Court Opinion

ID: 9439
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:45:37+00
Date Added: 2024-06-11T08:49:45.598305
License: Public Domain

United States Court of Appeals,

                             Fifth Circuit.

                      Nos. 94-20084, 94-20694.

      David F. COURY, Plaintiff-Appellee, Cross-Appellant,

                                    v.

        Alain PROT, Defendant-Appellant, Cross-Appellee.

                             June 19, 1996.

Appeals from the United States District Court for the Southern
District of Texas.

Before GARWOOD, SMITH and DENNIS, Circuit Judges.

     DENNIS, Circuit Judge:

     In this case David Coury, a citizen of California, sued Alain

Prot, a dual citizen of the United States and France, in a Texas

state court   to   recover   for   damages   resulting   from   breach   of

contract and fraud.      Prot removed the action to the federal

district court pleading that he was a dual citizen of France and

the United States domiciled in France and therefore entitled to

remove this action under the alienage provision of diversity

jurisdiction, 28 U.S.C. § 1332(a)(2).         After a jury trial, the

trial court dismissed Coury's fraud claim but submitted the balance

of his case to the jury, which returned a verdict awarding Coury

$164,500 including attorney's fees plus post-judgment interest

based on Prot's breach of contract. Subsequently, the court denied

Prot's post verdict motions and granted Coury's motion for turnover

of two parcels of Prot's Texas property in satisfaction of the

trial court's judgment implementing the jury award.

     Prot appealed from the main judgment of the trial court and

from its turnover order contending:      (1) the district court lacked
diversity jurisdiction under the alienage provision because when

the suit was commenced and removed Prot was a dual citizen of the

United States and France domiciled in France;     (2) the district

court erred in denying Prot's post verdict motion for leave to

amend his answer to add the affirmative defense that the contract

sued upon by Coury was illegal;      (3) Prot's Texas parcels of

property were exempt from turnover and forced sale under the state

constitutional and statutory homestead exemptions.

     Coury filed a cross appeal seeking pre-judgment interest and,

in the event of reversal of the breach of contract award, to

overturn the trial court's dismissal of his fraud claim.

      Upon its initial consideration of the appeals, a different

panel of this court concluded that based on the record presented

for its review it could not determine whether Prot's domicile at

the time the complaint was filed was in France or in Texas.       For

purposes of diversity jurisdiction, only the American nationality

of a dual national is recognized.   Action S.A. v. Marc Rich & Co.,

Inc., 951 F.2d 504, 507 (2nd Cir.1991) cert. denied, 503 U.S. 1006,

112 S.Ct. 1763, 118 L.Ed.2d 425 (1992);   see also Sadat v. Mertes,

615 F.2d 1176 (7th Cir.1980) ("only the American nationality of the

dual citizen should be recognized under 28 U.S.C. § 1332(a).").    An

American national, living abroad, cannot sue or be sued in federal

court under diversity jurisdiction, 28 U.S.C. § 1332, unless that

party is a citizen, i.e. domiciled, in a particular state of the

United States.   1 J. Moore, Moore's Federal Practice § 0.74[4]

(1996). Thus, Prot's initial claim of diversity jurisdiction under

the alienage provision was invalid. Furthermore, if Prot was found
to be domiciled abroad, he would not be a citizen of any state and

diversity of citizenship would also fail. However, if the district

court determined that Prot was domiciled in Texas at the time the

suit    was   filed   and   removed,        although   removal   may   have    been

improper, subject matter jurisdiction would not be lacking.                   Coury

v. Prot, slip op. at 2, 3, 40 F.3d 385 (5th Cir. Nov. 3, 1994)

(unpublished per curiam) (citing Grubbs v. General Electric Credit

Corp., 405 U.S. 699, 702, 92 S.Ct. 1344, 1347, 31 L.Ed.2d 612

(1972)).      Accordingly, the panel remanded the case to the district

court for it to determine whether subject matter jurisdiction

existed, with directions to vacate its judgment if jurisdiction was

lacking or to return the case to this court if jurisdiction

existed.       Coury v. Prot, slip op., 40 F.3d 385 (5th Cir.1994)

(unpublished per curiam).

       On remand, the trial court conducted an evidentiary hearing,

determined that Prot was domiciled in Texas when the suit was filed

in state court in May, and removed in June, of 1992, and that

jurisdiction existed.           The trial court returned the case to this

court.

                                   Jurisdiction

       The district court correctly determined that subject matter

and    diversity   of   citizenship         jurisdiction    exists.     Prot    was

domiciled in Texas when the state court action was commenced and

when he removed the case to federal court.               Although in 1992 Prot

had physically moved himself, his family and his business to

France, he had not formed an intention to remain there.

       Article   III,   §   2    of   the    Constitution   provides    that    the
judicial power of the United States shall extend, inter alia, to

controversies      "between       Citizens    of    Different    States"     and   to

controversies "between a State, or the Citizens thereof, and

foreign States, Citizens or Subjects." These provisions constitute

the    authority     for    the    grant     of    "diversity"   and    "alienage"

jurisdiction, respectively.           1 J. Moore, Moore's Federal Practice

§ 0.71[1] (1996).

       It is axiomatic that the federal courts have limited subject

matter jurisdiction and cannot entertain cases unless authorized by

the Constitution and legislation.              Id. at 5.-1].     The parties can

never consent to federal subject matter jurisdiction, and lack of

such    jurisdiction        is    a   defense      which   cannot      be    waived.

Fed.R.Civ.P. 12(h)(3);            See City of Indianapolis v. Chase Nat'l

Bank, 314 U.S. 63, 76, 62 S.Ct. 15, 20, 86 L.Ed. 47 (1941).

Accordingly,       there    is    a   presumption      against   subject      matter

jurisdiction that must be rebutted by the party bringing an action

to federal court.          See, e.g. Strain v. Harrelson Rubber Co., 742

F.2d 888, 889 (5th Cir.1984); 1 J. Moore, Moore's Federal Practice

§ 0.71[5.-1] (1996).

        What makes a person a citizen of a state?                 The fourteenth

amendment to the Constitution provides that:               "All persons born or

naturalized in the United States, and subject to the jurisdiction

thereof, are citizens of the United States and of the State wherein

they reside."       United States Const. amend. XIV, § 1.                   However,

"reside" has been interpreted to mean more than to be temporarily

living in the state;         it means to be "domiciled" there.              Thus, to

be a citizen of a state within the meaning of the diversity
provision, a natural person must be both (1) a citizen of the

United States, and (2) a domiciliary of that state. Federal common

law, not the law of any state, determines whether a person is a

citizen   of    a    particular   state    for   purposes   of   diversity

jurisdiction.       1 J. Moore, Moore's Federal Practice, § 0.74[1]

(1996);   e.g., Mas v. Perry, 489 F.2d 1396, 1399 (5th Cir.) cert.

denied, 419 U.S. 842, 95 S.Ct. 74, 42 L.Ed.2d 70 (1974).

      Consistent with general principles for determining federal

jurisdiction, diversity of citizenship must exist at the time the

action is commenced.      Newman-Green, Inc. v. Alfonzo-Larrain, 490

U.S. 826, 830, 109 S.Ct. 2218, 2221, 104 L.Ed.2d 893 (1989).            In

cases removed from state court, diversity of citizenship must exist

both at the time of filing in state court and at the time of

removal to federal court. See, e.g., Kanzelberger v. Kanzelberger,

782 F.2d 774, 776 (7th Cir.1986).         If diversity is established at

the commencement and removal of the suit, it will not be destroyed

by subsequent changes in the citizenship of the extant parties.

Smith v. Sperling, 354 U.S. 91, 93 n. 1, 77 S.Ct. 1112, 1114 n. 1,

1 L.Ed.2d 1205 (1957);     Mollan v. Torrance, 22 U.S. (9 Wheat.) 537,

539, 6 L.Ed. 154 (1824);      1 J. Moore, Moore's Federal Practice, §

0.74[1] (1996).

     The lack of subject matter jurisdiction may be raised at any

time during pendency of the case by any party or by the court.

Fed.R.Civ.P. 12(h)(3).      Moreover, the Supreme Court has held that

a party cannot waive the defense and cannot be estopped from

raising it.     E.g., Insurance Corp of Ireland v. Compagnie des

Bauxites de Guinee, 456 U.S. 694, 102 S.Ct. 2099, 72 L.Ed.2d 492
(1982);   Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 98

S.Ct. 2396, 57 L.Ed.2d 274 (1978). Obviously, these principles can

result in a tremendous waste of judicial and private resources.

The general reaction is that this waste is simply a price that must

be paid for federalism.     1 J. Moore, Moore's Federal Practice §

0.74[1] (1996).    Some cases cry out for an exception to the rules,

for example, when a party who invokes federal jurisdiction recants

his original jurisdictional allegations or "discovers" that there

was no diversity after all after suffering a loss on the merits.

Id.   So far, however, the traditional rule stands firm despite the

urging of commentators for doctrines of estoppel or waiver to bar

litigants from "playing fast and loose with the judicial machinery"

and using the federal courts' limited subject matter jurisdiction

in bad faith.     Id. at n. 29.   A few circuits have demonstrated a

willingness to do so only to be repudiated by intervening Supreme

Court decisions.    American Fire & Casualty Co. v. Finn, 341 U.S. 6,

16-18, 71 S.Ct. 534, 541-542, 95 L.Ed. 702 (1951);    City of Brady,

Texas v. Finklea, 400 F.2d 352, 357-358 (5th Cir.1968);           Di

Frischia v. New York Cent. R.R., 279 F.2d 141, 141-144 (3rd

Cir.1960);   Klee v. Pittsburgh & W. Va. Ry. Co., 22 F.R.D. 252,

252-255 (W.D.Pa.1958).

       Jurisdictional matters are to be decided by the court,

although the court may, in its discretion, submit to the jury

contested factual issues involving the presence of diversity of

citizenship, to be used as an advisory determination. E.g. Har-Pen

Truck Lines, Inc. Mills, 378 F.2d 705 (5th Cir.1967).     As long as

the trial court applies the correct standard of law, its findings
as to the citizenship of the parties will be upheld on appeal

unless they are clearly erroneous. Fed.R.Civ.P. 52(a); see, e.g.,

Village Fair Shopping Center Co. v. Sam Broadhead Trust, 588 F.2d

431 (5th Cir.1979) (fact finding regarding principal place of

business of corporation not clearly erroneous);        1 J. Moore,

Moore's Federal Practice § 0.74[1] (1996).

     In making a jurisdictional assessment, a federal court is not

limited to the pleadings;   it may look to any record evidence, and

may receive affidavits, deposition testimony or live testimony

concerning the facts underlying the citizenship of the parties.

See, e.g. Jones v. Landry, 387 F.2d 102 (5th Cir.1967);        1 J.

Moore, Moore's Federal Practice § 0.74[1] (1996).     The court has

wide, but not unfettered, discretion to determine what evidence to

use in making its determination of jurisdiction.     See Ray v. Bird

& Son & Asset Realization Co., 519 F.2d 1081 (5th Cir.1975).

      A person cannot be a "citizen" of a state unless she is also

a citizen of the United States.    See e.g., Newman-Green, Inc. v.

Alfonzo-Larrain, 490 U.S. 826, 109 S.Ct. 2218, 104 L.Ed.2d 893

(1989);   Mas v. Perry, 489 F.2d 1396 (5th Cir.) cert. denied, 419

U.S. 842, 95 S.Ct. 74, 42 L.Ed.2d 70 (1974).        A United States

citizen who is domiciled in a state is a citizen of that state.

See Robertson v. Cease, 97 U.S. 646, 648-650, 24 L.Ed. 1057 (1878).

Thus, with few exceptions, state citizenship for diversity purposes

is regarded as synonymous with domicile.     E.g., Rodriguez-Diaz v.

Sierra-Martinez, 853 F.2d 1027 (1st Cir.1988); 1 J. Moore, Moore's

Federal Practice § 0.74[3] n. 3.    Accordingly, it has been held

consistently that a diversity suit may not be maintained under 28
U.S.C. § 1332(a)(1) by or against a United States citizen who is

domiciled in a foreign country, for a resident of a foreign country

is not necessarily a citizen thereof.        Smith v. Carter, 545 F.2d

909 (5th Cir.) cert. denied, 431 U.S. 955, 97 S.Ct. 2677, 53

L.Ed.2d 272 (1977).    Moreover, an American living abroad is not by

virtue of that domicile a citizen or subject of the foreign state

in which he resides so as to permit invocation of the alienage

jurisdiction prescribed in 28 U.S.C. § 1332(a)(2) of the Judicial

Code.    13B Wright-Miller-Cooper, Federal Practice & Procedure §

3621 (1984).

        Furthermore, there is an emerging consensus among courts

that, for a dual national citizen, only the American citizenship is

relevant   for   purposes   of   diversity   under    28   U.S.C.   §   1332.

Consequently, diversity jurisdiction may be properly invoked only

when a dual citizen's domicile, and thus his citizenship, is in a

state diverse from that of adverse parties.           See Action S.A. v.

Marc Rich & Co., 951 F.2d 504 (2nd Cir.) cert. denied, 503 U.S.

1006, 112 S.Ct. 1763, 118 L.Ed.2d 425 (1992);          Mutuelles Unies v.

Kroll & Linstrom, 957 F.2d 707 (9th Cir.1992);             Sadat v. Mertes,

615 F.2d 1176 (7th Cir.1980); Las Vistas Villas, S.A. v. Petersen,

778 F.Supp. 1202 (D.C.Fla.1991) (affirmed by 13 F.3d 409 (11th

Cir.1994)); Liakakos v. CIGNA Corp, 704 F.Supp. 583 (E.D.Pa.1988);

See also Maple Island Farm, Inc. v. Bitterling, 196 F.2d 55 (8th

Cir.) cert. denied, 344 U.S. 832, 73 S.Ct. 40, 97 L.Ed. 648 (1952).

Accordingly, the dual citizen should not be allowed to invoke

alienage jurisdiction because this would give him an advantage not

enjoyed by native-born American citizens.            Sadat v. Mertes, 615
F.2d 1176 (7th Cir.1980);       Soghanalian v. Soghanalian, 693 F.Supp.

1091 (D.C.Fla.1988);        Liakakos v. CIGNA Corp., supra.          The latter

conclusion is sound according to 1 Moore's Federal Practice §

0.74[4], because the major purpose of alienage jurisdiction is to

promote international relations by assuring other countries that

litigation    involving     their    nationals   will    be    treated   at   the

national level, and alienage jurisdiction is also intended to allow

foreign subjects to avoid real or perceived bias in the state

courts—a justification that should not be available to the dual

citizen who is an American.          See also 13B Wright-Miller-Cooper §

3621 (1984).

      A change in domicile typically requires only the concurrence

of: (1) physical presence at the new location and (2) an intention

to remain there indefinitely;          13B Wright-Miller-Cooper, Federal

Practice and Procedure § 3613 (1984), citing, inter alia, Stine v.

Moore, 213 F.2d 446 (5th Cir.1954);          Paudler v. Paudler, 185 F.2d

901 (5th Cir.) cert. denied, 341 U.S. 920, 71 S.Ct. 742 (1950);

or, as some courts articulate it, the absence of any intention to

go elsewhere.     13B Wright-Miller-Cooper § 3613 n. 3.                  Thus, a

person who has the clear intent to change domicile does not

accomplish the change until he is physically present in the new

location with that intent.          On the other hand, mere presence in a

new location does not effect a change of domicile;                   it must be

accompanied    with   the    requisite    intent.       In    most   cases,   the

difficult issue is not presence but whether the intent to change

domicile can be shown.         1 J. Moore, Moore's Federal Practice §

0.74[3.-1] (1996).
       A person's domicile persists until a new one is acquired or

it is clearly abandoned.   Lew v. Moss, 797 F.2d 747 (9th Cir.1986);

Mas v. Perry, 489 F.2d 1396 (5th Cir.) cert. denied, 419 U.S. 842,

95 S.Ct. 74, 42 L.Ed.2d 70 (1974).   There is a presumption in favor

of the continuing domicile which requires the party seeking to show

a change in domicile to come forward with enough evidence to that

effect to withstand a directed verdict.    Lew v. Moss, 797 F.2d at

751.      While some opinions seem to imply that the burden of

persuasion rests with the party attempting to show a change of

domicile, this is an overstatement.    The proper rule is that the

party attempting to show a change assumes the burden of going

forward on that issue.       The ultimate burden on the issue of

jurisdiction rests with the plaintiff or the party invoking federal

jurisdiction.   1 J. Moore, Moore's Federal Practice § 0.74[3.-3],

n. 8, (1996) citing Lew v. Moss, 797 F.2d 747, 751 (9th Cir.1986);

Slaughter v. Toye Bros. Yellow Cab Co., 359 F.2d 954, 956 (5th

Cir.1966);    Gregg v. Louisiana Power & Light Co., 626 F.2d 1315

(5th Cir.1980).

       In determining a litigant's domicile, the court must address

a variety of factors.      No single factor is determinative.   The

court should look to all evidence shedding light on the litigant's

intention to establish domicile.      The factors may include the

places where the litigant exercises civil and political rights,

pays taxes, owns real and personal property, has driver's and other

licenses, maintains bank accounts, belongs to clubs and churches,

has places of business or employment, and maintains a home for his

family.    See Lew v. Moss, 797 F.2d 747 (9th Cir.1986);   Hendry v.
Masonite Corp., 455 F.2d 955 (5th Cir.) cert. denied, 409 U.S.

1023, 93 S.Ct. 464, 34 L.Ed.2d 315 (1972);     1 J. Moore, Moore's

Federal Practice § 0.74[3.-3] n. 18 (1996) (citing authorities).

A litigant's statement of intent is relevant to the determination

of domicile, but it is entitled to little weight if it conflicts

with the objective facts.   Freeman v. Northwest Acceptance Corp.,

754 F.2d 553, 556 (5th Cir.1985);   Hendry v. Masonite Corp., 455

F.2d 955, 956 (5th Cir.) cert. denied, 409 U.S. 1023, 93 S.Ct. 464,

34 L.Ed.2d 315 (1972).

     Most courts regard domicile as presenting a mixed question of

law and fact.    E.g., Village Fair Shopping Center Co. v. Sam

Broadhead Trust, 588 F.2d 431, 433 (5th Cir.1979).    Nevertheless,

in practice, the district court's determination of domicile is

reviewed on appeal as a question of fact;   it will be upheld unless

"clearly erroneous."     1 J. Moore, Moore's Federal Practice §

0.74[3.-3] n. 29 and authorities cited therein.

      Applying these precepts to the case at bar, we conclude that

there was no clear error in the district court's determination that

Prot was domiciled in Texas when the action was initially filed and

when he removed it to federal court.    Accordingly, the district

court's conclusion that diversity and subject matter jurisdiction

exist in this case was also correct.

     Because Prot twice recanted his statement as to whether he

intended to establish domicile in France the trial court was

entitled to regard his representations as lacking in candor and

credibility. Originally, in Prot's notice of removal filed on June

29, 1992, he represented to the court that he was "a dual-citizen
both of France and the United States however, significantly prior

to the time that suit was filed against him he became domiciled in

France."    Later, after Coury obtained judgment against Prot and

moved to have Prot's Texas parcels of real estate turned over, Prot

filed an affidavit in connection with the court's hearing on the

turnover motion on August 8, 1994.   In the affidavit, Prot recanted

his pleading that he was domiciled in France, averring that he

never intended to live permanently in France or to abandon his

Texas home;      that his intention was always to return to his

homestead in Texas.     His affidavit further provided that in late

1990 a bottled water business opportunity in France caused him to

begin commuting between Texas and France;     his wife resided full

time in their Bellaire, Texas1 home as late as April 1991;   in June

1991 he and his wife moved temporarily to France due to increased

demands of his business;    neither he nor his wife ever established

a permanent residence in France;     his wife returned to Texas for

over a year from the summer of 1992 until September 1993;     in the

meantime he had been leasing the Bellaire house for no longer than

eighteen-month terms;      he and his wife intended to return to

Bellaire some day so she could resume work at the Texas Medical

Center;    he would not be willing to sell the Bellaire property;   he

filed a voluntary designation of homestead on the Bellaire property

in March 1994;    he did not know when he would be able to return to

the United States—stating the bottled water business had already

taken a year and a half longer than he planned;          because the

     1
      Bellaire, Texas is a small municipal corporation located in
the center of Houston, Texas.
quarters in which he resided near the natural springs were about

forty miles by mountain roads to the school his children attended,

his wife and children reside in Limoges, France, while he lives on

the property where the business is located—an arrangement he

assured the court was totally unsatisfactory as a permanent home.

     Finally, in his first appeal to this court in 1994, Prot

asserted that the district court may have lacked subject matter

jurisdiction, viz., no diversity jurisdiction. On remand from this

court, at the evidentiary hearing held by the district court to

determine whether jurisdiction exists, Prot recanted the testimony

in his sworn affidavits at the hearing on the turnover motion.    In

support of the proposition that he was not domiciled in Texas in

May and June of 1992, at the time the suit was filed and removed,

Prot testified that it was "primarily" his wife's wish to return to

the United States, thereby implying he had no such desire;     that

their return to Texas was contingent on the success of the bottling

water business;   that he had characterized their move to France as

"temporary" in earlier statements only because his wife did not

wish to live in France permanently;   and his intention to return to

Texas was nothing more that an indefinite plan for the future.    On

cross examination Coury's attorney asked Prot about the "dozen

occasions" Prot testified that it was his "constant intent to

return to Texas some day, throughout the time [Prot] left Texas

until the present."      In response, Prot indicated that he had

testified so because that was what he had told his wife.         The

record does not indicate that Prot otherwise tried to reconcile the

conflicting testimony.
       Based on the evidence of record, much of which consisted of

Prot's conflicting statements and actions, the district court found

that   Prot   established   a    domicile   in   Texas     in    1987,   that    he

physically moved himself and his family to France in 1991 to avoid

transatlantic commuting, but that the evidence failed to show an

essential requisite of a change in domicile, viz., that he formed

an intention in 1991 or 1992, prior to the filing of the complaint

and the removal of this case, to remain in France indefinitely.                  In

view of Prot's repeated statements that he and his wife did not

intend to stay in France indefinitely and that they always intended

to return to Texas, we conclude that the district court's findings

were not clearly erroneous.

       Furthermore, the trial court applied the correct principles

of law to these facts in concluding that diversity jurisdiction

exists.   Because Prot's domicile was determined to be Texas at the

time the suit was filed and removed, while Coury's domicile was in

California,    diversity    of   citizenship     existed    between      the    two

parties pursuant to 28 U.S.C. § 1332(a)(1).                     The removal was

improper, however, because a defendant may not remove a state

action to federal court if a defendant is a citizen of the state in

which the action is filed.       28 U.S.C. § 1441(b).       Coury waived this

defect, however, by his failure to seek a remand of the action to

state court within 30 days of removal.              28 U.S.C. § 1447(c).

Nevertheless, although removal may have been improper, subject

matter jurisdiction is not lacking.            Grubbs v. General Electric

Credit Corp., 405 U.S. 699, 702, 92 S.Ct. 1344, 1347, 31 L.Ed.2d

612 (1972) ("Longstanding decisions of this Court make clear,
however, that where after removal a case is tried on the merits

without objection and the federal court enters judgment, the issue

in subsequent proceedings on appeal is not whether the case was

properly removed, but whether the federal district court would have

had original jurisdiction of the case had it been filed in that

court.").

                        Homestead Exemption

     The district court did not clearly err in determining that at

the time the motion for turnover of Prot's Texas properties was

filed in March 1994, Prot's Bellaire, Texas property was no longer

protected from turnover and forced sale by the Texas homestead

exemption.   Prot began commuting to France from Texas in 1991 and

by 1994, he and his family had lived in France continuously for

over two years.     He had purchased at least two properties and

established a permanent and primary residence on one of them.   It

was plausible for the trial court to conclude that after the

success of his business had been delayed one and one-half years

beyond his original plans, and his wife and children rejoined him

in France in September of 1993, and he established for them a home

near the children's school in Limoges, France, the Prots had

established a new homestead in France and had abandoned their

homestead in Bellaire, Texas prior to the turnover proceedings in

1994.

        The question of whether there has been an abandonment of a

homestead is to be determined from all the pertinent facts and

circumstances of each particular case as it arises.     Coleman v.

Banks, 349 S.W.2d 737, 739 (Tex.Civ.App.1961) (application for writ
of error refused, no reversible error);             Hix v. De Phillipi, 216

S.W.2d 643, 645-646 (Tex.Civ.App.1948) (application for writ of

error refused, no reversible error).            A homestead exemption may be

lost     or   abandoned    by   a   removal     from   the     premises    under

circumstances clearly indicating that the removal is not merely

temporary.      A homestead claimant is not required to remain on the

premises at all times, and he does not necessarily lose, forfeit or

abandon his homestead rights merely by removing or being absent

from the premises when the absence is temporary.                    McFarland v.

Rousseau, 667 S.W.2d 929 (Tex.Ct.App.1984).            However such absence

is a matter properly to be considered, in connection with other

circumstances, in determining the question of abandonment.                 Carver

v. Gray, 140 S.W.2d 227 (Tex.Civ.App.1940) (application for writ of

error dismissed, judgment correct).

         Generally,   in   order    to   constitute    an    abandonment    of a

homestead by a removal from the premises, the removal must be

accompanied by the intent never to return to occupy the premises as

a homestead.       See Coyel v. Mortgage Bond Co. of New York, 124

S.W.2d    204    (Tex.Civ.App.1939).        A    removal     from    a   property

constituting a homestead does not cause an abandonment of the

homestead where the owner has an unqualified, fixed, and abiding

intention to return to the property and occupy it as a homestead,

where such intentions remain at all times, and no other homestead

is acquired.     City National Bank of Bryan v. Walker, 111 S.W.2d 350

(Tex.Civ.App.1937) (application for writ of error dismissed for

want of jurisdiction) (The court found Walker had not abandoned his

homestead though it had been vacated when he moved to another
state, because Walker had not purchased another homestead, had left

all furnishings in the house, and had retained his lodge, church

and other affiliations in Bryan).        Nevertheless, the element of

lapse of time the owner has remained away is a matter to be

considered, and if the absence is prolonged, it may, if there is no

evidence of a fixed intention to return, constitute an abandonment.

Nelson v. Nelson, 134 B.R. 838, 845-846 n. 3 (N.D.Tex.1991) ("If a

homestead claimant has remained away from home a prolonged period

of time, an intention of no interest to return may be inferred.");

see also Tuerpe v. George Saunders Live Stock Commission Co., 245

S.W. 741, 742 (Tex.Civ.App.1922) (writ of error dismissed or

refused) ("while in this case the Tuerpes were vigorous in their

denial of any intention to abandon the ranch homestead, we cannot

say ... that this evidence was not overcome by their admissions and

conduct over a period of several years and we perceive no reason

why we should set aside the ... findings of the trial judge against

[the Tuerpes]").

      Although a homesteader who has removed from the premises with

no   intention   to   return   may   change   his   intention   to   resume

possession and thereby reinvest the property with the homestead

character, such resumption of possession has only the effect of

creating a new homestead right from the time of the new occupancy,

or immediately prior to occupancy as long as the claimant has a

fixed time in the near future that he will occupy the homestead.

However, the resurrection of the homestead right in the property

does not affect the rights of third persons acquired in the interim

between the loss of the old and the acquisition of the new.             See
Zimmer v. Pauley, 51 Wis. 282, 8 N.W. 219, 221 (1881) (where overt

acts   by    plaintiff     supported     redemption     of    possibly     abandoned

homestead just prior to the date of judgment against plaintiff, and

thus the plaintiff's property was protected from the judgment);

Kaes v. Gross, 92 Mo. 647, 3 S.W. 840, 842 (1887) ("If [a homestead

exemption] be once lost, and possession of the homestead be again

resumed, such resumption of possession will only have the effect of

giving origin to a new homestead right, bearing date from the new

occupancy, and having no retroactive validity on the old right lost

by abandonment, and possessing no force against the rights of third

persons acquired in the interim between the loss of the old and the

acquisition of the new right.").

       Since no one can own two homesteads at the same time, if the

debtor acquires a new homestead, he thereby abandons and loses his

homestead rights in the former place of residence.                  Norman v. First

Bank   &     Trust,      Bryan,    557   S.W.2d      797,    801    (Tex.Civ.App.)

(application for writ of error refused, no reversible error, 1978).

The best evidence of the abandonment of a former homestead is the

fact   that    a   new    and     permanent   home    has    been    acquired,   and

appropriated as such.           Panhandle Const. Co. v. Wiseman, 110 S.W.2d

615,   617    (Tex.Civ.App.1937)         (application        for    writ   of   error

dismissed for want of jurisdiction) ("[t]here is no rule of law

better established in Texas than that possession and use of real

estate by one who owns it, and who, with his family, resides upon

it, makes it the homestead of the family in law and in fact, and it

has been repeatedly held by the courts of this state that the best

evidence of the abandonment of a former homestead is the fact that
a new and permanent home has been acquired and appropriated as

such.").    The removal of the owners from one property to another,

and the occupancy and use of the latter property as a homestead,

unaccompanied by any act evidencing an intention to return to the

former    home,       silently,     but   effectively,   proclaims     the   latter

property to be their homestead and constitutes the highest and most

conclusive evidence of abandonment of the former property as a

homestead.       Norman v. First National Bank and Trust, Bryan, 557

S.W.2d 797, 800-802 (Tex.Civ.App.) (application for writ of error

refused, no reversible error, 1978) citing, inter alia, Hinton v.

Uvalde Paving Co., 77 S.W.2d 733 (Tex.Civ.App.1934) (application

for writ of error refused).

         Whether       land   claimed     for   homestead    exemption   was   used

principally for residential purposes or otherwise is a question of

fact for the determination of the jury.                Continental Inv. Co. v.

Schmeich, 145 S.W.2d 219, 221 (Tex.Civ.App.1940) (application for

writ of error refused).             However, whether a subject property has

been impressed with the character of homestead is based on findings

of fact and conclusions of law.             Caulley v. Caulley, 806 S.W.2d 795

(Tex.1991).      Abandonment of a homestead is a question of fact to be

determined in each case from the entire evidence before the court.

Coleman     v.    Banks,      349    S.W.2d     737,   741     (Tex.Civ.App.1961)

(application for writ of error refused, no reversible error).

Proof     that    a    new    homestead     has   been      acquired   establishes

abandonment of the old homestead as a matter of law.                     Norman v.

First Bank & Trust, Bryan, 557 S.W.2d 797, 800 (Tex.Civ.App.)

(application for writ of error refused, no reversible error, 1978).
This Court accepts a district court's finding of fact unless they

are clearly erroneous—"due regard shall be given to the opportunity

of the trial court to judge of the credibility of the witnesses",

Fed.R.Civ.P. 52(a)—and this court reviews issues of law de novo.

State Savings and Loan Assn. v. Liberty Trust, 863 F.2d 423 (5th

Cir.1989). The burden of showing that the findings of the district

court are clearly erroneous is heavier if the credibility of

witnesses is a factor in the trial court's decision.                 Village Fair

Shopping   Center   v.    Broadhead,      588   F.2d   431,   434     n.   2   (5th

Cir.1979).

       Applying these precepts to the case at bar, we conclude that

the district court did not err in determining that by 1994 Prot had

established   a   new    homestead   in    France,     no   longer    having   the

requisite intent to maintain the Bellaire, Texas property as his

homestead, and in concluding that the Bellaire Boulevard property

was not protected at that time from turnover and forced sale by the

Texas homestead exemption.

      The evidence before the court consisted of two depositions of

Prot, taken in 1992 and 1994, and an affidavit submitted by Prot in

lieu of an appearance at the evidentiary hearing on jurisdiction on

remand.    When Prot initially moved to France in 1991 to manage his

bottle water company, though he also moved his wife and children

and   their   residential    belongings,        he   anticipated      having   the

business up and running in eighteen months.            His wife moved back to

San Antonio, Texas in the summer of 1992 and worked there until the

fall of 1993.     At that point Prot admits that his business was not

developing as successfully as possible and his wife and children
moved back to France to join him in September 1993.                     Prot's

intention to return to Texas within eighteen months was no longer

realistic.     He remodeled an apartment on the property where the

spring water was located and Prot's family settled into a home 40

miles away in Limoges near the children's school.             When the motion

for turnover was filed in 1994, Prot and his family had not lived

at   the   Bellaire    Boulevard   property     for   three    years;     Prot

discontinued his Texas mailing address in 1993;               he had lost his

homestead property tax treatment on the Bellaire, Texas property;

he evidently did not file a homestead declaration for the Bellaire

property until after Coury moved for its turnover;              he was unsure

of whether he still maintained an active checking account in Texas,

indicating little if any use of the account if it existed;              he had

stated in a 1992 deposition that he did not have any intention of

making his primary residence in the United States at any time in

the future, though later he stated that English was not his primary

language and that he may not have understood the question;                 and

Prot continuously leased out the Bellaire property after his

initial move to France in 1991.       In addition, Prot declared to the

French     Consulate   that   he   lived   in   France   "full-time";       he

maintained active checking and savings accounts in French financial

institutions;    in additionto operating the bottling business, Prot

is a "French farmer" in the timber and hay businesses;                  and he

admitted at the evidentiary hearing in 1994 to determine where he

was domiciled that he "purchased land in France and move[d] his

family into a home that was prepared for the use as a home".

      We find no clear error in the district court's determination
that prior to 1994 Prot created a new homestead in France and

abandoned his Texas homestead, subsequent to which the Texas

property was not protected by the homestead exemption.

                           Other Issues

     For the reasons assigned by the trial court, we affirm the

trial court's determination that Prot waived by not pleading the

affirmative defense of illegality of the contract and find no abuse

of discretion in the court's denial of Prot's post-verdict motion

for leave to amend his answer to plead the affirmative defense of

illegality of contract.   Fed.R.Civ.P. 8(c).   Also, it appears that

Coury may be entitled to an award of prejudgment interest.    Cavnar

v. Quality Control Parking, 696 S.W.2d 549 (Tex.1985);     see also

Concorde Limousines, Inc. v. Moloney Coachbuilders, Inc., 835 F.2d

541, 548-550 (5th Cir.1987) (for discussion of the development of

Texas law concerning prejudgment interest).      The district court

failed to rule on this claim.     Accordingly, this case will be

remanded to the trial court for adjudication of this issue.

     The judgment of the trial court is Affirmed, in part, but the

case is remanded in part to that court for its determination of

Coury's prejudgment interest claim.