Court Opinion

ID: 854190
Source: CourtListenerOpinion
Date Created: 2013-03-04 15:56:38.585351+00
Date Added: 2024-06-11T09:04:44.990537
License: Public Domain

12-3504
     Universitas Education, LLC v. Nova Group, Inc.

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Thurgood Marshall United
 3       States Courthouse, 40 Foley Square, in the City of New York,
 4       on the 4th day of March, two thousand thirteen.
 5
 6       PRESENT: DENNIS JACOBS,
 7                              Chief Judge,
 8                ROSEMARY S. POOLER,
 9                              Circuit Judge.
10                ERIC N. VITALIANO,
11                              District Judge.*
12
13       - - - - - - - - - - - - - - - - - - - -X
14       UNIVERSITAS EDUCATION, LLC,
15                Plaintiff-Appellee,
16
17                    -v.-                                                     12-3504
18
19       NOVA GROUP, INC., AS TRUSTEE, SPONSOR
20       AND NAMED FIDUCIARY OF THE CHARTER OAK
21       TRUST WELFARE BENEFIT PLAN,
22                Defendant-Appellant.
23
24       - - - - - - - - - - - - - - - - - - - -X

                *
               The Honorable Eric N. Vitaliano, District Judge of
         the United States District Court for the Eastern District of
         New York, sitting by designation.
                                                  1
 1   FOR APPELLANT:             JACK E. ROBINSON, Robinson Law
 2                              Offices, Stamford, Connecticut.
 3
 4   FOR APPELLEE:              PAULA K. COLBATH, Loeb & Loeb
 5                              LLP (Michael Barnett, Loeb &
 6                              Loeb LLP, on the brief), New
 7                              York, New York.
 8
 9        Appeal from a judgment of the United States District
10   Court for the Southern District of New York (Swain, J.).
11
12        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
13   AND DECREED that the judgment of the district court be
14   AFFIRMED. The mandate shall issue immediately. Nova Group
15   shall bear the costs of appeal.
16
17        Nova Group, Inc. (“Nova Group”) appeals from the
18   judgment of the United States District Court for the
19   Southern District of New York (Swain, J.), confirming an
20   arbitration award in favor of Universitas Education, LLC
21   (“Universitas”) in the amount of $26,525,535.88, plus
22   prejudgment interest and attorneys’ fees. We assume the
23   parties’ familiarity with the underlying facts, the
24   procedural history, and the issues presented for review.
25
26        The sole issued raised on appeal is whether the
27   district court had subject matter jurisdiction over this
28   action. We review this question de novo. See Oscar Gruss &
29   Son, Inc. v. Hollander, 337 F.3d 186, 193 (2d Cir. 2003).
30
31        The underlying dispute involves a trustee’s refusal to
32   pay approximately $30 million in life insurance proceeds to
33   the trust beneficiary following the insured’s death in June
34   2008. When Nova Group (the trustee) rejected a claim by
35   Universitas (the beneficiary) to the death benefit,
36   Universitas filed a demand for arbitration, pursuant to a
37   contract-based arbitration clause. On January 24, 2011, the
38   arbitrator held Nova liable to Universitas for
39   $26,525,535.88. Nova then filed a Petition to Vacate in
40   Connecticut Superior Court pursuant to the Federal
41   Arbitration Act (“FAA”), 9 U.S.C. § 10, and Universitas
42   filed an action in New York Supreme Court seeking
43   confirmation of the award pursuant to 9 U.S.C. § 9. Both
44   parties removed the respective actions to federal court,
45   asserting the existence of diversity of citizenship and a
46   federal question.
47

                                  2
 1        After losing on the merits, Nova Group then challenged
 2   the district court’s subject matter jurisdiction over the
 3   case. The court court summarily dismissed this argument as
 4   “wholly without merit” and entered judgment for Universitas.
 5   A 249. We agree with this decision.
 6
 7        “[S]ubject matter jurisdiction is an unwaivable sine
 8   qua non for the exercise of federal judicial power.” Curley
 9   v. Brignoli, Curley & Roberts Assocs., 915 F.2d 81, 83 (2d
10   Cir. 1990). So Nova Group’s motion is late in the day, but
11   not untimely.
12
13        Subject matter jurisdiction clearly exists here.
14   Federal courts have diversity jurisdiction over
15   controversies between “citizens of different States.” 28
16   U.S.C. § 1332(a)(1); U.S. Const. art. III, § 2. “Diversity
17   jurisdiction exists over ‘civil actions where the matter in
18   controversy exceeds the sum or value of $75,000, exclusive
19   of interest and costs, and is between . . . citizens of
20   different States.’” Hallingby v. Hallingby, 574 F.3d 51, 56
21   (2d Cir. 2009) (quoting 28 U.S.C. § 1332(a)(1)).
22
23        Universitas is a citizen of New York because it is a
24   limited liability company whose members are domiciled in New
25   York. Nova Group is a Delaware corporation with its
26   principal place of business and headquarters in Simsbury,
27   Connecticut, making it a citizen of both Delaware and
28   Connecticut. The amount in controversy indisputably exceeds
29   $75,000. Nova Group argues that a court must also consider
30   the citizenship of trust beneficiaries for purposes of
31   subject matter jurisdiction if suit is brought by a trustee
32   (which, in this case, would undermine the parties’ diversity
33   of citizenship). This argument was rejected in Navarro
34   Savings Association v. Lee, 446 U.S. 458 (1980). See id. at
35   465-66 (affirming the rule, “more than 150 years” old, that
36   permits trustees “to sue in their own right, without regard
37   to the citizenship of the trust beneficiaries”). Contrary
38   to Nova Group’s contentions, Carden v. Arkoma Associates,
39   494 U.S. 185 (1990), which concerned the citizenship of a
40   limited partnership, did not overrule Navarro. Rather, the
41   Supreme Court explicitly held that the two opinions did not
42   conflict. See id. at 191-94. Navarro therefore remains

                                  3
 1   good law, and the district court properly held that it had
 2   jurisdiction pursuant to 28 U.S.C. § 1332(a)(1).1
 3
 4        For the foregoing reasons, and finding no merit in Nova
 5   Group’s other arguments, we hereby AFFIRM the judgment of
 6   the district court. The mandate shall issue immediately.
 7   Nova Group shall bear the costs of appeal.
 8
 9                              FOR THE COURT:
10                              CATHERINE O’HAGAN WOLFE, CLERK
11

         1
           Because we hold that the district court had
     jurisdiction under 28 U.S.C. § 1332(a)(1), we need not
     determine whether the case also presented a federal question
     and thus created an independent basis for jurisdiction under
     28 U.S.C. § 1331.
                                  4