Techno-TM, LLC v. Fireaway, Inc.
OPINION AND ORDER: For the foregoing reasons, the complaint is dismissed for lack of subject matter jurisdiction. SO ORDERED. (Signed by Judge Miriam Goldman Cedarbaum on 2/20/2013) (ama)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
OPINION AND ORDER
-against12 Civ. 4137 (MGC)
WHITMAN BREED ABBOTT & MORGAN LLC
Attorneys for Plaintiff
50 Main Street, Suite 1000
White Plains, New York 10606
Gerard N. Saggese III, Esq.
LAW OFFICES OF IRA DANIEL TOKAYER, ESQ.
Attorneys for Defendant
405 Lexington Avenue, 7th Floor
New York, New York 10174
Ira Daniel Tokayer, Esq.
Techno-TM LLC (“Techno-TM”) brings this breach of contract
action against Fireaway, Inc. (“Fireaway”).
The sole basis for
federal jurisdiction is diversity of citizenship.
reasons that follow, Techno-TM’s complaint is dismissed for lack
of subject matter jurisdiction.
Techno-TM filed its complaint on May 24, 2012, and asserted
jurisdiction under 28 U.S.C. § 1332(a).
As relevant here,
Section 1332(a) authorizes jurisdiction over civil actions
between “citizens of different States” and “citizens of a State
and citizens or subjects of a foreign state.”
jurisdiction requires that “all adverse parties to a litigation
are completely diverse in their citizenships.”
Inc. v. SCS Commc’ns, Inc., 251 F.3d 315, 322 (2d Cir. 2001).
On July 13, 2012, Fireaway filed a motion to dismiss the
complaint on the ground that Techno-TM had failed to plead
sufficient facts to establish subject matter jurisdiction.
July 17, 2012, the parties appeared for an initial pretrial
conference, and Techno-TM was directed to submit information on
the citizenship of its members.
Because Techno-TM is a limited
liability company, its citizenship for diversity purposes is the
citizenship of its members.
See Handelsman v. Bedford Vill.
Assocs. Ltd. P’ship, 213 F.3d 48, 52-53 (2d Cir. 2000).
member’s citizenship is determined as of the time this action
was commenced on May 24, 2012.
Linardos v. Fortuna, 157 F.3d
945, 947 (2d Cir. 1998).
Following the conference, on July 20, 2012, Techno-TM
submitted a letter naming its four members as Maryann Huhs, Roy
Huhs, Jr., John Huhs, and Michael Huhs.
The letter represented
that Maryann, Roy, and John resided and made their homes in the
State of Washington, and Michael in Illinois, both at the time
of the letter and at the time the action was brought.
Meanwhile, on July 16, 2012, Techno-TM, along with several
other entities and Maryann and Roy Huhs individually, were sued
in Washington State court.
On July 30, 2012, just ten days
after Techno-TM wrote to this court, the defendants in the
Washington action filed a notice of removal to federal court in
the Western District of Washington on the basis of diversity
Belikov v. Huhs, No. 12 Civ. 1286 (TSZ) (W.D.
The notice of removal stated: “Defendants Maryann
Huhs and Roy E. Huhs, Jr. are U.S. citizens who resided in Costa
Rica through February 2012, and have not established a state of
permanent residence in the United States.
They own property and
currently are domiciled in Washington, but are registered to
vote in Nevada and are principals of companies whose principal
places of business are in Nevada.”
After counsel for Fireaway submitted a letter highlighting
the inconsistent statements about Maryann and Roy Huhs’
citizenship, the parties appeared at a second conference on
August 9, 2012.
The parties were ordered to exchange initial
disclosures and inform me when the issue of citizenship had been
resolved by the Washington District Court.
Several days later,
on August 15, 2012, the defendants in the Washington action
amended their notice of removal to abandon their claim of
jurisdiction based on diversity of citizenship and to assert
federal question jurisdiction instead.
The court in Washington
remanded the case to state court for lack of federal question
jurisdiction, and thus the issue of the citizenship of Maryann
and Roy Huhs was not decided.
Techno-TM has now submitted affidavits by Maryann and Roy
Huhs in support of its position that both were citizens of
Washington when this action was filed on May 24, 2012.
“[I]rrespective of how the parties conduct their case, the
courts have an independent obligation to ensure that federal
jurisdiction is not extended beyond its proper limits.”
v. BankAmerica Corp., 219 F.3d 79, 90 (2d Cir. 2000).
case, there is no dispute that John Huhs and Michael Huhs are
citizens of Washington and Illinois, respectively, and that
Fireaway is a citizen of Delaware and Minnesota.
federal jurisdiction exists hinges on the citizenship of Maryann
and Roy Huhs.
Techno-TM, as the party invoking federal
jurisdiction, bears the burden of proving by a preponderance of
the evidence that subject matter jurisdiction exists.
Aurecchione v. Schoolman Transp. Sys. Inc., 426 F.3d 635, 638
(2d Cir. 2005).
Citizenship is measured by domicile, which is the place a
person has “his true fixed home and principal establishment, and
to which, whenever he is absent, he has the intention of
Linardos, 157 F.3d at 948 (internal quotations
To change domicile, a party must have both a
residence in a new domicile and an intention to remain there.
United States citizens domiciled abroad “are neither
citizens of any state of the United States nor citizens or
subjects of a foreign state, so that § 1332(a) does not provide
that the courts have jurisdiction over a suit to which such
persons are parties.”
Herrick, 251 F. 3d at 322 (internal
Thus, if Maryann and Roy Huhs had not
established a new domicile in a state of the United States by
May 24, 2012 after returning from Costa Rica, there is no
diversity jurisdiction in this action.
In determining domicile and thus citizenship, courts may
consider evidence, such as affidavits, of the facts on which
Gualandi v. Adams, 385 F.3d 236, 244 (2d
Cir. 2004) (citing Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006,
1011 (2d Cir. 1986)).
Where there is evidence of multiple
residences, a court “should focus on the party’s intent,”
ascertained by examining “the entire course of a person’s
conduct in order to draw the necessary inferences as to the
Gutierrez v. Fox, 966 F. Supp. 214, 217
(S.D.N.Y. 1997) (internal quotations omitted).
citizenship, courts consider factors including voting
registration, employment, current residence, location of real
and personal property, location of spouse and family, driver’s
license, automobile registration, tax payment and addresses, and
location of a person’s bank account and physician.
Both Maryann and Roy Huhs have submitted affidavits,
swearing that Washington was their state of permanent residence
and the place to which they intended to return when away at the
time this action was commenced.
They attest that they resided
on Mercer Island, Washington, had family, property, and bank
accounts in Washington, used accountants, doctors, dentists, and
financial advisors in Washington, registered their vehicles in
Washington, and were members of social clubs in Washington.
was licensed to practice law in Washington, was a hearing
examiner and arbitrator in Washington, and had cars registered
These representations are of lesser import given that it is
not contested that Maryann and Roy Huhs lived in Washington for
quite some time prior to the years immediately preceding this
But in July of 2010, the Huhses moved from Washington
to Nevada, and rented an apartment in Las Vegas because they
were considering the area for their retirement.
mind, they applied for residency in Costa Rica, which they were
granted in December 2010.
The Huhs’ affidavits establish that
some key connections were in fact not associated with Washington
at the time this action was filed.
Although Maryann had a
Washington driver’s license, Roy did not, and both Maryann and
Roy were registered to vote in Nevada.
The Huhs’ affidavits state that they decided to return to
Washington from Costa Rica in December of 2011, and listed their
house in Costa Rica for sale in January of 2012.
the importance of the issue, the affidavits do not affirmatively
state when the Huhses left Costa Rica or arrived in Washington.
It is clear from emails submitted by Techo-TM that at least a
month before this suit was filed in May of 2012, the Huhses were
present in Washington.
But the statement to the Washington
District Court in July of 2012 -- while this action was pending
in this court in the Southern District of New York -- that
Maryann and Roy Huhs “have not established a state of permanent
residence in the United States” completely undermines the Huhs’
representation that they had established a residence in
Washington and saw it as the location they would return to after
being away. 1
The affidavits show that they had retired to Costa
Rica, and lived there for at least a year.
to the Washington federal court that they had not yet
established a state of permanent residence is in complete
conflict with the representation to this court that the Huhses
had changed their domicile from Costa Rica to Washington.
Hakkila v. Consol. Edison Co. of New York, Inc., 745 F. Supp.
988, 990 (S.D.N.Y. 1990) (“An old domicile continues, despite a
change of residence, until there is an intent to create a new
The Huhs’ assertion that they were citizens of Washington
at the time that this action was brought is particularly
undermined by the fact that in several lengthy submissions by
Techno-TM, nothing has ever been offered to explain the
statement made to the Washington court.
That it was a statement
made by counsel, and not an affidavit by Maryann or Roy Huhs, is
of no moment because counsel must have gotten the information
The removal notice also states that the Huhses “currently are
domiciled in Washington.” This statement is in tension with the
notice’s other statements that the Huhses had no permanent
residence in the United States and had connections with Nevada,
since domicile includes both residence and an intent to remain
at that residence. It seems the word domicile, as used in the
notice, was given its colloquial, rather than legal, meaning.
from the Huhses themselves.
It is also troubling that the
Huhses took such drastically different positions before two
different district courts in the span of only ten days -- on
July 20 to this court, and on July 30 to the court in
When the Huhses wanted the court to accept
jurisdiction of this case, they represented that they were
citizens of the State of Washington.
Ten days later, when it
would have helped them remove a Washington State case to federal
court, they represented they were not citizens of the State of
Washington, because they could not have removed that case if
See 28 U.S.C. § 1441(b)(2).
Furthermore, Roy Huhs
is admitted to the bar in Washington, and thus he must have
understood the implications of what was being said to each
Although the defendants in the Washington action
eventually amended their notice of removal, they did so only
after the matter was brought to my attention.
My conclusion is reinforced by the principles of judicial
estoppel, a doctrine that prevents parties from taking
inconsistent positions when different positions are to their
The Supreme Court has recognized that the doctrine’s
purpose is “to protect the integrity of the judicial process,”
by “prohibiting parties from deliberately changing positions
according to the exigencies of the moment.”
New Hampshire v.
Maine, 532 U.S. 742, 749-50, 121 S. Ct. 1808, 149 L. Ed. 2d 968
(2001) (internal quotations omitted).
It is an “equitable
doctrine invoked by the court at its discretion,” and while
courts often look to several factors to determine whether to
apply the doctrine, it is neither inflexible nor reducible to
“any general formulation of principle.”
Id. at 750-51 (internal
Representing directly opposite facts to
two different federal district courts in the span of ten days is
an affront to the integrity of the judicial process.
Techno-TM argues that principles of judicial estoppel
cannot apply to questions of subject matter jurisdiction, and it
therefore cannot be bound by the Huhs’ statement in the
Washington removal notice.
Indeed, the Second Circuit has urged
caution in considering whether the doctrine of judicial estoppel
applies to matters affecting federal subject matter
Creaciones Con Idea, S.A. de C.V. v. Mashreqbank
PSC, 232 F.3d 79, 82 (2d Cir. 2000); Wight, 219 F.3d at 89-90.
But the rationale of this guidance is as follows:
matter jurisdiction . . . functions as a restriction on federal
power, and contributes to the characterization of the federal
Certain legal consequences directly follow from
For example, no action of the parties can confer subject-
matter jurisdiction upon a federal court.
Thus, the consent of
the parties is irrelevant, principles of estoppel do not apply,
and a party does not waive the requirement by failing to
challenge jurisdiction early in the proceedings.”
Ins. Corp. of
Ireland, Ltd. V. Compagnie des Bauxites de Guinee, 456 U.S. 694,
702, 102 S. Ct. 2099, 72 L. Ed. 2d 492 (1982) (internal
Here, the Huhs’ inconsistent statements are used to help
determine whether or not the facts establish that they were
domiciled in Washington.
This does not present the concern of
using a party’s statement to conclusively establish or defeat
subject matter jurisdiction.
Moreover, the Second Circuit has
recently observed that it has “never held, however, that
judicial estoppel can never apply to matters affecting subject
Intellivision v. Microsoft Corp., 484
Fed. App’x 616, 621 (2d Cir. 2012) (summary order).
For the foregoing reasons, the complaint is dismissed for
lack of subject matter jurisdiction.
New York, New York
February 20, 2013
MIRIAM GOLDMAN CEDARBAUM
United States District Judge
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