Van Buskirk v. The United Group of Companies
Opinion
Plaintiffs-Appellants Bruce and Lori Van Buskirk ("Plaintiffs") appeal from a judgment entered by the United States District Court for the Northern District of New York (Gary L. Sharpe,
J
.) dismissing Plaintiffs' claims for lack of subject matter jurisdiction and the district court's subsequent denial of a motion for reconsideration. Plaintiffs argue that, on
de novo
review, the entire record on appeal demonstrates that they were citizens of Florida - not New York - at the time they filed their suit, and therefore satisfied the complete diversity requirement of
I. BACKGROUND
In July 2016, Plaintiffs brought suit against Defendants-Appellees ("Defendants") - The United Group of Companies, Inc.; DCG Funds Management, LLC; DCG/UGOC Funds Management II, LLC; MCM Securities, LLC; Millennium Credit Markets, LLC; Davis Capital Group, Inc.; and individual officers of the various companies - alleging violations of state law including common law fraud, breach of fiduciary duty, negligent misrepresentation, unjust enrichment, and aiding and abetting fraud. Plaintiffs subsequently amended their complaint twice. In all three iterations of their complaint, Plaintiffs alleged that they were "resident[s] of Cobleskill, New York" and that Defendants were citizens of New York or North Carolina.
In February 2018, the district court ordered Plaintiffs to show cause as to why the action should not be dismissed sua sponte under Federal Rule of Civil Procedure 12(h)(3) for lack of subject matter jurisdiction. Plaintiffs submitted a two-paragraph response stating that the court had diversity jurisdiction because "Plaintiffs used to reside in Cobleskill, New York ... but sold their residence in New York and now reside" in Naples, Florida. J. App'x at 107. Plaintiffs argued that Defendants were aware of this "domicile" because they had sent mail to the Florida address. Plaintiffs also attached (1) blurry photocopies of their Florida drivers' licenses - one visibly dated "12-28-2016" - and (2) a photocopy of a January 2018 piece of mail from one Defendant addressed to Plaintiffs at the Florida address. In a March 21, 2018 docket entry, the district court agreed with Defendants that "Plaintiffs ... failed to satisfy their burden of proving that they were citizens of states diverse from those of all defendants at the time of filing" and dismissed the complaint for lack of subject matter jurisdiction. J. App'x at 119. Judgment was entered that day.
Plaintiffs thereafter filed a motion for reconsideration, arguing that dismissal was improper and submitting "Declaration[s] of Domicile" - sworn statements signed by Plaintiffs on May 9, 2013 indicating that they then resided in Florida and intended Florida to be their permanent home. On April 13, 2018, the district court denied the motion because the affidavits were known to Plaintiffs at the time of the prior order to show cause and Plaintiffs had failed to invoke any of the strict grounds for reconsideration. Plaintiffs subsequently filed a timely notice of appeal from the district court's April 13, 2018 order denying Plaintiffs' motion for reconsideration.
II. STANDARD OF REVIEW
We generally treat an appeal from a denial of a motion for reconsideration that largely renews arguments previously made in the underlying order as bringing up for review the underlying order or judgment.
See
"R" Best Produce, Inc. v. DiSapio
,
III. DISCUSSION
Plaintiffs argue on appeal that the district court failed to properly consider evidence proving they were citizens of Florida at the time they filed their complaint. Specifically, Plaintiffs argue that the district court did not attribute enough weight to the evidence submitted in response to the district court's order to show cause or the civil cover sheet they submitted when they filed their initial complaint; Plaintiffs further contend that the district court ought to have considered the declarations of domicile from 2013 that they submitted as part of their motion for reconsideration. In the alternative, Plaintiffs argue that we should invoke our authority under
The parties do not dispute that this case may only be properly entertained in federal court on the basis of diversity jurisdiction under
"An individual's citizenship, within the meaning of the diversity statute, is determined by his domicile ... [in other words] the place where a person has his true fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning."
Palazzo ex rel. Delmage v. Corio
,
*54
Here, Plaintiffs alleged in their complaint that they were residents of Cobleskill, New York. As a threshold matter, residence alone is insufficient to establish domicile for jurisdictional purposes.
See
Leveraged Leasing Admin. Corp. v. PacifiCorp Capital, Inc.
,
Nor did the district court abuse its discretion in denying Plaintiffs' motion for reconsideration of its March 21, 2018 dismissal. A motion for reconsideration is an extraordinary request that is granted only in rare circumstances, such as where the court failed to consider evidence or binding authority. "The standard for granting such a motion is strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked - matters, in other words, that might reasonably be expected to alter the conclusion reached by the court."
Shrader v. CSX Transp., Inc.
,
Plaintiffs likewise have not explained why they failed to move to amend pursuant to either Federal Rule of Civil Procedure 15(a)(2), which provides that leave to amend "should [be] freely give[n] ... when justice so requires" - including after final judgment has been vacated,
see
Nat'l Petrochem. Co. of Iran v. M/T Stolt Sheaf
,
Nevertheless, pursuant to
To be sure, we have also articulated a caveat to § 1653 's general principle: "[w]here ... the district court has pointed out the defects in the complaint and has afforded a plaintiff a reasonable time to amend[,] and the plaintiff, with the intention to delay, has not done so, the appellate court will not allow the plaintiff-appellant leave to amend."
John Birch Soc'y
,
As Defendants point out, other circuits have refused to permit § 1653 relief - even absent an intent to delay - when the party seeking to invoke federal jurisdiction has been given an opportunity to amend their pleadings at the district court level and failed to do so.
See, e.g.
,
Naartex Consulting Corp. v. Watt
,
Considering the whole record pursuant to § 1653, we conclude that the sworn declarations of domicile dated May 2013 offered as part of Plaintiffs' motion for reconsideration suggest that Plaintiffs were in fact domiciled in Florida as early as 2013. Since the district court is in the best position to consider the veracity of this evidence in the first instance, we vacate the judgment of the district court and remand so that Plaintiffs may amend their complaint and so that the district court may determine whether the evidence provided by Plaintiffs - as a whole - is sufficient to invoke federal diversity jurisdiction.
3
On remand, the district court may also consider whether an award of costs to Defendants - including attorney's fees - would mitigate the prejudice incurred by Defendants through this late amendment.
See, e.g.,
Gen. Signal Corp. v. MCI Telecomms. Corp.
,
IV. CONCLUSION
For the foregoing reasons, the judgment of the district court is VACATED and REMANDED for further proceedings consistent with this opinion.
Plaintiffs argue that the district court's denial of the motion for reconsideration must be reviewed
de novo
because the denial "both affirmed the district court's prior Dismissal Order and offered, for the first time, explanation in support of its prior conclusion." (Appellants' Brief at 13.) But the district court expressly stated the reasoning for its dismissal in its March 21, 2018 docket entry, finding that "Plaintiffs [had] failed to satisfy their burden of proving that they were citizens of states diverse from those of all defendants at the time of filing." J. App'x at 119. By contrast, the court's April 13, 2018 order only considered the grounds for a motion for reconsideration, not the merits of the dismissal for lack of jurisdiction. Accordingly, abuse of discretion is the proper standard.
See
AEP Energy Servs. Gas Holding Co. v. Bank of Am., N.A.
,
The parties dispute whether the civil cover sheet may be considered at all. Because we find it is insufficient to establish Plaintiffs' domicile in any event, we need not address this issue.
As a general matter, Plaintiffs must prove complete diversity by a preponderance of the evidence, but a change in domicile by clear and convincing evidence.
See
Palazzo ex rel. Delmage
,
Reference
- Full Case Name
- Bruce A. VAN BUSKIRK and Lori A. Van Buskirk, Plaintiffs-Appellants, v. the UNITED GROUP OF COMPANIES, INC., DCG Funds Management, LLC, DCG/UGOC Funds Management II, LLC, Michael J. Uccellini, Executor of the Estate of Walter F. Uccellini, MCM Securities, LLC, Millennium Credit Markets, LLC, Davis Capital Group, Inc., Jessica F. Steffensen, Executrix of the Estate of Walter F. Uccellini, Defendants-Appellees, Richard W. Davis, Jr., Defendant.
- Cited By
- 352 cases
- Status
- Published