United States District Court, N.D. Illinois
January 30, 2004.
RICHARD HANNENBERG, Plaintiff
THOMAS A. BAKER, DAVID F.TUTTLE, RANDALL GOLTER, PAUL HUNSICKER, JAMES KNACKSTEDT, CHRISTIAN MORALES, GARY QUICK, and MARK SMITH, Defendants
The opinion of the court was delivered by: JOAN H. LEFKOW, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff, Richard Hannenberg ("Hannenberg"), filed this action
against defendants, Thomas A. Baker, David F. Turtle, Randall Goiter,
Paul Hunsicker, James Knackstedt, Christian Morales, Gary Quick, and Mark
Smith (collectively "defendants"), seeking a declaration that (1)
defendants are not authorized to control the governance of Balance
Concord, Incorporated, an Illinois not-for-profit corporation
("Balance"), as a result of any acts taken at their "irregular" May
3, 2003 meeting; (2) defendants are not authorized to interfere with
Hannenberg's service as the duly elected and serving Treasurer of
Balance; and (3) defendants are not authorized to demand or retain
possession of the books and records of Balance, or to make or circulate
any publications under the name of Balance. Defendants have moved to
dismiss or, alternatively, transfer venue in this case. For the reasons
set forth below, the court grants defendants' motion to dismiss for lack
of subject matter of jurisdiction.
Defendants move to dismiss Hannenberg's Complaint on a number of
grounds, but the
court begins and ends its analysis with the issue of subject matter
jurisdiction. See Okoro v. Bohman, 164 F.3d 1059, 1061 (7th Cir.
1999) ("[J]urisdictional issues should be addressed first and if they are
resolved against jurisdiction the case is at an end and there is no
occasion to address the merits."). Hannenberg attempts to invoke this
court's diversity jurisdiction under 28 U.S.C. § 1332(a)(1), which
requires complete diversity of citizenship between all plaintiffs and
defendants and an amount in controversy exceeding $75,000. While
defendants do not make the argument, the Complaint could have been
dismissed for failure to properly list the citizenship of the parties.
The Complaint merely lists the residence of Hannenberg and the
defendants, which is different from a party's citizenship and
insufficient to establish diversity jurisdiction under § 1332(a).
See, e.g., Macken v. Jensen, 333 F.3d 797, 799 (7th Cir. 2003)
("[C]itizenship may differ from residence. . . ."); Meyerson v.
Harrah's East Chicago Casino, 299 F.3d 616, 617 (7th Cir. 2002)
("[R]esidence and citizenship are not synonyms and it is the latter that
matters for purposes of the diversity jurisdiction.").
Notwithstanding, defendants do challenge this court's jurisdiction
based on the amount in controversy. If the amount in controversy were not
contested by the defendants, the court would accept as true Hannenberg's
allegations unless it "appear[ed] to a legal certainty that the claim is
for less than that required by the rule." NLFC, Inc. v. Devcom
Mid-America, Inc., 45 F.3d 231, 237 (7th Cir. 1995) (citing St.
Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)).
Since, however, the amount in controversy has been challenged as a
factual matter, the burden falls on Hannenberg to provide "competent
proof of the amount in controversy. NLFC, Inc., 45 F.3d at 237
(citing McNutt v. General Motors Acceptance Corp. of Indiana,
298 U.S. 178, 189 (1936)). Competent proof means "proof to a reasonable
probability that jurisdiction
exists." Rexford Rand Corp. v. Ancel, 58 F.3d 1215, 1218
(7th Cir. 1995).
In a declaratory judgment action, the amount in controversy is measured
by the value of the "object of the litigation." Hunt v. Washington
State Apple Advertising Comm'n, 432 U.S. 333, 347 (1977). Moreover,
under the "either viewpoint rule," the value of the object of the
litigation may be calculated from the viewpoint of either party,
McCarty v. Amoco Pipeline Co., 595 F.2d 389, 395 (7th Cir.
1979); see also, Macken, 333 F.3d at 799 ("what the plaintiff
stands to gain, or what it would cost the defendant to meet the
plaintiffs demand."). Hannenberg's Complaint does not specifically
explain why the amount in controversy requirement is met, although he
does make the three separate requests for relief listed above. Hannenberg
fails to elaborate or present proof on how his requests for relief would
exceed the amount in controversy requirement from the viewpoint of either
himself or the defendants.
In his response Hannenberg suggests that the amount in controversy is
satisfied due to the fact that he is empowered to select and execute
investments for Balance. He claims that the `Value" of that investment is
under his care, and that he purchased a $550,000 annuity insurance
contract for Balance. Hannenberg relies on variations of this amount,
along with bank account totals of Balance which he contends he controls
But the amount of the investments in Balance, or for that matter
Balance's value as a corporation, is not at issue. The Seventh Circuit
recently addressed an analogous situation in Macken. In that
case the plaintiffs, two beneficiaries of a trust and their mother,
brought suit against the trustee of the trust seeking an accounting and
the lull text of the trust instrument In support of their jurisdictional
allegations, the plaintiffs claimed that the trust itself was valued at
$300,000, well above the $75,000 amount in controversy threshold. The
court easily rejected this
claim by noting that "there is no dispute about the value of the
assets held in trust or either child's entitlement, so that sum is no
more `in controversy' than the value of a Rolls Royce would be relevant
to a dispute about the price of new shock absorbers." Id. at
799. Instead, whether the amount in controversy had been met depended on
the value of the accounting to either the plaintiffs or defendants or the
value of obtaining the full text of the trust instrument. The court noted
that the value of the accounting was negligible, and as for the value to
the plaintiffs of obtaining the trust instrument, such value was
difficult to estimate. Therefore, the court noted that "[w]hen the value
of a controversy cannot be estimated, litigation must commence in state
court." Id. at 800-801 ("Not until it becomes evident that the
information in these trust instruments is worth more than $75,000 should
anyone knock on the federal court's door.").
Applied here, Macken requires Hannenberg to show the value,
from either his or the defendants' point of view, of his specific
requests for relief. The value of any investments he claims to control
would simply not be in controversy and add nothing to the analysis.*fn1
Moreover, none of Hannenberg's requests for relief are supported by
competent proof. For example, he seeks a declaration that the defendants
are not authorized to control the governance of Balance. Assuming he has
standing to make such a request, he fails to even try to establish what
of that request would amount to. He also seeks a declaration that
defendants may not interfere with his job as Treasurer, but he fails to
explain what the value of such a declaration would be. Indeed, he fails
to even clarify whether his position is in fact paid. Nor is there
suggestion as to how the value of Balance's books or records, from the
viewpoint of either Hannenberg or the defendants, satisfies the amount in
In any event, the burden of ascertaining the amount in controversy does
not lie with the court or the defendants; it lies squarely with
Hannenberg. See NLFC, Inc., 45 F.3d at 237. He has not presented
sufficient proof to show that the amount in controversy has been met in
this case. Accordingly, defendants' motion to dismiss is granted [#7].
This case is dismissed without prejudice for lack of subject matter
jurisdiction. All other pending motions are denied as moot.