United States District Court, E.D. Pennsylvania
April 26, 2004.
MICHAEL A. MATLOCK, JR., TRUSTEE OF THE MATLOCK REAL ESTATE EQUITY TRUST; MATLOCK REAL ESTATE EQUITY TRUST
The opinion of the court was delivered by: MARY A. McLAUGHLIN, District Judge
MEMORANDUM AND ORDER
The Court sua sponte remanded this case back to the Court of Common
Pleas of Bucks County on March 31, 2004, on the ground that there was no
diversity of citizenship and, therefore, the Court lacked subject matter
jurisdiction over the case. The plaintiff thereafter filed a motion for
costs and fees, including attorney's fees. The Court has the authority to
grant an award of fees and costs, notwithstanding that the case has
already been remanded back to state court. Mintz v. Educ. Testing Serv.,
99 F.3d 1253, 1257-58 (3d Cir. 1996). Because the Court finds that there
was no factual or legal basis to remove the case, it will grant the
The plaintiff and the defendant are citizens of Pennsylvania. The
defendant is sued as the trustee of two trusts whose situs is New York.
The beneficiaries of the trust are the defendant, who is also the settlor of the trust, and his descendants. The
Supreme Court decided in Navarro Savings Assoc. V. Lee, 466 U.S. 458, 464
(1980), that the Court should look to the citizenship of the trustee when
deciding the citizenship of a trust for purposes of diversity of
citizenship. The other alternative considered by the Court in Navarro was
the citizenship of the beneficiary of the trust. Both the trustee and the
beneficiary of the two trusts at issue here are citizens of
Pennsylvania. There was no basis for the defendant to think that there
was diversity of citizenship here. Indeed, the Court is concerned that
the defendant tried to mislead the Court about his citizenship and the
law on diversity of citizenship.
This case was brought in the Court of Common Pleas of Bucks County by a
citizen of Pennsylvania against Michael A. Matlock, Jr., individually and
as trustee of the Matlock Family Trust, a/k/a Matlock Real Estate Equity
Trust, and Matlock Family Trust, a/k/a Matlock Real Estate Equity Trust.
The complaint was served on February 2, 2004. On March 4, 2004, the
plaintiff, with defendants' consent, filed an amended complaint with the
caption of this case. The defendant trustee removed the case to this
court on March 10, 2004.
The notice of removal alleged diversity of citizenship. The Court
reviewed the notice of removal shortly after it was filed and became
concerned that there was no diversity of citizenship. The notice of
removal did not assert the citizenship of any of the parties. Instead, it referred to paragraphs 2
and 3 of the amended complaint as stating that the trust is an entity
with a place of business in New York and the defendant, Michael A.
Matlock, Jr., is a resident of the State of New York. The notice of
remand stated that the plaintiff is identified in the complaint as a
resident of Bucks County, Pennsylvania.
When the Court reviewed the amended complaint, I noticed that paragraph
3 said that the defendant trustee "is believed to have a place of
residence located at 21 West 10th Street, New York, New York 10011,
and/or 1975 River Road, Upper Black Eddy, Bucks County, Pennsylvania,
18972." It concerned the Court that the defendant had left out the part
of the paragraph that listed Pennsylvania as a possible residence of Mr.
Matlock. Knowing that the Court must look to the citizenship of a trustee
when deciding diversity of citizenship, the Court became concerned that
the defendant had misstated the allegations of the complaint to lead the
Court to believe that Mr. Matlock was a citizen of the State of New
The Court then ordered the defendant to explain why there was diversity
of citizenship. In response to the Court's order, the defendant submitted
an affidavit, stating that: (1) he resided in New York more than six
months of the year; (2) the trust is a New York trust and entity; and,
(3) his daughter, who is ten years of age and with whom he resides, is in
public school in New York. He did not say anything about his citizenship or the
beneficiaries of the trust. The defendant did not cite any law to
establish that the situs of the trust is relevant for diversity of
Again, the Court ordered the defendant to explain the factual and legal
basis for invoking this Court's diversity jurisdiction. In response, the
defendant stipulated that he is a citizen of the Commonwealth of
Pennsylvania. It was then that the Court remanded the case.
The Court must conclude that there was no factual or legal basis for
the removal. Even of more concern to the Court is that the defendant
attempted to mislead the Court in both his notice of removal and in his
affidavit. In the notice of removal, he misstated the allegations of the
amended complaint with respect to his residency. In his affidavit, the
defendant attempted to mislead the Court by suggesting that he was a
citizen of New York when in reality he is a citizen of the Commonwealth
of Pennsylvania. He may also have misrepresented the residence of his
daughter. Finally, in his opposition to the pending motion, he said that
his daughter was the beneficiary of the trust when the trust instrument
says that he and his descendants are the beneficiaries.
Although the Court sua sponte pursued the issue of subject matter
jurisdiction, the plaintiff's counsel was preparing to file a motion to
remand. Indeed, the plaintiff's counsel sent a letter to the defendant explaining to him that this
Court did not have jurisdiction over the matter and asking the defendant
to stipulate to a remand and pay Six Hundred Dollars in attorney's fees
and costs. The defendant rejected this very reasonable request. This
rejection came after the Court had raised the issue and explained to the
defendant that it is the citizenship of the trustee that is relevant for
The Court holds that the plaintiff is entitled to her costs and
attorney's fees incurred in preparing and filing a motion to remand this
An appropriate Order follows. ORDER
AND NOW, this ___ day of April, 2004, upon consideration of Plaintiff's
Motion Requesting Court to Supplement Order of Remand to Include Order
for Repayment of Just Costs and Expenses including Attorney Fees, or in
the Alternative, Application for Such Costs and Fees, Pursuant to
28 U.S.C. § 1447 (c) (Docket No. 8), the defendant's answer thereto, and
the plaintiff's reply, IT IS HEREBY ORDERED that said motion is GRANTED.
IT IS FURTHER ORDERED that the defendant shall pay the plaintiff Two
Thousand Two Hundred Sixty-two and 50/100 Dollars in costs and expenses,
including attorney's fees, on or before May 7, 2004.
BY THE COURT.
© 1992-2004 VersusLaw Inc.