MERCHANTS MUTUAL INSURANCE COMPANY v. NEW VISTAS CORPORATION

Filing 37

OPINION filed. Signed by Judge Brian R. Martinotti on 7/31/2018. (mmh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
____________________________________
:
MERCHANTS MUTUAL INSURANCE :
COMPANY,
:
:
Plaintiff,
:
:
Civ. A. No. 3:16-cv-8274-BRM-DEA
v.
:
:
NEW VISTAS CORPORATION,
:
OPINION
:
Defendants.
:
____________________________________:
MARTINOTTI, DISTRICT JUDGE
Before this Court is Defendants Park Plaza Associates, LLC s/h/a Park Plaza, LLC
(“Park Plaza”) and Gino’s 2002 Irrevocable Trust’s (“Trust”) (collectively “Defendants”)
Motion to Dismiss Plaintiff’s Complaint pursuant to Federal Rule of Civil Procedure 12(b).
(ECF No. 20 at 1-2.) Plaintiff Merchants Mutual Insurance Company (“Merchants Mutual”)
opposes the Motion. (ECF No. 21.) Having reviewed the parties’ submissions filed in
connection with the Motion and having declined to hold oral argument pursuant to Federal Rule
of Civil Procedure 78(b), for the reasons set forth below and for good cause having been shown,
Defendants’ Motion to Dismiss is GRANTED.
I.

BACKGROUND

For the purposes of this Motion, the Court may consider conflicting written and oral
evidence and the Court will decide for itself the factual issues which determine jurisdiction. See
Cohen v. Kurtzman, 45 F. Supp. 2d 423, 427 (D.N.J. 1999) (citing Williamson v. Tuckerson,

645 F.2d 404, 413 (5th Cir. 1981). Further, when diversity jurisdiction is challenged under Rule
12(b)(1), the plaintiff bears the burden of persuasion. Cohen, 45 F. Supp. 2d at 429.
This case arises from damage allegedly caused by snow accumulating on the roof of
Park Plaza strip mall. (Am. Compl. (ECF No. 12).) The snow accumulation caused the roof of
the strip mall to cave in and damage the property of G&S Food Services t/a Bella Italia (“Bella
Italia”). (Id.) In 2001, Bella Italia entered into a lease agreement with Park Plaza to rent a retail
space. (Id. at ¶¶ 5, 7.) In this lease agreement, Bella Italia agreed to pay 15% of the maintenance
fees of the strip mall’s common areas and roof. (Id. at ¶ 6.) On January 1, 2014, New Vista
became the management company of Park Plaza. (Id. at ¶ 7.) Prior to New Vista taking over
management, Park Plaza routinely hired crews to remove snow from the strip mall’s roof. (Id.
at ¶ 8.) New Vista’s contract with Park Plaza allegedly required New Vista to remove snow
from the roof. (Id. at ¶ 9.)
Bella Italia contacted New Vista about the snow accumulation, and New Vista sent a
representative to assess the roof but no action was taken. (Id. at ¶¶ 10, 12-14.) On approximately
February 13, 2014, the roof of the pharmacy adjacent to Bella Italia collapsed, allegedly from
the weight of the ice and snow. (Id. at ¶ 17.) This collapse caused structural damage to Bella
Italia which forced the property to be condemned for closure for an extended period of time.
(Id. at ¶ 19.) Merchants Mutual paid Bella Italia a total of $559,217.96 for the damage caused
by the roof’s collapse. (Id. at ¶ 22.) Merchants Mutual seeks to recover the $559,217.96 as
subrogee of Bella Italia (id. at ¶ 23) and, on November 4, 2016, filed this suit against New Vista
Corporation (“New Vista”), Park Plaza, and the Trust alleging: (1) breach of contract (Count
One); (2) negligence (as to New Vista) (Count Two); (3) misrepresentation (as to Park Plaza
and Trust) (Count Three). (ECF No. 12 at 4, 6, 7.) Merchants Mutual seeks damages in the

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amount of $559,217.96, with the cost of this action, and any other relief this court may deem
just and proper. (Id. at 5-7.)
Park Plaza is a limited liability corporation. (Id. at ¶ 1.) The Trust is the 99% owner of
Park Plaza. (ECF No. 22 at ¶ 3.) Mr. John O. McManus and Ms. Julianna Palazzolo-Pelicane
(“Pelicane”) are the trustees of the Trust. (ECF No. 12 at ¶ 4; ECF No. 20-4 at 1.) Significantly,
however, Merchants Mutual alleges the Trust is a citizen of New Jersey “by and through its
independent trustee,” McManus, with no mention of Pelicane or either individual’s citizenship.
(ECF No. 12 at ¶ 4.) Consequently, Merchants Mutual contends Park Plaza and the Trust are
citizens of New Jersey, contrasted with its own New York citizenship. (Id. at ¶¶ 1, 4.)
Park Plaza moves for an order dismissing Merchant Mutual’s Complaint in its entirety,
alleging the Complaint fails to identify the domicile of the members of Park Plaza and the Trust.
(ECF No. 20-4 at 1.) Furthermore, Park Plaza argues Pelicane and several beneficiaries of the
Trust are domiciled in New York, which destroys complete diversity between Merchant Mutual
and the Trust. (ECF No. 20 at 1; ECF No. 20-4 at 1.) Merchant Mutual opposes the motion and
argues the motion should be denied for lack of a factual record on the status of Pelicane’s
citizenship and requests an evidentiary hearing on Pelicane’s citizenship. (ECF No. 21.) Park
Plaza replied with a certification of Pelicane in which she stated she is a resident of New York
State and attached an exhibit with Pelicane’s unexpired New York State Driver License with
the address listed as Staten Island, New York. (ECF No. 22-1.)
II.

LEGAL STANDARD

Rule 12(b)(1) of the Federal Rules of Civil Procedure mandates the dismissal of a case
for “lack of subject matter jurisdiction.” Fed. R. Civ. P. 12(b)(1). When a defendant moves to
dismiss a claim for lack of subject matter jurisdiction under Rule 12(b)(1), the court must

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determine whether the defendant is making a “facial or factual challenge to the court’s subject
matter jurisdiction.” Gould Elecs., Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000);
Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977). Under a facial
attack, the movant challenges the legal sufficiency of the claim, and the court considers only
“the allegations of the complaint and documents referenced therein and attached thereto in the
light most favorable to the plaintiff.” Gould Elecs., 220 F.3d at 176; Mortensen, 549 F.2d at
891 (“The facial attack does offer similar safeguards to the plaintiff [as a 12(b)(6) motion]: the
court must consider the allegations of the complaint as true.”). The court “may dismiss the
complaint only if it appears to a certainty that the plaintiff will not be able to assert a colorable
claim of subject matter jurisdiction.” D.G. v. Somerset Hills Sch. Dist., 559 F. Supp. 2d 484,
491 (D.N.J. 2008) (citing Cardio-Med. Assoc., Ltd. v. Crozer-Chester Med. Ctr., 721 F.2d 68,
75 (3d Cir. 1983)).
Under a factual attack, however, the challenge is to the trial court’s “very power to hear
the case.” Mortensen, 549 F.2d at 891. Thus:
[T]here is substantial authority that the trial court is free to weigh
the evidence and satisfy itself as to the existence of its power to
hear the case. In short, no presumptive truthfulness attaches to
plaintiff’s allegations, and the existence of disputed material facts
will not preclude the trial court from evaluating for itself the
merits of jurisdictional claims.
Mortensen, 549 F.2d at 891. Moreover, in a factual attack, “the court may consider and weigh
evidence outside the pleadings to determine if it has jurisdiction.” Gould Elecs., 220 F.3d at
178. Regardless of the analysis, the plaintiff bears the burden of demonstrating the existence of
subject matter jurisdiction. See McCann v. Newman Irrevocable Tr., 458 F.3d 281, 286 (3d Cir.

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2006); Lightfoot v. United States, 564 F.3d 625, 627 (3d Cir. 2009) (citing Carpet Grp. Int'l v.
Oriental Rug Importers Ass’n, 227 F.3d 62, 69 (3d Cir. 2000)).
Here, Defendants raise a facial 12(b)(1) challenge, asserting that Merchant Mutual’s
Complaint is deficient on its face in that is does not properly allege the citizenship of Park Plaza
or the Trust. Alternatively, Defendants raise a factual attack, arguing Pelicane’s citizenship is
in New York which, if true, would destroy complete diversity. (ECF No. 20-4.)
III.

DECISION

Defendants are correct that, on its face, Merchants Mutual’s Amended Complaint fails
to sufficiently plead the citizenship of Park Plaza and the Trust, failing to reference the entities’
citizenship. See GBForeFront, LP v. Forefront Mgmt. Grp. LLC, 888 F.3d 29, 35-36 (3d Cir.
2018). This flaw is fatal, see id., and Defendants’ Motion to Dismiss is GRANTED. The Court
need not reach the merits of Defendants’ factual challenge.
However, the Third Circuit has cautioned against dismissal when pleading errors can be
corrected. See id. (quoting 28 U.S.C. § 1653 (“Defective allegations of jurisdiction may be
amended, upon terms, in the trial or appellate courts.”)). At this stage, and having reviewed the
arguments submitted in connection with Defendants’ factual challenge, it is unclear whether
the Amended Complaint is simply “inartful drafting on a technical point, albeit a serious one,”
see id., and whether Merchants Mutual will be able to, in good faith, amend the Amended
Complaint. Therefore, Merchants Mutual, having the burden of showing the case is properly
before the federal court, Samuel-Bassett v. KIA Motors America, Inc., 357 F.3d 392, 396 (3d
Cir. 2004), is permitted, until August 15, 2018, to file a second amended complaint, which
must, in good faith, sufficiently plead this Court’s jurisdiction. Failure to do so will result in
dismissal.

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IV.

CONCLUSION

For the reasons set forth above, Defendants’ Motion to Dismiss Plaintiff’s Complaint
(ECF No. 20) is GRANTED. The case shall remain open until August 15, 2018, during which
time Merchant Mutual may file a second amended complaint, which, in good faith, shall
sufficiently plead this Court’s jurisdiction. Failure to do so will result in dismissal.

Date: July 31, 2018

/s/ Brian R. Martinotti
HON. BRIAN R. MARTINOTTI
UNITED STATES DISTRICT JUDGE

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