___________ No. 96-2383

___________ Jimmy Lee Walker, III, by his * legal guardian Cynthia M. * Walker; * * Plaintiff - Appellant, * * Cynthia M. Walker; James * Harrison Massey, * * Appellants, * * v. * * Norwest Corporation, a * Minnesota Corporation and * Fiduciary of Jimmy Lee Walker, * III; Norwest Bank, South * Dakota; Norwest Investment * Appeal from the United States Management & Trust, a Sioux * District Court for the Falls, South Dakota, based * District of South Dakota. subsidiary of Norwest * Corporation and as Fiduciary * of Jimmy Lee Walker, III; * Richard Kovacevich, * individually and as Chief * Executive Officer of Norwest * Corporation, and Fiduciary of * Jimmy Lee Walker, III; Gary * Olson, individually, and as * President, Chairman, and Chief * Executive Officers of Norwest * Bank South Dakota, N.A., * Regional Office, and as * Fiduciary of Jimmy Lee Walker, * III; Kirk Dean, individually, * and as President of Norwest * Bank South Dakota, N.A., Rapid * City location and as Fiduciary * of Jimmy Lee Walker, III; * Dennis Hoffman, individually * and as President of Norwest * Investment Management & Trust, * and Fiduciary of Jimmy Lee * Walker, III; Tom Naasz, * individually, and as Vice * President of Norwest Investment *

### The Honorable Richard H. Battey, Chief Judge, United State s

District Court for the District of South Dakota.
-2- Management & Trust; and as * Fiduciary of Jimmy Lee Walker, * III; and as Co-Trustee and * Fiduciary of Jimmy Lee Walker, * III; Beal Law Offices, as a law * firm, partnership, corporation, * or other public or private * entity, and Fiduciary of Jimmy * Lee Walker, III; George Beal, * individually, and as partner, * owner, employee, agent, * authorized representative, or * other of Beal Law Offices; as * officer, attorney, agent, * employee, authorized * representative or other of * Norwest Bank South Dakota N.A.; * Norwest Investment Management & * Trust; and Norwest Corporation; * and as attorney, agent * Fiduciary of Jimmy Lee Walker, * III, * * Defendants - Appellees. *

___________ Submitted: December 9, 1996 Filed: February 28, 1997

___________ Before McMILLIAN, JOHN R. GIBSON, and MAGILL, Circuit Judges.

___________ JOHN R. GIBSON, Circuit Judge.
JimmyLee Walker, III, his guardian, Cynthia Walker, and thei r attorney , James Harrison Massey, appeal from the district court's awar d 1 of sanctions against Massey for filing a diversi ty case in which he failed to plead complete diversity of citizenship, and indeed, pleaded facts whic h tended to show there was not complete

### The defendants are: Norw est Corporation, Richard Kovacevich,

Norwes t Bank South Dakota, N.A., Gary Olson, Kirk Dean, Norwes t Investment Management & Trust, Dennis Hoffman, Tom Naasz, Beal Law Offices, and George Beal. The individual defendants were sue d individually and as trustees or corporate agents.
-3- diversity. The Walkers and Massey contend that the district court erred in awarding sanctions at all, in determining the amount of sanctions, and in not allowing the Walkers to amend their complaint. We affirm.

Massey f iled a complaint in the district court for the District of SouthDakota on behalf of the Walkers, alleging breach of fiduciary duty and other state law causes of action in connecti on with the administration of a tr ust fund held for Jimmy Lee Walker at Norwest Bank South Dakota , N.A. The complaint stated that jurisdiction was based on diversity, since "the Plaintiff and some of the Defendants are citizens of differen t states." (Emphasis added). The Walkers are both South Dakotans. Th e complaint averred that one of the defendants, Norwest Corporation, was a Minnesota corporation. The complaint did not allege the other d efendants' 2 citizen ship precisely, but stated that many of them were South Dakot a "residents." The individual defendants included employees of Norwest or its su bsidiary corporations and a South Dakota lawyer who represente d Norwest. The corporate defendants were Norwest subsidiaries. The Walkers also joined a South Dakota law firm that represented Norwest. All th e indivi duals were named in their individual, as well as official , capacities.

Up on receiving the complaint, the attorney for Norwest Corporatio n and its subsidiaries and officers wrote Mr. Massey informing him that his complaint showed on its face that there was no diversity jurisdiction. Th e letter as ked Massey to dismiss the complaint, and warned that if he di d not, N orwest would seek sanctions, including attorneys' fees. Massey' s only answer was a

### -4-

letter that acknowledged Norwest's correspondenc e, but made no substantive response to the deficiency counsel had pointed out.

After Massey failed to offer any explanation for his defectiv e complaint or to move to amend or dismiss it, Norwest moved to dismiss and for an awar d of sanctions, as it had promised to do. Massey filed a response c ontending that the complaint was adequate as filed. In th e alternative, the response stated that if the complaint was not adequate, plaintiffs would amend it; however, the plaintiffs did not specify how the y proposed to amend the complaint. Under Local Ru le 15.1 of the District of South Dakota, a party moving to amend his pleadings must file a copy of th e prop osed amended pleading with his motion. Massey filed no propose d amended pleading.

With h is response to the motion to dismiss, Massey filed a brie f presenting a theory that the citizenship of Norw est Corporation determined the citizenship of al l the other defendants, notwithstanding that all the individual defendants were named in their individual capacities. The brie f
con tended that the complaint therefore successfully alleged diversit y juris diction: "This life-sustaining arterial linkage between these sai d Def endants and Norwest Corporation in essence and in reality creates a n indistinguishable and inseparable unity of existence and identity."

The district court granted the Fed. R. Civ. P. 12(b)(1) motion t o dismiss for lack of jurisdiction and sanctioned attorney Massey under Fed. R. Civ. P. 11. Order of January 9, 1996. The court held that there was
no diversity jurisdiction because there was not complete diversity among plain tiffs and defendants, since plaintiffs were South Dakotans an d
numerous defendants were alleged to be South Dakota "residents." The cour t ordered the defendants to file an accounting of their fees and expense s incurred in defending against the suit.

### -5- The Walkers then filed a motion for reconsideration which stated:

Other Defendants [in addition to Norwes t Corporation, its subsidiaries, and Kovacevich] named to Plaintiff's Complaint, may or may not be citizens of the State of South Da kota . It is Plaintiff's position that with regard to the issue of federal jurisd iction, this fact alone should not be determinative i n this case

. (Emphasis added). The court denied the motion f or reconsideration. Order of January 22, 1996.

As the district court had ordered, the defendants filed statement s of their fees and expenses, in the form of affidavits with attache d itemizations of work performed and costs incurred. One law firm represente d Norwest Corporation, its subsidiaries, and the individuals who worked for Nor west and its subsidiaries. That firm had $2,794.52 in fees an d expenses. Another firm represented the lawyer, George Beal, and his law firm. That firm had $2,050.75 in fees and expenses.

Masseyresponded to the affidavits in a filing characterizing th e defendants' statement s of expenses as "so shamefully over-exaggerated and over-inflated so as to shock the conscience of ethical minded lega l practitioners."

The co urt held a hearing on the fees issue, and Massey declined t o cross-examine the att orneys or to put on any evidence. The court ordered Mas seyto pay the two sets of defendants the full amount each ha d requested, $2,794.52 and $2,050.75, respectively. Order of May 6, 1996.

The Walkers and Massey appeal.

### "For purposes of diversity jurisdiction, the terms 'domicile' 3 

### and 'citizenship' are synonymo us." Sheehan v. Gustafson , 967 F.2d 1214, 1215 (8th Cir. 1992) (qu oting Yeldell v. Tutt , 913 F.2d 533, 537 (8th Cir. 1990)).
-6- I.

They first argue that the district court abused its discretion i n determining that Massey had filed a complaint that was not warranted b y existing law or a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law. They contend that their allegations that the defendants were South Dakota residents wer e not de terminative of the defendants' citizenship, since they could b e living in South Dakota without intent to stay there. See Sheehan v

. Gustafson , 967 F.2d 1214, 1215 (8th Cir. 1992). They contend that Rule 11 does n ot require the kind of "complicated, in-depth, and possibl y imposs ible inquiry" that would have been necessary to determine th e defend ants' citizenship before filing a complaint based on diversity o f citizenship.

We review

the district court's decision in a Rule 11 proceeding for abuse of discretion. Cooter & Gell v. Hartmarx Corp. , 496 U.S. 384, 399- 405 (1990). A district court necessarily abuses its discretion if it base s its ruling on an erroneous view of the law. Id. at 405.

It was the Walkers' burden to plea d the citizenship of the parties in attempting to invoke diversity jurisdiction. See Sanders v. Clemc o Indus. , 8 23 F.2d 214, 216 (8th Cir. 1987). They failed to carry tha t burden , since they did not allege the domicile of the individua l 3 defendants or the place of incorporation and principal place of business of all the corporate defendants. See id.

### -7- However, the district court construed the allegation that th e individuals were South Dakota residents as an admission that they wer e domiciled in South Dakota. The Walkers and Massey did not complain of thi s inference or argue in the district court that the defendants alleged t o reside in South Dakota did not intend to remain there indefinitely

. Instead , they responded to the motion to dismiss with an unelaborate d statement that their complaint "as filed, does state appropriate grounds for federal jurisdiction." In their motion for reconsideration of th e court's order, they stated that it was immaterial whether some of th e defendants were South Dakota citizens, as long as some defendants wer e citizens of another state. It is, to say the least, well settled tha t fede ral diversity jurisdiction requires complete diversity, so that n o defendant is a citizen of the same state as any plaintiff. See Strawbridg e
v. Curtiss , 7 U.S. 267 (1806); Owen Equip. & Erection Co. v. Kroger , 437 U.S. 365, 373-74 (197 8). Having pursued this untenable theory before the district court, the Walkers and Massey cannot change their theory on appea l and fault the district court for deciding the case on the theory the y presented to it.

Furthermo re, even though it is the Walkers' burden to plead, and if necessary, prove diversity, Sheehan , 967 F.2d at 1215, they did not allege that a ll of the defendants are domiciled in a state other than Sout h Dakota. Instead, the y argue that finding out the defendants' citizenship woul d be more trouble than they should be expected to take. This is a burden that plaintiffs desiring to invoke diversity jurisdiction hav e assumed si nce the days of Chief Justice Marshall. See Strawbridge v

. Cur tiss , 7 U.S. at 267. The fact that the Walkers did not allege th e citizenship of the defendants convinces us that the district court did not abuse its discretion in determining that Rule 11 sanctions wer e appropriate.

II.
The Walkers and Massey next contend that the district court

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abused its discretion in awarding monetary sanctions, since dismissal of the complaint would have been adequate. They argue that the award o f monetary sanctions inthis case would discourage "novel legal arguments." Their legal argument in the district court was c ontrary to the established statutory requirement s for diversity. See 28 U.S.C. § 1332(a)(1) (1994). They also argue that the district court should h ave inquired into Massey's financial circumstances, and that if it had done so, it would have found that he "is presently experiencing financial hardships and is unable to pa y this sanct ion." Not only did Massey fail to argue this point to th e district court, but there is no record evidence to support the argumen t before this court. Finally, they argue that the defendants have no need for compensation for their fees and expenses, since they are "multi

bil lion/million dollar defendants." There is no record evidence of th e defendants' financial condition, but there is evidence that they incurred fees and expenses because of the Walkers' lawsuit. We see no abuse o f discretion in awarding monetary sanctions.

III.

The W alkers and Massey contend that the district court abused it s discretion in denying their request to amend their complaint. Although th e Walkers did ask for leave to amend their complaint in their response to th e motion to dismiss, th ey did not comply with the local rule requiring them to file a copy of the proposed pleading. Nor did they give any hint of ho w they wished to change their complaint. They did not indicate a desire to dis miss any of the defendants before the district court dismissed thei r
com plaint. The district court has no obligation to dismiss non-divers e defendants sua sponte. See Vild v. Visconsi , 956 F.2d 560, 570 (6th Cir.) , cert. denied , 506 U. S. 832 (1992). After the d ismissal and denial of the motion to reconsider, the district court held a hearing on the amount of attorneys' fees to be awarded. At that hearing, Massey began to reargue the merits of

### Although it is possible for this court to dismiss nondiverse

parties on appeal, see Newman-Green, Inc. v. Alfonzo-Larrain , 490 U.S. 826, 836-37 (1989), the Walkers have not asked us to do so and therefore the issue has not been briefed.
-9- the dismissal. The court stated that some of the individual defendant s were South Dakota residents. Mr. Massey replied : "I think an appropriate ste p for the Court to have taken would have been to dismiss thos e indiv iduals that the Court considered that it could not bring into th e diversitystatute through pendent jurisdiction which is within th e discretion of the Cou rt." Massey still had not alleged a citizenship for many of the defendants and did not identify which defendants should b e dismissed to create diversity jurisdiction. The district court is no t obliged to do Massey's research for him, especially at such a late date. 4 There was no abuse of discretion.

IV.

The Walkers and Massey argue that the district court erred in no t requiring defendants' counsel to put on further evidence in support o f their accountings after Massey objected to them. The accountings wer e fully su pported by evidence in the form of affidavits and itemize d sta tements. The district court held a hearing on the fees issue, an d Massey elected not to cross-examine defendants' counsel. The distric t court's order was supported by adequate evidence.

V.

The Walkers and Massey argue that the district court erred i n awarding the full amo unt of fees and expenses defendants requested, since the defend ants' counsel did more work than was justified. Massey wa s persistent in filing baseless and uninformed ple adings, motion papers, and briefs, which drove up the defendants' fees. The district court did not abuse its discretion in entering

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sanctions for the full amount of expenses and fees claimed.

VI.
Finally, we must rule on the appellees' motions to strike portion s of M assey's and the Walkers' brief. The brief does contain extende d narrative pertaining to matters outside the record and irrelevant to any issue s on appeal before this court. We therefore grant the appellees ' motion to strike from the appellants' brief factual assertions no t accompa nied by citations to the record, including the entirety of th e sections titled "Relevant History of James Harrison Massey" and "History of the Case Before the District Court."

We aff irm the district court's entry of Rule 11 sanctions in th e amounts provided.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.