Washington v. HOVENSA LLC

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 10-2328

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GLORIA WASHINGTON,

Appellant

v.

HOVENSA LLC;

TRIANGLE CONSTRUCTION

AND MAINTENANCE, INC.

_____________

Appeal from the District Court

of the Virgin Islands

(D.C. Civil No. 1-06-cv-00097)

District Judge: Honorable Harvey Bartle, III

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Argued April 12, 2011

Before: SCIRICA, RENDELL and AMBRO, Circuit Judges

(Filed: July 21, 2011)

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K. Glenda Cameron, Esq.

Law Offices of K.G. Cameron

2006 Eastern Suburb, Suite 101

Christiansted, St Croix

USVI 00820

Lee J. Rohn, Esq. [Argued]

Law Offices of Rhon & Carpenter

1101 King Street

Christiansted, VI 00820

Counsel for Appellant

Sunshine S. Benoit, Esq.

Bryant, Barnes, Beckstedt & Blair

1134 King Street, 2nd Floor

P.O. Box 224589

Christiansted, St. Croix, VI 00820

Counsel for Appellant Hovensa LLC

David J. Cattie, Esq. [Argued]

Charles E. Engeman, Esq.

Ogletree, Deakins, Nash, Smoak & Stewart

1336 Beltjen Road, Suite 201

St. Thomas, VI 00802

Counsel for Appellee Triangel

Construction and Maintenance, Inc.

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OPINION OF THE COURT

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2

RENDELL, Circuit Judge.

In this appeal, we review the District Court‟s grant of

defendants‟ motion to dismiss for lack of subject-matter

jurisdiction based on its determination that plaintiff Gloria

Washington was domiciled in the Virgin Islands at the time

she filed her complaint against defendants Hovensa, LLC

(“Hovensa”) and Triangle Construction and Maintenance,

Inc. (“Triangle”), notwithstanding her insistence that she was

domiciled in Texas. In reviewing a district court‟s conclusion

regarding where a party is domiciled, our review is for clear

error as to the court‟s factual determination but de novo as to

the applicable legal principles and the court‟s conclusions of

law. See McCann v. Newman Irrevocable Trust, 458 F.3d

281, 286 (3d Cir. 2006) (“A district court‟s determination

regarding domicile or citizenship is a mixed question of fact

and law . . . .”); Krasnov v. Dinan, 465 F.2d 1298, 1299-1300

(3d Cir. 1972) (“Historical or chronological data which

underline a court‟s determination of diversity jurisdiction are

factual in nature.”) (internal citations omitted).

Although a court‟s inquiry into where a party is

domiciled involves a predominantly factual determination,

see McCann, 458 F.3d at 286; Krasnov, 465 F.2d at 1300,

certain well-defined legal precepts can, and in this case, do,

govern that determination. Here, we take issue primarily with

the District Court‟s application of those legal principles to

reach the conclusion that Washington was domiciled in the

Virgin Islands. We also find that the District Court erred in

concluding that Washington‟s business, domestic and social

life was centered in St. Croix. We will accordingly remand

this case.

3

I.

On April 5, 2006, Gloria Washington was injured

while driving a rental car on Hovensa‟s property in the Virgin

Islands. She alleged in her complaint that, at the time she was

driving, improperly trained Triangle employees were

conducting sandblasts without proper supervision or

barricades and using faulty sandblasting equipment. A

sandblast that hit Washington‟s vehicle shattered the driver‟s

side window, resulting in physical injuries to Washington and

damage to her rental car. On July 24, 2006, she filed a

complaint in the District Court of the Virgin Islands against

Hovensa and Triangle, citizens of the Virgin Islands, based on

diversity of citizenship, claiming that they were responsible

for her physical injuries and the damage to the vehicle.

At the time Washington filed this complaint, she had

ties to both the Virgin Islands and Texas. She owned a home

in Baytown, Texas, but also had an apartment in St. Croix,

where she had been living and working for seven months.

She had been employed in Baytown, Texas by Sabine Storage

Operations, a Texas corporation, but went to the V.I. in

December 2005 to work as a pipe inspector for Sabine; there,

she was assigned to work at the Hovensa refinery in St. Croix.

When asked by opposing counsel at her deposition whether

she knew, in December 2005, “how long the assignment [at

the Hovensa refinery] was going to be, or was it indefinite,”

she replied: “I didn‟t know. It was indefinite.” In

summarizing her testimony on this point, the District Court

stated that her “work assignment at the Hovensa refinery was

for an indefinite period of time,” a fact the Court considered

“significant.”

4

Washington was born in St. Croix, and several of her

family members, including her mother, sister, and brothers,

resided there in July 2006. Upon returning to the Virgin

Islands in December 2005, Washington rented and furnished

an apartment that she was living in at the time of the accident.

The District Court found that her apartment “was in close

proximity” to her “mother, sisters, brothers, nieces and

nephews” and that “she socialized with them on a regular

basis.” The record clearly establishes only that she lived in

the same area as her sister and that, at the time of her

deposition, she went swimming every couple of weeks with

her family. In addition, Washington began a romantic

relationship with a V.I. resident after arriving in St. Croix but

before filing her complaint. Between her arrival in St. Croix

and the time of the accident, Washington had not returned to

Texas.

At the time she filed her complaint, Washington also

had several links to Texas: she owned the home in Baytown,

Texas, which she was maintaining at the time of the suit and

in which her daughter now lives; she received mail at her

Baytown address; her primary care doctor, whom she saw at

least yearly, was located in Texas; she maintained her Texas

driver‟s license and owned a car in Texas; she paid taxes in

Texas; she continued to have a bank account in Texas; she

maintained a cell phone with a Texas company; and she

visited Texas about three to five times a year. Conversely, in

the V.I., she did not have a primary care physician, a driver‟s

license, or a bank account, and she had never purchased a

home or joined any organizations there. In July 2006, she

was receiving a $100 per diem from her employer to cover

her rent and other living expenses during her time in St.

Croix. In an affidavit submitted after defendants filed their

5

motion to dismiss, Washington stated that, when she traveled

to St. Croix, she intended to return to Texas when her project

was complete, and to continue to live in Texas.

II.

Washington sued Hovensa and Triangle in the District

Court of the Virgin Islands on July 24, 2006. At the end of

the discovery period that followed, both parties filed motions,

the disposition of which Washington challenges on appeal.

After failing to reach an agreement with defendants‟ counsel

to extend expert discovery deadlines, Washington filed a

Motion to Extend the Expert Deadlines on the basis that her

vocationalist and economist did not yet have access to a

hearing test that they needed in order to testify. The

Magistrate Judge denied her motion, which was filed after the

expiration of the deadline set by the District Court‟s Final

Scheduling Order, finding that Washington failed to establish

good cause for modifying the scheduling order under Fed. R.

Civ. P. Rule 16(b)(4).

Washington also delayed in getting the Independent

Medical Examination (“IME”) at Triangle‟s expense that the

parties agreed she would undergo. She canceled her first

appointment and refused to have X-rays taken at the second.

In response, Triangle filed an Emergency Motion for Physical

Examination of Washington at her expense, which the

Magistrate Judge granted. Washington then moved for

reconsideration, which the Magistrate Judge denied.

After these motions were resolved, defendants filed a

Motion to Dismiss for Lack of Subject Matter Jurisdiction

pursuant to Fed. R. Civ. P. Rule 12(h)(3), on the ground that

6

Washington was domiciled in the V.I. when she filed her

complaint, not in Texas, and, thus, that the District Court

lacked jurisdiction over her cause of action. The District

Court granted defendants‟ motion, finding it significant that

“the center of [Washington‟s] business, domestic, and social

life was in St. Croix,” and that she was living and working in

the V.I. when the complaint was filed. Washington v.

Hovensa, LLC, 2010 WL 1734775, at *2 (D.V.I. April 28,

2010). It placed particular emphasis on her expectation that

her job in the V.I. would “continue indefinitely,” relying on

certain language in Krasnov v. Dinan, 465 F.2d 1298 (3d Cir.

1972). Id. There, despite defendant‟s ties to Connecticut, we

concluded that he was domiciled in Pennsylvania because he

was to remain there indefinitely. See Krasnov, 465 F.2d at

1302-03. The District Court believed Washington‟s case to

be analogous. It acknowledged that Washington owned an

unoccupied house in Texas and had other ties to that state, but

ultimately concluded that “her physical presence in the Virgin

Islands, her intent to work indefinitely in St. Croix, and her

business and social life there” pointed “decisively” towards

the Virgin Islands as her domicile. Washington, 2010 WL

1734775, at *2.

In determining Washington‟s domicile, the District

Court determined that her own affidavit statement declaring

her intention to return to and permanently reside in Texas

“must be disregarded.” It explained that “„[o]ne‟s testimony

as to his intention to establish a domicile, while entitled to

full and fair consideration, is subject to the infirmity of any

self-serving declaration, and it cannot prevail to establish

domicile when it is contradicted or negatived by an

inconsistent course of conduct; otherwise stated, actions

speak louder than words.‟” Id. (quoting Korn v. Korn, 398

7

F.2d 689, 691 (3d Cir. 1968)). Instead, the Court chose to

look only to Washington‟s statements prior to defendants‟

motion to dismiss and her actions at the time of the filing of

the complaint.

On appeal, Washington challenges the District Court‟s

dismissal for lack of subject matter jurisdiction, arguing that,

at the time she filed her complaint, she was on temporary

assignment in the Virgin Islands for her Texas employer but

that she remained a Texas domiciliary who intended to return

to, and permanently reside in, Texas. She also challenges the

Magistrate Judge‟s denial of her Motion to Extend Expert

Deadlines and grant of Triangle‟s Emergency Motion for

Physical Examination at Washington‟s expense.

We have jurisdiction over this appeal under 28 U.S.C.

§ 1291, as we are reviewing a final order of the district court.

III.

Under § 1332(a)(1), federal district courts have

original jurisdiction over civil actions where the matter in

controversy exceeds the sum or value of $75,000 and is

between “citizens of different States.” 28 U.S.C. §

1332(a)(1). We determine the citizenship of the parties based

on the relevant facts at the time the complaint was filed. S.

Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Grp.

Ltd., 181 F.3d 410, 414 n.2 (3d Cir. 1999) (citing Smith v.

Sperling, 354 U.S. 91, 93 n.1 (1957)).

A party‟s citizenship is determined by her domicile,

and “„the domicile of an individual is his true, fixed and

permanent home and place of habitation. It is the place to

8

which, whenever he is absent, he has the intention of

returning.‟” McCann, 458 F.3d at 286 (quoting Vlandis v.

Kline, 412 U.S. 441, 454 (1973)). Thus, domicile is

established by an objective physical presence in the state or

territory coupled with a subjective intention to remain there

indefinitely. See Frett-Smith v. Vanterpool, 511 F.3d 396,

400-01 (3d Cir. 2008). When the objective and subjective

concur, one‟s domicile is immediately established. Krasnov,

463 F.3d at 1300.

As we explained in McCann, a court considers several

factors in determining an individual‟s domicile, including

“„declarations, exercise of political rights, payment of

personal taxes, house of residence, and place of business.‟”

McCann, 458 F.3d at 286 (quoting Krasnov, 465 F.2d at 1301

(internal quotation omitted)). Other factors to be weighed

may include “location of brokerage and bank accounts,

location of spouse and family, membership in unions and

other organizations, and driver‟s license and vehicle

registration.” Id. (citing 13B Charles Alan Wright, Arthur R.

Miller & Mary Kay Kane, Federal Practice and Procedure §

3612 (3d ed. 2005)). More generally, the court must locate

“the center of one‟s business, domestic, social and civic life.”

Frett-Smith, 511 F.3d at 401.

IV.

We begin our review of the District Court‟s domicile

determination by noting a legal precept that may not have

been stressed before the District Court but that we

nonetheless consider important. As we have explained, an

individual‟s domicile changes instantly if he “takes up

residence at the new domicile” and “intend[s] to remain

9

there.” Krasnov, 465 F.2d at 1300. But “„[a] domicile once

acquired is presumed to continue until it is shown to have

been changed.‟” Korn, 398 F.2d at 691 n.4 (quoting Mitchell

v. United States, 88 U.S. 350, 353 (1874)). “This principle,”

we said in McCann, “gives rise to a presumption favoring an

established domicile over a new one.” McCann, 458 F.3d at

286-87 (citing Acridge v. Evangelical Lutheran Good

Samaritan Soc., 334 F.3d 444, 448 (5th Cir. 2003)); see also

Gutierrez v. Fox, 141 F.3d 425, 427 (2d Cir. 1998); State

Farm Mut. Auto. Ins. Co. v. Dyer, 19 F.3d 514, 519 (10th Cir.

1994); Holmes v. Sopuch, 639 F.2d 431, 434 (8th Cir. 1981);

Hawes v. Club Ecuestre El Comandante, 598 F.2d 698, 701

(1st Cir. 1979); Stine v. Moore, 213 F.2d 446, 447 (5th Cir.

1954); 13B Wright et al., supra, § 3612.

This presumption does not shift the burden of proof to

establish diversity of citizenship away from the proponent of

federal jurisdiction; the party asserting diversity jurisdiction –

here, Washington – retains the burden of proving that

diversity of citizenship exists by a preponderance of the

evidence. See Krasnov, 465 F.2d at 1301. Nevertheless, the

presumption does demand more from the party seeking to

establish a new domicile – here, Hovensa and Triangle – than

if that party were seeking to establish a continuing domicile.

See 13B Wright et al., supra, § 3612 (“The effect of this

presumption is to put a heavier burden on a party who is

trying to show a change of domicile than is placed on one

who is trying to show the retention of an existing or former

one.”).1 This “heavier burden” involves “shifting to . . . [the]

1

See also Fed. R. Evid. Rule 301 (“In all civil actions and

proceedings not otherwise provided for by Act of Congress or

by these rules, a presumption imposes on the party against

10

party [that bears it] the burden of production regarding the

change of domicile, not raising the standard of proof.”

McCann, 458 F.2d 281 at 287 n.3.2 When the party “claiming

a new domicile is the opponent of federal jurisdiction,” as

here, it “bears the initial burden of producing sufficient

evidence to rebut the presumption in favor of the established

domicile.” Id. at 288. If the opposing party – in this case,

Washington – is successful, the presumption is defeated, the

case proceeds, and “the party asserting jurisdiction bears the

burden of proving diversity of citizenship.” Id.

Here, while it is conceivable that defendants presented

enough evidence to meet their burden of production, it is not

clear from the District Court‟s opinion that it even considered

whom it is directed the burden of going forward with

evidence to rebut or meet the presumption, but does not shift

to such party the burden of proof in the sense of the risk of

nonpersuasion, which remains throughout the trial upon the

party on whom it was originally cast.”).

2

The burden of proof in a civil case has two distinct

components – the burden of going forward with proof, which

is referred to as the “burden of production,” and the burden of

persuading the trier of fact, known as the “burden of

persuasion.” McCann, 458 F.3d at 287. “The party bearing

the burden of persuasion must lose if the evidence is evenly

balanced. The burden of production, in contrast, does not

concern the quantum of proof required for a party to

ultimately prevail, but instead determines which party must

first present evidence sufficient to raise a given issue as

pertinent.” United States v. Harstock, 347 F.3d 1, 7 (1st Cir.

2003).

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the presumption as it weighed the evidence. Where so many

facts that our caselaw regards as important bolster the

baseline presumption that Washington retained her

established residence in Texas – from Washington‟s home

ownership, driver‟s license, vehicle registration, bank

account, cell phone, and primary care doctor in Texas to her

employer‟s per diem payments while she was in the V.I. –

defendants have a substantial initial hurdle to overcome in

introducing evidence that Washington was domiciled in the

V.I..3 We are not convinced that, in light of the presumption

3

Numerous cases focus on these very indicia as being

important. See, e.g., Frett-Smith, 511 F.3d at 401 (in ruling

that plaintiff was domiciled in the V.I., emphasizing that she

filed tax returns in the V.I. and had a U.S.V.I. driver‟s

license); Muscarello v. Ogle County Bd. of Comm’rs, 610

F.3d 416, 424 (7th Cir. 2010) (in finding that plaintiff was

domiciled in Arizona, pointing to her registration to vote in

Arizona, Arizona driver‟s license, and listing of her Arizona

address with Medicare and Social Security and on various

property tax bills); Garcia Perez v. Santaella, 364 F.3d 348,

352-53 (1st Cir. 2004) (finding that plaintiffs were domiciled

in Florida, which became their “personal and financial base,”

where they acquired Florida drivers‟ licenses, registered to

vote there, and opened a Miami bank account that they used

as their primary account); Schiavone v. Donovan, 2009 WL

2957315, at *3 (D.N.J. Sept. 15, 2009) (finding that the

preponderance of evidence supports a Florida domicile

where, among other facts pointing toward Florida, defendant

was registered to vote in Florida, had a Florida driver‟s

license, owned property there, had a bank account and safety

deposit box there, received a tax exemption there, and

registered a vehicle and maintained auto insurance there);

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of continued domicile, the District Court gave the facts

supporting the presumption of Washington‟s established

domicile in Texas all the weight they deserved. While the

District Court included these facts in its factual recitation,

they do not appear to have been given any weight in its

analysis.

The second legal principle we wish to stress relates to

the consideration to be given to an admittedly self-serving

affidavit. Washington submitted an affidavit after defendants

filed their motion to dismiss, stating that, at the time she filed

her complaint, she intended to return to Texas and to continue

to live in Texas once her project in the V.I. was completed.

Citing Korn, the District Court determined that the affidavit

“must be disregarded.” Washington, 2010 WL 1734775, at

*2. It provided no further explanation beyond this citation as

Doe v. Schwerzler, 2008 WL 1781986, at *3 (D.N.J. Apr. 17,

2008) (finding that plaintiff was domiciled in Kentucky based

on “proof . . . dispositive on the issue of her citizenship”: that

she had registered to vote in Kentucky, had a Kentucky

driver‟s license, leased property in Kentucky, and paid

utilities and income taxes there); Murphy v. Miller, 2005 WL

318749, at *1 (E.D. Pa. 2005) (concluding, based on “the

factors that have been analyzed time and time again in this

district,” – including defendant‟s opening a bank account in

California, buying and registering a car there, and applying

for a California driver‟s license – that he was domiciled in

California); Messick v. S. Pa. Bus Co., 59 F. Supp. 799 (D.C.

Pa. 1945) (in finding that plaintiff was domiciled in

Delaware, attaching significance to his home ownership, bank

account, and payment of taxes in Delaware).

13

to why it chose to disregard Washington‟s testimony or how

the situation in Korn maps onto the facts at issue here.

In Korn, we stated that “[o]ne's testimony as to his

intention to establish a domicile, while entitled to full and fair

consideration, is subject to the infirmity of any self-serving

declaration, and it cannot prevail to establish domicile when it

is contradicted or negatived by an inconsistent course of

conduct.” 398 F.2d at 691 (emphasis added). In Korn, a

divorce action, the plaintiff sought to establish domicile in St.

Thomas. He declared in an affidavit that he traveled to St.

Thomas with the intent to make it his permanent residence

and domicile. Yet, as we outlined in detail, his “entire course

of conduct” contradicted his declaration of intent.4 We thus

4

Plaintiff was a doctor who had practiced osteopathic

medicine in Philadelphia, Pennsylvania for thirty-one years

before going to St. Thomas. He had been convicted in

Philadelphia of performing an illegal abortion and was in the

midst of divorce proceedings in both Philadelphia and New

Jersey when he left suddenly for St. Thomas, discontinued the

pending actions, and commenced a new divorce suit. Despite

his testimony that he was coming to the V.I. to “make a new

life” and start a new practice there, he made no attempt to

ascertain the requirements for medical licensing until five

months after arriving there. Moreover, at the time he filed the

divorce action, he had made no attempt to establish a

permanent home in the V.I., had traveled back and forth to

the U.S. several times, had checked in and out of several

hotels in the V.I., continued to list his address on official

documents as Philadelphia, PA, and continued to maintain his

health insurance in Philadelphia. Korn, 398 F.3d at 693.

14

discounted his self-serving testimony that he planned to stay

in the V.I., and drew the “inescapable conclusion” that he was

forum shopping in his quest for a divorce. Id. at 693.

However, this is not a case like Korn where “the

surrounding facts and circumstances clearly indicate” that

plaintiff‟s testimony is fabricated. 398 F.2d at 691. To the

contrary, Washington‟s statement that she intended to return

to and reside in Texas is buttressed, not contradicted, by her

course of conduct at the time she filed her complaint.

Accordingly, Korn is not controlling, and Washington‟s

affidavit should not have been disregarded.

We think it is important that a court be guided by these

key legal principles in determining domicile, and we will

remand for it to do so and render its ruling giving them due

consideration.

V.

The District Court also made an error of fact. In its

brief consideration of the facts pointing toward the V.I., and

those pointing toward Texas, the District Court twice

mentioned that Washington‟s business, domestic and social

life was centered in St. Croix. Yet, little evidence in the

record supports this conclusion as to Washington‟s life at the

time she filed the complaint. Washington testified to living in

the same neighborhood as her sister and to starting a romantic

relationship with a V.I. resident prior to filing her complaint,

but the record is otherwise lacking in evidence that she

socialized often with her family or with other V.I. residents or

that her “business life” in the V.I. went beyond her temporary

employment assignment there.

15

On the other hand, the record does contain indicia that

her stay in the V.I. was transient and not permanent when she

filed her complaint. As mentioned above, Washington set up

none of the trappings of a “true, fixed and permanent home,”

McCann, 458 F.3d at 286, in the V.I., and her employer was

paying her a $100 per diem for living expenses at the time she

filed her complaint. The District Court does not mention

these facts in analyzing the issue.

This factual error does not render the District Court‟s

entire decision clearly erroneous, but it should be corrected

on remand, as it is not supported by evidence in the record.

VI.

Relatedly, we note that, while it is generally useful to

analogize fact patterns of other cases and base rulings on

outcomes in similar cases, it may not be quite so useful in this

type of case, where the facts presented can vary so slightly,

and yet the slightest variation leads to a different result.5

Here, the District Court concluded that Washington‟s

statement that the length of her job was “indefinite” when she

went to the V.I. made her case analogous to the situation in

Krasnov. In Krasnov, we ruled that defendant, a member of a

semi-monastic teaching order headquartered in Connecticut

5

Cf. Gallagher v. Philadelphia Transp. Co., 185 F.2d

543, 546 (3d Cir. 1951) (conceding that “there is a good deal

of rather ambiguous talk in the cases, some of which might

arguably be taken to support [the district court‟s] . . .

position,” but nonetheless reversing the district court‟s

domicile determination).

16

who was working in Pennsylvania when he filed his

complaint, was domiciled in Pennsylvania. Defendant was

regularly transferred to different locations for teaching

assignments. He had very few possessions and owned no

property other than a foot locker which accompanied him to

Pennsylvania. 465 F.3d at 1301. In determining that he was

a Pennsylvania domiciliary, we considered these facts as well

as his testimony that he intended to remain in Pennsylvania as

long as he was assigned to teach there and that the term of his

teaching assignment was indefinite. Id. at 1301-02.

However, there was no discussion in Krasnov of any other, let

alone established, residence to which the defendant said he

intended to return. Unlike Washington, he went from

assignment to assignment in a different location each time.

This variation in the facts makes a difference; here, we think,

it is an important one. Washington‟s testimony as to her lack

of knowledge of the length of her assignment in the V.I. is not

analogous to the situation in Krasnov.

Accordingly, we will vacate and remand for further

proceedings consistent with this opinion.

VII.

Washington also challenges the Magistrate Judge‟s

orders denying her motion for extension of expert deadlines

and granting defendants‟ motion to compel a medical

examination.6 We find that, because Washington failed to

6

We review a district court‟s discovery order for abuse of

discretion, and we will not disturb such an order absent a

showing of actual or substantial prejudice. Anderson v.

Wachovia Mortg. Corp., 621 F.2d 261, 281 (3d Cir. 2010).

17

follow the proper procedure to object to the Magistrate

Judge‟s order denying extension of expert deadlines, she has

waived her right to challenge this order on appeal. See

United Steelworkers of Am. v. New Jersey Zinc Co., 828 F.2d

1001, 1006 (3d Cir. 1987). Moreover, even if the issue were

not waived, we discern no abuse of discretion in the

Magistrate Judge‟s denial of Washington‟s request based on a

finding that Washington failed to establish good cause for

modifying the scheduling order. The Magistrate Judge also

did not abuse his discretion in granting appellees‟ motion to

compel a medical examination and in requiring Washington

to pay the expenses of the examination. Accordingly, we

affirm the Magistrate Judge‟s rulings on these motions.

18