Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-90-02133/USCOURTS-ca10-90-02133-0/pdf.json

Parties Involved:
Thomas W. Hill
Appellant
Threet And King
Appellee

Document Text:

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FILED 

UNITED STATES COURT OF APPEALSUoited States C.outt of Appeals 

Tenth Circuit 

'l'EN'l'II CIRCUIT 

THREET AND KING, a partnership, 

Plaintiff-counter-defendantAppellee, 

v. 

THOMAS W. HILL, 

Defendant-counter-claimantAppellant. 

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DEC .. 6 1990 

&OBERT L. HOECKER 

Clerk 

} No. 90-2133 ~ 

} (D. New Mexico} 

} (D.C. No. CV 87-1306-SC} 

) 

) 

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} 

ORDER AND JUDGMENT* 

Before ANDERSON, BALDOCK, and EBEL, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a}; 10th Cir. R. 34.1.9. The cause is therefore ordered 

submitted without oral argument. 

This is an action for monies due on an account. Following 

the filing of plaintiff Threet and King's complaint, defendant 

Hill responded prose, denying that he owed the stated amount and 

asserting a counterclaim for legal malpractice. Subsequently, in 

November of 1987, Hill filed a motion to dismiss the complaint for 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 90-2133 Document: 010110097232 Date Filed: 12/06/1990 Page: 1 
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♦ 

"failure to state a claim upon which relief can be granted," 

arguing that diversity between the parties did not exist. The 

District Court, in a Memorandum Opinion and Order dated December 

30, 1987, treated this motion as one falling within the ambit of 

Rule 12(b)(l), a motion to dismiss for lack of subject matter 

jurisdiction. The court denied the motion, granting Threet and 

King leave to amend the complaint. 

Hill then filed a Motion for Reconsideration of the Court's 

Order of December 1987. In a -second Memorandum Opinion and Order, 

dated October 19, 1988, the court found that diversity of citizenship did not exist at the time of the filing of the complaint. 

The court, therefore, granted the motion and dismissed Threet and 

King's complaint without prejudice. 

Hill next filed a motion claiming that the court's order of 

October 1988 was not dispositive with respect to the matters 

raised in his counterclaim because, while diversity of citizenship 

did not exist at the time of filing the complaint, it did exist at 

the time of the filing of the counterclaim. He further requested 

that the court's 1988 order be amended to provide for dismissal of 

the case with prejudice pursuant to Rule 59 or 60, and for leave 

to supplement the pending counterclaim motion. In a third 

Memorandum Opinion and Order, dated June 6, 1990, the court 

dismissed defendant's counterclaim without prejudice and denied 

all motions. Hill now appeals. 

Hill's first argument on appeal is that the jurisdictional 

defect was rectified at the time of the filing of the counterclaim, thus authorizing the court to adjudicate the merits. We 

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reject this argument for substantially the same reasons the court 

articulated in its Memorandum Opinion and Order of June 1990. If 

a court correctly determines that no basis exists for federal 

jurisdiction over plaintiff's complaint, then it cannot adjudicate 

a compulsory counterclaim for which an independent jurisdictional 

basis has not been asserted. 6 C. Wright & A. Miller, Federal 

Practice and Procedure§ 1414 (1971) (citing Manufacturers 

Casualty Ins. Co. v. Arapahoe Drilling Co., 267 F.2d 5, 8 (10th 

Cir. 1959)). That jurisdictional determination is properly made 

at the time the action is commenced, when the complaint is filed. 

Farmer's Alliance Mutual Insurance Co. v. Jones, 570 F.2d 1384 

(10th Cir.), cert. denied, 439 U.S. 826 (1978); 13B C. Wright, A. · 

Miller & E. Cooper, Federal Practice and Procedure§ 3608 (1984). 

And, if diversity of citizenship did not exist at the time of the 

filing of the complaint, it cannot be created after that time by a 

change in domicile of one of the parties. 13B C. Wright, A. 

Miller & E. Cooper, Federal Practice and Procedure S 3608 (1984). 

Cf. Smith v. Sperling, 354 U.S. 91, 93 n.1 (1957) (jurisdiction, 

once attached, is not impaired by a party's later change in 

domicile)~ In re Agent Orange Prod. Liab. Litig., 818 F.2d 145, 

163 (2nd Cir.), cert. denied, 484 U.S. 1004 (1988) (same). 

Hill next urges us to dismiss the case with prejudice because 

the amount in controversy did not exceed $10,000. As the district 

court explained in its Memorandum Opinion and Order of October 

1988, because the amount in controversy goes solely to the issue 

of the Court's subject matter jurisdiction, the matter is properly 

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considered under Rule 12(b)(l). Because such a motion addresses 

only the court's authority to entertain the complaint and not the 

substantive merits of the case, it cannot provide the basis for a 

dismissal with prejudice. SAC. Wright & A. Miller, Federal 

Practice and Procedure S 1350 (1990). 

The order of the district court is accordingly AFFIRMED. The 

mandate shall issue forthwith. 

ENTERED FOR THE COURT 

Stephen H. Anderson 

Circuit Judge 

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