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SCHAFLER v. MARINE MIDLAND BANK

United States District Court, Western District of New York


April 14, 2003

PEPI SCHAFLER (SUMMER), PLAINTIFF, VS. MARINE MIDLAND BANK AND MANUFACTURERS AND TRADERS TRUST CO., DEFENDANTS.

The opinion of the court was delivered by: John T. Elfvin, Senior District Judge.

MEMORANDUM and ORDER*fn1

Plaintiff commenced this action June 12, 1987 against Marine Midland Bank ("Marine Midland")*fn2 and Manufacturers and Traders Trust Company ("M&T")*fn3 in the New York State Supreme Court, County of Erie, asserting, inter alia, claims of forgery, theft and unlawful conversion. Plaintiff subsequently removed this action to this Court on September 23, 2002. Presently before this Court is defendants' motion to remand this action to the state court. Defendants' motion will be granted for the reasons stated hereinbelow.

The gravamen of plaintiff's allegations is that the defendants had improperly allowed her husband, Donald Summer, to withdraw $95,200 from a joint bank account without her permission. Plaintiff alleges that, on or about November 7, 1985, Merrill Lynch, the account holder, disbursed two checks totaling $95,200 to Summer upon his request. The checks were drawn by defendant M&T Bank and made payable to the order of Schafler and her husband. Summer then endorsed the checks with the notation "For Deposit" and deposited the checks in his own personal bank account at Marine Midland. Schafler alleges that she never received any portion of the $95,200 and contends, inter alia, that defendants were negligent or reckless in allowing an unlawful conversion, theft and forgery of the funds.

Plaintiff removed this case to this Court, pursuant to 28 U.S.C. § 1441, and filed a motion for summary judgment on September 23, 2002. Defendants now move to remand this case to state court based principally on the fact that this Court lacks subject matter over such.*fn4 In support, defendants argue that no diversity jurisdiction existed between the parties, at the time plaintiff commenced this case in state court, because each of the parties then was a New York citizen. Plaintiff contends otherwise based on the fact that she now lives in California.

The familiar legal principles of diversity jurisdiction, as enumerated in 28 U.S.C. § 1332, pertinently states that diversity is present when a civil action is between "citizens of different States; ***." 28 U.S.C. § 1332(a)(1). For diversity purposes, a corporation is "deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." 28 U.S.C. § 1332(c)(1). On the other hand, a person is a citizen — for section 1332(a)(1) purposes — in the State where he or she is domiciled. See Bevilaqua v. Bernstein, 642 F. Supp. 1072, 1073 (S.D.N.Y 1986) (discussing the fact that, for diversity purposes, citizenship is determined by a party's domicile). Domicile, in turn, comprises a person's physical presence in a State and an intent to reside there permanently. See Haymes v. Columbia Pictures Corp., 16 F.R.D. 118, 120 (S.D.N.Y. 1954) ("Domicil consists of physical presence in a given jurisdiction with intent to reside therein permanently or indefinitely."). It is undisputed that both the plaintiff and the defendants had been, for diversity purposes, citizens of New York at the time plaintiff filed her Complaint in the state court.*fn5 Although plaintiff admits as much, she contends that diversity jurisdiction had been subsequently created when she moved to California in 1995. The Court disagrees.

This Court lacks subject matter jurisdiction over this case because "[i]n an action in which jurisdiction is premised on diversity of citizenship, diversity must exist at the time the action is commenced." Universal Licensing Corp. v. Paola del Lungo S.p.A., 293 F.3d 579, 581 (2d Cir. 2002); see LeBlanc v. Cleveland, 248 F.3d 95, 100 (2d Cir. 2001) (holding that a change in plaintiff's citizenship, subsequent to the filing of her lawsuit, did not affect the presence of diversity jurisdiction and that, for diversity purposes, the status of plaintiff's citizenship at the time she filed her complaint was controlling); Wolde-Meskel v. Vocational Instruction Project Comm. Servs., Inc., 166 F.3d 59, 62 (2d Cir. 1999) ("Satisfaction of the § 1332(a) diversity requirements (amount in controversy and citizenship) is determined as of the date that suit is filed — the `time-of-filing' rule."). Therefore, the only relevant inquiry as to diversity in this case is the respective citizenship of each party at the time plaintiff filed her Complaint on or about June 12, 1987. Because it is undisputed that, on such date, the plaintiff and the defendants were citizens of New York — and therefore not citizens of different States — no diversity of citizenship existed which could operate to confer subject matter jurisdiction upon this Court under 28 U.S.C. § 1332(a)(1). This case must therefore be remanded to state court because this Court lacks subject matter jurisdiction over this action.*fn6

Accordingly, it is hereby ORDERED that defendants' motion to remand is granted, that this case is remanded to New York State Supreme Court, County of Erie, and that plaintiff's motion for summary judgment is denied as moot.

*fn2 Marine Midland Bank is the former name of what is now known as HSBC Bank USA.

*fn3 Another earlier named defendant — Merrill Lynch, Pierce, Fenner & Smith, Inc. — is no longer a party to this litigation.

*fn4 Defendants also contend that plaintiff was not entitled to remove this action to this Court because, pursuant to 28 U.S.C. § 1441(a), a civil action brought in a State Court may only be removed by a defendant. In addition, defendants argue that any removal to this Court must have been done within 30 days of defendants' receipt of the state court complaint. See 28 U.S.C. § 1446(b).

*fn5 Plaintiff's relevant place of domicile is established by the fact that her Complaint indicates that she was a resident of New York — see Aff. of Michael B. Powers, Esq., Ex. A, June 12, 1987 Compl. ¶ 1 — and because she has admitted to the Court — during oral argument regarding this matter on January 17, 2003 — that she had lived in Amherst, N.Y. until 1995. In addition, plaintiff does not dispute that both Marine Midland and M&T maintained principal places of business in New York on the date in which plaintiff filed her complaint. See Powers Aff., Ex. B, ¶ 2; Ex. C, ¶ 2.

*fn6 Plaintiff's claims also do not indicate any federal questions such that would give rise to subject matter jurisdiction under 28 U.S.C. § 1331.


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