BlueTarp Fincl v. Robertson ( 2021 )

Case: 21-30056 Document: 00515998552 Page: 1 Date Filed: 08/27/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
No. 21-30056 August 27, 2021
Lyle W. Cayce
Clerk
BlueTarp Financial, Incorporated,
Plaintiff—Appellee,
versus
Robertson Development, L.L.C.,
Defendant—Appellant.
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:19-CV-13006
Before Elrod, Southwick, and Costa, Circuit Judges.
Per Curiam:*
This case arises out of a dispute over an unpaid line of credit between
the parties. Because it is unclear whether the district court had diversity
jurisdiction over the case, we issue a limited remand to the district court to
make this determination in the first instance.
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 21-30056 Document: 00515998552 Page: 2 Date Filed: 08/27/2021
No. 21-30056
I.
BlueTarp Financial, Inc. provides lines of credit to businesses so that
those businesses can purchase building materials. Robertson Development,
LLC, took out a line of credit to purchase supplies from Morrison
Terrebonne Lumber Center. Robertson Development failed to make its
payments to BlueTarp on that line of credit. At that point, Robertson
Development executed a promissory note promising to pay back the account
balance of $290,694.10 to BlueTarp. Robertson Development also failed to
pay that amount according to the terms of the promissory note.
The parties next entered a settlement agreement wherein Robertson
Development pledged to pay $75,000 over several monthly installments to
satisfy its debt to BlueTarp. That agreement provided that if Robertson
Development failed to make two consecutive payments at any time, then
“the balance [would] revert back to the original amount.” After Robertson
Development missed its payments, and after BlueTarp had sent a final
demand letter to try to prompt more consistent payments, BlueTarp filed the
present action in federal court to enforce the settlement agreement.
BlueTarp filed for summary judgment, which the district court
granted in part. Later, BlueTarp filed a second motion for summary
judgment, which was also granted in part. Robertson Development now
appeals both partial grants of summary judgment.
II.
For the first time on appeal, Robertson Development argues that the
district court lacked subject matter jurisdiction over this case. Of course,
objections to subject matter jurisdiction “may be resurrected at any point in
the litigation” because “[s]ubject-matter jurisdiction can never be waived or
forfeited.” Gonzalez v. Thaler, 565 U.S. 134, 141 (2012). We address
2
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questions of subject matter jurisdiction de novo.1 Goodrich v. United States, 3
F.4th 776, 779 (5th Cir. 2021). “[P]arties must make ‘clear, distinct, and
precise affirmative jurisdictional allegations’ in their pleadings.” MidCap
Media Fin., L.L.C. v. Pathway Data, Inc., 929 F.3d 310, 313 (5th Cir. 2019)
(quoting Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1259 (5th Cir.
1988)). For diversity cases under 28 U.S.C. § 1332, this means that the
complaint must allege complete diversity of citizenship between the parties.
See id.BlueTarp failed to allege complete diversity even though it relied on
§ 1332 as the basis for federal jurisdiction. According to the complaint,
BlueTarp is a Maine corporation with its principal place of business in Maine
and Robertson Development is a “Louisiana corporation whose principal
place of business” is in Louisiana.
But according to Robertson Development’s filings with the Louisiana
Secretary of State,2 Robertson Development, LLC is, as its name suggests, a
limited liability company, not a corporation. Whereas the citizenship of a
corporation is determined by its place of incorporation and its principal place
of business, “the citizenship of a[n] LLC is determined by the citizenship of
all of its members.” Id. at 314 (quoting Harvey v. Grey Wolf Drilling Co., 542
F.3d 1077, 1080 (5th Cir. 2008)). BlueTarp did not allege the citizenship of
Robertson’s members in its initial complaint. It therefore failed to properly
allege complete diversity of citizenship.
1
Even if the district court lacked jurisdiction, “we have jurisdiction on appeal, not
on the merits but for the purpose of addressing the lower court’s jurisdiction to entertain
the suit.” Griffin v. Lee, 621 F.3d 380, 384 (5th Cir. 2010).
2
We are permitted to take judicial notice of a “fact that is not subject to reasonable
dispute,” such as facts contained in public filings. Fed. R. Evid. 201(b); MidCap, 929 F.3d
at 315.
3
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No. 21-30056
Under 28 U.S.C. § 1653, “[d]efective allegations of jurisdiction may
be amended, upon terms, in the trial or appellate courts.” We have
interpreted this to mean that in cases “[w]here jurisdiction is clear from the
record,” we may allow “direct amendments to the pleadings without a
remand.” Molett v. Penrod Drilling Co., 872 F.2d 1221, 1228 (5th Cir. 1989).
And if “jurisdiction is not clear from the record, but there is some reason to
believe that jurisdiction exists, the Court may remand the case to the district
court for amendment of the allegations and for the record to be
supplemented.” Id. However, “if there is no evidence of diversity on the
record, we cannot find diversity jurisdiction, and we must dismiss the action
for lack of jurisdiction.” Howery v. Allstate Ins. Co., 243 F.3d 912, 920 (5th
Cir. 2001).
It is unclear on this record who the members of Robertson
Development are or what their citizenship may be.3 It is, however, possible
that jurisdiction exists. We therefore issue a limited remand to the district
court to determine whether it has diversity jurisdiction. If jurisdiction does
not exist, then the district court must dismiss the case. If there is subject
matter jurisdiction, then the record on appeal should be supplemented
accordingly.
3
Robertson Development has also argued on appeal that Morrison Lumber is a
necessary party to this litigation, yet its citizenship has not been alleged either. On remand,
the district court should determine: (1) whether Morrison Lumber is indeed a necessary
party to this case; and (2) if so, whether diversity jurisdiction still exists after accounting
for Morrison Lumber’s citizenship.
4