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Van Buskirk v. The United Group of Companies, Inc.

United States Court of Appeals, Second Circuit

August 16, 2019

Bruce A. Van Buskirk and Lori A. Van Buskirk, Plaintiffs-Appellants,
v.
The United Group of Companies, Inc., DCG Funds Management, LLC, DCG/UGOC Funds Management II, LLC, Michael J. Uccellini, Executor of the Estate of Walter F. Uccellini, MCM Securities, LLC, Millennium Credit Markets, LLC, Davis Capital Group, Inc., Jessica F. Steffensen, Executrix of the Estate of Walter F. Uccellini, Defendants-Appellees, Richard W. Davis, Jr., Defendant.

          Submitted: April 11, 2019

         Plaintiffs-Appellants appeal from a judgment of the United States District Court for the Northern District of New York (Sharpe, /.) dismissing their claims for lack of subject matter jurisdiction and the district court's subsequent denial of a motion for reconsideration, arguing that the district court failed to consider evidence that the parties were diverse at the time of filing. Because courts may freely permit jurisdictional amendments even at the appellate level, we vacate the judgment of the district court and remand for further proceedings consistent with this opinion.

          Gary A. Gotto, Keller Rohrback L.L.P., Phoenix, Arizona and David J. Ko, Keller Rohrback L.L.P., Seattle, Washington, for Plaintiffs-Appellants.

          Michael B. de Leeuw & Tamar S. Wise, Cozen O'Connor, New York, New York, for Defendants-Appellees.

          Before: Calabresi, Lohier, Sullivan, Circuit Judges.

          RICHARD J. SULLIVAN, CIRCUIT JUDGE

         Plaintiffs-Appellants Bruce and Lori Van Buskirk ("Plaintiffs") appeal from a judgment entered by the United States District Court for the Northern District of New York (Gary L. Sharpe, /.) dismissing Plaintiffs' claims for lack of subject matter jurisdiction and the district court's subsequent denial of a motion for reconsideration. Plaintiffs argue that, on de novo review, the entire record on appeal demonstrates that they were citizens of Florida - not New York - at the time they filed their suit, and therefore satisfied the complete diversity requirement of 28 U.S.C. § 1332, establishing federal subject matter jurisdiction. As explained below, because an appellate court may freely permit jurisdictional amendments, we vacate the judgment of the district court and remand so that Plaintiffs may amend their complaint. At that time, the district court may also consider whether to impose costs - including attorney's fees - on Plaintiffs attributable to their failure to provide the district court with all relevant evidence at the time of the order to show cause.

         I. Background

         In July 2016, Plaintiffs brought suit against Defendants-Appellees ("Defendants") - The United Group of Companies, Inc.; DCG Funds Management, LLC; DCG/UGOC Funds Management II, LLC; MCM Securities, LLC; Millennium Credit Markets, LLC; Davis Capital Group, Inc.; and individual officers of the various companies - alleging violations of state law including common law fraud, breach of fiduciary duty, negligent misrepresentation, unjust enrichment, and aiding and abetting fraud. Plaintiffs subsequently amended their complaint twice. In all three iterations of their complaint, Plaintiffs alleged that they were "resident[s] of Cobleskill, New York" and that Defendants were citizens of New York or North Carolina.

         In February 2018, the district court ordered Plaintiffs to show cause as to why the action should not be dismissed sua sponte under Federal Rule of Civil Procedure 12(h)(3) for lack of subject matter jurisdiction. Plaintiffs submitted a two-paragraph response stating that the court had diversity jurisdiction because "Plaintiffs used to reside in Cobleskill, New York . . . but sold their residence in New York and now reside" in Naples, Florida. J. App'x at 107. Plaintiffs argued that Defendants were aware of this "domicile" because they had sent mail to the Florida address. Plaintiffs also attached (1) blurry photocopies of their Florida drivers' licenses - one visibly dated "12-28-2016" - and (2) a photocopy of a January 2018 piece of mail from one Defendant addressed to Plaintiffs at the Florida address. In a March 21, 2018 docket entry, the district court agreed with Defendants that "Plaintiffs . . . failed to satisfy their burden of proving that they were citizens of states diverse from those of all defendants at the time of filing" and dismissed the complaint for lack of subject matter jurisdiction. J. App'x at 119. Judgment was entered that day.

         Plaintiffs thereafter filed a motion for reconsideration, arguing that dismissal was improper and submitting "Declaration[s] of Domicile" - sworn statements signed by Plaintiffs on May 9, 2013 indicating that they then resided in Florida and intended Florida to be their permanent home. On April 13, 2018, the district court denied the motion because the affidavits were known to Plaintiffs at the time of the prior order to show cause and Plaintiffs had failed to invoke any of the strict grounds for reconsideration. Plaintiffs subsequently filed a timely notice of appeal from the district court's April 13, 2018 order denying Plaintiffs' motion for reconsideration.

         II. Standard of Review

         We generally treat an appeal from a denial of a motion for reconsideration that largely renews arguments previously made in the underlying order as bringing up for review the underlying order or judgment. See "R" Best Produce, Inc. v. DiSapio,540 F.3d 115, 121-22 (2d Cir. 2008). "When reviewing the dismissal of a complaint for lack of subject matter jurisdiction, we review factual findings for clear error and legal conclusions de novo, accepting all material facts alleged in the complaint as true and drawing all reasonable inferences in the plaintiff's favor." Liranzo v. United States,690 F.3d 78, 84 (2d Cir. 2012). "Denials of motions for ...


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