Windward Bora v. Browne

23-684-cv (L)
Windward Bora v. Browne
In the
United States Court of Appeals
For the Second Circuit
________
AUGUST TERM 2023
ARGUED: MARCH 5, 2024
DECIDED: JULY 26, 2024
Docket Nos. 23-684-cv, 23-748-cv
WINDWARD BORA LLC,
Plaintiff–Appellant–Cross-Appellee,
v.
CONSTANCE R. BROWNE and ROYSTON D. BROWNE,
Defendants–Appellees–Cross-Appellants.
________
Appeal from the United States District Court
for the Southern District of New York.
________
Before: WALKER, NARDINI, AND MENASHI, Circuit Judges.
________
Plaintiff–Appellant Windward Bora LLC (“Windward”)
purchased a junior promissory note signed by Defendants–Appellees
Constance and Royston Browne (the “Brownes”) that was originally
secured by a junior mortgage on real property. Prior to this purchase,

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Windward’s predecessor-in-interest brought an action on the junior
mortgage and obtained a final judgment of foreclosure. Without
obtaining leave of the court in which that action was brought,
Windward filed the underlying diversity action against the Brownes,
seeking to recover on the promissory note that had been secured by
the junior mortgage.
Both parties moved for summary judgment. The district court
(Moses, M.J.) granted the Brownes’ motion and denied Windward’s.
It first determined that there was diversity jurisdiction by comparing
the national citizenship of the Brownes with that of Windward’s sole
member, a U.S. lawful permanent resident, concluding that the state
domiciles of the parties were irrelevant. It then held that the suit was
precluded by the pertinent New York election-of-remedies statute
because Windward failed to seek leave prior to proceeding at law (by
suing on the note) when its predecessor-in-interest had already
proceeded in equity (by suing on the mortgage) to recover the same
debt. The district court found that no special circumstances existed
to excuse Windward’s failure.
We agree with the district court’s conclusion that diversity
jurisdiction is present in this case but disagree that the parties’ state
domiciles were irrelevant to making that determination: such
jurisdiction would not exist had Windward’s permanent resident
member been domiciled in the same state as the Brownes when the
complaint was filed. Our analysis resolves a divide between the
district courts in this circuit, clarifying that there is no diversity
jurisdiction in a suit between U.S. citizens and unincorporated
associations with lawful permanent resident members if such
jurisdiction would not exist in a suit between the same U.S. citizens

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and those permanent resident members as individuals.
We also conclude that the district court did not err in granting
summary judgment for the Brownes under New York’s
election-of-remedies statute and therefore AFFIRM.
________
SETH D. WEINBERG, Syosset, NY, for Plaintiff–
Appellant–Cross-Appellee Windward Bora LLC.
JOSEPH A. ALTMAN, Fleetwood, NY, for Defendants–
Appellees–Cross-Appellants Constance R. Browne and
Royston D. Browne.
________
JOHN M. WALKER, JR., Circuit Judge:
Plaintiff–Appellant Windward Bora LLC (“Windward”)
purchased a junior promissory note signed by Defendant–Appellees
Constance and Royston Browne (the “Brownes”) that was originally
secured by a junior mortgage on real property. Prior to this purchase,
Windward’s predecessor-in-interest brought an action on the junior
mortgage and obtained a final judgment of foreclosure. Without
obtaining leave of the court in which that action was brought,
Windward filed the underlying diversity action against the Brownes,
seeking to recover on the promissory note that had been secured by
the junior mortgage.
Both parties moved for summary judgment. The district court
(Moses, M.J.) granted the Brownes’ motion and denied Windward’s.
It first determined that there was diversity jurisdiction by comparing

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the national citizenship of the Brownes with that of Windward’s sole
member, a U.S. lawful permanent resident, concluding that the state
domiciles of the parties were irrelevant. It then held that the suit was
precluded by the pertinent New York election-of-remedies statute
because Windward failed to seek leave prior to proceeding at law (by
suing on the note) when its predecessor-in-interest had already
proceeded in equity (by suing on the mortgage) to recover the same
debt. The district court found that no special circumstances existed
to excuse Windward’s failure.
We agree with the district court’s conclusion that diversity
jurisdiction is present in this case but disagree that the parties’ state
domiciles were irrelevant to making that determination: such
jurisdiction would not exist had Windward’s permanent resident
member been domiciled in the same state as the Brownes when the
complaint was filed. Our analysis resolves a divide between the
district courts in this circuit, clarifying that there is no diversity
jurisdiction in a suit between U.S. citizens and unincorporated
associations with lawful permanent resident members if such
jurisdiction would not exist in a suit between the same U.S. citizens
and those permanent resident members as individuals.
We also conclude that the district court did not err in granting
summary judgment for the Brownes under New York’s
election-of-remedies statute and therefore AFFIRM.
BACKGROUND
In 2005, Constance and Royston Browne purchased a property
in Bronx County, New York (the “Property”). To make that purchase,
they obtained a loan in the amount of $536,000 from First Estate

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Funding Corp (“FEFC”) upon executing a promissory note in favor of
FEFC (the “Senior Note”) that was secured by a mortgage on the
Property (the “Senior Mortgage”). The Brownes then obtained a
second loan in the amount of $100,500 from FEFC by executing
another promissory note (the “Junior Note”) secured by a second
mortgage on the Property (the “Junior Mortgage”). Both of these
notes and mortgages subsequently passed hands many times.
The Brownes stopped making payments and thus defaulted on
both mortgages in 2008. In 2009, Aurora Loan Services, LLC
(“Aurora”), which then held the Senior Mortgage and Note, brought
a foreclosure action on the mortgage against the Property in New
York state court (the “State Action”).1 The Brownes and Mortgage
Electronic Registration Systems, Inc. (“MERS”), which then held the
Junior Mortgage and Note, were named as defendants in the action
but failed to answer.
In 2016, while the State Action was ongoing, the newest
acquirer of the Junior Mortgage and Note, Gustavia Home, LLC
(“Gustavia”), filed a foreclosure action on the mortgage against the
Property in federal court (the “Federal Action”).2 The Brownes and
the newest acquirer of the Senior Mortgage and Note, Nationstar
Mortgage LLC (“Nationstar”), were named as defendants in the
action. Only Nationstar appeared and answered.
1 Aurora Loan Servs., LLC v. Browne, No. 381143/2009 (N.Y. Sup. Ct. Bronx Cnty.).
2 Gustavia Home, LLC v. Brown, No. 16-CV-9318 (JMF) (S.D.N.Y.). Like Windward
Bora, as discussed infra, Gustavia is a Delaware LLC with Yonel Devico—who, at
the time that the Federal Action was filed, was a citizen of Morocco and a lawful
permanent resident in the United States—as its sole member.

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In 2017, a judgment of foreclosure and sale was issued in the
State Action, which extinguished the rights of the Brownes and MERS
(and their successors) in the Property. The state court ordered that
the Property be sold at public auction to satisfy the amount due on
the Senior Note and that any surplus monies be deposited with the
Bronx County Clerk. Gustavia, as MERS’ successor, moved to
intervene in the State Action to enjoin the foreclosure sale, but its
motion was dismissed as untimely.
In March 2018, Nationstar moved to dismiss Gustavia’s federal
action for lack of subject-matter jurisdiction, invoking the
Rooker-Feldman doctrine, as well as arguing that the federal action was
barred by res judicata and collateral estoppel. Less than a month later,
Nationstar and Gustavia stipulated to dismiss with prejudice
Gustavia’s claims against Nationstar in the Federal Action (the
“Nationstar Agreement”). The precise terms of this stipulation—
including any potential payment to Gustavia—are not in the record.
In May 2018, Gustavia obtained a default judgment in the federal
action against the Brownes, which directed that the Property be sold
at public action to satisfy the amount due on the Junior Note.
In 2019, the Property was sold at public auction at a price of
$1,293,832.88 pursuant only to the State Action. The record does not
reflect whether any surplus monies remained from the auction
proceeds after the Senior Note was paid off.
On June 19, 2020, Windward Bora LLC, the present holder of
the Junior Note,3 filed this federal action, seeking recovery under that
3 Windward bought the Junior Note from Gustavia for $100 on November 1, 2019.

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Note. Windward invoked the district court’s diversity jurisdiction
under 28 U.S.C. § 1332. It is undisputed that at the time of filing, the
Brownes were U.S. citizens domiciled in New York and Windward’s
sole member, Yonel Devico, was a citizen of Morocco and a U.S.
lawful permanent resident.4 Devico’s domicile, however, is disputed.
Windward alleged in its complaint that Devico was a Florida
domiciliary; it also submitted a picture of Devico’s Florida driver’s
license, issued in April 2019, and an affidavit sworn by Devico in
April 2021 in a different legal case that stated he resided in Florida.5
The Brownes contended that Devico was domiciled in New York
when the complaint was filed, pointing to two documents as
evidence: a satisfaction of mortgage signed by Devico in January 2018
that stated he resided in New York and a court summons dated
October 2020 indicating that Devico owned a New York
condominium at that time.
In 2022, after discovery closed, the parties filed cross-motions
for summary judgment. The Brownes made two key arguments
relevant to this appeal. First, they asserted that the district court
4 After Windward filed the complaint, Devico became a naturalized U.S. citizen.
This is irrelevant for jurisdictional purposes, however, because “[d]iversity is
measured as of the time the action is brought.” OneWest Bank, N.A. v. Melina, 827
F.3d 214, 218 (2d Cir. 2016) (per curiam).
5 Domicile and residence are not synonymous, “although the two typically
coincide.” 13E Charles Alan Wright & Arthur R. Miller et al., Federal Practice and
Procedure § 3612 (3d ed. June 2024 Update). An individual’s state domicile is “more
than [her] residence,” because it requires both residence in a state and an intent to
remain there. Id.; see Palazzo ex rel. Delmage v. Corio, 232 F.3d 38, 42 (2d Cir. 2000)
(“Domicile is 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.” (internal quotation marks omitted)).

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lacked diversity jurisdiction because both they and Devico were
domiciled in New York and, as a limited liability company (“LLC”),
Windward took on Devico’s state domicile for jurisdictional
purposes. Second, they argued that, even if the district court had
jurisdiction, New York’s election-of-remedies statute barred a suit on
the Junior Note because Windward’s predecessor, Gustavia, had
already pursued and obtained a judgment of foreclosure on the Junior
Mortgage in the previous federal action and Windward had not
sought leave of the court before filing its suit.
The district court disagreed with the Brownes that Devico was
domiciled in New York rather than Florida, concluding that the
Brownes’ documents had not “raise[d] a genuine dispute of fact as to
Devico’s domicile.” Sp. App’x 3 n.3. But the district court also found
the question of Devico’s state domicile “irrelevant” to whether it had
diversity jurisdiction. Id. Instead, it concluded that only Devico’s
national citizenship was relevant for jurisdictional purposes: because
Devico was a Moroccan citizen at the time of filing, Windward was
also a Moroccan citizen—and thus diverse from the Brownes
regardless of Devico’s state domicile.
After determining that it had jurisdiction, the district court
granted summary judgment in favor of the Brownes and dismissed
the complaint. Although it found that Windward had otherwise
established a prima facie case to enforce the Junior Note, it agreed with
the Brownes that New York’s election-of-remedies law—specifically,
section 1301(3) of the New York Real Property Actions and
Proceedings Law (“RPAPL”)—barred Windward’s suit. This appeal
and cross-appeal followed.

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DISCUSSION
Windward argues on appeal that the district court erred in
holding that its claim was barred by RPAPL § 1301(3). The Brownes
assert that, although the district court correctly dismissed the case
under RPAPL § 1301(3), it erred in rejecting their other arguments:
that there was no diversity jurisdiction, that Windward lacked
standing to sue on the Junior Note, and that the case was time-barred.
Addressing the Brownes’ threshold arguments, we agree with
the district court that the parties are diverse. But, unlike the district
court, we conclude that diversity here hinged on the parties’ state
domiciles. We also agree, for the reasons previously explained by the
district court, that Windward has standing and that the case is not
time-barred. See Sp. App’x 15-16, 20-22. Finally, we hold that the
district court properly dismissed the complaint under
RPAPL § 1301(3) on the ground that no special circumstances excused
Windward from its obligation to request leave to sue on the Junior
Note.
I. Diversity Jurisdiction
We first address whether diversity jurisdiction is present in this
case, which will determine if we have the subject matter jurisdiction
necessary to hear it.
“[S]ubject matter jurisdiction is an unwaivable sine qua non for
the exercise of federal judicial power . . . .” Curley v. Brignoli, Curley
& Roberts Assocs., 915 F.2d 81, 83 (2d Cir. 1990). The sole basis for
subject matter jurisdiction proffered in this case is diversity
jurisdiction under 28 U.S.C. § 1332 (the “diversity statute”). When

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reviewing a district court’s determination of diversity jurisdiction
“we review factual findings for clear error and legal conclusions de
novo.” Washington Nat'l Ins. Co. v. OBEX Grp. LLC, 958 F.3d 126, 133
(2d Cir. 2020) (internal quotation marks omitted).
Two requirements must be met for diversity jurisdiction: (1) the
amount in controversy in the case must exceed $75,000 and (2) the
case must be between “citizens of different States” or “citizens of a
State and citizens or subjects of a foreign state,” such that there is
complete diversity of citizenship between every plaintiff and every
defendant. 28 U.S.C. § 1332(a)(1) & (2); see Pa. Pub. Sch. Emps.’ Ret.
Sys. v. Morgan Stanley & Co., Inc., 772 F.3d 111, 117–18 (2d Cir. 2014).
While the first requirement is easily met in this case, the second
compels us to address a question over which district courts in this
circuit are divided: whether the state domicile(s) of an LLC’s lawful
permanent resident member(s) are relevant to determining diversity
jurisdiction. Compare Windward Bora, LLC v. Barrie, No. 19-CV-
7272(EK)(MMH), 2022 WL 4485149, at *3 (E.D.N.Y. Sept. 27, 2022)
(state domiciles irrelevant), with N.Y. Metro. Reg'l Ctr., L.P. II v.
Mammoet USA Holding, Inc., 552 F. Supp. 3d 451, 458–59 (S.D.N.Y.
2021) (state domiciles relevant). After analyzing the rules of diversity
jurisdiction as they relate to both lawful permanent residents and to
LLCs, we conclude that the state domicile(s) of an LLC’s lawful
permanent resident member(s) are relevant to the diversity
determination.
A. Diversity Rules for Lawful Permanent Residents
Appreciating the district courts’ division on this issue requires
us to examine how the diversity statute has historically applied to
lawful permanent residents. Prior to 1988, such residents were

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treated the same as non-resident foreign citizens for jurisdictional
purposes: there was jurisdiction over suits between a United States
citizen and a permanent resident because the diversity statute granted
jurisdiction over controversies between “citizens of a State and
citizens or subjects of a foreign state.” 28 U.S.C. § 1332(a)(2); Singh v.
Daimler-Benz AG, 9 F.3d 303, 306 (3d Cir. 1993) (before 1988,
“permanent resident[s] . . . were considered citizens or subjects of a
foreign state” (internal quotation marks omitted)). This meant that a
federal court would have diversity jurisdiction in a case between a
U.S. citizen and a permanent resident even when both were domiciled
in the same state. See H.K. Huilin Int'l Trade Co. v. Kevin Multiline
Polymer Inc., 907 F. Supp. 2d 284, 286 (E.D.N.Y. 2012).
In 1988, Congress amended section 1332 to prevent this
outcome,6 adding language that stated that “an alien admitted to the
United States for permanent residence shall be deemed a citizen of the
State in which such alien is domiciled.” Pub. L. No. 100-702, § 203(a),
102 Stat. 4642, 4646 (1988) (the “1988 Amendment”). Prior to this
amendment, a permanent resident would not have been considered a
6 There is a general consensus that the 1988 Amendment was motivated, at least in
part, by a desire “to preclude federal jurisdiction in an action in which a
[permanent] resident alien is sued by a citizen of the same state.” H.K. Huilin, 907
F. Supp. 2d at 286 (internal quotation marks omitted); see also Singh, 9 F.3d at 309
(“The Senate’s consideration of the [1988 Amendment] focused on the incongruity
of permitting a permanent resident alien living next door to a citizen to invoke
federal jurisdiction for a dispute between them while denying a citizen living
across the street the same privilege.” (citing 134 Cong. Rec. 31,055 (1988)); Saadeh
v. Farouki, 107 F.3d 52, 59–60 (D.C. Cir. 1997) (discussing Congress’s aim of
reducing the federal diversity caseload, in part by “eliminat[ing] diversity
jurisdiction in cases between a citizen and an alien permanently residing in the
same state” (citing H.R. REP. No. 100–889, at 44 (1988), reprinted in 1988
U.S.C.C.A.N. 5982, 6005)).

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citizen of the state he was domiciled in because state citizenship
required both U.S. citizenship and state domicile: thus, a U.S. citizen
living in New York was a New York citizen but a Moroccan citizen
living in New York was not. See Sun Printing & Publ'g Ass'n v.
Edwards, 194 U.S. 377, 383 (1904).
Treating permanent residents as state citizens caused new
problems, however. Although the 1988 Amendment aimed to
constrain diversity jurisdiction, it could also be read as expanding
jurisdiction to controversies between permanent residents and
non-resident foreign citizens. See Tagger v. Strauss Grp. Ltd., 951 F.3d
124, 126 (2d Cir. 2020) (per curiam). Federal circuit courts differed on
how to interpret the amendment—and whether such an expansion
was even constitutional. Compare Singh, 9 F.3d at 306–12, with Saadeh
v. Farouki, 107 F.3d 52, 57-61 (D.C. Cir. 1997); see also U.S. Const. art. III,
§ 2, cl. 1 (extending the judicial power of the United States to
controversies “between Citizens of different States . . . and between a
State, or the Citizens thereof, and foreign States, Citizens or
Subjects”).
Congress subsequently amended section 1332 again in 2011 to
remove the language of the 1988 Amendment and to add language to
section 1332(a)(2)—the provision that provided for jurisdiction
between “citizens of a State and citizens or subjects of a foreign
state.” See Pub. L. No. 112-63, § 101, 125 Stat. 758, 758 (2011) (the
“2011 Amendment”). This amendment explicitly denied federal
jurisdiction over “an action between citizens of a State and citizens or
subjects of a foreign state who are lawfully admitted for permanent
residence in the United States and are domiciled in the same State”
(the “Exception”). Id. Thus, while permanent residents were no

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longer deemed to have state citizenship as they had been under the
1988 Amendment, their state domiciles remained relevant to diversity
jurisdiction.
This change served the same function as the 1988
Amendment—preventing diversity jurisdiction in cases between a
U.S. citizen and a permanent resident domiciled in the same state—
while avoiding the “possibly anomalous results” the 1988
Amendment might have allowed when a permanent resident
attempted to bring a case against a non-resident foreign citizen. H.R.
Rep. No. 112-10, at *7 (2011), reprinted in 2011 U.S.C.C.A.N. 576 (Leg.
Hist.); see id. (noting that the 2011 Amendment will “achieve the goal
of modestly restricting jurisdiction, which Congress sought to
accomplish when it first enacted the [1988 Amendment]”).
B. Diversity Rules for Limited Liability Companies with
Lawful Permanent Resident Members
For the purpose of diversity jurisdiction, an LLC is treated as
an unincorporated association. Compare Platinum-Montaur Life Scis.,
LLC v. Navidea Biopharms., Inc., 943 F.3d 613, 615 (2d Cir. 2019), with
Jaser v. New York Prop. Ins. Underwriting Ass'n, 815 F.2d 240, 242 (2d
Cir. 1987). Although Congress has never explicitly laid out
jurisdictional rules for unincorporated entities, the Supreme Court
has held that diversity jurisdiction in a suit by or against such an
“entity depends on the citizenship of all its members.” Americold
Realty Tr. v. Conagra Foods, Inc., 577 U.S. 378, 381 (2016) (cleaned up);
see also Platinum-Montaur Life Scis., 943 F.3d at 615. Since under the
current version of section 1332(a)(2) a lawful permanent resident is no

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longer “deemed a citizen of the State in which [he] is domiciled”7 but
is instead a “citizen[ ] or subject[ ] of a foreign state,”8 some district
court judges (including the one in this case) have concluded that an
LLC adopts the national citizenship(s) of its lawful permanent
resident member(s). See Sp. App’x 3–4 n.3; Barrie, 2022 WL 4485149,
at *3; cf. Tagger, 951 F.3d at 126.
This is a sensible deduction, but it is not where the inquiry
should end. Instead, we must additionally consider whether the state
domiciles of an LLC’s permanent resident members should also be
attributed to the LLC, such that the 2011 Amendment’s Exception
would apply in suits between U.S. citizens and LLCs with permanent
resident members domiciled in the same state as those U.S. citizens.
Put in different terms: even if an LLC takes on the national
citizenships of its permanent resident members, must we nonetheless
consider the state domiciles of those members? We conclude that the
answer is yes, for two reasons.
First, an unincorporated association, unlike a corporation, does
not possess legal personhood or identity separate from its members.
See Advani Enters., Inc. v. Underwriters at Lloyds, 140 F.3d 157, 160
(2d Cir. 1998); see also 13F Charles Alan Wright & Arthur R. Miller et
al., Federal Practice and Procedure § 3630 (3d ed. June 2024 Update)
(noting that the artificial personhood of a corporation—which allows
it to hold citizenship that differs from the citizenships of its members
for the purpose of diversity jurisdiction—is a “[legal] fiction” that “is
7 1988 Amendment.
8 2011 Amendment.

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not applied to unincorporated associations”). The Supreme Court has
therefore established a jurisdictional “rule linking unincorporated
entities with their members.” Americold Realty, 577 U.S. at 381
(internal quotation marks omitted). It follows from this rule that, if a
suit between a U.S. citizen and a permanent resident would lack
diversity jurisdiction because they are domiciled in the same state,
there should also be no diversity jurisdiction when the suit is instead
between that U.S. citizen and an LLC of which the same permanent
resident is a member. We see no reason why an LLC should adopt
only its permanent resident members’ national citizenships but not
their state domiciles when those permanent resident members
themselves are jurisdictionally affected by both their national
citizenships and their state domiciles.
Second, the history of congressional amendments to section
1332 shows a clear intent to limit federal diversity jurisdiction.
Though some litigants have argued that the removal of the 1988
Amendment’s language evinced congressional intent to allow suits
between an LLC and a U.S. citizen even where the same suit could not
exist between that LLC’s permanent resident members and the same
U.S. citizen,9 that theory “reads far too much into the 2011
[A]mendment.” See Mammoet USA, 552 F. Supp. 3d at 459–60. The
9 Under the 1988 Amendment, there would clearly be no diversity jurisdiction in a
suit between a U.S. citizen and an LLC with a permanent resident member
domiciled in the same state as the U.S. citizen: the permanent resident would have
been “deemed a citizen of the State in which [he was] domiciled” (emphasis added)
and the LLC would have adopted that state citizenship, destroying diversity
between the LLC and the U.S. citizen domiciled in that state. 1988 Amendment.
Therefore, litigants have argued that by removing that amendment’s language in
the 2011 Amendment, Congress intended for diversity jurisdiction to exist in that
circumstance. See Mammoet USA, 552 F. Supp. 3d at 459–60.

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1988 Amendment aimed to curtail jurisdiction between U.S. citizens
and permanent residents domiciled in the same state. When the
language of that amendment was construed by some courts as
opening up a new avenue of jurisdiction—between permanent
residents and non-resident foreign citizens—the statute was amended
again to foreclose that possibility. It would be incongruous with this
statutory history if, without clear signs from the text or legislative
record, we now held that the 2011 Amendment unlocked a different
door to jurisdiction. Cf. BNSF Ry. Co. v. Loos, 586 U.S. 310, 329 (2019)
(Gorsuch, J., dissenting) (noting that “the record of enacted changes
Congress made to the relevant statutory text over time” is “the sort of
textual evidence everyone agrees can sometimes shed light on
meaning”).
Some district courts have pointed to our decisions in Bayerische
Landesbank v. Aladdin Cap. Mgmt. LLC, 692 F.3d 42 (2d Cir. 2012), and
Advani Enters., Inc. v. Underwriters at Lloyds, 140 F.3d 157 (2d Cir.
1998), for the proposition that the domiciles of members of an
unincorporated association are irrelevant to diversity jurisdiction. See
Barrie, 2022 WL 4485149 at *3. These cases do not stand for that
proposition. In Bayerische Landesbank, the defendant LLC’s sole
member was another LLC whose individual members were all U.S.
citizens and residents, which ensured diversity from the plaintiff, a
German corporation. See Bayerische Landesbank, 692 F.3d at 48–49.
And in Advani, we determined that diversity was lacking because the
plaintiff, a U.S. corporation, failed to allege that the members of the
defendant unincorporated associations were diverse. Advani, 140
F.3d at 160–61. In neither case did we hold that an unincorporated
association could, consistent with the diversity statute, sue a citizen

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of the same state in which its members were domiciled as lawful
permanent residents.
In sum, we apply a simple rule when determining whether
there is diversity jurisdiction over a case involving an unincorporated
association with lawful permanent resident members: if there would
be no jurisdiction if the case involved only an unincorporated
association’s permanent resident members but not the association
itself, there can be no jurisdiction in the case involving the
unincorporated association.
Applying this rule to the present case, we find that diversity
jurisdiction exists. Although the district court erroneously concluded
that Devico’s state of domicile was “irrelevant to . . . diversity
jurisdiction,” it nonetheless determined that Devico was domiciled in
Florida when the action was filed. See Sp. App’x 3–4, n.3. We find no
clear error in the district court’s factual finding as to Devico’s
domicile. See Washington Nat'l Ins. Co., 958 F.3d at 133. Because there
would be diversity jurisdiction in a case between the Brownes, who
are U.S. citizens domiciled in New York, and Devico, who was a
Moroccan citizen and lawful permanent resident domiciled in
Florida, such jurisdiction also exists in a case between the Brownes
and Windward, an LLC with Devico as its sole member.
II. RPAPL § 1301(3)
Now that we have confirmed that there is diversity jurisdiction
over this case, we turn to Windward’s argument that the district court
erred in dismissing the complaint under New York’s pertinent
election-of-remedies statute, RPAPL § 1301(3). This provision
compels a holder of mortgage debt (a “mortgagee”) who seeks to

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recover that debt to choose between a proceeding in equity (by suing
on the mortgage) or at law (by suing on the note). Gizzi v. Hall, 767
N.Y.S.2d 469, 471 (3d Dep't 2003) (mortgagee “must only elect one of
these alternate remedies”). If the mortgagee sues in equity and
obtains a final judgment of foreclosure—as Windward’s
predecessor-in-interest did here—“no other action shall be
commenced or maintained to recover any part of the mortgage
debt . . . without leave of the court in which the former action was
brought.” RPAPL § 1301(3).
Because Windward did not seek such leave before suing on the
Junior Note, we agree with the district court that the complaint must
be dismissed unless “special circumstances [a]re shown which
manifestly require[]” that Windward be allowed to “institute a
separate action on the [same mortgage] debt.”10 Rainbow Venture
Assocs., L.P. v. Parc Vendome Assocs., Ltd., 633 N.Y.S.2d 478, 479 (1st
Dep’t 1995) (internal quotation marks omitted). Determining
whether such circumstances exist is “a matter of discretion”
“regulated by consideration of equitable principles on a case by case
basis.” Resol. Tr. Corp. v. J.I. Sopher & Co., 108 F.3d 329, 1997 WL
100879, at *2 (2d Cir. 1997) (unpublished) (internal quotation marks
omitted).
10 The Brownes argue on appeal that the New York Foreclosure Abuse Prevention
Act (L 2022, ch 821) (“FAPA”), which amended RPAPL § 1301, applies
retroactively to this case and “removes [this] judicial discretion,” making dismissal
mandatory “for failure to comply with RPAPL § 1301.” Appellees’ Br. at 4. The
district court did not address this question because FAPA was enacted after the
parties’ summary judgment briefing was submitted. We decline to address the
effect of FAPA because, even assuming that statute does not apply retroactively,
dismissal under the prior version of RPAPL § 1301 was appropriate.

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Windward argues that special circumstances are present here
because the foreclosure and sale of the Property in the State Action
brought by the senior noteholder rendered the judgment of
foreclosure in the Federal Action brought by Windward’s predecessor
junior noteholder effectively “void.”11 Appellant’s Br. at 10. The
caselaw Windward cites in support of this proposition is readily
distinguishable, however: here, Windward’s predecessor elected to
bring the Federal Action and vigorously pursued that action until it
obtained a foreclosure judgment, which still has legal effect. Cf. Valley
Sav. Bank v. Rose, 646 N.Y.S.2d 349, 351 (2d Dep’t 1996) (prior
foreclosure judgment legally voided by the bankruptcy discharge and
the mortgagee “notabl[y] . . . did not elect” to bring initial action on
mortgage debt but was “obliged to” do so under state law); Old
Republic Nat. Title Ins. Co. v. Conlin, 13 N.Y.S.3d 99, 101 (2d Dep’t 2015)
(mortgagee’s predecessor “effectively abandoned” foreclosure
action).
Moreover, Windward failed to provide the district court with
any evidence regarding either the terms of the Nationstar Agreement
(pursuant to which Nationstar was dismissed from the Federal
Action) or whether surplus funds remained after the Property’s
auction in the State Action. The district court correctly noted that,
without such evidence, it could not ensure that “there [was] ‘no
11 Windward pushes this argument further, asserting not only that special
circumstances exist that should allow it to circumvent RPAPL § 1301(3)’s
requirements but that RPAPL § 1301(3) is “not applicable” to this case because
“there is no possibility of duplicative litigation.” Appellant’s Br. at 10. We find
this argument unconvincing: it has no support in the statutory text or New York
caselaw and ignores the fact that the Brownes have now had to expend time and
money to defend a second suit on the same mortgage debt.

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Nos. 23-684, 23-748
20
possibility of a double recovery.’” Sp. App’x 27 (quoting Lehman v.
Roseanne Invs. Corp., 483 N.Y.S.2d 106, 108 (2d Dep’t 1984)).12
Windward claims that, at the summary judgment stage, the district
court should have drawn in its favor any “ambiguity” over whether
“potential surplus funds[] or settlement funds exist.” Appellant’s Br.
at 18. But because Windward was asking the district court to exercise
its equitable discretion to excuse Windward’s failure to seek leave
prior to filing, the burden was on Windward to prove the
unavailability of alternate means of collecting the mortgage debt.13
See Dyck-O'Neal, Inc. v. Thomson, 868 N.Y.S.2d 838, 840 (4th Dep’t
2008) (no “special circumstances” excusing RPAPL § 1301(3) violation
where plaintiff failed to establish circumstances of property’s sale).
Windward failed to meet this burden and we therefore hold that the
district court did not abuse its discretion in concluding that there were
no special circumstances which “manifestly required” it to hear the
underlying action. See Rainbow Venture, 633 N.Y.S.2d at 479 (internal
quotation marks omitted).
12 Indeed, as the district court pointed out, “it seems likely (given the sale price of
$1,293,832.88, see Referee’s Deed) that surplus funds were recovered . . . .”
Sp. App’x 27.
13 Before a district court can draw all ambiguities and inferences in favor of the
non-moving party, as it must do at the summary judgment stage, that party is still
required to “offer some hard evidence showing that its version of the events is not
wholly fanciful.” See D'Amico v. City of New York, 132 F.3d 145, 149 (2d Cir. 1998).
Windward failed to allege facts before the district court regarding the existence of
surplus monies or the terms of the Nationstar Agreement, let alone offer any
supporting evidence.

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CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the
district court.

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