Van Buskirk v. The United Group of Companies

18‐1469‐cv
Van Buskirk v. The United Group of Companies
United States Court of Appeals
for the Second Circuit
A UGUST TERM 2018
No. 18‐1469
B RUCE A. V AN B USKIRK AND L ORI A. V AN B USKIRK,
Plaintiffs‐Appellants,
v.
T HE U NITED G ROUP OF C OMPANIES, INC., DCG F UNDS MANAGEMENT, LLC,
DCG/UGOC F UNDS MANAGEMENT II, LLC, MICHAEL J. U CCELLINI , E XECUTOR OF
THE E STATE OF WALTER F. U CCELLINI , MCM S ECURITIES, LLC, MILLENNIUM C REDIT
MARKETS , LLC, D AVIS C APITAL G ROUP , INC., JESSICA F. S TEFFENSEN, E XECUTRIX OF
THE E STATE OF WALTER F. U CCELLINI ,
Defendants‐Appellees,
R ICHARD W. D AVIS, JR .,
Defendant.
S UBMITTED: A PRIL 11, 2019
D ECIDED: A UGUST 16, 2019
Before: C ALABRESI, L OHIER , SULLIVAN, Circuit Judges.
Plaintiffs‐Appellants appeal from a judgment of the United States District
Court for the Northern District of New York (Sharpe, J.) dismissing their claims
for lack of subject matter jurisdiction and the district court’s subsequent denial of
a motion for reconsideration, arguing that the district court failed to consider

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evidence that the parties were diverse at the time of filing. Because courts may
freely permit jurisdictional amendments even at the appellate level, we vacate the
judgment of the district court and remand for further proceedings consistent with
this opinion.
Gary A. Gotto, Keller Rohrback L.L.P.,
Phoenix, Arizona and David J. Ko, Keller
Rohrback L.L.P., Seattle, Washington, for
Plaintiffs‐Appellants.
Michael B. de Leeuw & Tamar S. Wise, Cozen
O’Connor, New York, New York, for
Defendants‐Appellees.
R ICHARD J. S ULLIVAN, Circuit Judge:
Plaintiffs‐Appellants Bruce and Lori Van Buskirk (“Plaintiffs”) appeal from
a judgment entered by the United States District Court for the Northern District of
New York (Gary L. Sharpe, J.) dismissing Plaintiffs’ claims for lack of subject
matter jurisdiction and the district court’s subsequent denial of a motion for
reconsideration. Plaintiffs argue that, on de novo review, the entire record on
appeal demonstrates that they were citizens of Florida – not New York – at the
time they filed their suit, and therefore satisfied the complete diversity
requirement of 28 U.S.C. § 1332, establishing federal subject matter jurisdiction.
As explained below, because an appellate court may freely permit jurisdictional
amendments, we vacate the judgment of the district court and remand so that
Plaintiffs may amend their complaint. At that time, the district court may also

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consider whether to impose costs – including attorney’s fees – on Plaintiffs
attributable to their failure to provide the district court with all relevant evidence
at the time of the order to show cause.
I. B ACKGROUND
In July 2016, Plaintiffs brought suit against Defendants‐Appellees
(“Defendants”) – The United Group of Companies, Inc.; DCG Funds Management,
LLC; DCG/UGOC Funds Management II, LLC; MCM Securities, LLC; Millennium
Credit Markets, LLC; Davis Capital Group, Inc.; and individual officers of the
various companies – alleging violations of state law including common law fraud,
breach of fiduciary duty, negligent misrepresentation, unjust enrichment, and
aiding and abetting fraud. Plaintiffs subsequently amended their complaint twice.
In all three iterations of their complaint, Plaintiffs alleged that they were
“resident[s] of Cobleskill, New York” and that Defendants were citizens of New
York or North Carolina.
In February 2018, the district court ordered Plaintiffs to show cause as to
why the action should not be dismissed sua sponte under Federal Rule of Civil
Procedure 12(h)(3) for lack of subject matter jurisdiction. Plaintiffs submitted a
two‐paragraph response stating that the court had diversity jurisdiction because
“Plaintiffs used to reside in Cobleskill, New York . . . but sold their residence in

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New York and now reside” in Naples, Florida. J. App’x at 107. Plaintiffs argued
that Defendants were aware of this “domicile” because they had sent mail to the
Florida address. Plaintiffs also attached (1) blurry photocopies of their Florida
drivers’ licenses – one visibly dated “12‐28‐2016” – and (2) a photocopy of a
January 2018 piece of mail from one Defendant addressed to Plaintiffs at the
Florida address. In a March 21, 2018 docket entry, the district court agreed with
Defendants that “Plaintiffs . . . failed to satisfy their burden of proving that they
were citizens of states diverse from those of all defendants at the time of filing”
and dismissed the complaint for lack of subject matter jurisdiction. J. App’x at 119.
Judgment was entered that day.
Plaintiffs thereafter filed a motion for reconsideration, arguing that
dismissal was improper and submitting “Declaration[s] of Domicile” – sworn
statements signed by Plaintiffs on May 9, 2013 indicating that they then resided in
Florida and intended Florida to be their permanent home. On April 13, 2018, the
district court denied the motion because the affidavits were known to Plaintiffs at
the time of the prior order to show cause and Plaintiffs had failed to invoke any of
the strict grounds for reconsideration. Plaintiffs subsequently filed a timely notice
of appeal from the district court’s April 13, 2018 order denying Plaintiffs’ motion

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for reconsideration.
II. S TANDARD OF R EVIEW
We generally treat an appeal from a denial of a motion for reconsideration
that largely renews arguments previously made in the underlying order as
bringing up for review the underlying order or judgment. See “R” Best Produce,
Inc. v. DiSapio, 540 F.3d 115, 121–22 (2d Cir. 2008). “When reviewing the dismissal
of a complaint for lack of subject matter jurisdiction, we review factual findings
for clear error and legal conclusions de novo, accepting all material facts alleged in
the complaint as true and drawing all reasonable inferences in the plaintiff’s
favor.” Liranzo v. United States, 690 F.3d 78, 84 (2d Cir. 2012). “Denials of motions
for reconsideration are reviewed only for abuse of discretion.” Analytical Surveys,
Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir. 2012).1
1 Plaintiffs argue that the district court’s denial of the motion for reconsideration must be
reviewed de novo because the denial “both affirmed the district court’s prior Dismissal Order and
offered, for the first time, explanation in support of its prior conclusion.” (Appellants’ Brief at
13.) But the district court expressly stated the reasoning for its dismissal in its March 21, 2018
docket entry, finding that “Plaintiffs [had] failed to satisfy their burden of proving that they were
citizens of states diverse from those of all defendants at the time of filing.” J. App’x at 119. By
contrast, the court’s April 13, 2018 order only considered the grounds for a motion for
reconsideration, not the merits of the dismissal for lack of jurisdiction. Accordingly, abuse of
discretion is the proper standard. See AEP Energy Servs. Gas Holding Co. v. Bank of Am., N.A., 626
F.3d 699, 739 n.21 (2d Cir. 2010) (concluding that de novo review is required when the district court
first addresses the merits on a motion for reconsideration).

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III. D ISCUSSION
Plaintiffs argue on appeal that the district court failed to properly consider
evidence proving they were citizens of Florida at the time they filed their
complaint. Specifically, Plaintiffs argue that the district court did not attribute
enough weight to the evidence submitted in response to the district court’s order
to show cause or the civil cover sheet they submitted when they filed their initial
complaint; Plaintiffs further contend that the district court ought to have
considered the declarations of domicile from 2013 that they submitted as part of
their motion for reconsideration. In the alternative, Plaintiffs argue that we should
invoke our authority under 28 U.S.C. § 1653 to find complete diversity based on
the newly submitted evidence. While we essentially agree with the district court’s
rulings based on the record that existed at the time, we also agree with Plaintiffs
that § 1653 affords them another opportunity to establish diversity jurisdiction.
The parties do not dispute that this case may only be properly entertained
in federal court on the basis of diversity jurisdiction under 28 U.S.C. § 1332. As
relevant to this appeal, “diversity jurisdiction is available only when all adverse
parties to a litigation are completely diverse in their citizenships.” Herrick Co. v.
SCS Commc’ns, Inc., 251 F.3d 315, 322 (2d Cir. 2001). Complete diversity requires

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that “all plaintiffs . . . be citizens of states diverse from those of all defendants.”
Pa. Pub. Sch. Emps.’ Ret. Sys. v. Morgan Stanley & Co., 772 F.3d 111, 118 (2d Cir.
2014). At issue here is whether Plaintiffs are in fact diverse; since it is undisputed
that Defendants are citizens of New York and North Carolina, Plaintiffs may not
share that citizenship and still satisfy the requirements of diversity jurisdiction.
“An individual’s citizenship, within the meaning of the diversity statute, is
determined by his domicile. . . [in other words] the place where a person has his
true fixed home and principal establishment, and to which, whenever he is absent,
he has the intention of returning.” Palazzo ex rel. Delmage v. Corio, 232 F.3d 38, 42
(2d Cir. 2000) (internal citation marks and citations omitted). A person has only
one domicile at any given moment, though it may change. Id. For purposes of
diversity jurisdiction, the relevant domicile is the parties’ domicile at the time the
complaint was filed. See Universal Licensing Corp. v. Paola del Lungo S.p.A., 293 F.3d
579, 581 (2d Cir. 2002).
Here, Plaintiffs alleged in their complaint that they were residents of
Cobleskill, New York. As a threshold matter, residence alone is insufficient to
establish domicile for jurisdictional purposes. See Leveraged Leasing Admin. Corp.
v. PacifiCorp Capital, Inc., 87 F.3d 44, 47 (2d Cir. 1996). In any case, even if Plaintiffs

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had alleged that they were domiciled in Cobleskill, New York, their complaint
would still have been inadequate, since, as already observed, at least one
Defendant was a citizen of New York, defeating complete diversity. To invoke
federal diversity jurisdiction, in response to the district court’s order to show
cause, Plaintiffs needed to produce evidence establishing that they had been
domiciled in Florida at the time they filed their suit. But they did not produce such
evidence. The sworn declarations indicated Plaintiffs had moved to Florida but
did not specify when that move occurred. The attached exhibits were similarly
unavailing; one driver’s license was dated December 2016 and the piece of mail
was dated January 2018 – both after the July 2016 filing. On appeal, Plaintiffs argue
that the district court should have considered the civil cover sheet filed with the
initial complaint because it suggested that Plaintiffs resided in Florida when the
complaint was filed by listing “Collier” as the county in which Bruce Van Buskirk
resided. But again, evidence of residence is insufficient to establish domicile.2
Accordingly, the district court properly dismissed the complaint based on the
evidence before it at the time.
Nor did the district court abuse its discretion in denying Plaintiffs’ motion
2 The parties dispute whether the civil cover sheet may be considered at all. Because we find it
is insufficient to establish Plaintiffs’ domicile in any event, we need not address this issue.

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for reconsideration of its March 21, 2018 dismissal. A motion for reconsideration
is an extraordinary request that is granted only in rare circumstances, such as
where the court failed to consider evidence or binding authority. “The standard
for granting such a motion is strict, and reconsideration will generally be denied
unless the moving party can point to controlling decisions or data that the court
overlooked – matters, in other words, that might reasonably be expected to alter
the conclusion reached by the court.” Shrader v. CSX Transp., Inc., 70 F.3d 255, 257
(2d Cir. 1995). As part of their motion for reconsideration, Plaintiffs for the first
time attached sworn declarations stating that their domicile was Florida as early
as 2013. But since Plaintiffs had not provided the district court with that evidence
until the motion for reconsideration – and did not explain why they failed to
provide the declarations in response to the order to show cause – the district court
overlooked nothing at the time of the dismissal. Therefore, the district court did
not abuse its discretion when it denied the late request to add evidence –
previously known to Plaintiffs at the time of the order to show cause – as part of a
motion for reconsideration.
Plaintiffs likewise have not explained why they failed to move to amend
pursuant to either Federal Rule of Civil Procedure 15(a)(2), which provides that

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leave to amend “should [be] freely give[n] . . . when justice so requires” – including
after final judgment has been vacated, see Nat’l Petrochem. Co. of Iran v. M/T Stolt
Sheaf, 930 F.2d 240, 245 (2d Cir. 1991) (observing that in some cases “it might be
appropriate . . . to take into account the nature of the proposed amendment in
deciding whether to vacate”) – or 28 U.S.C. § 1653, which broadly allows for the
amendment of “[d]efective allegations of jurisdiction . . . in the trial or appellate
courts.” Rather than pursue such relief, Plaintiffs submitted a two‐page motion –
characterized as a motion for reconsideration – which included a request for the
court to consider new evidence that was clearly available to Plaintiffs at the time
of the order to show cause. Although the district court might have construed
Plaintiffs’ motion as a clumsily‐made motion to amend, we cannot find that the
district court abused its discretion when it denied Plaintiffs – who were
represented by counsel – their motion for reconsideration.
Nevertheless, pursuant to 28 U.S.C. § 1653, appellate courts have discretion
to consider the entire record to determine whether there is subject matter
jurisdiction. This provision – as noted above – allows both “trial and appellate
courts” to amend “defective allegations of jurisdiction.” 28 U.S.C. § 1653; see John
Birch Soc’y v. Nat’l Broad. Co., 377 F.2d 194, 198–99 (2d Cir. 1967); see also Troupe v.

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Chi., D. & G. Bay Transit Co., 234 F.2d 253, 258 n.6 (2d Cir. 1956) (holding that courts
of appeals can consider the whole record under § 1653). “Such amendments will
be freely permitted where necessary to avoid dismissal on purely technical
grounds. . . . [And u]nless the record clearly indicates that the complaint could not
be saved by any truthful amendment, . . . we generally afford an opportunity for
amendment.” Canedy v. Liberty Mut. Ins. Co., 126 F.3d 100, 103 (2d Cir. 1997). In
the past, this statute has provided the basis for us to deem pleadings amended on
appeal or grant leave to amend on appeal and remand for proceedings on the
merits in the district court. See, e.g., Durant, Nichols, Houston, Hodgson & Cortese‐
Costa P.C. v. Dupont, 565 F.3d 56, 64–66 (2d Cir. 2009) (remanding so that the
district court could resolve factual disputes); see also Maitland v. Fishbein, 712 F.
App’x 90, 92–93 (2d Cir. 2018) (summary order) (remanding for further
proceedings on the merits).
To be sure, we have also articulated a caveat to § 1653’s general principle:
“[w]here . . . the district court has pointed out the defects in the complaint and has
afforded a plaintiff a reasonable time to amend[,] and the plaintiff, with the
intention to delay, has not done so, the appellate court will not allow the plaintiff‐
appellant leave to amend.” John Birch Soc’y, 377 F.2d at 199. But Defendants have

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not argued that Plaintiffs had any intention to delay the suit, nor is such a motive
otherwise apparent from the record.
As Defendants point out, other circuits have refused to permit § 1653 relief
– even absent an intent to delay – when the party seeking to invoke federal
jurisdiction has been given an opportunity to amend their pleadings at the district
court level and failed to do so. See, e.g., Naartex Consulting Corp. v. Watt, 722 F.2d
779, 792 n.21 (D.C. Cir. 1983) (“[C]ourts are not obliged to indulge litigants
indefinitely, especially when their amendments constitute futile gestures.”); Mills
v. Maine, 118 F.3d 37, 53 (1st Cir. 1997) (“[W]e reiterate our view that, where a party
has had an opportunity to seek to amend its pleadings in the district court, it is not
appropriate for that party belatedly to seek leave to amend on appeal pursuant to
28 U.S.C. § 1653.”). Nevertheless, on the record before us, we are not persuaded
that such a refusal is warranted here. Significantly, the issue of jurisdiction was
never raised by Defendants and was only identified by the district court eighteen
months after the case commenced, when the court sua sponte ordered Plaintiffs to
show cause why the case should not be dismissed. Beyond the order to show
cause, Plaintiffs were not provided other opportunities to amend or otherwise
clarify their jurisdictional argument prior to entry of judgment. Plaintiffs are not

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blameless; they could have requested an opportunity to amend, and their response
to Judge Sharpe’s order left much to be desired. But we are reluctant to dismiss a
complaint for lack of subject matter jurisdiction when subsequent facts reveal
diversity jurisdiction may have existed all along. See Dupont, 565 F.3d at 64.
Considering the whole record pursuant to § 1653, we conclude that the
sworn declarations of domicile dated May 2013 offered as part of Plaintiffs’ motion
for reconsideration suggest that Plaintiffs were in fact domiciled in Florida as early
as 2013. Since the district court is in the best position to consider the veracity of
this evidence in the first instance, we vacate the judgment of the district court and
remand so that Plaintiffs may amend their complaint and so that the district court
may determine whether the evidence provided by Plaintiffs – as a whole – is
sufficient to invoke federal diversity jurisdiction.3 On remand, the district court
may also consider whether an award of costs to Defendants – including attorney’s
fees – would mitigate the prejudice incurred by Defendants through this late
amendment. See, e.g., Gen. Signal Corp. v. MCI Telecomms. Corp., 66 F.3d 1500, 1514
(9th Cir. 1995) (“[A] district court, in its discretion, may impose costs pursuant to
3 As a general matter, Plaintiffs must prove complete diversity by a preponderance of the
evidence, but a change in domicile by clear and convincing evidence. See Palazzo ex rel. Delmage,
232 F.3d at 42; Brignoli v. Balch, Hardy & Scheinman, Inc., 696 F. Supp. 37, 41 & n.5 (S.D.N.Y. 1988)
(holding that the higher burden applies when proving a change of domicile).

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Rule 15 as a condition of granting leave to amend in order to compensate the
opposing party for additional costs incurred because the original pleading was
faulty.”); 6 Charles Alan Wright et al., Federal Practice and Procedure § 1486 (3d ed.
2010) (“The statement in Rule 15(a)(2) that the court ‘should freely give leave when
justice so requires’ presupposes that the court may use its discretion to impose
conditions on the allowance of a proposed amendment as an appropriate means
of balancing the interests of the party seeking the amendment and those of the
party objecting to it. . . . The most common condition imposed on an amending
party is costs.”). Additionally, the parties shall bear their own costs on appeal.
IV. CONCLUSION
For the foregoing reasons, the judgment of the district court is VACATED
and REMANDED for further proceedings consistent with this opinion.

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