U.S. Bank Trust, N.A. v. Licata et al
DECISION AND ORDER denying 10 Motion for Default Judgment and dismissing complaint for lack of subject matter jurisdiction. Signed by Hon. Michael A. Telesca on 06/21/2017. (CDH). -CLERK TO FOLLOW UP-
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
U.S. BANK TRUST, N.A., AS TRUSTEE FOR
LSF9 MASTER PARTICIPATION TRUST,
DECISION AND ORDER
-vsDUANE J. LICATA, LORI A. LICATA,
nonpayment of a mortgage by defendants Duane J. Licata and Lori A.
Licata (collectively defendants).
Docket No. 10.
Plaintiff has moved for default
For the reasons set forth below,
plaintiff’s motion is denied and the action is dismissed for lack
of subject matter jurisdiction.
Plaintiff, through its counsel, Gross Polowy LLC (“Gross
Polowy”), commenced the instant action on January 17, 2017. Docket
Plaintiff alleges that defendants have failed to make
payments under the terms of a mortgage held by it and secured by
outstanding amount of the loan, as well as foreclosure and sale of
Plaintiff asserts federal subject matter jurisdiction based
asserts that defendants are both citizens of New York and that it
is “a national association” with its principal place of business in
Id. at ¶¶ 2-3.
Plaintiff purports to bring this action as
trustee for the LSF9 Master Participation Trust (the “Trust”), but
has provided no details regarding its powers as trustee or the
citizenship of the Trust’s beneficiaries.
Defendants failed to appear in this action despite having been
duly served, and a Clerk’s Entry of Default was entered on March 7,
Docket No. 8.
Plaintiff filed the instant motion for a
default judgment on May 5, 2017.
Docket No. 10.
Subject Matter Jurisdiction
“Federal courts are courts of limited jurisdiction whose power
United Food & Commercial Workers Union,
Local 919, AFL-CIO v. CenterMark Properties Meriden Square, Inc.,
30 F.3d 298, 303 (2d Cir. 1994).
Accordingly, there exists an
“inflexible rule” that “if a court perceives at any stage of the
proceedings that it lacks subject matter jurisdiction, then it must
take proper notice of the defect by dismissing the action.”
v. E. Meadow Union Free Sch. Dist., 514 F.3d 240, 250 (2d Cir.
2008); see also R.S. v. Bedford Cent. Sch. Dist., 899 F. Supp. 2d
285, 289 (S.D.N.Y. 2012) (subject matter jurisdiction is not a
prudential or discretionary doctrine, but rather, is an inflexible
rule that without exception requires federal courts, on their own
motion, to determine if jurisdiction is lacking).
court’s jurisdiction must clearly appear from the face of [the]
complaint. . . .”
Verosol USA, Inc. v. Fla. Shades, Inc., 1992 WL
omitted). “And when a complaint fails to plead subject matter
jurisdiction, the Court is obligated to dismiss it sua sponte.”
Receivables Exch., LLC v. Hotton, 2011 WL 239865, at *1 (E.D.N.Y.
Jan. 21, 2011) (citing Fed. R. Civ. P. 12(h)(3)).
In this case, plaintiff has failed to adequately allege
subject matter jurisdiction.
In a recent decision, the United
States District Court for the Northern District New York dismissed
a complaint filed by Gross Polowy on behalf of plaintiff for
precisely this reason.
See U.S. Bank Trust, N.A. v. Monroe, 2017
WL 923326, at *3 (N.D.N.Y. Mar. 8, 2017).
The court in the Monroe
case noted that Gross Polowy has, on several previous occasions,
filed actions in federal court that fail to properly allege subject
Specifically, the court explained that the
citizenship of a national banking association is determined by the
state designated in its articles of association as its main office.
Id. at *4 (citing Wachovia Bank v. Schmidt, 546 U.S. 303, 306
In this case, as in the Monroe case, plaintiff has not
provided any information regarding its articles of incorporation,
and has therefore failed to provide the Court with the information
necessary to ascertain its citizenship.
plaintiff has commenced this action in its role as trustee for the
“The rule for determining the diversity citizenship of a
trust (when it is the citizenship of the trust itself that matters)
traditional trust, meaning it was established primarily for gift or
estate planning purposes, courts have held it takes the citizenship
of its trustees without regard to the trust’s beneficiaries. . . .
On the other hand . . . business trusts - which are established as
an alternative to incorporation and are intended to make a profit take the citizenships of their beneficiaries.”
citations and quotations omitted).
Here, as in Monroe, plaintiff
“has included no allegations concerning the type of trust at issue
alternatively, the citizenships of the trust’s beneficiaries.” Id.
jurisdiction over the instant matter.
Plaintiff’s attorneys have been warned that it is improper to
pursue an action in federal court without properly asserting
subject matter jurisdiction. See id. (“The Court strongly cautions
U.S. Bank (and its attorneys, Gross Polowy) against continuing to
claim federal jurisdiction in this or other lawsuits if it either
lacks an arguable basis for doing so or does not wish to invest the
effort required to make its case.”).
It nevertheless filed the
instant motion for default judgment without making any attempt to
circumstances, the Court finds that dismissal of the complaint is
See id. (“If a case is significant enough to warrant
a federal forum, properly pleading and showing jurisdiction is a
reasonable price of admission.
If not, the courts of New York are
perfectly capable of handling a foreclosure action for nonpayment
of a mortgage (perhaps even more so than a federal district
Participation Trust v. Gross, 2017 WL 2602057, at *3 (W.D.N.Y. June
14, 2017) (dismissing complaint brought by Gross Polowy on behalf
dismissed, it need not consider the merits of plaintiff’s motion
for default judgment.
The Court notes, however, that plaintiff’s
motion for a default judgment is procedurally deficient.
Gross, 2017 WL 2602057, at *3 (“Although this Court lacks subject
matter jurisdiction to entertain this case, the Court notes several
other missteps committed by Plaintiff’s attorney to allow for
greater efficiency in the event Plaintiff chooses to re-file this
In this case, as in Monroe, Gross, and numerous other
actions filed by Gross Polowy, plaintiff has failed to satisfy the
requirements of the New York Real Property Actions and Proceedings
Law and has filed a deficient request for attorneys fees.
Court will not reiterate the specific details of these procedural
failings, which have been exhaustively pointed out in previous
Instead, the Court notes that Federal Rule of
appearing in federal court.
Counsel is advised to consider the
provided by this Court and others.
For the foregoing reasons, Plaintiff’s motion for a default
judgment (Docket No. 10) is denied and the complaint is dismissed
for lack of subject matter jurisdiction. The Clerk of Court is
directed to close this case.
ALL OF THE ABOVE IS SO ORDERED.
s/ Michael A. Telesca
HON. MICHAEL A. TELESCA
United States District Judge
June 21, 2017
Rochester, New York.
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