Diversity of Citizenship is Determined at Time Suit is Instituted, and Not When the Cause of Action Arose

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Todd A. Duckson, Civil No. 11-1647 (DWF/AJB)
Plaintiff,
v. MEMORANDUM
OPINION AND ORDER
Christopher E. Clouser,
Defendant.
INTRODUCTION
This matter is before the Court on Plaintiff’s Motion to Remand (Doc. No. 4). For
the reasons set forth below, the Court denies Plaintiff’s motion.
BACKGROUND
Plaintiff initiated this action in Scott County District Court asserting a claim of
defamation against Defendant Christopher E. Clouser and seeking judgment “in an
amount in excess of $50,000.” (Doc. No. 1, Ex. A, Compl. at 4.) The complaint alleges
that, “[o]n or about February 22, 2011 through May 24, 2011, Defendant Clouser
published a series of defamatory e-mails [about Plaintiff] to numerous associates of
Plaintiff.” (Compl. ¶ 12.) On June 24, 2011, Defendant removed the action to this Court,
citing diversity of citizenship between the parties and “an amount in controversy greater
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than $75,000.00.” (Doc. No. 1 at 1.) Plaintiff now moves the Court to remand this action
to the state court from which it was removed pursuant to 28 U.S.C. § 1447(c).
DISCUSSION
I. Legal Standard
Pursuant to 28 U.S.C. § 1441(a), a defendant may remove “any civil action
brought in a State court of which the district courts of the United States have original
jurisdiction . . . to the district court of the United States for the district and division
embracing the place where such action is pending.” A party opposing removal may bring
a motion requesting that the federal court remand the case back to state court. 28 U.S.C.
§ 1447(c). The district court shall remand the case back to state court if it determines that
the court lacks subject matter jurisdiction. 28 U.S .C. § 1447(c); Martin v. Franklin
Capital Corp., 546 U.S. 132, 134 (2005). On a motion to remand, the party seeking
removal and opposing remand bears the burden of demonstrating federal jurisdiction by a
preponderance of the evidence. In re Prempro Prods. Liab. Litig., 591 F.3d 613, 620 (8th
Cir. 2010); In re Bus. Men’s Assur. Co. of Am., 992 F.2d 181, 183 (8th Cir. 1993). The
Court should resolve any doubt as to the propriety of removal in favor of remand.
Prempro, 591 F.3d at 620; Bus. Men’s Assur., 992 F.2d at 183.
II. Motion to Remand
Diversity jurisdiction exists where there is (1) complete diversity of citizenship
and (2) the amount in controversy exceeds the jurisdictional minimum of $75,000,
exclusive of interest and costs. 28 U.S.C. § 1332(a). “The existence of diversity of
citizenship is determined at the time the suit is instituted, and not when the cause of
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action arose.” Yeldell v. Tutt, 913 F.2d 533, 537 (8th Cir. 1990) (citing Smith v. Snerling,
354 U.S. 91, 93 n.1 (1957)).
Plaintiff does not dispute that the amount in controversy in this case exceeds
$75,000.1 Rather, Plaintiff argues that Defendant is a citizen of the State of Minnesota,
not the State of Florida, thus defeating diversity jurisdiction. Plaintiff asserts that
evidence that Defendant was served by substituted service at a residence on Green Trees
Road in Wayzata, Minnesota (Doc. No. 14, Carlson Aff. ¶ 3, Ex. A), and that the property
(which is held in trust by Defendant’s wife) is designated as a homestead (id. ¶ 4, Ex. B),
demonstrates that Defendant is and was domiciled in Minnesota during the relevant time
period.
The terms “domicile” and “citizenship” are synonymous for purposes of diversity
jurisdiction. Yeldell, 913 F.2d at 537. “To establish domicile, an individual must both be
physically present in the state and have the intent to make his home there indefinitely.”
Id. Intention to remain in the state permanently, however, is not necessary. Id. Once an
individual has established domicile in a particular state, he remains domiciled there until
he legally acquires a new domicile. Id.
Notably, the record is substantially lacking with respect to the relevant time period
surrounding this action. Therefore, the Court’s decision in this case is a close one. Still,
the Court finds that Defendant has demonstrated, by a preponderance of evidence, that he
was a citizen of Florida at the time this suit was initiated on or about June 8, 2011.
1 The Court notes that Plaintiff’s complaint seeks judgment “in excess of $50,000”
in addition to attorneys’ fees and costs. (Compl. at 4.) Plaintiff’s counsel conceded at
the hearing, however, that the amount in controversy exceeds $75,000.
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Defendant submitted an affidavit (dated September 28, 2011) in opposition to
Plaintiff’s motion in which he states that he has not lived in Minnesota since September
2010 and that he “presently reside[s]” in Wellington, Florida. (See Doc. No. 18, Clouser
Aff. ¶ 7.) While Defendant also states that he was in Rhode Island “attending to
business” on June 8, 2011 (the date the complaint was purportedly served on Defendant’s
wife at her home in Minnesota),2 the affidavit does not specifically state where Defendant
resided on that date. (Id. ¶ 10; Carlson Aff. ¶ 3, Ex. A.) Still, Defendant claims that he
has “been a Florida citizen for many years,” he is registered to vote in Florida, owns a
home in Florida, and possesses a valid Florida driver’s license (issued in 2008). (Clouser
Aff. ¶¶ 1, 5, 7, Exs. C, E.) Defendant further represents that his wife “put the Minnesota
home up for sale” once he “returned to Florida in September 2010” and that the couple
intends to claim the Florida home as their homestead upon the sale of the Minnesota
home. (Id. ¶ 8.)
Additionally, on December 15, 2010, Plaintiff’s employment as Chairman for the
International Tennis Hall of Fame & Museum went into effect through 2013. (Id. ¶ 4,
Ex. B.) The employment letter bearing the same date provides that, as part of his
responsibilities, Defendant “will lead the Board of Directors and the 2011-2013 capital
campaign from [Defendant’s] home in Wellington, Florida and at [International Tennis
Hall of Fame] headquarters in Newport, Rhode Island.” (Id.)
2 At the time of service, the female upon whom service was made “would not
identify herself other than that she resided therein and confirmed that Christopher Clouser
resided there.” (Carlson Aff. ¶ 3, Ex. A.)
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Having considered the evidence in the record, the Court finds that Defendant has
established a physical presence in Florida as well as an intent to remain in Florida
indefinitely as of September 2010. Consequently, the Court concludes, on the record
now before it, that Defendant has met his burden of establishing federal jurisdiction by a
preponderance of the evidence. The Court thus denies Plaintiff’s motion to remand.3
ORDER
Based upon the foregoing, and the files, records, and proceedings herein, IT IS
HEREBY ORDERED that Plaintiff’s Motion to Remand (Doc. No. [4]) is DENIED.
Dated: November 4, 2011 s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge
3 Conspicuous by its absence, however, is any evidence as to Defendant’s presence
in Florida on or about June 8, 2011. Defendant admits that he “was in Newport,
Rhode Island attending to business” on that date and that he “visited Minnesota to
celebrate Father’s Day on June 18-19” before leaving for London, England on June 20,
2011. (Clouser Aff. ¶ 10.) Also suspicious is Defendant’s claim that “in the last 12
months, [he has] only physically been in the State of Minnesota 48 times.” (Id. ¶ 9.) The
Court notes that its decision is a close one given the lack of objective evidence in the
record to support Defendant’s claimed intent to remain in Florida at the relevant time.
The Court denies Plaintiff’s motion but notes that, if the parties’ discovery efforts reveal
compelling evidence on the issue of subject matter jurisdiction, the Court will entertain a
motion for reconsideration of this order from either party. See D. Minn. LR 7.1(h);
28 U.S.C. § 1447(c) (“If at any time before final judgment it appears that the district
court lacks subject matter jurisdiction, the case shall be remanded.”); see also Bus. Men’s
Assur., 992 F.2d at 181 (noting that the district court did not abuse its discretion by not
conducting an evidentiary hearing “to resolve its doubts about federal jurisdiction” where
no such hearing was requested by the party seeking removal and the court remanded).
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