Wilmington Plantation, LLC v. Fidelity National Title Insurance

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0669n.06
No. 12-5787
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
)
WILMINGTON PLANTATION, LLC, ) FILED
) Jul 19, 2013
Plaintiff-Appellant, ) DEBORAH S. HUNT, Clerk
)
v. )
) ON APPEAL FROM THE UNITED
FIDELITY NATIONAL TITLE ) STATES DISTRICT COURT FOR THE
INSURANCE COMPANY, ) MIDDLE DISTRICT OF TENNESSEE
)
Defendant-Appellee. )
Before: SILER, GIBBONS, and GRIFFIN, Circuit Judges.
PER CURIAM. This appeal arises out of a real estate purchase agreement in which
Wilmington Plantation (“Wilmington”) contracted to purchase 19.846 acres of property (“the
Property”) in Chatham County, Georgia from William W. Foster, Jr. Wilmington purchased an
Owner’s Policy of Title Insurance, underwritten by Fidelity National Title Insurance Company
(“Fidelity”). Subsequently, Wilmington made a claim under the Title Policy, asserting that it did not
acquire fee simple title in the Property. Fidelity denied coverage to Wilmington on the basis that its
claims were excepted from coverage. Wilmington then filed suit against Fidelity for breach of
contract, equitable estoppel, and bad faith, invoking the district court’s diversity jurisdiction pursuant
to 28 U.S.C. § 1332(a). The district court dismissed the bad faith claim and later granted summary
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No. 12-5787
Wilmington Plantation, LLC v. Fidelity National Title Insurance Company
judgment to Fidelity on the breach of contract and equitable estoppel claims. This timely appeal
followed.
Wilmington alleges in its complaint that it is a limited liability company, organized and
existing in the state of Tennessee, with its principal place of business in Tennessee. The complaint
also alleges that Fidelity is a corporation, organized and existing in the state of California, with its
principal place of business in the state of Florida. A limited liability company has the citizenship
of each of its partners or members. Delay v. Rosenthal Collins Grp., 585 F.3d 1003, 1005 (6th Cir.
2009). The complaint does not explicitly plead the complete diversity of the parties in accordance
with this principle and therefore, at oral argument, we requested that Wilmington file a statement
with the court listing the citizenship of each of its members. In response, Wilmington filed a
statement indicating that four of its members are citizens of the state of Florida, which would appear
to defeat complete diversity of citizenship. However, diversity is determined at the time an action
is commenced. Sanders v. Kettering Univ., 411 F. App’x 771, 781 (6th Cir. 2010) (citing Napletana
v. Hillsdale College, 385 F.2d 871, 872 (6th Cir. 1967)). Although Fidelity did not contest
jurisdiction, federal jurisdiction cannot be obtained by consent and we have an independent
obligation to determine that jurisdiction exists. V&M Star, LP v. Centimark Corp., 596 F.3d 354,
356 (6th Cir. 2010). Accordingly, we REMAND the case to the district court for further proceedings
to determine the citizenship of Wilmington at the commencement of the action and whether it had
subject-matter jurisdiction at that time.
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