WESTMORELAND OPPORTUNITY FUND, LLC v. ZAPPALA et al

Filing 18

MEMORANDUM ORDER indicating that, for reasons stated more fully within said Order, Plaintiff shall file its Amended Complaint by 8/5/13 at 12:00 p.m.; that Defendant's Motion to Dismiss 9 is denied, without prejudice. Signed by Judge Nora Barry Fischer on 7/22/13. (jg) Modified on 7/22/2013. (jg, )

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
WESTMORELAND OPPORTUNITY FUND,
LLC,
Plaintiff,
v.
RICHARD A. ZAPPALA, RANK J.
ZAPPALA and RONALD A. ROSENFELD,
Defendants.

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Civil Action No. 13-456

MEMORANDUM ORDER
Presently before the Court are a Motion to Dismiss filed by Defendants, Richard A.
Zappala, Rank J. Zappala and Ronald A. Rosenfeld, (Docket No. [9]), their Brief in Support
(Docket No. [10]), and Plaintiff Westmoreland Opportunity Fund, LLC’s Brief in Opposition to
Defendants’ Motion to Dismiss (Docket No. [17]). Upon consideration of these submissions, the
allegations in Plaintiff’s Complaint (Docket No. [1]), and the attachments to Plaintiff’s
Complaint, including: the Open-End Mortgage Note (Exhibit “A”); the Open-End Mortgage and
Security Agreement (Exhibit “B”); Principals’ Indemnification Agreement (Exhibit “C”);
Environmental and Accessibility Indemnity Agreement (Exhibit “D”); and Correspondence
dated January 7, 2013 (Exhibit “E”), the Court construes Plaintiff’s Brief in Opposition as a
motion to amend its Complaint and will grant Plaintiff leave to file an Amended Complaint by
the deadline set forth below.
As the parties acknowledge, it is Plaintiff’s burden to demonstrate that the diversity
jurisdiction of this Court is appropriately exercised under 28 U.S.C. § 1332(a)(1) by pleading
sufficient facts from which the Court can determine that the parties are completely diverse and
that the amount in controversy is in excess of the statutory threshold of $75,000.00. See U.S.C. §
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1332(a)(1) (“The district courts shall have original jurisdiction of all civil actions where the
matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is
between-(1) citizens of different States”).

Having fully considered the matters in dispute

between the parties, the Court will grant Plaintiff leave to amend its Complaint to plead
additional facts which may establish that all of the requirements of § 1332(a)(1) are satisfied. In
reaching this decision, the Court briefly notes the following.
First, with respect to the challenged amount in controversy, the Court finds that Plaintiff
has argued additional facts in its opposition brief which are not pled in its Complaint in
contravention of Third Circuit precedent. See Dongelewicz v. PNC Bank Nat’l. Ass’n., 104 F.
App’x 811, 819 n.4 (3d Cir. 2004) (quoting Williams v. New Castle County, 970 F.2d 1260, 1266
n.4 (3d Cir. 1992)) (“‘a contention in a brief’ ‘clearly … may not’ be used to ‘substitute for an
allegation in a complaint.’”). To this end, Plaintiff avers that the attorneys’ fees and costs it
seeks in this action exceed $75,000.00 but has not pled any specific amount of same or that the
fees and costs exceed $75,000.00. (See Docket No. 17 at 3, n.1, 9-10, n.6). Therefore, the Court
may not consider these additional facts when ruling on the instant motion to dismiss and the
interests of judicial economy dictate that the Court should not undertake such an inquiry without
having all of the well-pleaded facts properly set forth in an Amended Complaint.

See

Dongelewicz, 104 F. App’x at n.4.
Second, although not raised by the parties, the Court sua sponte questions whether
complete diversity of the parties has been properly pled in this case in light of Third Circuit
decisions examining the citizenship of limited liability companies for diversity purposes. See
Zambelli Fireworks Mfg. Co., Inc. v. Wood, 592 F.3d 412, 420 (3d Cir. 2010); see also Lucier v.
SmithKline Beecham Corp., --- F.3d ----, 2013 WL 2456043, at *8 (3d Cir. Jun. 7, 2013). In this

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regard, Plaintiff has pled that it is a Pennsylvania limited liability company that operates in
Monroeville, Pennsylvania, facts which may be sufficient to demonstrate the citizenship of a
corporation for diversity purposes. (Docket No. 1 at ¶ 1). However, in light of Zambelli
Fireworks, “the citizenship of an LLC is determined by the citizenship of its members,” as
opposed to the test used to evaluate the citizenship of corporations. Zambelli Fireworks, 592
F.3d at 420. Here, Plaintiff has failed to plead the citizenship of any of its members and
therefore has failed to demonstrate that its citizenship is diverse from Defendants, who are
individuals domiciled in the State of Florida and the Commonwealth of Virginia. (See Docket
No. 1 at ¶¶ 1-5). Thus, the Court cannot determine whether diversity jurisdiction has been
properly invoked by Plaintiff at this time and Plaintiff will be granted leave to file an Amended
Complaint setting forth the citizenship of all of its members.
For these reasons,
IT IS HEREBY ORDERED that Plaintiff shall file its Amended Complaint by August 5,
2013 at 12:00 p.m.
IT IS FURTHER ORDERED that Defendant’s Motion to Dismiss [9] is DENIED,
without prejudice.

s/Nora Barry Fischer
Nora Barry Fischer
U.S. District Court
Date: July 22, 2013
cc/ecf: All counsel of record.

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