Elesha Soto v. TARA KALATZES and GUS KALATZES

UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
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ELESHA SOTO,
Plaintiff - Appellant,
v.
TARA KALATZES and GUS
KALATZES,
Defendants - Appellees.
No. 21-4081
(D.C. No. 2:21-CV-00223-TS-JCB)
(D. Utah)
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before BACHARACH, MURPHY, and CARSON, Circuit Judges.
_________________________________
Pro se Plaintiff Elesha Soto filed a complaint against Defendants Gus and Tara
Kalatzes, alleging they breached the parties’ lease agreement. Plaintiff asserts the
district court had federal-question and diversity jurisdiction under 28 U.S.C. §§ 1331
and 1332. Because her complaint alleged only state-law claims, Plaintiff and
Defendants are citizens of Utah, and the amount in controversy was $25,000, the
* After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
FILED
United States Court of Appeals
Tenth Circuit
October 18, 2021
Christopher M. Wolpert
Clerk of Court
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district court sua sponte dismissed Plaintiff’s complaint without prejudice for lack of
subject-matter jurisdiction. We exercise jurisdiction under 28 U.S.C. § 1291 and
affirm.
I.
This case arises out of a failed commercial transaction. Defendant Gus
Kalatzes owns and manages commercial real property. Plaintiff leased property from
Gus for her salon, Cuts Plus. She alleges Gus’s wife, Tara, handled “all the secretary
duties” for her husband’s commercial and residential rental properties. On March 1,
2021, Gus notified Plaintiff that he would not renew her lease after its expiration.
As a result, Plaintiff filed a complaint in the District of Utah against both Defendants,
Gus and Tara. Plaintiff alleged Defendants breached the parties’ lease agreement by
failing to repair the property, permitting two other salons to open nearby,
overcharging her for monthly utilities, and not renewing her lease. She sought
$25,000.00 in damages. Plaintiff sought to proceed in forma pauperis (IFP).
The district court referred Plaintiff’s IFP motion to a magistrate judge who
entered an order requiring Plaintiff to supplement the motion and to show cause why
the district court should not dismiss her action for lack of subject-matter jurisdiction.
The magistrate judge warned that failure to do so would result in a recommendation
to dismiss the case. The show-cause order explained that, although Plaintiff
“mark[ed] diversity jurisdiction on the forms,” she failed to establish jurisdiction
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because she alleged all parties “resid[e] in Utah,” 1 and the amount in controversy was
$25,000. The order stated Plaintiff’s complaint did not establish federal-question
jurisdiction because it failed to allege any federal claims. Plaintiff timely responded
to the order, but she averred no facts establishing federal jurisdiction of any kind.
Thus, the district court dismissed Plaintiff’s complaint without prejudice for lack of
subject-matter jurisdiction. Plaintiff appeals.
II.
We review a district court’s order dismissing a case for lack of subject-matter
jurisdiction de novo. Grynberg v. Kinder Morgan Energy Partners, L.P., 805 F.3d
901, 905 (10th Cir. 2015) (citation omitted). In doing so, we liberally construe a pro
se plaintiff’s filings, Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam)
(citation omitted), but we will not act as her advocate. Hall v. Bellmon, 935 F.2d
1106, 1110 (10th Cir. 1991).
“Federal courts are courts of limited jurisdiction, possessing only that power
authorized by Constitution and statute.” Gunn v. Minton, 568 U.S. 251, 256 (2013)
(citation and quotation marks omitted). “The basic statutory grants of federal-court
subject-matter jurisdiction are contained in 28 U.S.C. §§ 1331 and 1332.” Arbaugh
v. Y&H Corp., 546 U.S. 500, 513 (2006). “Section 1331 provides for ‘[f]ederal-
1 While “[a]n individual’s residence is not equivalent to his domicile[,] and it
is domicile that is relevant for determining citizenship,” Siloam Springs Hotel, L.L.C.
v. Century Sur. Co., 781 F.3d 1233, 1238 (10th Cir. 2015) (citation omitted),
Plaintiff’s form complaint uses the word “citizen” and states that Plaintiff, Tara
Kalatzes, and Gus Kalatzes are citizens of Utah.
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question’ jurisdiction, [and] § 1332 for ‘[d]iversity of citizenship’ jurisdiction.” Id.
Federal-question jurisdiction exists for all claims “arising under the Constitution,
laws, or treaties of the United States.” 28 U.S.C. § 1331. And diversity jurisdiction
exists when “the matter in controversy exceeds the sum or value of $75,000,
exclusive of interest and costs, and is between . . . citizens of different States” or
“citizens of a State and citizens or subjects of a foreign state.” Id. § 1332. Diversity
jurisdiction requires complete diversity—no plaintiff may be a citizen of the same
state as any defendant. Grynberg, 805 F.3d at 905 (citation omitted). Federal courts
must presume that a case lies outside their limited jurisdiction, “and the burden of
establishing the contrary rests upon the party asserting jurisdiction.” Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted).
III.
Plaintiff argues that the district court erred in dismissing her complaint
because she did not receive proper notice, she complied with the district court’s
show-cause order, and the district court is “the only place where these issues
submitted for judgment can be addressed.” But the magistrate judge’s show-cause
order notified Plaintiff that he would recommend her complaint be dismissed if she
could not establish a basis for federal jurisdiction. And though Plaintiff timely
responded, she failed to establish federal jurisdiction. Last, as explained below,
Plaintiff is incorrect that the federal district court is the “only place” where the issues
she raised may be addressed.
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Plaintiff pleaded that the district court had both federal-question and diversity
jurisdiction. But she (1) alleged only state-law claims related to her lease agreement
with Gus Kalatzes; (2) asserted that she, Gus Kalatzes, and Tara Kalatzes are citizens
of Utah; and (3) stated the amount in controversy was $25,000.00.
Plaintiff’s response to the magistrate judge’s show-cause order referred to the
citizenship of business entities, though Defendants are individuals, and stated, “that
owners listed also maintain his and her citizenship in Greece international, including
several other states of records undiscovered.” But if Plaintiff intended to explain that
Tara and Gus Kalatzes are Greek and not Utah citizens, contrary to her complaint’s
allegations, she failed to identify them as the Greek citizen business “owners.” See
Kokkonen, 511 U.S. at 377 (1994) (“It is to be presumed that a cause lies outside this
limited jurisdiction, and the burden of establishing the contrary rests upon the party
asserting jurisdiction.” (citations omitted)). And regardless, Plaintiff’s show-cause
response did not refute the alleged $25,000.00 amount in controversy, which falls far
short of § 1332(a)’s $75,000 threshold.
For these reasons, the district court properly dismissed Plaintiff’s complaint
for lack of subject-matter jurisdiction.
AFFIRMED.
Entered for the Court
Joel M. Carson III
Circuit Judge
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