United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
J. Tharp, Jr. United States District Judge.
Drake James Leoris, Jr. filed suit in the Circuit Court for
the Nineteenth Judicial Circuit, Lake County, Illinois,
seeking a declaratory judgment that he is the sole
beneficiary of Illinois Land Trust 50677T (“the land
trust”). According to Drake Leoris Jr.'s complaint,
he and his father, Drake Leoris Sr., were joint tenants in
the land trust, which owns property located at 620-622 Laurel
Avenue in Highland Park, Illinois (“the
property”). Before Leoris Sr.'s death, he assigned
his interest in the land trust to his wife (and Leoris
Jr.'s stepmother), Jean M. Leoris. Leoris Jr.'s suit
challenges that assignment, alleging, among other things,
that Leoris Sr. was mentally incapacitated at the time it was
made. The suit names as defendants Jean Leoris and Chicago
Title Land Trust Company, the land trust's trustee.
Leoris removed the suit to federal court. See Notice of
Removal, ECF No. 1. According to the removal notice, Leoris
Jr. is a resident of Illinois, Jean Leoris is a resident of
Wisconsin, and the land trust is an “Illinois land
trust.” Id. at 1. Although the removal notice
does not identify an amount in controversy, the light it
sheds is dim, merely noting that at one point Leoris Sr. owed
$500, 000 in debt encumbering the property. The Court has
raised the issue of subject matter jurisdiction sua
sponte. “Courts have an independent obligation to
determine whether subject-matter jurisdiction exists, even
when no party challenges it.” Hertz Corp. v.
Friend, 559 U.S. 77, 94 (2010).
existence vel non of subject matter jurisdiction in
this case poses a novel question of the role the Illinois
land trust-a unique type of trust in which the trustee has
virtually no power-plays in assessing diversity. When a
property is placed in a land trust, “both the legal and
equitable title to the res are vested in the trustee, not the
beneficiary.” Estate of Bowgren v. C.I.R., 105
F.3d 1156, 1160 (7th Cir. 1997). But technical legal
ownership is, more or less, the beginning and the end of the
trustee's power over the res. “Land trusts vest the
usual attributes of ownership-the rights of possession and
management of the property, as well as the rights to rents
and proceeds from the property-in the beneficiary or
beneficiaries.” Id. The beneficiaries'
interests in the property are categorized as personal
property interests rather than real estate interests.
Id. Because the beneficiaries have complete control
over the property, “the trustee has no duties or powers
other than to execute deeds and mortgages or otherwise to
deal with the property as directed by the holder of the power
of direction.” Id.
initial matter, the parties dispute whether the land trust
bears the citizenship of the trustee or the beneficiaries.
Typically, in cases concerning a trust, the relevant
citizenship depends on who is suing or being sued:
“[T]he citizenship of the litigant controls. . . . When
the trustee sues (or is sued), the trustee's citizenship
matters. And when the beneficiary sues or is sued, or a trust
litigates in its own name, again the citizenship of the party
controls.” RTP LLC v. ORIX Real Estate Capital,
Inc., 827 F.3d 689, 691 (7th Cir. 2016). In
RTP, the Seventh Circuit reversed its long-standing
precedent and determined that the citizenship of the
beneficiaries of a trust-rather than the citizenship of the
trustee-are relevant for diversity purposes when a trust
itself is sued. In this case, however, the trustee (Chicago
Title), not the trust itself, is the named defendant, and it
is undisputed that Chicago Title is an Illinois citizen.
Moreover, even if the relevant citizenships were those of the
land trust's beneficiaries rather than that of the
trustee, the land trust would still (likely) be a citizen of
Illinois because the removal notice identifies Leoris Jr.,
who is at least a partial beneficiary of the land trust, as a
resident of Illinois.
this suggests, then, that the Court has no subject matter
jurisdiction over the case because Leoris Jr., the plaintiff,
is probably a citizen of Illinois, as is one of the
defendants (the trustee). But there is another wrinkle. For
purposes of assessing diversity, the Court may ignore a
nominal defendant, who “can be joined to aid the
recovery of relief without an assertion of subject matter
jurisdiction only because he has no ownership interest in the
property which is the subject of the litigation.”
S.E.C. v. Cherif, 933 F.2d 403, 414 (7th Cir. 1991).
“Because the nominal defendant is a trustee, agent, or
depositary, who has possession of the [property] which are
the subject of the litigation, he must often be joined purely
as a means of facilitating collection. The court needs to
order the nominal defendant to turn over [the property] to
the prevailing party.” Id. The trustee in this
case is a nominal party. There is no dispute that the land
trust owns the property; the dispute in this case concerns
who, as between Leoris Jr. and Jean Leoris, holds the
“personal property interests” attendant to being
a beneficiary of the land trust. Bowgren, 105 F.3d
at 1160. No. party asserts that the trustee has personal
property interests as a beneficiary of the land trust.
Instead, the trustee is a mere conduit through which proper
beneficiaries of the land trust exercise their personal
property rights. Viewing the case through that lens, the
trustee is hardly different than an escrow agent or any other
individual who possesses property, but whose only role in a
dispute is to deliver the property to the victor. Leoris Jr.
contends that the trustee is not a nominal party because it
is “a necessary defendant in order for the court to
effectuate complete relief, ” Pl.'s Jurisdictional
Br. 6, ECF No. 10, but this describes precisely the
circumstance in which a party is nominal: when the party must
be joined to a suit to provide the ultimate relief, but
otherwise has no interest in the outcome of the case. See
Matchett v. Wold, 818 F.2d 574, 576 (7th Cir. 1987)
(“The addition to a lawsuit of a purely nominal
party-the holder of the stakes of the dispute between the
plaintiff and the original defendant-does not affect
the trustee's citizenship may be ignored, however, does
not mean that Jean Leoris filed a proper notice of removal.
The removal notice lists only Leoris Jr.'s and Jean
Leoris's residencies rather than their states of
citizenship, and allegations of residency are insufficient to
establish diversity jurisdiction. See Simon v. Allstate
Employee Group Med. Plan, 263 F.3d 656, 658 n.1 (7th
Cir. 2001). The removal notice is also deficient because
neither it nor the complaint alleges an amount in controversy
exceeding $75, 000-or an amount in controversy at all.
See Webb v. Fin. Indus. Regulatory Auth., Inc., 889
F.3d 853, 856 (7th Cir. 2018) (“The diversity statute,
28 U.S.C. § 1332, grants jurisdiction when there is
complete diversity of citizenship between the parties and the
amount in controversy exceeds $75, 000, exclusive of interest
and costs.”). Jean Leoris is therefore directed to file
an amended removal notice properly identifying the
citizenships of the parties and the amount in controversy by
June 26, 2018, or this case will be remanded to state court.
 As the Court discusses below, the
complaint improperly identifies the residencies, rather than
the citizenships, of ...