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Geico General Insurance Co. v. Palmer

United States District Court, D. Arizona

January 25, 2017

Geico General Insurance Company, Plaintiff,
v.
Garrett Miera Palmer, et al., Defendants.

          ORDER

          Paul G. Rosenblatt United States District Judge

         In its Complaint for Declaratory Relief (Doc. 1), the plaintiff alleges that this Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1332(a). Having reviewed the complaint upon its reassignment to the undersigned Judge, the Court finds that the jurisdictional allegations therein are insufficient as a matter of law to establish the existence of subject matter jurisdiction. The Court will therefore require the plaintiff to file an amended complaint properly stating a jurisdictional basis for this action. See 28 U.S.C. § 1653; see also, Smith v. McCullough, 270 U.S. 456, 459, 46 S.Ct. 338, 339 (1926) ("The established rule is that a plaintiff, suing in federal court, must show in his pleading, affirmatively and distinctly, the existence of whatever is essential to federal jurisdiction, and, if he does not do so, the court, on having the defect called to its attention or on discovering the same, must dismiss the case, unless the defect be corrected by amendment.")

         The existence of diversity jurisdiction is not evident from the face of the complaint inasmuch as the complaint fails to properly allege the citizenship of any party.

         First, the plaintiff alleges that it “is a foreign insurer headquartered in Chevy Chase, Maryland, with its principal place of business located in Chevy Chase, Maryland, authorized to do business and doing business in the State of Arizona.” This is insufficient for § 1332 purposes because an allegation of citizenship of a corporation requires an affirmative statement of the state by which it was incorporated as well as the state in which it has its principal place of business.

         Second, the complaint alleges that defendants Garrett Miera Palmer, Garrett McDaniel, and Ronald and Marti McDaniel are all “residents of Saint Johns, Arizona.” These allegations are deficient as a matter of law because allegations of residency do not suffice for purposes of § 1332. See Steigleder v. McQuesten, 198 U.S. 141, 143, 25 S.Ct. 616, 617 (1905) ("It has long been settled that residence and citizenship [are] wholly different things within the meaning of the Constitution and the laws defining and regulating the jurisdiction of the ... courts of the United States; and that a mere averment of residence in a particular state is not an averment of citizenship in that state for the purpose of jurisdiction."); accord, Kanter v. Warner-Lambert Co., 265 F.3d 853, 857-58 (9th Cir. 2001) (“Plaintiffs' complaint ... state[s] that Plaintiffs were 'residents' of California. But the diversity jurisdiction statute, 28 U.S.C. § 1332, speaks of citizenship, not of residency. ... [The] failure to specify Plaintiffs' state of citizenship was fatal to [the] assertion of diversity jurisdiction.")

         Third, the complaint alleges that defendant Seneca Homes, LLC is “a corporation incorporated in the State of Arizona with its primary place of business in Saint Johns, Arizona.” This allegation is deficient as a matter of law because a limited liability company is not treated as a corporation for purposes of determining whether diversity of citizenship exists under § 1332; rather, the citizenship of a LLC is the citizenship of each of its members. Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) ("Notwithstanding LLCs' corporate traits, ... every circuit that has addressed the question treats them like partnerships for the purposes of diversity jurisdiction. ... We therefore join our sister circuits and hold that, like a partnership, an LLC is a citizen of every state of which its owners/members are citizens.") Since the complaint fails to set forth the citizenship of any member of Seneca Homes, LLC, the Court will require the plaintiff to specifically identity in its amended complaint each Seneca Homes' member by name, specifically allege the type of business entity that any non-individual member is, and affirmatively allege the state of citizenship of each member.[1]

         The plaintiff is advised that its failure to timely or sufficiently comply with this order will result in the dismissal of this action for lack of subject matter jurisdiction. Therefore, IT IS ORDERED that the plaintiff's Complaint for Declaratory Relief (Doc. 1) is dismissed for lack of subject matter jurisdiction.

         IT IS FURTHER ORDERED that the plaintiff shall file an amended complaint properly stating a jurisdictional basis for this action no later than February 17, 2017.

         IT IS FURTHER ORDERED that the Clerk's Entry of Default for Garrett McDaniel (Doc. 25) and Garrett Miera Palmer (Doc. 35) are both vacated.

         IT IS FURTHER ORDERED that defendant Garrett McDaniel's motion for an extension of time to answer (Doc. 42) is denied as unnecessary.

         IT IS FURTHER ORDERED that the caption of all future documents filed in this action must comply with the party name capitalization rule of LRCiv 7.1(a)(3).

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Notes:

[1]Since only a corporation or an individual may be a citizen for purposes of ยง 1332 jurisdiction, the amended complaint must set forth any sub-layers of partners or members ...


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