Earl Velger v. Darwin Carr

NOT PRECENDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 12-2184
_____________
EARL ROBERT VELGER,
Appellant
v.
DARWIN CARR, individually and as Trustee of
LIVE BY FAITH IRREVOCABLE TRUST
On Appeal from the District Court of the Virgin Islands
(Division of St. Thomas)
(D. C. No. 3-10-cv-00042)
District Judge: Honorable Curtis V. Gomez
Submitted under Third Circuit LAR 34.1(a)
on December 6, 2012
Before: SMITH, HARDIMAN and ROTH, Circuit Judges
(Opinion filed: August 7, 2013)
OPINION
ROTH, Circuit Judge:
Earl Robert Velger appeals the District Court’s March 29, 2012, order dismissing
this case for lack of subject matter jurisdiction. We have jurisdiction to review the
District Court’s order pursuant to 28 U.S.C. § 1291, and we exercise plenary review over
a dismissal for lack of subject matter jurisdiction. Gould Elecs., Inc. v. United States,
220 F.3d 169, 176 (3d Cir. 2000).
This case involves Velger’s state law claims against Darwin Carr, “individually
and as trustee of the Live By Faith Irrevocable Trust.” Velger argues that the District
Court erred because there was complete diversity of citizenship between Velger and Carr.
We agree. United States district courts have original jurisdiction over civil actions that
are between citizens of different states and exceed $75,000 in controversy. 28 U.S.C. §
1332(a). For diversity of citizenship to confer federal jurisdiction it must be complete:
no plaintiff can be a citizen of the same state as any defendant. Strawbridge v. Curtiss, 7
U.S. (3 Cranch) 267 (1806); Midlantic Nat’l Bank v. Hansen, 48 F.3d 693, 696 (3d Cir.
1995). “A natural person is deemed to be a citizen of the state where she is domiciled,”
Swiger v. Allegheny Energy, Inc., 540 F.3d 179, 182 (3d Cir. 2008), and “domicile” is
residency with the intent to remain. McCann v. Newman Irrevocable Trust, 458 F.3d
281, 286 (3d Cir. 2006). Here, it is undisputed that Velger is a citizen of Michigan and
Carr is a citizen of the Virgin Islands. This constitutes complete diversity, and the
District Court had jurisdiction to hear the case, which it was obliged to exercise. See
Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976).1
The District Court’s determination that it lacked jurisdiction was based on its
1
While we note that Carr has died since this appeal was filed, this does not affect our
analysis. See McCann, 458 F.3d at 286 (“If a party is deceased, ‘the legal representative
of the estate of a decedent shall be deemed to be a citizen only of the same State as the
decedent.’” (quoting 28 U.S.C. § 1332(c)(2))).
2
conclusion that the defendant was the Live By Faith Irrevocable Trust (Trust), rather than
Carr in his individual capacity or as a trustee of the Trust. For purposes of diversity
jurisdiction, “the citizenship of both the trustee and the beneficiary should control in
determining the citizenship of a trust.” Emerald Investors Trust v. Gaunt Parsippany
Partners, 492 F.3d 192, 205 (3d Cir. 2007). Because one of the Trust’s beneficiaries is a
citizen of Michigan, the District Court found that the Trust was a citizen of Michigan,
destroying diversity. See id. However, based on our review of the record and Velger’s
November 16, 2012, letter to this Court, we must conclude that the defendant in this case
is Carr individually, not the Trust.2 We will therefore vacate the District Court’s order
and remand for further proceedings.
2
Moreover, to the extent Velger sues Carr in his capacity as a trustee of the Trust, the
parties may still be diverse and properly before the District Court. “In a suit by or against
the individual trustees of a trust, where the trustees possess certain customary powers to
hold, manage and dispose of assets, their citizenship, and not that of the trust
beneficiaries, is controlling for diversity of citizenship purposes.” Emerald Investors,
492 F.3d at 200-01 (quoting Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 464-66 (1980))
(internal quotation marks omitted).
3