General Electric Capital Corporation et al v. Malaszuk Specialized Logistics, LLC et al

Filing 22

ORDER Regarding Jurisdiction. Proof of Diversity Citizenship due 11/3/2015. Signed by District Judge James D. Peterson on 10/20/2015. (voc)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

GENERAL ELECTRIC CAPITAL CORPORATION and
GE CAPITAL COMMERCIAL, INC.,
ORDER
Plaintiffs,
v.

15-cv-191-jdp

MALASZUK SPECIALIZED LOGISTICS, LLC,
JOHN MALASZUK, and LISA MALASZUK,
Defendants.

There are two motions currently before the court: defendant Lisa Malaszuk’s motion
to dismiss, Dkt. 15, and plaintiffs General Electric Capital Corporation and GE Capital
Commercial, Inc.’s motion for leave to file a first amended complaint, Dkt. 17. Before the
court can rule on either motion, plaintiffs must file an amended complaint that adequately
alleges a basis for subject matter jurisdiction.
The initial complaint and the proposed amended complaint allege that John and Lisa
Malaszuk are residents of Wisconsin. Dkt. 1, ¶¶ 3-4 and Dkt. 17-1, ¶¶ 2-3. “[B]ut residence
and citizenship are not synonyms and it is the latter that matters for purposes of the diversity
jurisdiction.” Meyerson v. Harrah’s E. Chi. Casino, 299 F.3d 616, 617 (7th Cir. 2002).
“[R]esidence may or may not demonstrate citizenship, which depends on domicile—that is to
say, the state in which a person intends to live over the long run.” Heinen v. Northrop
Grumman Corp., 671 F.3d 669, 670 (7th Cir. 2012). It is immaterial that some of the
defendants admitted to these jurisdictional allegations. See Dkt. 12. Federal courts “have an
independent obligation to determine whether subject-matter jurisdiction exists, even in the
absence of a challenge from any party.” Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006).

Before this case can proceed, plaintiffs must file an amended complaint that properly
alleges John and Lisa’s citizenship, which will in turn adequately allege Malaszuk
Specialized’s citizenship. See Thomas v. Guardsmark, LLC, 487 F.3d 531, 534 (7th Cir. 2007)
(“[T]he citizenship of an LLC is the citizenship of each of its members.”). Plaintiffs may
therefore have 14 days from the date of this order to file an amended complaint that properly
alleges diversity of citizenship.
Although subject matter jurisdiction is not yet secure, the court will provide the
parties with additional guidance, given the procedural posture of the case. Plaintiffs must file
an amended complaint that repeats the allegations in their initial complaint. The court will
then hold an in-person hearing to address the merits of the two pending motions as they
apply to this new complaint. The parties should be prepared to discuss the following topics at
the hearing:
1. At this point, the court is not persuaded that General Electric Capital
Corporation can overcome Associates Financial Services Company. v. Eisenberg,
51 Wis. 2d 85, 186 N.W.2d 272 (1971), to assert a breach of guaranty
claim against Lisa Malaszuk based on a retroactive application of her
guaranty agreement. The court is therefore inclined to deny plaintiffs’
motion for leave to amend and grant Lisa Malaszuk’s motion to dismiss.
2. Plaintiffs’ motion for leave to amend asks the court to dismiss all claims
relating to GE Capital Commercial, Inc. Dkt. 17. But neither party has
addressed whether the court could retain supplemental jurisdiction over
these claims pursuant to 28 U.S.C. § 1367.
ORDER
IT IS ORDERED that plaintiffs General Electric Capital Corporation and GE Capital
Commercial, Inc. may have until November 3, 2015, to file and serve an amended complaint
containing good faith allegations sufficient to establish complete diversity of citizenship for

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purposes of determining subject matter jurisdiction under 28 U.S.C. § 1332. Failure to timely
amend will result in prompt dismissal of this case for lack of subject matter jurisdiction.

Entered October 20, 2015.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge

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