THE CINCINNATI INSURANCE COMPANY v. GLOBAL CARAVAN TECHNOLOGIES, INC. et al
ENTRY ON LIMITED REMAND - The Court concludes that Hoefer was not a citizen of Indiana on October 8, 2014, and Hoefer is an indispensable party. The Clerk of Court is directed to close this action. See entry for details Signed by Judge Tanya Walton Pratt on 9/5/2017. (MEJ) **Emailed to USCA re #16-3535** Modified on 9/5/2017 to clarify (MEJ). Modified on 9/5/2017 (LBT).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
THE CINCINNATI INSURANCE COMPANY,
) Case No. 1:14-cv-01643-TWP-DML
GLOBAL CARAVAN TECHNOLOGIES, INC.,
C.H. DOUGLAS & GRAY, LLC,
RED WING CAPITAL, LLC,
CHRISTOPHER DOUGLAS, HUSHENG DING, )
CHRIS TZENG, KYLE FANG, THOMAS GRAY, )
DORIS ROBERTS, and CHARLES HOEFER, JR, )
ENTRY ON LIMITED REMAND
This matter is before the Court on a limited remand ordered by the United States Court of
Appeals for the Seventh Circuit. The Court was instructed to conduct proceedings as necessary to
determine the citizenship of Charles Hoefer, Jr. (“Hoefer”) at the time of the commencement of
this case, and to determine whether Hoefer is an indispensable party to this action. The Court finds
that Hoefer was not a citizen of Indiana on October 8, 2014, and Hoefer is an indispensable party.
On January 17, 2013, Hoefer created Global Caravan Technologies, Inc. (“GCT”), a
business that intended to create and implement new technologies to manufacture recreational
vehicles. On May 1, 2014, Hoefer filed a lawsuit in the Marion Superior Court against his former
GCT business partners—Defendants Husheng Ding, Christopher Douglas, Thomas Gray, Chris
Tzeng, Red Wing Capital, Kyle Fang, Doris Roberts, Steve Coons, and C.H. Douglas & Gray,
LLC (collectively, the “Defendants”).
Thereafter, GCT—which later intervened—and the
Defendants named in Hoefer’s Complaint requested that Plaintiff, The Cincinnati Insurance
Company (“Cincinnati”), provide defense and indemnification under GCT’s commercial general
On October 8, 2014, Cincinnati filed this action, seeking a declaration that it is not
required to defend and indemnify the Defendants in the pending state court action. Both parties
filed cross motions for partial summary judgment and, on August 8, 2016, this Court granted
Cincinnati’s motion and denied the Defendants’ motion. (Filing No. 108.) The Court specifically
concluded that the applicable insurance policy does not require a defense by Cincinnati. Thereafter,
Defendants appealed the Court’s summary judgment ruling. On July 26, 2017, the Court of Appeals
for the Seventh Circuit remanded the case back to the trial court for the limited purpose of
establishing: 1) whether Hoefer was a citizen on October 8, 2014 when Cincinnati filed the
underlying action, and 2) whether Hoefer is an indispensable party. (Filing No. 121.)
For the reasons stated below, the Court determines that Hoefer was not a citizen of Indiana
at the time this action commenced and Hoefer is an indispensable party pursuant to Federal Rule
of Civil Procedure 19.
The Defendants and Hoefer contend that Hoefer was not an Indiana citizen on October 8,
2014. “A natural person is a citizen of the state in which he is domiciled.” Altom Transport, Inc.
v. Westchester Fire Ins. Co., 823 F.3d 416, 420 (7th Cir.2016) (citations omitted). Domicile is
assessed at the commencement of an action and has two elements: 1) physical presence in a state,
and 2) an intent to remain in that state. Id.; Denlinger v. Brennan, 87 F.3d 214, 216 (7th Cir.1996).
“[I]ntent is a state of mind which must be evaluated through the circumstantial evidence of a
person’s manifested conduct.” Sadat v. Mertes, 615 F.2d 1176, 1181 (7th Cir.1980). “It is not
enough to simply establish physical presence, but in order to turn residence in fact into a domicile
in law the party must show, by some objective act, his intention to maintain the residency
indefinitely.” Perry v. Pogemiller, 16 F.3d 138, 140 (7th Cir.1993).
There is no dispute that on October 8, 2014—the time this case commenced —Hoefer was
physically present in Swaziland, South Africa. He declares that when he moved to Swaziland, he
intended to remain there. (See Filing No. 127.) In late August 2014, Hoefer and his pregnant wife
moved to Swaziland to explore starting a business there and to raise their first child. Prior to the
move, Hoefer sold his real estate holdings in Indiana and cancelled all of his property leases.
Hoefer’s wife is not a United States citizen. At the time of the move, Hoefer’s wife was residing
in the United States legally on an F-1 student visa. Because of immigration laws, Hoefer and his
wife were advised by immigration attorneys against leaving the United States, if they intended to
permanently reside as a family in the United States in the future. Given their intent to permanently
reside in Swaziland, Hoefer and his wife moved there prior to October 8, 2014. (Filing No. 127 at
Hoefer suggests that the sale of his Indiana real estate holdings and his knowledge of the
difficulties his wife would endure reentering the United States establishes his desire not to return
to Indiana. He also notes that, in September and October 2014, he began planning and holding
business meetings in order to start a business in Swaziland. Since his move to Swaziland in August
2014, Hoefer has returned to the United States only once, and that was to attend mediation hearings
related to this lawsuit. Based on Hoefer’s declaration and the circumstantial evidence surrounding
his relocation, the Court finds that Hoefer intended to permanently maintain Swaziland as his
home. See Galva Foundry Co. v. Heiden, 924 F.2d 729, 730 (7th Cir. 1991) (“an individual’s state
of citizenship” is “the state he considers his permanent home”).
Regarding the issue of indispensability, all parties concede that Hoefer is an interested
party who could be affected by a declaratory judgment in this case. Cincinnati, however, argues
that Hoefer is not a necessary or indispensable party because Hoefer’s interests are protected by
the Defendants’ prosecution of their counterclaim for declaratory relief.
Under Federal Rule of Civil Procedure 19, a party is indispensable “if…in that person’s
absence, the court cannot accord complete relief among existing parties.” Fed. R. Civ. P.
19(a)(1)(A). However, “[i]f a person who is required to be joined if feasible cannot be joined, the
court must determine whether, in equity and good conscience, the action should proceed among
the existing parties or should be dismissed.” Fed. R. Civ. P. 19(b). When determining whether
equity requires dismissal, courts consider the following factors:
the extent to which a judgment rendered in the person’s absence might
prejudice that person or the existing parties;
the extent to which any prejudice could be lessened or avoided…by shaping
whether a judgment rendered in the person’s absence would be adequate;
whether the plaintiff would have an adequate remedy if the action were
The Court concludes that Hoefer is a necessary party because, even if Hoefer’s interests
are addressed by the Defendants’ counterclaim, any judgment rendered in Hoefer’s absence is not
binding on Hoefer. Such a judgment is inadequate and prejudicial, as it leaves Hoefer free to assert
the same litigated claims against either Cincinnati or the Defendants in the future. See Employers
Mut. Cas. Co. v. Witham Sales & Serv., Inc., No. 2:08 CV 233, 2009 WL 4281457, at *6 (N.D.
Ind. Nov. 23, 2009) (“if the injured party is not joined, it will not be bound by the court’s
declaration, thus causing this same issue to be relitigated in federal court and thereby reducing
judicial efficiency”); see also Am. Standard Ins. Co. of Wisconsin v. Rogers, 123 F. Supp. 2d 461,
467 (S.D. Ind. 2000) (“maintenance of separate actions, insurer v. insured and insurer v. injured
party, ‘creates possibility of inconsistent outcomes’”) (citation omitted). Dismissing Hoefer from
this case, as Cincinnati suggests, does not cure the issue of relitigation. Accordingly, the Court
finds that Hoefer is indispensable because he is an interested party and any judgment rendered in
his absence would not accord the parties’ complete relief. See id. The Court also notes that
Hoefer’s state court ligation provides Cincinnati with an adequate remedy should the Court dismiss
For the above reasons, the Court concludes that Hoefer was not a citizen of Indiana on
October 8, 2014, and Hoefer is an indispensable party. The Clerk of Court is directed to close this
Douglas H. Fisher
CINCINNATI INSURANCE COMPANY
George M. Plews
PLEWS SHADLEY RACHER & BRAUN
James J. Hutton
CINCINNATI INSURANCE COMPANY
Jonathan P. Emenhiser
PLEWS SHADLEY RACHER & BRAUN
S. Andrew Burns
COX SARGEANT & BURNS PC
Shelley M. Jackson
PLEWS SHADLEY RACHER & BRAUN
Bruce A. Walker
COX SARGENT & BURNS, P.C.
April C. Tarvin
STAFF COUNSEL OF THE CINCINNATI
Charles Russell Cox
COX, SARGEANT & BURNS, P.C.
David S. Wirth
THE CINCINNATI INSURANCE
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