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SEABOARD FINANCE COMPANY v. DAVIS

November 17, 1967

SEABOARD FINANCE COMPANY, A CORPORATION, PLAINTIFF,
v.
GEORGE DAVIS, A/K/A GEORGE DIMITROVICH, GEORGE S. PATTERSON, A/K/A GEORGE PATTERSON, A/K/A G.S. PATTERSON, JOAN M. PATTERSON, A/K/A JOAN PATTERSON, A/K/A J.M. PATTERSON, DEFENDANTS.



The opinion of the court was delivered by: Will, District Judge.

  OPINION

The plaintiff, Seaboard Finance Company, brings this action against three defendants to recover damages allegedly resulting from the fraudulent procurement of a loan. Pursuant to Rule 12(b) (1) of the Federal Rules of Civil Procedure, defendant, George Davis, has moved to dismiss on the ground of absence of federal jurisdiction over the subject matter. He asserts two grounds in support of his motion: (1) that there is not complete diversity of citizenship between all the opposing parties to the action, and (2) that the Court must apply an Illinois statute which precludes the suit.

Diversity of Citizenship

The plaintiff seeks to invoke diversity jurisdiction under 28 U.S.C. § 1332, which provides that federal district courts shall have original jurisdiction of civil actions between citizens of different states involving an amount in excess of $10,000. In Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806), the Supreme Court interpreted a predecessor of this section to require that all the parties on one side of the action be citizens of different states than all the parties on the other side. This has become known as the "complete diversity" rule and has been consistently adhered to by the federal courts since its inception. See City of Indianapolis v. Chase Nat'l Bank, 314 U.S. 63, 69, 62 S.Ct. 15, 86 L.Ed. 47 (1941); 1 Moore, Federal Practice ¶ 0.60 [8. -4] (2nd ed. 1964). Defendant Davis contends that such diversity is not here present.

He asserts that the plaintiff and defendants, George S. Patterson and Joan M. Patterson, are all citizens of the state of California. The plaintiff concedes that it is a citizen of California for purposes of federal jurisdiction, but it contends that the named defendants are not. Plaintiff asserts that these defendants have taken up residence in Tennessee and that they are "citizens" of that state.

The citizenship of an individual for purposes of diversity jurisdiction is considered to be that of his domicile.*fn1 A person's domicile is more than his present state of residence. An individual may indeed have more than one state of residence, but he is considered to have only one domicile. The domicile is the state in which a person resides with the intention of remaining.*fn2 Once a person's domicile is established, a new domicile is obtained only by a subsequent change of residence coupled with the intention of remaining indefinitely at the new residence. Gilbert v. David, 235 U.S. 561, 569, 35 S.Ct. 164, 59 L.Ed. 360 (1915); Sun Printing & Publishing Ass'n v. Edwards, 194 U.S. 377, 24 S.Ct. 696, 48 L.Ed. 1027 (1904); Anderson v. Splint Coal Corp., 20 F. Supp. 233, 234 (E.D.Ky. 1937). Among the objective factors considered to evidence the intention of the individual are: his declarations, the exercise of political rights, the payment of personal taxes, his house of residence, and his place of business.*fn3

The parties have submitted affidavits in support of their respective contentions. It is obvious, however, that the inferences and deductions which can be drawn from these affidavits are inconclusive. At the time of execution of the affidavits, the Pattersons were residing in Nashville, Tennessee, after residing in Van Nuys, California for approximately twelve years. Mr. Patterson was then employed in Tennessee. Mrs. Patterson continues to own their former residence in California and Mr. Patterson will be required to pay income taxes in the state of California for the year 1967. Mr. Patterson is a registered voter in California and he states that he intends to exercise his political rights in forthcoming elections there. None of these things can be said either to establish conclusively defendants' domicile in Tennessee or to evidence with certainty their intention to return to California. We have been advised orally that the Pattersons have since moved from Tennessee to New Jersey. The protracted absence of a person from his domicile does not itself establish a new domicile. The person must also evidence an intent to remain indefinitely at the new residence. Walden v. Broce Const. Co., 357 F.2d 242, 245 (10th Cir. 1966); Stine v. Moore, 213 F.2d 446, 448 (5th Cir. 1956). On the other hand, a change of residence is often considered prima facie evidence of a change of domicile,*fn4 and unless the person can show an intention to return to his former residence at a relatively definite future time, may be sufficient to ascribe a change of domicile. See Collins v. City of Ashland, 112 F. 175, 177-179 (E.D.Ky. 1901).

In his affidavit, Mr. Patterson refers to his employment in Tennessee as "temporary duties" and states that it is his intention to return to California at the completion of those duties. His affidavit does not disclose the expected duration of his duties in Tennessee or when he might reasonably be expected to return to California. His employment may be of definite or indefinite tenure and his resulting residence in Tennessee may be for a definite or indefinite period. Consequently, it would be presumptuous to render a decision on the question of the defendants' domicile at this time. This determination should properly await a hearing at which further inquiry can be made into the prospective duration of Mr. Patterson's employment in Tennessee and other factors which might conclusively evidence his intention.

The defendant contends that, even assuming the Pattersons' citizenship to have changed, the suit should be dismissed because diversity of citizenship did not exist at the time of the commencement of the action. It is well settled that diversity of citizenship is determined as of the date of commencement of the action. Farmers Elevator Mut. Ins. Co. v. Carl J. Austad & Sons, Inc., 343 F.2d 7, 11 (8th Cir. 1965); McNello v. John B. Kelly, Inc., 283 F.2d 96, 98 (3rd Cir. 1960); Factor v. Pennington Press, Inc., 230 F. Supp. 906, 909 (N.D.Ill. 1963). If there is no diversity at that time, it cannot be created by a subsequent change of domicile by one of the parties. Lyons v. Weltmer, 174 F.2d 473 (4th Cir.) cert. denied, 338 U.S. 850, 70 S.Ct. 93, 94 L.Ed. 520 (1949); Hagen v. Payne, 222 F. Supp. 548 (W.D.Ark. 1963); E.K. Carey Drilling Co. v. Murphy, 113 F. Supp. 226 (D.Colo. 1953). The court must dismiss, although the plaintiff may be able to reinstitute the suit.

This suit was filed on May 25, 1967. The affidavit of defendant, George Patterson, states that he resided in California until June 1, 1967 and that Joan Patterson resided in California until July 4, 1967. However, the affidavit submitted on behalf of the plaintiff states that both George and Joan Patterson had ceased to reside in California on or about the date of May 25, 1967. It is clear, therefore, that the defendants' presence in California on the date of the commencement of the action is in dispute. This dispute involves a question of fact which cannot be properly resolved without a hearing at which relevant evidence can be heard and weighed.

Prior Pending Action

The instant suit is the second suit brought by the plaintiff against these defendants arising out of the same transaction. Prior to instituting the instant suit, the plaintiff commenced an action in the Superior Court of the State of California for the County of Los Angeles against these same defendants seeking recovery on the same promissory note that is involved in this suit. All three defendants have appeared and answered in the California action and that case is now pending.

This type of multiple litigation has been described as "repetitive litigation."*fn5 Traditionally, a repetitive suit has not been subject to dismissal, but it sometimes has been subject to abatement. Under the common law of England, the pendency of an action in a court of general jurisdiction between the same parties was grounds for a plea of abatement in a second suit brought on the same cause of action. A different rule, however, has evolved in the United States, and a plea of abatement has generally been held good only when made in a repetitive suit brought in the same jurisdiction in which the prior action is pending. See Vestal, Repetitive Litigation, 45 Iowa L.Rev. 525, 528-37 (1960).

This limitation has had ramifications for the federal courts. It has traditionally meant that only repetitive suits filed in different federal courts were subject to abatement.*fn6 Where the plaintiff brings in personam actions in both a state and a federal court, it has consistently been held that the actions, even though repetitive, may proceed concurrently assuming both courts have jurisdiction.*fn7 The defendant is not entitled to abatement even if the repetitive suits have been commenced in a state and Federal court of the same state. Although this result may lead to conflict between Federal and state courts, it has been justified on the basis of the concurrent jurisdiction. It should be recognized, however, that while the defendant is not entitled to abatement as a matter of right in such situations, the federal courts apparently have the power to grant abatement as a matter of discretion.*fn8

Two observations should be made initially. First, the defendant contends that Section 48(1)(c) is not merely applicable on the basis of comity between the federal and state systems, but contends that its application is required by the policy of Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Thus, the defendant's motion presents the question of the applicability of this state statute in a diversity suit in a federal court of Illinois. Second, the defendant contends that the Court is required to dismiss the suit, rather than merely to abate the action. This obviously calls for a result which is contrary to the current federal practice. Whether such a result would be proper, depends (1) on the applicability of the state statute in the federal courts and (2) the construction given the statute by the courts of Illinois.

It should also be noted that the defendant has raised this matter on a motion to dismiss predicated on grounds of lack of jurisdiction over the subject matter. F.R.Civ.Proc. 12(b)(1). Although it would seem proper to consider the matter on a motion to dismiss, it is clear that this does not involve a question of jurisdiction. Actually, it involves a question of ...


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