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CRW Mechanical Consulting and Fabrication, LLC v. Sandine

United States District Court, D. Nebraska

October 11, 2019

CRW MECHANICAL CONSULTING AND FABRICATION, LLC, a limited liability company; Plaintiff,
v.
AARON F. SANDINE, an individual; and AFS FABRICATION, LLC, a limited liability company; Defendants.

          MEMORANDUM AND ORDER

          Brian C. Buescher United States District Judge.

         This case comes before the Court on Defendants' Motion to Remand (Filing 13) and Plaintiff's Motion for Immediate Order of Attachment (Filing 8). The Court finds that it has subject-matter jurisdiction over this matter and denies Defendants' Motion to Remand. The Court also finds that Plaintiff has not met its burden of demonstrating one of the prerequisites for statutory attachment under Neb. Rev. Stat. § 25-1001 (Reissue 2016) by a preponderance of the evidence. Accordingly, Plaintiff's Motion for Order of Immediate Attachment is denied.

         I. BACKGROUND

         Plaintiff, CRW Mechanical Consulting and Fabrication, LLC (“CRW”), is owned by its sole member Nathan C. Ruff (“Ruff”). Filing 18-1 at 1. Ruff purchased a residence in Ohio in August of 2013 and has lived at the residence since that time. Filing 18-1 at 1. In the past year, Ruff has been physically present in Ohio for fifty weeks, and he intends to continue living there. Filing 18-1 at 1-2. Despite living in Ohio, Ruff received correspondence from the Internal Revenue Service through September of 2018 at a Nebraska address. Filing 15 at 2. Ruff also received a few other documents at various Nebraska addresses. Filing 15 at 1-2. Ruff may have also licensed his vehicles in Nebraska prior to July of 2019. Filing 15 at 2.

         As it relates to attachment, Ruff states CRW finished a project for a customer, and the customer paid the amount due to CRW into Defendant, AFS Fabrication, LLC's (“AFS”), bank account at Defendant, Aaron Sandine's (“Sandine”), direction. Filing 10-1 at 2. Sandine is the sole owner and member of AFS. Filing 10-1 at 1. According to Ruff, Sandine misappropriated funds from a customer and misled CRW by wrongfully routing the customer's payment to his company's bank account. Filing 10-1 at 2-3. Ruff alleges he asked Sandine whether the customer had ever paid, apparently unaware of the customer's payment to AFS. Filing 10-1 at 2. Documentation provided by Ruff shows Sandine received $421, 902.41 from the customer. Filing 10-2.

         Sandine confirms that he received $421, 902.41 from the customer but avers that Ruff directed him and AFS to receive all funds from the customer and pay expenses with those funds. Filing 17 at 2. Ruff directed him to do so as part of his plan to make Sandine a partner at CRW. Filing 17 at 3. Sandine provided documentation showing that he used a portion of the disputed funds to pay subcontractors for work completed as a part of the underlying project. Filing 17 at 2; Filing 17 at 24. Sandine also provided a sample from a text exchange between himself and Ruff showing Ruff was aware AFS received payment from the customer. Filing 17 at 21.

         II. DISCUSSION

         A. Subject-Matter Jurisdiction

         Defendants' Motion to Remand was filed subsequent to Plaintiff's motion regarding attachment, but the Court must determine whether it has subject-matter jurisdiction before proceeding any further. Defendants request that the Court “remand this matter to the Douglas County District Court” for further proceedings. Filing 13 at 1. However, federal courts cannot remand an action originally filed in federal court. See Streambend Props. II, LLC v. Ivy Tower Minneapolis, LLC, 781 F.3d 1003, 1017 (8th Cir. 2015) (“[A] district court has no power to remand a non-removed case to state court.”); 14C Fed. Prac. & Proc. Juris. § 3739 (Rev. 4th ed.) (“Moreover, federal courts cannot remand an action that was originally filed in federal court.”); see also28 U.S.C. § 1447 (discussing remand as a possible “[p]rocedure after removal” (emphasis supplied)).

         Looking to the substance of Defendants' request, the Court deduces that Defendants are suggesting this court lacks subject-matter jurisdiction due to a lack of diversity between the parties. Accordingly, the Court treats Defendants' motion as one to dismiss pursuant to Fed.R.Civ.P. 12(b)(1). There is no dispute as to satisfaction of the amount-in-controversy requirement or Defendants' Nebraska citizenship. At issue is CRW's citizenship. Specifically, Defendants argue Ruff, as the sole member of CRW, is a citizen of Nebraska while CRW argues Ruff is a citizen of Ohio. SeeFiling 14 at 3; Filing 18 at 3.

         To determine diversity jurisdiction, courts look to the parties' citizenship statuses at the lawsuit's filing. OnePoint Sols., LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007). “Federal court diversity jurisdiction of state law claims requires an amount in controversy greater than $75, 000 and complete diversity of citizenship among the litigants.” Id.(citing 28 U.S.C. § 1332(a)). “Complete diversity of citizenship exists where no defendant holds citizenship in the same state where any plaintiff holds citizenship.” Id. “An LLC's citizenship, for purposes of diversity jurisdiction, is the citizenship of each of its members.” Id. (quoting GMAC Commercial Credit LLC v. Dillard Dep't Stores, Inc., 357 F.3d 827, 829 (8th Cir. 2004)). Citizenship is established when an individual is both physically present in a state and has the intent to make his or her home there. Eckerberg v. Inter-State Studio & Publ'g Co., 860 F.3d 1079, 1085 (8th Cir. 2017).

         The Court may receive competent evidence such as affidavits, deposition testimony, and other evidence in order to resolve a factual dispute when a factual attack is made on the jurisdictional allegations of the complaint. Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993) (citing Land v. Dollar, 330 U.S. 731, 735 n.4, 67 S.Ct. 1009, 1011 n.4, 91 L.Ed. 1209 (1947)). “Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction-its very power to hear the case-there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.” Id. The burden of proving jurisdiction is on the plaintiff. Id.

         Because CRW is organized as a limited liability company and Ruff is the sole member, the Court must determine Ruff's personal citizenship to determine the citizenship of the limited liability company. Filing 18-1 at 1; see also OnePoint Sols., LLC, 486 F.3d at 346. CRW has presented evidence that Ruff purchased a residence in Ohio in August of 2013 and has lived at the residence since that time. Filing 18-1 at 1. Ruff has been physically present in Ohio for approximately fifty out of the last fifty-two weeks. Filing 18-1 at 1-2. Ruff further intends to continue living at his Ohio residence. Filing 18-1 at 1-2. On the other hand, Defendants have provided evidence that Ruff has a presence in Nebraska, receives some mail there, and either he or an entity affiliated with Ruff has a vehicle in Nebraska. Filing 15 at 1-2. Defendants acknowledged at the hearing of this matter that Defendants have presented no evidence illustrating that Ruff had Nebraska citizenship as of the date this action was filed, which was September 13, 2019.

         Based upon the evidence presented, the Court finds Ruff-and therefore CRW-is a citizen of Ohio. This Court may therefore exercise diversity ...


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