David Klossner, Individually and d/b/a KDA Realty LLC v. Zurich American Insurance Company and American Zurich Insurance Company

Summary

A United States magistrate judge recommends remanding the removed insurance action for lack of subject-matter jurisdiction because the defendants did not adequately allege Plaintiff David Klossner’s citizenship for diversity purposes. The recommendation states that if the defendants provide sufficient allegations or evidence of citizenship within the objection period, the court should retain jurisdiction and deny the motion to remand.

Holdings

1. A statement that a natural person is a citizen and resident of a state, supported only by the person's current residence or address, does not plausibly allege domicile when the removing party does not address additional domicile factors or provide supporting evidence. Because Defendants failed to properly allege Klossner's citizenship, complete diversity was not adequately established.
2. At the pleading stage, a party invoking diversity jurisdiction generally must allege the citizenship of each party, rather than provide evidentiary proof of citizenship; however, the allegations must be sufficient to plausibly establish domicile and complete diversity.
3. Defendants sufficiently alleged that the amount in controversy exceeded $75,000 because the petition sought approximately $2.3 million in damages, statutory interest, and exemplary damages.
4. Failure to include required state-court documents with a notice of removal is ordinarily a nonjurisdictional procedural defect that may be remedied by supplementing the record rather than remanding the case.
5. The joint removal was procedurally proper because both ZAIC and AZIC were named as defendants and both appeared and jointly filed the notice of removal.

Questions Presented

1. Whether Defendants adequately established complete diversity for purposes of subject-matter jurisdiction under 28 U.S.C. § 1332.
2. Whether the notice of removal was procedurally defective because it did not include additional documents allegedly material to removal.
3. Whether KDA Realty LLC's citizenship affected diversity jurisdiction when Klossner was the LLC's sole member.
4. Whether the joint removal by ZAIC and AZIC was procedurally proper despite Defendants' contention that AZIC was improperly included.

Disposition

remanded