Wells Fargo Bank Northwest, N.A. v. Synergy Aerospace Corp. et al

Filing 19

OPINION AND ORDER: re: 10 MOTION to Dismiss for Lack of Jurisdiction filed by Oceanair Linhas Aereas, S.A., Synergy Aerospace Corp. For the foregoing reasons, Defendants' motion to dismiss for lack of subject matter jurisdiction is DENIED. Defendants shall file answers to the Complaint within 21 days of the date of this Opinion and Order. The Clerk of Court is directed to close the motion at Docket Number 10. SO ORDERED. (Signed by Judge J. Paul Oetken on 8/07/2017) (ama)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
WELLS FARGO BANK NORTHWEST, N.A.,
Plaintiff,
-vSYNERGY AEROSPACE CORP. and
OCEANAIR LINHAS AEREAS, S.A.,
Defendants.

16-CV-8065 (JPO)
OPINION AND ORDER

J. PAUL OETKEN, District Judge:
Plaintiff Wells Fargo Bank Northwest, N.A. (“Wells Fargo”) filed this action on October
14, 2016, against Synergy Aerospace Corp. (“Synergy”) and Oceanair Linhas Aereas, S.A.
(“Oceanair”). (Dkt. No. 1 (“Compl.”).) Invoking this Court’s diversity jurisdiction under 28
U.S.C. § 1332(a)(2), Wells Fargo asserts a breach-of-contract claim against each defendant. (Id.)
Synergy and Oceanair now move to dismiss for lack of subject matter jurisdiction pursuant to
Federal Rules of Civil Procedure 12(b)(1) and 12(h)(3). (Dkt. No. 10.) For the reasons that
follow, the motion is denied.
I.

Background
The following facts are taken from the Complaint, exhibits attached to the Complaint,

and exhibits attached to Defendants’ motion to dismiss and responsive briefing. 1
This case arises out of an aircraft lease. In 2014, Avolon Aerospace AOE 90 Limited
(“Avolon”), a limited company incorporated under the laws of the Cayman Islands, began
negotiations with Oceanair, a corporation organized under the laws of Brazil, for Oceanair to
lease an Airbus A330-243 aircraft (“Aircraft”) from Avolon. (Compl. ¶¶ 3, 8, 11.)
1

When deciding a motion to dismiss for lack of subject matter jurisdiction, the
Court may consider evidence outside the pleadings. Makarova v. United States, 201 F.3d 110,
113 (2d Cir. 2000) (citing Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d Cir. 1986)).
1

Because federal law restricts the ability of foreign citizens to register aircrafts with the
Federal Aviation Administration (“FAA”), see 49 U.S.C. § 44102; 14 C.F.R. § 47.7, Avolon and
Oceanair each created a trust with a U.S. entity designated as owner trustee. In June 2014,
Oceanair created a trust and designated the Bank of Utah as owner trustee. (Compl. ¶ 13.)
Around the same time, Avolon executed a trust agreement with Wells Fargo (“June 2014 Trust
Agreement”) (Compl. ¶ 12; Dkt No. 16-2.) The June 2014 Trust Agreement created the MSN
1508 Trust, designated Wells Fargo as owner trustee, and transferred title to the Aircraft to Wells
Fargo. (Dkt. No. 16-2 §§ 2.01-2.03.) In a letter dated June 9, 2014, the FAA indicated that the
June 2014 Trust Agreement would “support the registration of the [Aircraft] in the name of the
Owner Trustee” Wells Fargo. (Dkt. No. 16-4.)
After the trusts were created, Wells Fargo leased the Aircraft to the Bank of Utah.
(Compl. ¶ 14; Dkt. No. 1-3.) Under the Aircraft Lease Agreement (“Lease”), the Bank of Utah
agrees to make monthly rental payments to Wells Fargo that, if late, accrue interest assessed at a
pre-determined rate. (Compl. ¶¶ 15‒16; Dkt. No. 1-3 §§ 5.1, 5.5.) In the event of a default, the
Lease provides Wells Fargo the right “to proceed by appropriate court action to enforce
performance” of the Lease or to terminate the Lease and recover back-rent, lost profits, the
Aircraft itself, and associated costs. (Compl. ¶ 18; Dkt. No. 1-3 §§ 20.1, 20.3.)
As a condition of executing the Lease, Wells Fargo also required Synergy, a holding
company and related entity of Oceanair (Compl. ¶ 9), and Oceanair to sign guaranty agreements.
In the Synergy Guaranty (Dkt. No. 1-1) and Oceanair Guaranty (Dkt. No. 1-2) (collectively,
“Guaranties”), Synergy and Oceanair each independently “irrevocably, absolutely and
unconditionally guarantees” performance by, and “prompt” and “full” payment from, the Bank
of Utah. (Compl. ¶¶ 21‒22; Dkt. No. 1-1 § 1; Dkt. No. 1-2 § 2.) Both agreements also provide

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that Synergy and Oceanair are liable for any costs incurred by Wells Fargo in connection with
enforcing the Guaranties. (Compl. ¶¶ 21‒22; Dkt. No. 1-1 § 13; Dkt. No. 1-2 § 2.)
To effectuate a refinancing of the Aircraft, Wells Fargo entered into a sale-leaseback
arrangement with Corrib Aviation Limited (“Corrib”) in October 2014. (Dkt No. 16 ¶ 9
(“Rosevear Decl.”).) Under the sale-leaseback, Wells Fargo agreed to sell the Aircraft to, and
subsequently lease the Aircraft back from, Corrib. (Id.) The term of Wells Fargo’s lease runs
concurrent with the term of a loan made by Wells Fargo to Corrib, and title to the Aircraft will
revert to Wells Fargo at the end of the loan and lease term. (Id.) To facilitate the sale-leaseback,
Wells Fargo and Avolon entered into an Amended and Restated Trust Agreement (“Trust
Agreement”) on October 15, 2014. (Id.; Dkt No. 16-3.) Wells Fargo remained the registered
owner of the Aircraft after the sale-leaseback. (Dkt. Nos. 16-7, 16-8.)
Over time, the Bank of Utah fell behind on its rent payments. (Compl. ¶ 23.) Wells
Fargo sent Synergy a demand for payment on August 4, 2016 and, after receiving no payment, a
notice of default of August 11, 2016. (Compl. ¶ 24.) Wells Fargo alleges that as of October 11,
2016, Synergy and Oceanair were liable for $4,936,000 plus interest in damages. (Compl. ¶¶ 32,
38.) Alleging federal diversity jurisdiction, Wells Fargo filed this action for breach of contract
on October 14, 2016. (Compl. ¶ 4.)
Defendants filed the instant motion to dismiss pursuant to Rules 12(b)(1) and 12(h)(3) of
the Federal Rules of Civil Procedure. 2 (Dkt. No. 10.) Defendants argue that this Court lacks

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Rule 12(h)(3) requires that “[i]f the court determines at any time that it lacks
subject-matter jurisdiction, the court must dismiss the action.” Fed. R. Civ. P. 12(h)(3).
“Motions brought pursuant to Rule 12(h)(3) are subject to the same standards as motions to
dismiss for want of subject matter jurisdiction brought pursuant to Rule 12(b)(1) . . . .”
Correspondent Servs. Corp. v. JVW Inv., Ltd., No. 99 Civ. 8934, 2004 WL 2181087, at *5
(S.D.N.Y. Sept. 29, 2004), judgment entered sub nom. Correspondent Servs. Corp. v. J.V.W. Inv.
Ltd., 232 F.R.D. 173 (S.D.N.Y. 2005), and aff’d sub nom. Correspondent Servs. Corp. v. First
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subject matter jurisdiction because both Defendants and Plaintiff are properly classified as
foreign entities—which, if true, would deprive this Court of diversity jurisdiction under 28
U.S.C. § 1332(a)(2). (Dkt. No. 12 at 1.)
II.

Legal Standards
“Federal courts are courts of limited jurisdiction.” Gunn v. Minton, 133 S. Ct. 1059,

1064 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994))
(internal quotation marks omitted). “A case is properly dismissed for lack of subject matter
jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional
power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000).
“When resolving a Rule 12(b)(1) motion, a district court may refer to evidence outside
the pleadings, and the plaintiff bears the burden to prove subject-matter jurisdiction by a
preponderance of the evidence.” Morrow v. Ann Inc., No. 16 Civ. 3340, 2017 WL 363001, at *2
(S.D.N.Y. Jan. 24, 2017) (citing Makarova, 201 F.3d at 113); see also Kurzon v. Democratic
Nat’l Comm., No. 16 Civ. 4114, 2017 WL 2414834, at *1 (S.D.N.Y. June 2, 2017). When
considering a motion to dismiss for lack of subject matter jurisdiction, a federal court “must
accept as true all material factual allegations in the complaint . . . [b]ut . . . jurisdiction must be
shown affirmatively, and that showing is not made by drawing from the pleadings inferences
favorable to the party asserting it.” Shipping Fin. Servs. Corp. v. Drakos, 140 F.3d 129, 131 (2d
Cir. 1998) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Norton v. Larney, 266 U.S. 511,
515 (1925)).
Wells Fargo seeks to invoke this Court’s subject matter jurisdiction under 28 U.S.C.
§ 1332(a)(2). (Compl. ¶ 4.) Under § 1332(a)(2), federal district courts have original jurisdiction
Equities Corp. of Florida, 442 F.3d 767 (2d Cir. 2006). Accordingly, Defendants’ motion under
Rule 12(h)(3) will be treated as a motion pursuant to Rule 12(b)(1).
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over civil actions in which the amount in controversy exceeds $75,000 and the dispute is
between “citizens of a State and citizens or subjects of a foreign state.” 28 U.S.C. § 1332(a)(2).
Consequently, “diversity is lacking within the meaning of [§ 1332(a)(2)] where the only parties
are foreign entities.” Universal Licensing Corp. v. Paola del Lungo S.p.A., 293 F.3d 579, 581
(2d Cir. 2002).
In a suit involving a trustee suing or being sued in its own name, the citizenship of the
trustee may be used for purposes of establishing diversity jurisdiction. Navarro Savings Ass’n v.
Lee, 446 U.S. 458, 462‒64 (1980). “[T]rustees of an express trust are entitled to bring diversity
actions in their own names and upon the basis of their own citizenship. . . . [J]urisdiction
properly founded upon the diverse citizenship of individual trustees ‘is not defeated by the fact
that the parties whom they represent may be disqualified.’” Id. at 462–63 (quoting Coal Co. v.
Blatchford, 78 U.S. 172, 174 (1870)); see also Catskill Dev., L.L.C. v. Park Place Entm’t Corp.,
547 F.3d 115, 124 (2d Cir. 2008) (Sotomayor, J.) (“For purposes of diversity jurisdiction, the
citizenship of the fiduciary—not the beneficiary—generally controls.”).
However, “[i]t is firmly established that ‘citizens’ for purposes of a federal court’s
diversity jurisdiction ‘must be real and substantial parties to the controversy.’” Oscar Gruss &
Son, Inc. v. Hollander, 337 F.3d 186, 193 (2d Cir. 2003) (quoting Navarro, 446 U.S. at 460). A
court may not rest its diversity jurisdiction on the citizenship of a “‘naked trustee’ who act[s] as
[a] ‘mere conduit[]’ for a remedy flowing to others.” Navarro, 446 U.S. at 465 (quoting McNutt
v. Bland, 43 U.S. 9, 13 (1844)).
“If a trustee is truly a naked trustee, the trust’s beneficiaries are the real parties to the
controversy, and their citizenship will control for diversity purposes.” Cortlandt St. Recovery
Corp. v. Aliberti, No. 12 Civ. 8686, 2014 WL 6907548, at *2 (S.D.N.Y. Dec. 9, 2014) (quoting

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Wells Fargo Bank, N.A. v. Ullah, No. 13 Civ. 0485, 2014 WL 470883, at *3 (S.D.N.Y. Feb. 6,
2014)). But “[w]here a trustee brings the action in her own name, and where she is a bona fide
trustee, she is entitled to rely on her own citizenship for diversity purposes.” Nomura Asset
Acceptance Corp. Alternative Loan Trust, Series 2007-1 ex rel. HSBC Bank USA v. Nomura
Credit & Capital, Inc., 27 F. Supp. 3d 487, 490 (S.D.N.Y. 2014). 3
A trustee is a real party to the controversy where it “possesses certain customary powers
to hold, manage, and dispose of assets for the benefit of others.” Navarro, 446 U.S. at 464; see
also Dodge v. Tulleys, 144 U.S. 451, 455 (1892) (holding that the “trustee, to whom the legal
title was conveyed in trust, . . . was therefore the proper party in whose name to bring suit”);
Nomura, 27 F. Supp. 3d at 492 (“Where the action is brought in the name of the trustee, courts
must inquire into whether the trustee is more than just a ‘sham’ who has no real power to control
the litigation or the property at issue.” (citing Navarro, 446 U.S. at 465)). “Whether the trustee
possesses such powers is a question that is resolved based on the underlying trust document.”
U.S. Bank Nat. Ass’n v. Nesbitt Bellevue Prop. LLC, 859 F. Supp. 2d 602, 606 (S.D.N.Y. 2012).

3

Note that Rule 17(a) of the Federal Rules of Civil Procedure, which requires that
“an action must be prosecuted in the name of the real party in interest,” allows a “trustee of an
express trust” to “sue in [its] own name[] without joining the person for whose benefit the action
is brought.” Fed. R. Civ. P. 17(a). Defendants concede that Wells Fargo is a proper plaintiff
under Rule 17(a). (Dkt. No. 17 at 3 n.3.) However, the fact that Wells Fargo has complied with
Rule 17(a)’s procedural requirement does not automatically establish that Wells Fargo is a real
party to the controversy for purposes of diversity jurisdiction. “The Supreme Court has noted
that although there exists a ‘rough symmetry between the real party in interest standard of Rule
17(a) and the rule that diversity jurisdiction depends upon the citizenship of real parties to the
controversy . . . the two rules serve different purposes and need not produce identical outcomes
in all cases.’” Oscar Gruss, 337 F.3d at 194 (quoting Navarro, 446 U.S. at 462 n.9).
6

III.

Discussion
Because both Oceanair and Synergy are citizens of foreign states, 4 diversity jurisdiction

fails under § 1332(a)(2) if the plaintiff is not a citizen of a U.S. state. Wells Fargo is the only
plaintiff entity named in the caption of the suit, and it is a citizen of the state of Utah. 5 However,
“a federal court must disregard nominal or formal parties and rest jurisdiction only upon the
citizenship of real parties to the controversy.” Navarro, 446 U.S. at 461. Defendants argue that
because Avolon is the sole beneficiary of the MSN 1508 Trust, it is Avolon’s Cayman Islands
citizenship that determines plaintiff’s citizenship—and destroys diversity jurisdiction. (Dkt. No.
12 at 4‒5.) Plaintiff responds that Avolon’s citizenship is irrelevant to determining diversity
jurisdiction because Wells Fargo is a real party to the controversy. (Dkt. No. 14 at 4‒5, 10–12.)
Wells Fargo has the better of the argument. Because Wells Fargo “possesses certain
customary powers to hold, manage, and dispose of assets for the benefit of others,” Navarro, 446
U.S. at 464, Wells Fargo is a real and substantial party to the controversy.
First, Wells Fargo has the legal power to hold and dispose of the Aircraft. The Trust
Agreement conveyed title to the Aircraft to Wells Fargo (Dkt. No. 16-3 § 2.01), and divested

4

Oceanair is a corporation organized and existing under the laws of Brazil, with its
principal place of business in São Paulo, Brazil. (Compl. ¶ 3.) Synergy is a corporation
organized and existing under the laws of Panama, with its principal place of business in São
Paulo, Brazil. (Compl. ¶ 2.) As such, both defendants are citizens of a foreign state for the
purposes of § 1332. See JPMorgan Chase Bank v. Traffic Stream (BVI) Infrastructure Ltd., 536
U.S. 88, 91 (2002) (“A ‘corporation of a foreign State is, for purposes of jurisdiction in the
courts of the United States, to be deemed, constructively, a citizen or subject of such State.’”
(quoting Nat. S.S. Co. v. Tugman, 106 U.S. 118, 121 (1882))).
5

National banking associations are “deemed citizens of the States in which they are
respectively located,” 28 U.S.C. § 1348, and a national bank is “located” “in the State designated
in its articles of association as its main office,” Wachovia Bank v. Schmidt, 546 U.S. 303, 318
(2006). Because Wells Fargo Bank Northwest, N.A. is a national banking association with its
principal place of business is in Salt Lake City, Utah (Compl. ¶ 1; Dkt. No. 16-1), it is a citizen
of Utah for purposes of determining diversity jurisdiction.
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Avolon of any legal title in the Aircraft itself (id. § 8.01). Pursuant to the terms of the Trust
Agreement, Wells Fargo has the power to enter into an “assignment, sale, transfer or other
conveyance” of the Aircraft that will legally bind Avolon. (Id. § 8.02.) Wells Fargo exercised
this power when it executed the Lease with the Bank of Utah (Dkt. No. 1-3), and again when it
entered into the sale-leaseback arrangement with Corrib (Rosevear Decl. ¶ 9). 6
Second, Wells Fargo possesses the power to manage the Aircraft. The Lease grants
Wells Fargo the right to receive all payments and, at its option, to pursue the remedies set forth
in the Lease in the event of a default. (Dkt. No. 1-3 §§ 5.1, 20.1.) The Trust Agreement
indicates that Avolon “will have no rights or powers to direct, influence or control [Wells Fargo]
in the performance of [Wells Fargo’s] duties under this Agreement, including matters involving
the ownership and operation of the Aircraft.” (Dkt. No. 16-3 § 9.01(a).) And although Avolon
can remove Wells Fargo, it may do so “for cause only.” (Id. § 3.02.) In fact, FAA regulations
require that foreign trust beneficiaries not “have more than 25 percent of the aggregate power to
influence or limit the exercise of the trustee’s authority . . . [or] to direct or remove a trustee,” 14
C.F.R. § 47.7(c), and the FAA recognizes Wells Fargo as the registered owner of the Aircraft
(see Dkt. Nos. 16-4, 16-7, 16-8).

6

Defendants indicate that they are “troubled” by the sale-leaseback because it
transferred legal title to the Aircraft to Corrib. (Dkt. No. 17 at 1 n.1.) But Defendants’ concern
is misplaced. Wells Fargo remains a lessee of the Aircraft and will reacquire legal title to the
Aircraft at the end of the lease term. (Rosevear Decl. ¶ 9.) As such, Wells Fargo retains a
property interest in title to the Aircraft. Cf. Karras v. Teledyne Indus., Inc., 191 F. Supp. 2d
1162, 1172–73 (S.D. Cal. 2002) (finding irrelevant the defendant’s argument that “the Trustee
does not own the Trust assets because the grantors, and not the Trustee, pay taxes on the trust
assets” because the defendant “has not cited any case that holds that a trustee must ‘own’ the
trust assets to satisfy the real party in interest requirement” of Federal Rule of Civil Procedure
17). Indeed, the sale-leaseback provides persuasive evidence that Wells Fargo possesses the
power to “dispose of” the trust asset. Navarro, 446 U.S. at 464.
8

Defendants respond by arguing that Wells Fargo operates as a “‘passive’ trustee” who
has “ced[ed] all operational control of [Avolon’s] airplane to [Avolon].” (Dkt. No. 12 at 2
(citing Garcia v. Wells Fargo Bank Nw. NA Tr., No. 10 Civ. 20383, 2011 WL 3439530, at *1
(S.D. Fla. Aug. 5, 2011)).) But the fact that Wells Fargo does not actively direct the Aircraft’s
operations does not indicate that Wells Fargo lacks the “customary power[] to . . . manage” the
asset. Navarro, 446 U.S. at 464. This Court heeds the advice that “‘it would be a mistake to
complicate the ascertainment of jurisdiction by making it turn on the precise division of
responsibilities between’ trustees and other parties.” Wells Fargo Bank Nw., N.A. v. TACA Int’l
Airlines, S.A., 314 F. Supp. 2d 195, 201 (S.D.N.Y. 2003) (quoting May Dep’t Stores Co. v. Fed.
Ins. Co., 305 F.3d 597, 599 (7th Cir. 2002) (Posner, J.)); see also WBCMT 2007-C33 NY Living,
LLC v. 1145 Clay Ave. Owner, LLC, 964 F. Supp. 2d 265, 270 (S.D.N.Y. 2013) (“[C]omplex
facts give way to a simple legal answer: WBMCT has all right, title, and interest in the loan
documents. That makes it a real and substantial party to the controversy . . . .”). Avolon’s
ability to direct some aspects of Wells Fargo’s management of the Aircraft does not transform
Wells Fargo into a mere nominal party. See Cortlandt, 2014 WL 6907548, at *2–3; Mfrs. &
Traders Tr. Co. v. HSBC Bank USA, N.A., 564 F. Supp. 2d 261, 264 (S.D.N.Y. 2008).
Third, Wells Fargo is the only entity with standing to bring this suit. Neither the MSN
1508 Trust itself nor Avolon is a party to the Guaranties. (Dkt. Nos. 1‒1, 1‒2.) As far as the
Guaranties are concerned, Oceanair and Synergy have made no contracts with, and have
breached no obligations to, Avolon. Wells Fargo is not only a real party to the breach-ofguaranty controversy; it is the only potential plaintiff. See Oscar Gruss, 337 F.3d at 195
(holding that the defendant was a real and substantial party to the controversy where it “(1) had
negotiated and signed the agreement that was the subject of the action; (2) was most familiar

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with the matters in the suit; and (3) had a real and substantial financial interest in the outcome of
the litigation”); Fleet Nat. Bank v. Trans World Airlines, Inc., 767 F. Supp. 510, 514 (S.D.N.Y.
1991) (explaining that “one controlling factor” in finding a trustee to be a real party to the
controversy is when “the trustee [is] the only party able to seek return of the security at issue”);
Connecticut Nat. Bank v. Trans World Airlines, Inc., 762 F. Supp. 76, 79 (S.D.N.Y. 1991)
(rejecting the argument that the trustee was a “naked trustee” where “the only party that can seek
return of the property is [the trustee] . . . and, in fact, [the trustee] would be breaching its
fiduciary duties as trustee if it did not seek return of the property”).
The fact that Avolon, as the beneficiary of the MSN 1508 Trust, may ultimately benefit
from the instant litigation is of no consequence. Courts “regularly exercise diversity jurisdiction
in cases where non-diverse individuals or groups who are not direct parties to the litigation
nevertheless have a crucial interest in its outcome.” Oscar Gruss, 337 F.3d at 194 (quoting E.R.
Squibb & Sons, Inc. v. Accident & Cas. Ins. Co., 160 F.3d 925, 936 (2d Cir. 1998)) (internal
quotation mark omitted).
For these reasons, courts in this district have consistently determined that the trustee
owner of an aircraft is a real and substantial party to the controversy. Considering a set of
aircraft trust agreements similar to the one at issue in the instant case, Judge Lynch observed:
The trusts at issue . . . are not novel documents, but familiar
financing devices in the airline industry. As such, they have been
the subject of prior litigation, and this Court has held in earlier cases
that a trustee such as Wells Fargo is a ‘real and substantial party to
the controversy’ who ‘sues not only as an agent, but also as an
individual who has his own stake in the litigation.’ . . . Whatever
other powers Wells Fargo may possess or lack, at the core of the
Trust Agreements are provisions that empower it to own and convey
the property, to receive rent payments, and to exercise the remedies
provided in the leases. The powers granted by the Trust Agreements
. . . are more than ample to support Wells Fargo’s status as a party
with an independent stake in the matter.
10

TACA Int’l Airlines, 314 F. Supp. 2d at 200–01 (quoting Oscar Gruss, 337 F.3d at 194); see also
Mercantile-Safe Deposit & Tr. Co. v. Trans World Airlines, Inc., 771 F. Supp. 90, 92 (S.D.N.Y.
1991) (holding that the aircraft owner trustee was a real party to the controversy, and refusing to
look to the citizenship of trust beneficiaries, where “[t]he Agreement specifically affords plaintiff
the power to seek return of the property at issue” and “the trustee is entitled to sue in its own
name”).
Finally, contrary to Defendants’ argument, the Supreme Court’s recent decision in
Americold Realty Trust v. Conagra Foods, Inc., 136 S. Ct. 1012 (2016), does not change the rule
announced in Navarro or its applicability to this case. Americold held that “an unincorporated
entity sued in its organizational name,” including the real estate investment trust at issue in that
case, takes the citizenship of its members. Id. at 1017. But Americold has no bearing on
determining the citizenship if a trustee. As the Court explained:
“Navarro had nothing to do with the citizenship of [a] ‘trust.’”
Rather, Navarro reaffirmed a separate rule that when a trustee files
a lawsuit in her name, her jurisdictional citizenship is the State to
which she belongs—as is true of any natural person. This rule
coexists with our discussion above that when an artificial entity is
sued in its name, it takes the citizenship of each of its members.
Id. at 1016 (alterations in original) (quoting Carden v. Arkoma Assocs., 494 U.S. 185, 192–93
(1990)) (citations omitted). Because the MSN 1508 Trust is not a party to this case, Americold
does not guide this Court in determining the plaintiff’s citizenship for purposes of diversity
jurisdiction. See id. (“[W]hen a trustee files a lawsuit or is sued in her own name, her citizenship
is all that matters for diversity purposes. For a traditional trust, therefore, there is no need to
determine its membership, as would be true if the trust, as an entity, were sued.” (citation
omitted)); see also Ullah, 2014 WL 470883, at *4 (rejecting as irrelevant defendant’s argument

11

that “the citizenship of a trust is determined by the citizenship of its trustees and beneficiaries”
because the “action was filed by a trustee, not a trust”).
IV.

Conclusion
For the foregoing reasons, Defendants’ motion to dismiss for lack of subject matter

jurisdiction is DENIED. Defendants shall file answers to the Complaint within 21 days of the
date of this Opinion and Order.
The Clerk of Court is directed to close the motion at Docket Number 10.
SO ORDERED.
Dated: August 7, 2017
New York, New York
____________________________________
J. PAUL OETKEN
United States District Judge

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