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OMNI EQUITIES, INC. v. PEARL S. BUCK FOUND.

March 17, 1994

OMNI EQUITIES, INC., EDWARD ARTES-ROY, RICHARD E. GORDON, JR., KATHERINE K. GORDON
v.
THE PEARL S. BUCK FOUNDATION, MAGNACARD, INC., THE SOLARIS FOUNDATION, INC., HIGHLAND REALTY CORPORATION OF LAKE COUNTY



The opinion of the court was delivered by: DONALD W. VANARTSDALEN

 VanARTSDALEN, S.J.

 Introduction

 The only basis for federal jurisdiction over this case is diversity of citizenship pursuant to 28 U.S.C. § 1332. Although a nonjury trial was held on February 14, 1994, it now appears that there is a lack of complete diversity of citizenship of all essential ("indispensable") parties plaintiff from all essential ("indispensable") parties defendant. This court therefore lacks subject-matter jurisdiction and the case will be dismissed.

 Legal Standard

 Subject-matter jurisdiction is premised solely on the diversity of citizenship of the parties and on an amount in controversy exceeding the jurisdictional amount of $ 50,000.00. 28 U.S.C. § 1332 (1993). When a plaintiff sues more than one defendant in a diversity action, the plaintiff must meet the requirements of the diversity statute for each defendant or face dismissal. Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 109 S. Ct. 2218, 2221, 104 L. Ed. 2d 893 (1989). A corporation is deemed to be a citizen of any state in which it has been incorporated and of the state where it has its principal place of business. 28 U.S.C. § 1332(c) (1993). The parties invoking federal jurisdiction, in this case plaintiffs Omni Equities, Inc. (Omni) and Edward Artes-Roy, bear the burden of affirmatively pleading and proving subject-matter jurisdiction. McNutt v. General Motors Acceptance Corp. of Indiana, 298 U.S. 178, 80 L. Ed. 1135, 56 S. Ct. 780 (1936). Once jurisdiction is challenged, as it has been in this case by joined parties plaintiff Richard E. Gordon and Katherine K. Gordon (the Gordons), the party invoking federal jurisdiction must support the jurisdictional allegations with "competent proof" and show "by a preponderance of evidence" that jurisdiction exists. Id. at 189.

 Far from supplying competent proof, the pleadings in this case betray a vigorous effort by certain parties to sidestep or obfuscate the determination of citizenship. Since those parties also assert diversity of citizenship with equal vigor, the court has examined an array of materials to determine citizenship, including some appended to pleadings and others from outside sources. See Land v. Dollar, 330 U.S. 731, 91 L. Ed. 1209, 67 S. Ct. 1009 (1947) (holding that a court may examine materials outside the Complaint to determine whether subject-matter jurisdiction exists).

 Procedural History

 This action was commenced in this court by a complaint filed by Omni against The Pearl S. Buck Foundation (Pearl Buck Foundation) on January 6, 1993. (Filed Doc. No. 1.) The complaint alleged that Omni was incorporated in Massachusetts and had its principal place of business in California. (Filed Doc. No. 1 at P 3.) The Pearl Buck Foundation was alleged to be incorporated in Delaware and with its principal place of business in Pennsylvania. (Filed Doc. No. 1 at P 4.) These allegations are not contested. Complete diversity therefore existed at the outset upon the filing of the action.

 The original complaint alleged that on July 21, 1985, the Solaris Foundation, Inc. (Solaris) conveyed four described parcels of Florida real estate as a donation to the Pearl Buck Foundation as Trustee for the Roy Family Endowment for Gifted Children. According to the complaint, all of the money for acquiring the parcels of real estate emanated from various contributions by Omni to Solaris and other predecessors in title. The action was filed by Omni as a debtor-in-possession then under the jurisdiction of the United States Bankruptcy Court for the Central District of California. The relief sought was for a "judgment avoiding the transfers described above [the conveyance of the four parcels of Florida real estate to Pearl Buck Foundation] and such further relief as is appropriate." The only property involved in the original complaint was the four parcels of real estate.

 The second amended complaint was filed on August 24, 1993 by Artes-Roy as an added party plaintiff and alleged creditor of Omni. That complaint made allegations of cash and stock transfers from Solaris to the Pearl Buck Foundation, in addition to the real estate transfers. (Filed Doc. No. 24.) That complaint prayed that "all of the defendants be ordered by this court to take whatever actions necessary to effectuate the transfer of title to parcels A, B, C and D [the Florida real estate] to the benefit of Omni's creditors" and that "defendant [Pearl Buck Foundation] be ordered to pay to the creditors of Omni the sum of three million dollars . . ." The conveyances are alleged to have been contrived "to delay, hinder and defraud creditors" of Omni. *fn1"

 On April 12, 1993, Artes-Roy and Reinhard Mueller filed, pro se, separate motions to intervene as parties plaintiff. (Filed Doc. Nos. 7, 8.) The motions alleged that each movant was a creditor of Omni, and because the voluntary bankruptcy petition of Omni was dismissed on March 30, 1993, "Omni would not be able to adequately represent movant's interest." Because neither Omni nor the Pearl Buck Foundation filed any objection and both acquiesced in the motions, the motion was granted. (Filed Doc. No. 14.) *fn2"

 Artes-Roy, as an intervening party plaintiff, filed an amended complaint on June 22, 1993. (Filed Doc. No. 16.) The amended complaint simply added Artes-Roy and Mueller as parties plaintiff, and reiterated almost ...


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