The opinion
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ROBERT BARTON, et al., )
)
Plaintiffs, )
)
vs. ) 2:17-CV-618-SLB
)
NATIONWIDE MUTUAL FIRE )
INSURANCE COMPANY, )
)
Defendant. )
MEMORANDUM OPINION AND ORDER
This matter comes before the court on an order from the Eleventh Circuit
Court of Appeals, remanding this case solely “for the limited purpose of
determining the citizenship of the parties, to establish whether diversity citizenship
existed.” (Doc. 83 at 2).1 This court entered an Order to Show Cause directing the
Plaintiffs to show whether diversity jurisdiction exists in this case. (Doc. 84). For
the reasons set forth below, the court finds that the Plaintiffs have failed to show
that diversity jurisdiction exists.
I. BACKGROUND
On April 17, 2017, Plaintiffs Robert and Mindy Barton filed a complaint in
1 Reference to a document number, [“Doc. ___”], refers to the number
assigned to each document as it is filed in the court’s record. Page number
citations refer to the page numbers assigned to the document by the court’s
CM/ECF electronic filing system.
this court against Stacy Alliston Design and Building, Inc. (“SADB”) and
Nationwide Mutual Fire Insurance Company (“Nationwide”), seeking recovery
from insurer Nationwide for a $900,000 state court judgment against SADB—
Nationwide’s insured. (Doc. 1). The Bartons invoked this court’s diversity
jurisdiction under 28 U.S.C. § 1332. (Id. at 2). The Bartons alleged in the
complaint that they were residents of Alabama, that SADB was “a domestic
corporation licensed to do and doing business in Jefferson County, Alabama,” and
that Nationwide was “an Ohio corporation that does business in Alabama.” (Id. at
2).
Before the case was reassigned to the undersigned, this court spoke to the
issue of diversity jurisdiction on one occasion as the case proceeded. The court
realigned SADB as a plaintiff rather than a defendant because both SADB and the
Bartons effectively sought recovery from Nationwide, and, thus, had aligned
interests. (Doc. 21). In that Order, the court passingly stated, without going into
extensive detail or setting forth the specific factual allegations supporting the
citizenship of the parties, that diversity jurisdiction existed because the Plaintiffs
were all citizens of Alabama and Nationwide was a citizen of Ohio. (Id. at 2).
The case continued through summary judgment and to a bench trial, after
which this court granted judgment in favor of Nationwide. (Doc. 77). The Bartons
appealed the judgment to the Eleventh Circuit Court of Appeals. (Doc. 78).
Before reaching the merits of the appeal, however, the Eleventh Circuit remanded
the case to this court “for the limited purpose of determining the citizenship of the
parties, to establish whether diversity citizenship existed.” (Doc. 83 at 2). The
Eleventh Circuit noted that “the allegations in the complaint were insufficient to
establish the citizenship of the Bartons, co-plaintiff Stacy Alliston Design and
Building, Inc., and Nationwide at the time that it was filed.” (Id. at 1). This court
then entered an Order to Show Cause, requiring the Plaintiffs to show cause in
writing and through the production of evidence why the court had diversity
jurisdiction over this case. (Doc. 84).
Plaintiffs Robert and Mindy Barton filed a response asserting that the record
shows that complete diversity exists in this case. (Doc. 85). They argue that this
court has already found that diversity jurisdiction exists, further asserting that the
record supports that finding because the record shows that the Bartons reside in
Alabama and intend to remain there. (Id. at 2–5). The Bartons also attached a
Proposed First Amended Complaint that they say “specifically and properly alleges
the ‘citizenship’ of all the parties”; they request leave to amend their complaint if
necessary. (Id. at 5–6).
The proposed First Amended Complaint attached by the Bartons alleges that
the Bartons reside in Alabama, intend to remain in Alabama, are domiciled in
Alabama, and are citizens of Alabama. (Doc. 85-3 at 2). The Amended Complaint
also alleges that SADB is a citizen of Alabama that was incorporated in Shelby
County, Alabama, and that has a registered office in Sterrett, Alabama. (Id. at 2–
3). As for Nationwide, the Amended Complaint alleges that Nationwide is a
citizen of Ohio, stating that Nationwide was incorporated in Columbus, Ohio, and
has a “principal address” in Columbus, Ohio. (Id. at 3). The Bartons included
business entity information from the Alabama Secretary of State’s Office with both
their response and the proposed Amended Complaint. (Doc. 85-1); (Doc. 85-2);
(Doc. 85-3 at 8–9). The information from the Alabama Secretary of State shows
that SADB was incorporated in Shelby County, Alabama, in August 2000, then
was dissolved in December 2015, and had a principal address in Sterrett, Alabama.
(Doc. 85-1); (Doc. 85-3 at 8). The Secretary of State information shows that
Nationwide was incorporated in Ohio in 1933 and has a “principal address” in
Columbus, Ohio. (Doc. 85-2); (Doc. 85-3 at 2).
Nationwide did not file a reply.
II. STANDARD OF REVIEW
Federal jurisdiction is premised on either a federal question or diversity of
citizenship. See 28 U.S.C. §§ 1331, 1332. Pursuant to 28 U.S.C. § 1332, a district
court has diversity jurisdiction over civil actions where there is complete diversity
of citizenship between plaintiffs and defendants, among other requirements.
Complete diversity requires that “every plaintiff must be diverse from every
defendant.” Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir.
1998). Diversity jurisdiction is determined at the time a complaint is filed.
Thermoset Corp. v. Bldg. Materials Corp of Am., 849 F.3d 1313, 1317 (11th Cir.
2017).
If a plaintiff asserts diversity jurisdiction, the plaintiff “has the burden to
prove that there is diversity.” King v. Cessna Aircraft Co., 505 F.3d 1160, 1171
(11th Cir. 2007). Thus, the plaintiff “must allege facts that, if true, show federal
subject matter jurisdiction over her case exists.” Travaglio v. Am. Exp. Co., 735
F.3d 1266, 1268 (11th Cir. 2013). Those jurisdictional allegations “must include
the citizenship of each party, so that the court is satisfied that no plaintiff is a
citizen of the same state as any defendant.” Id.
Individual citizenship is determined by a person’s domicile, which requires
both residence in a place and the intention to remain there indefinitely. Travaglio,
735 F.3d at 1269. Residence alone, as opposed to domicile, does not convey
citizenship for the purposes of establishing diversity jurisdiction. Id.
Unlike an individual, a corporation is a citizen for the purposes of diversity
jurisdiction in both its state of incorporation and the state where it has its principal
place of business. 28 U.S.C. § 1332(c)(1). The Supreme Court has held that “the
phrase ‘principal place of business’ refers to the place where the corporation’s high
level officers direct, control, and coordinate the corporation’s activities.” Hertz
Corp. v. Friend, 559 U.S. 77, 80 (2010). In Hertz, the Supreme Court adopted a
“nerve-center” test to determine the single place where a corporation has its
principal place of business, noting that a corporation’s principal place of business
will typically be where the corporation maintains its headquarters, “provided that
the headquarters is the actual center of direction, control, and coordination, i.e., the
‘nerve center,’ and not simply an office where the corporation holds its board
meetings.” Id. at 92–93. The Supreme Court commented in Hertz that it rejected
the idea that “the mere filing of a form like the Securities and Exchange
Commission’s Form 10–K listing a corporation’s ‘principal executive offices’
would, without more, be sufficient proof to establish a corporation’s ‘nerve
center.’” Id. at 97. Considering Hertz, the Eleventh Circuit has held that, without
more, an allegation of a corporation’s “Principal Office Address” as listed with a
state’s Secretary of State is insufficient to allege a principal place of business under
the “nerve center” test to establish diversity jurisdiction. Wylie v. Red Bull N. Am.,
Inc., 627 F. App’x 755, 758 (11th Cir. 2015).
Where pleadings do not sufficiently allege facts to support jurisdiction,
“[d]efective allegations of jurisdiction may be amended, upon terms, in the trial or
appellate courts.” 28 U.S.C. § 1653. Additionally, the court can look to record
evidence to cure defective allegations of citizenship for the purposes of diversity
jurisdiction. Travaglio, 735 F.3d at 1269. Where a court cannot find clearly
alleged diversity of citizenship, the court must dismiss the case for lack of
jurisdiction. Id.
III. DISCUSSION
In this case, the Bartons’ response to this court’s Order to Show Cause and
their proposed Amended Complaint fail to sufficiently allege the citizenship of the
parties to support diversity jurisdiction under 28 U.S.C. § 1332. While the Bartons
have provided sufficient information to determine the citizenship of the Plaintiffs,
they have not provided the necessary information to determine the citizenship of
Defendant Nationwide, as required to show complete diversity between plaintiffs
and defendants. See Triggs, 154 F.3d at 1287.
In their response, the Bartons state that the record shows that they are
domiciled in Alabama. (Doc. 85 at 4–5). Additionally, in their proposed Amended
Complaint, the Bartons allege that they have lived at a specific home in Alabama
since 2006, have never resided in any state other than Alabama, and intend to
continue living in Alabama. (Doc. 85-3 at 2). Thus, the proposed Amended
Complaint shows that the Bartons are domiciled in Alabama, as they reside in
Alabama and intend to remain there. See Travaglio, 735 F.3d at 1269. The
allegations of domicile establish that the Bartons are citizens of Alabama for the
purposes of diversity jurisdiction. See id.
The Bartons’ proposed Amended Complaint also alleges that SADB is a
citizen of Alabama for the purposes of diversity jurisdiction. The proposed
Amended Complaint alleges that SADB was incorporated in Shelby County,
Alabama, and has a registered office in Sterrett, Alabama. (Doc. 85-3 at 2–3). The
Bartons also include information from the Alabama Secretary of State showing that
SADB was incorporated in Alabama in August of 2000, but then dissolved in
December 2015. (Id. at 8). Thus, SADB was already dissolved when the Bartons
filed their complaint in 2017. See (Doc. 1). A corporation that has dissolved “has
no principal place of business.” Holston Invs., Inc. B.V.I. v. LanLogistics Corp.,
677 F.3d 1068, 1071 (11th Cir. 2012). Since diversity jurisdiction is determined at
the time a complaint is filed and SADB had no principal place of business in 2017,
SADB was a citizen of Alabama, its state of incorporation. See Thermoset Corp.,
849 F.3d at 1317; 28 U.S.C. § 1332(c)(1). Accordingly, the record and the
Bartons’ proposed Amended Complaint show that the Plaintiffs in this case are all
citizens of Alabama for the purposes of diversity jurisdiction.
The court finds no such basis for citizenship as to Defendant Nationwide.
The Bartons’ proposed Amended Complaint alleges that Defendant Nationwide is
incorporated in Columbus, Ohio, and has a “principal address” in Columbus, Ohio.
(Doc. 85-3 at 3). The Plaintiffs also include information from the Alabama
Secretary of State providing Nationwide’s state of incorporation and “principal
address.” (Id. at 9). However, nowhere in their response or their proposed
Amended Complaint do the Bartons allege Nationwide’s principal place of
business, as required for determining a corporation’s citizenship. See 28 U.S.C.
§ 1332(c)(1). Instead, they merely state Nationwide’s “principal address.” See
(Doc. 85-2); (Doc. 85-3 at 3, 9). As the Supreme Court suggested in Hertz and as
the Eleventh Circuit held in Wylie, alleging a corporation’s principal address as
found on a form is not the same as alleging or showing the corporation’s “nerve
center” and principal place of business. See Hertz, 559 U.S. at 92–93, 97; Wylie,
627 F. App’x at 758. Because the Bartons have not alleged, and the record does
not show, any facts regarding Nationwide’s principal place of business, the court
cannot determine Nationwide’s citizenship for the purposes of establishing
diversity jurisdiction. See 28 U.S.C. § 1332(c)(1). Therefore, the Plaintiffs have
not met their burden of proving diversity jurisdiction by alleging the citizenship of
the parties such that “the court is satisfied that no plaintiff is a citizen of the same
state as any defendant.” Travaglio, 735 F.3d at 1268.
IV. CONCLUSION
Accordingly, based on the Bartons’ response and proposed Amended
Complaint, the court still cannot determine “that the parties were completely
diverse,” as requested in the Eleventh Circuit’s Order remanding this case. See
(Doc. 83 at 2). Because the court still cannot verify the existence of diversity
jurisdiction pursuant to 28 U.S.C. § 1332, the court ORDERS the Plaintiffs to file
on or before August 17, 2021, an amended complaint properly alleging the
citizenship of the parties in this case, such that the court can verify the existence of
diversity jurisdiction. If the Plaintiffs again fail to properly allege citizenship for
the purposes of diversity jurisdiction, this court will dismiss the case for lack of
jurisdiction. Otherwise, the court will confirm the existence of diversity
jurisdiction and return this case to the Eleventh Circuit.
DONE and ORDERED this 10th day of August, 2021.
Shas Lovelace Plackbun
SHARON LOVELACE BLACKBURN”
UNITED STATES DISTRICT JUDGE
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