Core VCT Plc v. Hensley ( 2014 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
CORE VCT PLC,
CORE VCT IV PLC, and
CORE VCT V PLC
Plaintiffs, Civil Action No. 14-0074 (ESH)
v.
JAMES HENSLEY,
Defendant.
MEMORANDUM OPINION AND ORDER
Before the Court is defendant James Hensley’s motion pursuant to Federal Rule of Civil
Procedure 12(b)(1) to dismiss the complaint for lack of subject matter jurisdiction. (Def.’s Mot.
to Dismiss, Feb. 27, 2014 [ECF No. 4] (“Def.’s Mot.”).) For the reasons stated herein, the Court
will deny the motion without prejudice and refer the case to a magistrate judge for an evidentiary
hearing on the question of jurisdiction.
BACKGROUND
Plaintiffs Core VCT Plc, Core VCT IV Plc, and Core VCT Plc (collectively “Core”) are
public limited companies organized under the laws of the United Kingdom. (Compl. ¶ 1, Jan.
17, 2014 [ECF No. 1].) Invoking the Court’s diversity jurisdiction, see 28 U.S.C. § 1332(a)(2),
they have filed a complaint seeking recognition and enforcement of a judgment of the United
Kingdom’s High Court of Justice pursuant to the Uniform Foreign-Country Money Judgments
Recognition Act of 2011, D.C. Code § 15-361 et seq. (the “Act”). (Compl. ¶¶ 3, 11-13.)
Defendant, a United States citizen, has moved to dismiss the complaint for lack of jurisdiction on
the ground that he is a United States citizen domiciled abroad in Monaco and thus not subject to
a suit in federal court based on diversity jurisdiction. (Def.’s Mot. at 1; id. Ex. A (Decl. of James
Hensley, Feb. 27, 2014) (“1st Hensley Decl.”).) After defendant filed his motion to dismiss,
plaintiffs sought the opportunity to engage in limited written jurisdictional discovery, presenting
evidence that arguably contradicted defendant’s claim to be domiciled in Monaco. (Pls.’ Mem.
in Support of Mot. for Jurisdictional Discovery at 2, Mar. 14, 2014 [ECF No. 5]; id. Exs. A-E.)
After considering defendant’s opposition and amended declaration (see Def.’s Opp. to Pls.’ Mot.
for Jurisdictional Discovery, Mar. 28, 2014 [ECF No. 6]; id. Ex. A (Decl. of James Hensley,
Mar. 27, 2014) (“2d Hensley Decl.”)), and plaintiffs’ reply (see Pls.’ Reply in Support of Mot.
for Jurisdictional Discovery, Apr. 7, 2014 [ECF No. 7] (“Pls.’ Reply”) the Court authorized
jurisdictional discovery as proposed in plaintiffs’ motion.1 (Memorandum Opinion and Order at
3, Apr. 8, 2014 [ECF No. 8]).) Plaintiffs then filed their response to the motion to dismiss,
disputing defendant’s claim to be domiciled in Monaco and arguing that the evidence before the
Court establishes that defendant is domiciled in Illinois. (Pls.’ Opp. to Def.’s Mot. to Dismiss,
May 23, 2014 [ECF No. 9] (“Pls.’ Opp.”).)
ANALYSIS
In relevant part, the diversity jurisdiction statute provides that federal district courts have
“jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of
$75,000, exclusive of interest and costs, and is between . . . citizens of a State and citizens or
subjects of a foreign state.” 28 U.S.C. § 1332(a)(2) (emphasis added). For purposes of diversity
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In resolving a jurisdictional dispute, “the court has considerable latitude in devising the
procedures it will follow to ferret out the facts pertinent to jurisdiction.” Prakash v. Am. Univ.,
727 F.2d 1174, 1179 (D.C. Cir. 1984). The court is not limited to the factual allegations in the
complaint, but “may also consider material outside of the pleadings in its effort to determine
whether the court has jurisdiction in the case.” Id.
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jurisdiction, a person is a “citizen of the State” in which he is domiciled. See Prakash v. Am.
Univ., 727 F.2d 1174, 1180 (D.C. Cir. 1984). However, a United States citizen who “has no
domicile in any State . . . is stateless” and cannot sue or be sued in federal court on the basis of
diversity. See Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828 (1989); see also
Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 68 (2d Cir. 1990) (“Though we are unclear as to
Congress’s rationale for not granting United States citizens domiciled abroad rights parallel to
those it accords to foreign nationals, the language of § 1332(a) is specific and requires the
conclusion that a suit by or against United States citizens domiciled abroad may not be premised
on diversity.”). As “diversity of citizenship is assessed at the time the action is filed,” Freeport-
McMoRan, Inc. v. K N Energy, Inc., 498 U.S. 426, 428 (1991), the question for the Court is
whether defendant was domiciled in Illinois and thus a “citizen of a State” or domiciled in
Monaco and thus “stateless” at the time this action was filed.
A person’s “[d]omicile is determined by two factors: physical presence in a state, and
intent to remain there for an unspecified or indefinite period of time.” Prakash v. Am. Univ., 727
F.2d at 1180. Although “residency is indicative of domicile, it is not determinative.” Naegele v.
Albers, 355 F. Supp. 2d 129, 134-35 (D.D.C. 2005); see also Shafer v. Children's Hosp. Soc’y of
Los Angeles, 265 F.2d 107, 121 (D.C. Cir. 1959) (“[D]omicile and residence are two different
things.”); United States v. Williams, 825 F. Supp. 2d 117, 124 (D.D.C. 2011) (residence is “[t]he
act or fact of living in a given place for some time, while domicile is a person's true, fixed,
principal, and permanent home, to which that person intends to return and remain even though
currently residing elsewhere”). Indeed, a person may have multiple residences, but may have
only one domicile, and a person may be a resident of one locality, but be domiciled in another.
Williams, 825 F. Supp. 2d at 124; Lopes v. Jetsetdc, LLC, No. 1:13-cv-01550, 2014 WL
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1388836, at *2 (D.D.C. Apr. 9, 2014). Thus, “a prolonged absence from one’s domicile is not
determinative of abandonment.” Wagshal v. Rigler, 947 F. Supp. 10, 13 (D.D.C. 1996). Finally,
for purposes of diversity jurisdiction, courts apply a presumption of continuing domicile, so that
domicile in one place remains until domicile in a new place is established. See Desmare v. U.S.,
93 U.S. 605, 610 (1876); Techno-TM, LLC v. Fireaway, Inc., 928 F. Supp. 2d 694, 697
(S.D.N.Y. 2013) (holding that United States citizen domiciled abroad would retain that domicile
until “a new domicile in a state of the United States” was established).
Any analysis of domicile “must be fact-specific.” Wagshal, 947 F. Supp. at 13. Indicia
of domiciliary status may include a person’s current residence, a sworn declaration of domicile,
ownership of real and personal property, voting registration, bank accounts, automobile
registration, driver’s license and club membership. Williams, 825 F. Supp. 2d at 124.
With respect to the question of defendant’s domicile at the time this action was filed, the existing
record establishes the following material facts:
(1) that from 1985 to 1989, defendant lived in Chicago with his wife in a condominium
they had purchased in 1985 (2d Hensley Decl. ¶ 4);
(2) that in 1989, defendant changed jobs and moved to France, that his wife followed in
1990, that they leased an apartment in Paris where they lived together from 1990 until
approximately July 1998, that they had a child who was born in France, that his wife is a French
national whose family lives in France, that he had a Residence Card that allowed him to legally
reside in France, that he paid individual income tax to the French government from 1995 to 1998
while he was employed by a French company, and that he and his wife divorced in 2002, but she
and his child remain living in France (2d Hensley Decl. ¶¶ 5-8);
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(3) that in July 1998, defendant moved to Monaco in conjunction with a new business
venture, that he was issued a Residence Card in 1999 that allows him to legally reside in
Monaco, that his most recent residence card was issued in October 2011 and shows an expiration
date of July 18, 2014, and that he resided there at various rented apartments and hotels until at
least April 2013 (2d Hensley Decl. ¶¶ 3, 9-16);
(4) that defendant continues to own his condominium in Illinois, which he claimed as a
principal residence in 2012, that he has continuously maintained an Illinois driver’s license,
which he renewed most recently in 2012, that in recent years he has made not infrequent trips to
Chicago, that his current employer, Global DMC Partners, has a business address in Chicago,
Illinois, that his Monaco residence card is likely no longer valid, and that there is no
documentary evidence establishing where he has actually resided in Monaco since he moved out
of his apartment in August 2012 (2d Hensley Decl. ¶¶ 18, 19, 22; Pls.’ Opp. Exs. A-E; Pls.’
Reply Exs. A & B); and
(5) that defendant has an international drivers’ license, that he is not registered to vote in
Illinois, that there is no evidence that he has a current residence in Illinois, and that he has rented
out the condominium he owns since 1990 (2d Hensley Decl. ¶¶ 15, 19, 20).
In addition, the record includes defendant’s and his ex-wife’s sworn declarations that
they moved to France “with the intent to make it our permanent residence and to remain there
indefinitely” (2d Hensley Decl. ¶ 5; Defs.’ Reply Ex. A (Decl. of Michele G. Brian-Hensley,
May 28, 2014)); defendant’s sworn declaration that he moved to Monaco with the same intent
and has “maintained [Monaco] as my residence since in or about July 1998” (2d Hensley Decl. ¶
3); his sworn declaration that he maintains a valid Illinois driver’s license because that makes it
easier to rent cars (id. ¶ 22); and his sworn declaration that although his work for Global DMC
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Partners requires him to occasionally travel to the United States, these visits “are always of a
temporary duration and never made with the intent to remain in those locations permanently.”
(Id. ¶¶ 18.) Defendant also acknowledges that his Monaco Residence Card may have become
invalid “in or about May/June 2013” but he states that he “intend[s] to enter into a new long-term
lease . . . in June 2014 and, at that time, renew [the card].” (Id. ¶ 14.)
Plaintiffs argue that the record as a whole “clearly and definitely establishes that
[defendant] was not domiciled in Monaco when this action was commenced.” (Pls.’ Opp. at 2.)
Rather, plaintiffs argue, the record establishes that defendant is domiciled in Illinois either
because: (1) he never abandoned his Illinois domicile when he moved to France; (2) he
established domicile in Monaco, but his domicile reverted from Monaco back to Illinois when he
lost his “legal” residence in Monaco; or (3) he established domicile in Monaco, but he
reestablished domicile in Illinois by the time this case was filed. (Id. at 3-4.) The Court
disagrees. Not only are there facts that support defendant’s claim to be domiciled abroad, the
record includes defendant’s sworn declaration of domiciliary intent. Even though a sworn
statement of domiciliary intent is not dispositive, see, e.g., Washington v. Hovensa LLC, 652 F.
3d 340, 344 (3rd Cir. 2011), the Court does not agree with plaintiffs that it can find defendant’s
declaration not credible without an evidentiary hearing.2 See Prakash v. Am. Univ., 727 F.2d at
1180 (“When . . . a party expressly declares his intent, and the opposing written submissions do
not demonstrate the falsity of the declaration with reasonable certainty, the issue necessarily
2
As grounds for challenging defendant’s credibility, plaintiffs point to, inter alia, the difference
between his first declaration, which states that he has resided in Monaco “continuously” since
1998 (1st Hensley Decl. ¶¶ 2-3) and his second declaration, which states that he has “maintained
[Monaco] as my residence since in or about July 1998” (2d Hensley Decl. ¶ 3) and also the fact
that in 2012 he submitted an application for a property tax exemption based on his sworn
statement that he uses the condominium as a “principal residence” while submitting documents
to this Court that establish that the condominium has been rented out since 1990.
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becomes one of the declarant's credibility. In that event, the court cannot rest its decision simply
on the paper record, but must hold a hearing in order to adequately assess credibility.”)
CONCLUSION
Accordingly, for the reasons stated above, it is hereby
ORDERED that defendant’s motion to dismiss for lack of subject matter jurisdiction is
DENIED WITHOUT PREJUDICE; and it is further
ORDERED that pursuant to Local Civil Rule 72.3(a), this case is referred to Magistrate
Judge Alan Kay for an evidentiary hearing on the question of the Court’s subject matter
jurisdiction.
/s/
ELLEN SEGAL HUVELLE
United States District Judge
Date: July 23, 2014
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