010); Wachovia Bank v. Schmidt, 546 U.S. 303, 317 n.9
(2006); Wisconsin Knife Works v. National Metal Crafters, 781 F.2d 1280, 1282 (7th Cir. 1986).
Accordingly, Plaintiffs are ORDERED to file an amended complaint that corrects the
defects in its pleading of the Court’s subject matter jurisdiction. Plaintiffs’ amended complaint
must be filed on or before February 8, 2013. If Plaintiff fails to file an amended complaint in the
manner and time prescribed or if, after reviewing it, the Court finds that Plaintiffs cannot establish
federal subject matter jurisdiction, the Court will dismiss the action for lack of jurisdiction. See
Guaranty Nat’l Title Co, 101 F.3d at 59 (7th Cir. 1996).
IT IS SO ORDERED.
DATED: January 25, 2013

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G. PATRICK MURPHY
United States District Judge
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