HARRIS MANAGEMENT INC et al v. COULOMBE et al
Filing
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ORDER ON MOTION FOR REMAND granting 15 Motion to Remand to State Court By JUDGE GEORGE Z. SINGAL. (lrc)
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
HARRIS MANAGEMENT, INC. and JJR
ASSOCIATES, LLC,
Plaintiffs,
v.
PAUL COULOMBE, PGC1, LLC, and
PGC2, LLC,
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) Docket no. 2:14-cv-41-GZS
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Defendants.
ORDER ON MOTION FOR REMAND
Before the Court is Plaintiffs Harris Management, Inc. and JJR Associates, LLC’s
(collectively “Harris”) Motion for Remand (ECF No. 15). For the reasons briefly explained below,
the Court GRANTS the Motion for Remand.
I.
FACTUAL BACKGROUND
The Court recites only those facts that are pertinent to the jurisdictional issue before it.
This dispute arose regarding the sale and the management of the Boothbay Country Club and the
sale of nearby property. Plaintiff Harris Management, Inc. is in the business of leasing and
managing golf courses in the State of Maine and is in the business of providing golf and
construction management services. (Complaint (ECF No. 1-1) ¶ 2.) Plaintiff JJR Associates, LLC
owned property near the Boothbay Country Club. (Id. ¶ 35.) In early 2013, Defendant Paul
Coulombe provided the capital to purchase the properties owned by JJR Associates, LLC as well
as the Boothbay Country Club. (Id. ¶¶ 17, 35, 40.) On February 7, 2013, Defendant Coulombe,
through Defendant PGC1, LLC, closed on the purchase of the properties owned by JJR Associates,
LLC. On that same date, Defendant Coulombe, through Defendant PGC2, LLC, closed on the
Boothbay Country Club purchase. (Id. ¶ 45.)
After disagreement arose regarding the management of the Boothbay Country Club,
Plaintiffs Harris Management, Inc. and JJR Associates, LLC filed a civil action in Sagadahoc
County Superior Court for the State of Maine on January 8, 2014. (Complaint (ECF No. 1-1).)
The causes of action pressed by Harris Management, Inc. and JJR Associates, LLC are limited to
various state causes of action that do not present any basis for federal question jurisdiction.1
Plaintiff Harris Management, LLC is a corporation formed under the laws of the State of Maine
with its principal place of business in Bath, Maine. (Id. ¶ 1.) Plaintiff JJR Associates, LLC is a
Maine limited liability company that is managed by Jason R. Harris, Jeff Harris and Richard Harris.
(Id. ¶¶ 4, 5.) There is no dispute that all three members of JJR Associates, LLC are domiciled in
Maine.
The Complaint names three defendants: (1) Paul Coulombe, (2) PGC1, LLC and (3) PGC2,
LLC. Defendant Paul Coulombe is domiciled in the State of Florida. (Notice of Removal (ECF
No. 1) at 2.) Defendants PGC1, LLC and PGC2, LLC are each limited liability companies. The
sole member of PGC1, LLC and PGC2, LLC is TPI, LLC, which is also a limited liability
company. (Id.) The sole member of TPI, LLC is the Paul G. Coulombe Trust, dated July 3, 2007
(the “Trust”). (Id.) The sole beneficiary of the Trust is Defendant Paul Coulombe, a Florida
domiciliary. (Id.) The trustees of the Trust are Defendant Paul Coulombe and Geoffrey Alexander.
There is no dispute that Geoffrey Alexander is domiciled in Maine.
On February 3, 2014, Defendants removed this case to federal court on the basis of
diversity jurisdiction. (ECF No. 1). On February 18, 2014, Plaintiffs moved to remand this case,
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Specifically, Plaintiffs assert causes of action for breach of contract (Count I), promissory estoppel (Count II), unjust
enrichment (Count III), quantum meruit (Count IV) and, fraud (Count V).
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asserting that the court lacks subject matter jurisdiction because complete diversity is lacking (ECF
No. 15).
II.
LEGAL STANDARD
In questions of federal jurisdiction, “the party invoking the jurisdiction of a federal court
carries the burden of proving its existence.” Coventry Sewage Associates v. Dworkin Realty Co.,
71 F.3d 1, 4 (1st Cir. 1995) (quoting Taber Partners, I v. Merit Builders, Inc., 987 F.2d 57, 60 (1st
Cir. 1993), cert. denied, 510 U.S. 823 (1993)); see also Spielman v. Genzyme Corp., 251 F.3d 1,
4 (1st Cir. 2001). Since Defendants removed to this Court, the burden is on Defendants to
demonstrate the existence of federal jurisdiction.
Defendants asserts that this Court has diversity jurisdiction. 28 U.S.C. § 1332 provides
that “[t]he district courts shall have original jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000, exclusive of interests and costs and is between
. . . citizens of different States[.]” Diversity of citizenship “must be complete” to satisfy 28 U.S.C.
§ 1332. In re Olympic Mills Corp., 477 F.3d 1, 6 (1st Cir. 2007). “In cases involving multiple
plaintiffs or defendants, the presence of but one nondiverse party divests the district court of
original jurisdiction over the entire action.” Id. Finally, “removal statutes are strictly construed,”
Danca v. Private Health Care Systems, Inc., 185 F.3d 1, 4, (1st Cir. 1999), and “any doubts about
the propriety of a removal are resolved in favor of remand.” Ibanez v. U.S. Bank Nat. Ass'n,
CIV.A. 11-11808-RGS, 2011 WL 5928583, at*1 (D. Mass. Nov. 29, 2011).
III.
DISCUSSION
The parties contest the citizenship of Defendants PGC1, LLC and PGC2, LLC. Both
Defendants PGC1, LLC and PGC2, LLC are limited liability companies. The citizenship of a
limited liability company is determined by the citizenship of all of its members. Pramco, LLC ex
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rel. CFSC Consortium, LLC v. San Juan Bay Marina, Inc., 435 F.3d 51, 54-55 (1st Cir. 2006).
The sole member of both Defendants PGC1, LLC and PGC2, LLC is TPI, LLC, also a limited
liability company. The sole member of TPI, LLC is the Paul G. Coulombe Trust. The parties
disagree regarding how the citizenship of a trust should be determined.
Having reviewed the parties’ submissions and the support cited by the parties, the Court
agrees with the decisions concluding the citizenship of trustees must be considered when
determining the citizenship of a trust.2 See Carden v. Arkoma Associates, 494 U.S. 185, 195
(1990) (“[D]iversity jurisdiction in a suit by or against the entity depends on the citizenship of ‘all
of the members[.]’”); Emerald Investors Trust v. Gaunt Parsippany Partners, 492 F.3d 192, 203
(3d Cir. 2007) (stating that “we do not see why a trust’s ‘members’ include only its beneficiary
and not its trustee. Of course, if a trustee is a member of a trust then when Carden is applied to a
trust, a court in determining its citizenship must consider the trustee’s citizenship.”). But see San
Juan Basin Royalty Trust v. Burlington Res. Oil & Gas Co., L.P., 588 F. Supp. 2d 1274, 1280
(D.N.M. 2008)(“When suit is brought by a trust in its own name, the Court finds that the trust takes
on the citizenship of its beneficiaries.”). The Court declines to adopt the approach suggested by
Defendants to examine the actual workings of the trust and how it affected the facts of this case.
See Emerald Investors Trust, 492 F.3d at 202-03 (stating that “the problem with this [case-bycase] rule is that it places a great and unnecessary burden on both the litigants and the courts
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In deciding this case, the Court need not, and therefore does not, determine whether the citizenship of a trust is
determined by consideration of the domicile of the trustees and the beneficiaries. See Emerald Investors Trust, 492
F.3d at 205 (holding that “the citizenship of both the trustee and the beneficiary should control in determining the
citizenship of a trust”); Yueh-Lan Wang ex rel. Wong v. New Mighty U.S. Trust, 841 F. Supp. 2d 198, 207 (D.D.C.
2012) (declining to decide whether to adopt either a test that looks solely to the beneficiaries or to the beneficiaries
and trustees because consideration of the beneficiaries’ citizenship destroyed diversity of citizenship); 1963 Jackson,
Inc. v. De Vos, 1:10-CV-01206-STA, 2010 WL 5093349, at *4 (W.D. Tenn. Dec. 8, 2010) (adopting the “dual trustee
beneficiary rule” as set forth in Emerald Investors Trust in remanding the case); Bergeron ex rel. Ridgewood Elec.
Power Trust V v. Ridgewood Elec. Power Trust V, CIV.A.07 10622 RGS, 2007 WL 1959209, at *2 (D. Mass. July
5, 2007) (citing Emerald Investors Trust and considering the citizenship of the beneficiaries as the reason for lack of
diversity of citizenship). Rather, the inclusion of the trustees’ citizenship is sufficient to determine this case.
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themselves. . . . [T]he court would have to monitor jurisdictional discovery to the same extent that
it monitors any discovery in the case, and make findings with respect to the roles of the trustee and
beneficiary in the affairs of the trust, all in a case that might be dismissed, or, if removed from a
state court, remanded to it.”); May Dep’t Stores Co. v. Fed. Ins. Co., 305 F.3d 597, 599 (7th Cir.
2002); see also Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 464 n.13 (1980) (stating that, “[i]t is of
first importance to have a definition that will not invite extensive threshold litigation over
jurisdiction.” (internal citations and punctuation omitted).)
In this case, the parties do not dispute that one of the trustees of the Paul G. Coulombe
Trust is domiciled in Maine. Accordingly, the Paul G. Coulombe Trust, TPI, LLC and Defendants
PGC1, LLC and PGC2, LLC are deemed to be domiciled in Maine for purposes of diversity
jurisdiction. Therefore, complete diversity is lacking, and this case was improperly removed. The
Motion for Remand (ECF No. 15) is GRANTED. This case is hereby REMANDED to state court.
SO ORDERED.
/s/ George Z. Singal
United States District Judge
Dated this 23rd day of September, 2014.
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