FORD MOTOR CREDIT COMPANY LLC v. FRIEDLAND et al

Filing 8

MEMORANDUM OPINION filed. Signed by Judge Mary L. Cooper on 12/29/2014. (mmh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
:
FORD MOTOR CREDIT COMPANY LLC, : CIVIL ACTION NO. 14-6561 (MLC)
:
Plaintiff,
:
MEMORANDUM OPINION
:
v.
:
:
MARC FRIEDLAND, et al.,
:
:
Defendants.
:
:
THE PLAINTIFF — Ford Motor Credit Company LLC (“FMLLC”) — brought
this action (“District Court Action”) on October 22, 2014 to recover damages for the
breach of certain guaranties against the defendants, Marc Friedland and Francine Noce.
(See dkt. entry no. 1, Compl.) FMLLC alleges that the defendants are liable for the
indebtedness incurred by Epic Auto Leasing, LLC (“EAL”), and asserts subject-matter
jurisdiction under 28 U.S.C. § (“Section”) 1332(a). (Id. at 1–3.)
THE COURT intends to dismiss the complaint without prejudice, because the
complaint is deficient on several grounds. See Fed.R.Civ.P. 12(h)(3) (instructing district
court to dismiss if subject-matter jurisdiction is lacking).
CITIZENSHIP
FMLLC alleges that: (1) it “is a Delaware limited liability company, with its
principal place of business [in] Dearborn, Michigan”; (2) “Ford Holdings LLC is the sole
member of [FMLLC]”; (3) “Ford Holdings LLC is a Delaware limited liability company

with its principal place of business in Dearborn, Michigan”; and thus (4) FMLLC “is a
citizen of the States of Delaware and Michigan”. (Compl. at 2–3.)
Limited liability companies are unincorporated associations, and thus deemed to be
citizens of the states in which all of their members are citizens, not the states in which they
were formed and have their principal places of business. See VICI Racing v. T-Mobile
USA, 763 F.3d 273, 282 (3d Cir. 2014). FMLLC fails to trace through however many
layers of members there may be to determine its citizenship, i.e., that of Ford Holdings
LLC’s members, the members of Ford Holdings LLC’s members, and so on. See
Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 420 (3d Cir. 2010); see also Hart v.
Terminex Int’l, 336 F.3d 541, 543 (7th Cir. 2003) (criticizing party for “fail[ing] to trace
the ownership of [a party] past the first layer of partners, which is necessary where as here
a partnership has as one of its partners a second partnership”, because “it is the citizenship
of the partners of the second partnership that matters (and if those partners are themselves
partnerships, the inquiry must continue to their partners and so on)”; Preferred Merch.
Hood, LLC v. Family Dollar, Inc., No. 06-67, 2006 WL 1134915, at *1 (D.N.H. Apr. 25,
2006) (finding allegation that party was a Massachusetts citizen because it had “two
members: . . . a Massachusetts limited liability company . . . and . . . a Massachusetts
limited partnership” to be “meaningless” to jurisdictional inquiry). The name and
citizenship of each member must be “affirmatively and distinctly” stated. See S.
Freedman & Co. v. Raab, 180 Fed.Appx. 316, 320 (3d Cir. 2006).

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FMLLC also fails to allege Friedland’s citizenship and Noce’s citizenship.
FMLLC merely alleges that Friedland and Noce are New Jersey citizens “[u]pon
information and belief”. (Compl. at 3.) An allegation that is based upon information and
belief “does not convince the Court that there is diversity among the parties”. Vail v.
Doe, 39 F.Supp.2d 477, 477 (D.N.J. 1999).1
The Court will dismiss the complaint without prejudice because FMLLC fails to
show that complete diversity of citizenship exists here. See Lincoln Prop. Co. v. Roche,
546 U.S. 81, 88–89 (2005) (requiring complete diversity between each plaintiff and each
defendant).
LOCAL CIVIL RULES
EAL petitions for bankruptcy relief (“Bankruptcy Matter”) in the United States
Bankruptcy Court for the District of New Jersey, Newark Vicinage (“Bankruptcy Court”).
See In re Epic Auto Leasing, LLC, Bankr. D.N.J. No. 10-25207 (“In re EAL”), dkt. entry
no. 1, 5-18-10 Pet. Noce is EAL’s president, and is listed as a creditor and a codebtor.
Id. at 3; see In re EAL, dkt. entry no. 1, Scheds. F & H. FMLLC has a claim pending
therein. See In re EAL, dkt. entry no. 60, 5-20-14 Order. The docket for the Bankruptcy
Matter reveals that it remains open, and that the claims asserted in the District Court
Action are hopelessly intertwined with the issues before the Bankruptcy Court.

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FMLLC has merely voluntarily dismissed its claims against Friedland “without
prejudice”. (See dkt. entry no. 6, Voluntary Dismissal Notice.) FMLLC must still demonstrate
Friedland’s citizenship, because the voluntary dismissal was not with prejudice.
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FMLLC is required by the Local Civil Rules to certify “whether the matter in
controversy is the subject of any other action pending in any court, . . . and, if so, the
certification . . . shall identify each such action . . . and all parties thereto”. L.Civ.R. 11.2.
Instead, FMLLC asserts that “the matter in controversy is not the subject of any other
action pending in any Court”. (Compl. at 9; see also dkt. entry no. 1-1, Civil Cover Sheet
(leaving blank “Related Case(s) If Any” section).) Because the Clerk of the District
Court was not notified of the Bankruptcy Matter, the District Court Action was not
assigned to the District Court’s Newark Vicinage.
The Court also notes that the complaint is incomplete. FMLLC refers to several
exhibits in the complaint. (See Compl. at ¶¶ 15, 17–18, 22–30, 33, 46.) But FMLLC
fails to file those exhibits. See L.Civ.R. 5.2(8) (requiring party to annex “all documents
referenced as exhibits or attachments”).
The Court is authorized to impose harsh penalties to enforce the Local Civil Rules.
See Kabacinski v. Bostrom Seating, 98 Fed.Appx. 78, 82 n.3 (3d Cir. 2004); United States
v. Eleven Vehicles, Their Equip. & Accessories, 200 F.3d 203, 214 (3d Cir. 2000); see
also Fowler v. UPMC Shadyside, 578 F.3d 203, 214 (3d Cir. 2009) (affirming dismissal
of class action claim, because plaintiff did not comply with relevant local civil rule). The
Court, if not dismissing the complaint for FMLLC’s failure to properly assert subjectmatter jurisdiction, would dismiss the complaint for FMLLC’s failure to abide by Local
Civil Rules 11.2 and 5.2(8).

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FMLLC’S OPTIONS
I.

SECTION 1332(a)
FMLLC may recommence the claims asserted in the District Court Action in state

court within thirty days, as the limitations period for the cause of action is tolled by the
filing of a federal complaint. See Jaworowski v. Ciasulli, 490 F.3d 331, 333–36 (3d Cir.
2007); Galligan v. Westfield Ctr. Serv., 82 N.J. 188, 191–95 (1980). Or FMLLC may
move within thirty days in accordance with the Federal Rules of Civil Procedure and the
Local Civil Rules to reopen the District Court Action in this Court, and simultaneously
file supporting documentation:
(1) listing each member within FMLLC on October 22, 2014, and analyzing the
citizenship of each member within FMLLC — including Ford Holdings LLC — as it
existed on October 22, 2014;
(2) demonstrating which states Friedland and Noce were citizens of on October 22,
2014;
(3) showing the exhibits cited in the complaint; and
(4) demonstrating that the Court has subject-matter jurisdiction under Section
1332(a).
The Court advises FMLLC that jurisdiction is measured “against the state of facts
that existed at the time of filing”, and thus FMLLC must explicitly allege citizenship as it
existed on October 22, 2014. Grupo Dataflux v. Atlas Global Grp., 541 U.S. 567, 571
(2004). The Court further advises FMLLC that an allegation as to where any person
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resides, is licensed, or has a place of business will not properly invoke the Court’s
jurisdiction. See McNair v. Synapse Grp., 672 F.3d 213, 219 n.4 (3d Cir. 2012) (stating
allegation as to residency is “jurisdictionally inadequate” in action brought under Section
1332(a)(1)); see also O’Brien v. Nowicki, 490 Fed.Appx. 506, 508 n.2 (3d Cir. 2013)
(stating “[o]f course, citizenship and residency are not synonymous”).
The Court will deny a motion to reopen if FMLLC makes: (1) any allegations that
are based upon information and belief; (2) any assertions that are not specific (e.g., citizen
of “a state other than New Jersey”); or (3) a request for time to discern jurisdiction.
FMLLC should have ascertained subject-matter jurisdiction before choosing to bring the
District Court Action. As FMLLC is represented by counsel, the Court “should not need
to underscore the importance of adequately pleading and proving diversity”. CGB
Occupational Therapy v. RHA Health Servs., 357 F.3d 375, 382 n.6 (3d Cir. 2004).
FMLLC’s “lack of care in invoking the District Court’s jurisdiction is regrettable”.
McNair, 672 F.3d at 219 n.4.
II.

BANKRUPTCY REFERRAL
The Court, if ultimately granting a motion by FMLLC to reopen the District Court

Action, may refer all of the claims asserted in the District Court Action to the Bankruptcy
Court. See 28 U.S.C. § 157(a) (stating “district court may provide that any or all cases
under title 11 and any or all proceedings arising under title 11 or arising in or related to a
case under title 11 shall be referred to the bankruptcy judges for the district”).

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The extent of the Bankruptcy Court’s jurisdiction over the claims would depend on
whether the District Court Action concerns: (1) a core proceeding; or (2) a non-core
proceeding, which is a proceeding that is otherwise related to a case under title 11. See
28 U.S.C. § 157(b)(2)–(4); see also 28 U.S.C. § 157(b)(1) (stating bankruptcy court may
enter orders and judgments in core proceeding); 28 U.S.C. § 157(c)(1) (stating bankruptcy
court enters proposed findings of fact and conclusions of law in non-core proceeding, and
district court enters final order or judgment); see also Mullarkey v. Tamboer (In re
Mullarkey), 536 F.3d 215, 220–21 (3d Cir. 2008) (discussing bankruptcy court’s
jurisdiction). The Bankruptcy Court itself would determine the extent of that jurisdiction.
See 28 U.S.C. § 157(b)(3) (stating bankruptcy court determines whether matter is core
proceeding); Certain Underwriters at Lloyd’s of London v. Otlowski, No. 08-3998, 2009
WL 234957, at *2 (D.N.J. Jan. 29, 2009) (stating “Section 157(b)(3) calls for the
bankruptcy judge to make the initial decision on whether a case is a core proceeding, and
its language is not ambiguous”); E. W. Trade Partners v. Sobel WP (In re E. W. Trade
Partners), No. 06-1812, 2007 WL 1213393, at *3–4 (D.N.J. Apr. 23, 2007) (same).
THE COURT will issue an appropriate order and judgment.

s/ Mary L. Cooper
MARY L. COOPER
United States District Judge
Dated: December 29, 2014

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