IndyMac Venture, LLC v. Mulligan
2:15-cv-07057
E.D.N.YAug 30, 2019Background
- IndyMac Venture, LLC filed a mortgage foreclosure under New York RPAPL Article 13 against Thomas E. Mulligan, Riverhead Building Supply Corp., and American Express Centurion Bank; an amended complaint was served but defendants did not answer and a clerk’s notation of default was entered.
- Plaintiff invoked federal jurisdiction solely on the basis of diversity of citizenship.
- The amended complaint alleged only: (a) IndyMac Venture is an LLC with its principal place of business in Pasadena, California; (b) Mulligan is a New York resident with two New York addresses; (c) Riverhead Building Supply Corp. has a New York business address; and (d) American Express Centurion Bank has a business address in Salt Lake City, Utah.
- The magistrate judge found these jurisdictional allegations deficient because they failed to plead the citizenship of the LLC’s members, the domicile (not just residence) of Mulligan, Riverhead’s state of incorporation and principal place of business, and the state designated as the main office for the national bank.
- Because subject‑matter jurisdiction was not adequately alleged, the magistrate judge recommended denying the motion for default judgment, dismissing the amended complaint without prejudice, and granting leave to amend the jurisdictional allegations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal diversity jurisdiction exists over the action | IndyMac asserted diversity jurisdiction by alleging it is an LLC with principal place of business in California and that defendants are located in other states | (No appearances; implicitly that plaintiff’s pleadings must satisfy jurisdictional pleading rules) | Complaint fails to allege citizenship of the LLC’s members; diversity not established on the record |
| Whether Mulligan’s pleaded residence establishes his citizenship/domicile | Alleged Mulligan is a New York resident with New York addresses | Residence alone is insufficient to establish domicile/citizenship | Residence allegations insufficient to establish domicile; citizenship not pleaded |
| Whether Riverhead Building Supply’s business address pleads corporate citizenship | Alleged Riverhead has a business address in New York | Business address alone does not show state of incorporation or principal place of business | Pleadings fail to allege incorporation or nerve‑center; insufficient to establish citizenship |
| Whether American Express Centurion Bank’s business address pleads national bank citizenship | Alleged business address in Utah | Business address is not dispositive; the articles of association designating the main office control | Allegations silent as to main office in articles of association; citizenship not established |
Key Cases Cited
- Bayerische Landesbank v. Aladdin Capital Mgmt., LLC, 692 F.3d 42 (2d Cir. 2012) (governs citizenship rules for entities and corporate principal place of business)
- Hertz Corp. v. Friend, 559 U.S. 77 (2010) (defines corporate "nerve center" for principal place of business)
- Wachovia Bank v. Schmidt, 546 U.S. 303 (2006) (national bank is citizen of state designated as main office in its articles of association)
- Carter v. Healthport Tech., LLC, 822 F.3d 47 (2d Cir. 2016) (LLC citizenship determined by citizenship of each member)
- Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., Div. of Ace Young Inc., 109 F.3d 105 (2d Cir. 1997) (federal courts must ensure existence of subject matter jurisdiction and may raise it sua sponte)
- Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (2005) (diversity jurisdiction requires parties to be citizens of different states)
- Martinez v. Bynum, 461 U.S. 321 (1983) (definition and import of domicile for citizenship purposes)