Court Opinion

ID: 4408394
Source: CourtListenerOpinion
Date Created: 2019-06-19 18:00:27.458829+00
Date Added: 2024-06-11T14:24:31.269631
License: Public Domain

NONPRECEDENTIAL DISPOSITION
                To be cited only in accordance with Fed. R. App. P. 32.1

                United States Court of Appeals
                                 For the Seventh Circuit
                                 Chicago, Illinois 60604

                                 Submitted June 3, 2019*
                                  Decided June 19, 2019

                                          Before

                           JOEL M. FLAUM, Circuit Judge

                           MICHAEL Y. SCUDDER, Circuit Judge

                           AMY J. ST. EVE, Circuit Judge

No. 19-1227

ANNIE JOHNSON and MARK                             Appeal from the United States District
JOHNSON,                                           Court for the Northern District of Illinois,
    Plaintiffs-Appellants,                         Eastern Division.

       v.                                          No. 1:18-cv-3401

NATIONAL ASSET ADVISORS, LLC,                      Sara L. Ellis,
and HARBOUR PORTFOLIO VII, LP,                     Judge.
     Defendants-Appellees.

                                        ORDER

       This case is another example of the need to establish subject-matter jurisdiction
and, when diversity of citizenship is invoked, to identify the citizenship of each party to
the case. Annie and Mark Johnson agreed to make repairs to a house that they occupied
in exchange for an alleged promise by a real-estate investment company and its
representative to pay the property taxes until the Johnsons brought the house to code;

       * We have agreed to decide the case without oral argument because the briefs and
record adequately present the facts and legal arguments, and oral argument would not
significantly aid the court. FED. R. APP. P. 34(a)(2)(C).
No. 19-1227                                                                          Page 2

the Johnsons could then purchase the house. But the real-estate company did not pay
the taxes, and the Johnsons wound up being evicted. The Johnsons turned to federal
court, suing two defendants for breach of contract (among other claims). The district
court dismissed the claims as untimely and entered judgment for the defendants.

       The Johnsons asserted diversity of citizenship as the basis for federal jurisdiction.
See 28 U.S.C. § 1332. Their complaint alleged that the first defendant, National Asset
Advisors, LLC, was a limited liability company with its principal place of business in
South Carolina, and that the second defendant, Harbour Portfolio VII, LP, was a Texas
limited partnership with its principal place of business in Texas. The Johnsons assert
that they are citizens of Illinois and that neither defendant is a citizen of Illinois.

         On appeal, the appellees’ brief stated that the Johnsons’ jurisdictional statement
is “incomplete,” and we agreed, so we ordered the appellees to provide a complete
jurisdictional summary. See CIR. R. 28(a)(1). The appellees, however, also failed to
submit a jurisdictional statement that was both complete and correct because they failed
to identify by name all partners of Harbour and each partner’s state of citizenship.
Appellees must provide this information because the citizenship of a partnership is that
of all its partners. See Hart v. Terminix Int’l, 336 F.3d 541, 543 (7th Cir. 2003). And the
citizenship of a partnership must be traced through however many layers of partners
there may be. Meyerson v. Harrah’s E. Chicago Casino [Meyerson I], 299 F.3d 616, 617
(7th Cir. 2002). It is also not sufficient for the plaintiffs to state simply that neither
defendant is a citizen of the state of which the plaintiffs are citizens. Id.

        The appellees requested additional time to identify the layers of Harbour’s
partnership, and we granted them more time to gather the necessary information about
its 91 partners—27 of which are partnerships, limited partnerships, or limited liability
companies. Even with that extra time, they have failed to supply the required
information. And they inform us that they will not do so because, they claim, they do
not have “access” to the information. The appellees acknowledge that their failure may
result in dismissal of this appeal and vacatur of the district court’s judgment in their
favor. See Meyerson v. Showboat Marina Casino P’ship [Meyerson II], 312 F.3d 318, 321
(7th Cir. 2002) (remanding for district court to dismiss case for lack of diversity
jurisdiction because party refused to provide its ownership information). For their part,
the Johnsons responded by submitting a filing asking us to enter judgment for them on
the merits, but they did not attempt to explain how they have satisfied the requirements
of diversity jurisdiction.
No. 19-1227                                                                           Page 3

        Based on these submissions, the Johnsons have failed to carry their burden of
establishing that this case falls within the jurisdiction of the federal courts. Once the
possible defect in jurisdiction was identified, the parties had to demonstrate complete
diversity of citizenship, and despite several chances to do so, they have failed. “Failure
to go through all the layers [of a partnership] can result in dismissal for want of
jurisdiction.” Meyerson I, 299 F.3d at 617; Belleville Catering Co. v. Champaign Mkt. Place,
L.L.C., 350 F.3d 691, 693–94 (7th Cir. 2003); Hart, 336 F.3d at 544; Guar. Nat’l Title Co.
v. J.E.G. Assocs., 101 F.3d 57, 59 (7th Cir. 1996). With the parties having failed to supply
the necessary information, dismissal of the lawsuit is necessary.

       The failure to ascertain the complete citizenship of the parties in this case has
wasted tremendous time and resources. The Johnsons should not have sued in federal
court before identifying the defendants’ citizenship, and the defendants should have
pointed out the problem before asking the district court to decide the merits.
See Belleville Catering Co., 350 F.3d at 693. We have considered remanding the case to
give the district court a chance to explore whether it can compel the defendants to
provide “access” to their citizenship information. But enough federal-court time has
been spent on this case. The defendants’ inability to provide access deprives them of a
ruling in their favor, so we see no need to remand for further litigation.

       We thus DENY the Johnsons’ motion for judgment, VACATE the judgment of
the district court, and REMAND with instructions to dismiss the case for lack of
jurisdiction.