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United States District Court, Northern District of Iinois

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Name of Assigned Jud; Sitting J i
me aa ee John W. Darrah ine sae Oh gh
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CASE NUMBER 11 C9123 DATE v 04/10/12
CASE Pentecostal Assemblies of the World, Inc. v. Collins et. al.
TITLE

Upon review of the Complaint, the Court finds that the Plaintiff has not properly pleaded facts to support this
Court’s exercise of jurisdiction. The Court directs the Plaintiff to file an amended complaint on or before
May 10, 2012, that properly alleges the citizenship of the parties, or the Court will dismiss this case for lack
of jurisdiction. Further, counsel for Plaintiff is directed to provide a copy of this Order to its client and to
make no charge for any services necessary in complying with this Order.

| For further details see below.] Docketing to mail notice.

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STATEMENT

The Plaintiff, Pentecostal Assemblies of the World, Inc. (PAW), brings a breach-of-contract claim against
the Defendants, invoking the Court’s diversity jurisdiction. However, PAW fails to allege sufficient facts to
invoke this court’s diversity jurisdiction. To invoke a court’s jurisdiction under 28 U.S.C. § 1332, a party must
allege, among other things, that there is complete diversity between the parties, meaning that the parties are
citizens of different states. 28 U.S.C. § 1332. In this case, PAW alleges only the residence of the various parties.
Citizenship and residence, however, are not synonyms; and PA W’s jurisdictional allegations are thus insufficient
on that front. Hunter v. Amin, 583 F.3d 486, 491 (7th Cir. 2009). Moreover, PAW alleges that one of the
Defendants, Jurare Resource Group, Inc. (Jurare), is a““convention management firm” and goes on to allege where
it is “located at.” PAW’s allegations in this regard are deficient on two grounds. First, PAW does not make clear
whether Jurare is a corporation or a limited liability corporation or some other kind of limited partnership.
Second, regardless of whether Jurare is a corporation or an LLC or partnership, its citizenship is not defined by
where it is “located.” Corporations have dual citizenship — they are citizens of both the state in which they were
incorporated and the state in which they have their principal places of business. McMillan v. Sheraton Chicago
Hotel & Towers, 567 F.3d 839, 845 n. 10 (7th Cir. 2009) (citing 28 U.S.C. § 1332(c)(1)). PAW has alleged
neither. If it is an LLC or some similar type of organization, PAW must allege the citizenship of its members.
Muscarello v. Ogle Cty. Bd. of Comm'rs, 610 F.3d 416, 424 (7th Cir. 2010). In addition, PAW fails to properly
allege its own citizenship. It states that it is a religious organization but fails to specify what type of organization
itis or follow the rules for desl its'citizeashitg as noted above. Denlinger v. Brennan, 87 F.34214, 217 (7th
Cir. 1996).

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STATEMENT

These are well-settled rules, and PAW’s wholesale disregard of them is sloppy. The Court directs PAW
to file an amended complaint that properly alleges the citizenship of the parties, or the Court will dismiss this case
for lack of jurisdiction. Further, counsel for PAW is directed to provide a copy of this Order to its client and to
make no charge for any services necessary in complying with this Order.

Finally, § 1332 requires claims invoking a court’s diversity jurisdiction be in excess of $75,000. PAW
alleges that it has suffered damages exceeding $175,000 because of the Defendants’ conduct. But that claim is
dubious on its face. In essence, PAW alleges that after it selected a different event-planning firm to book and
organize its convention space, the Defendants continued to act on PAW’s behalf without any legal authority to
do so. PAW alleges that the Defendants, among other things, obligated PAW to blocks of rooms without the
legal authority to do so and cancelled the blocks of rooms that PA W’s other event-planning firm had booked for
it. According to the allegations, one of the fraudulently booked contracts would have earned Defendants $6,000.
PAW further alleges that it had to expend resources — presumably from its new event-planning firm — to
renegotiate the blocks of rooms that Defendants cancelled. Curiously, PAW alleges that the Defendants’
unethical actions, “left uncorrected . .. would have left [it] with a substantial financial attrition penalty as well
as the inconvenience and added expense of securing adequate meeting space.” (Compl. { 26). But PAW did
correct them, and the hypothetical damages it might have suffered if it had not been made aware of Defendants’
conduct cannot constitute part of its damages. Rather, its damages are the expenses it had to incur in order to
correct those actions.
| Those expenses are two-fold: (1) expenses in paying someone to renegotiate the contracts that Defendant
|| Debra Collins cancelled or fraudulently planned; (2) expenses associated with higher room fees due incurred after
the bookings were renegotiated. PAW alleges that Defendants would have received $6,000 in commission for
one of the alleged fraudulent bookings; it is difficult to envision that corrective action in four cases would have
totaled anything approaching $175,000. At the moment, the amount in controversy is not contested. While it
is difficult to envision that PAW suffered $175,000 in actual damages because of the Defendants’ misconduct,
| it is not a “legal certainty” at this point. Depending on the number of rooms that PAW books and potential
} increases in rates during the renegotiation process, PAW conceivably could have suffered damages in excess of,
$75,000. That is enough, for now. St. Paul Mercury Indem. Co. v. Red Cab. Co., 303 U.S. 283, 289, 58 S.Ct.
586 (1938); McMillan, 567 F.3d at 844. However, the burden of demonstrating that the claim satisfies the
amount-in-controversy requirement remains with PA W; and should Defendants later challenge that amount, PAW
shall have to support its allegation with competent proof to stave off dismissal for want of jurisdiction. McMillan,
567 F.3d at 844. PAW would be advised in amending its complaint to make more clear the basis for its claim
that it has suffered $175,000 in damages lest Defendants challenge that amount and put PAW to its proof.

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