Lanaras v. Premium Ocean LLC

Background

Maria Lanaras brought a breach-of-contract action against Premium Ocean, LLC, Out of the Blue Wholesale, LLC, Out of the Blue Seafood, LLC, Juliana Paparizou, Efraim Bason, and Ronit Bason. The complaint asserted federal diversity jurisdiction under 28 U.S.C. § 1332(a), alleging that Lanaras was a citizen and resident of Greece and that all defendants were domiciled in New York.

For diversity purposes, a limited liability company has the citizenship of each of its members. The complaint alleged that Ronit Bason and Juliana Paparizou were members of each of the three limited liability companies. The defendants argued that the court lacked subject-matter jurisdiction because Ronit Bason was a United States citizen domiciled in Israel. A United States citizen domiciled abroad is not treated as either a citizen of a U.S. state or a citizen of a foreign country for purposes of diversity jurisdiction.

Legal standard

The party invoking federal jurisdiction must establish it by a preponderance of the evidence. Citizenship for diversity purposes is determined by a person’s domicile when the complaint is filed. Domicile means the person’s true, fixed home and principal establishment, together with the intent to return there when away. The court may consider evidence outside the pleadings, including affidavits and other documents, when deciding a motion to dismiss for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1).

Court’s analysis

The court found that Bason was domiciled in Israel on February 12, 2020, when Lanaras filed the action. Bason was born in Israel and held dual United States and Israeli citizenship. She testified that she returned to Israel in 2006 and had lived there since then.

The court recognized evidence that Bason had substantial New York connections between 2008 and 2016. She and a limited liability company of which she was a member bought and later sold New York residences. New York business records also listed her as an agent for service of process at New York addresses for two limited liability companies of which she was a member. The court stated that this evidence showed a substantial New York presence and an intention to return to New York during that earlier period.

The court nevertheless found that Bason had been domiciled in Israel since some time after her 2016 divorce. She testified that she lived in Israel with her children, had no plans or expectations of moving to the United States, typically spent only 30 to 60 days each year in New York, and stayed in an apartment she owned in Queens. Her sons attended school in Israel, she had worked as a high school secretary in Israel for eight years, she was registered to vote only in Israeli elections, and her doctors and divorce lawyer were in Israel. She also attended synagogue in Israel. The court found this evidence clear and convincing, and Lanaras did not dispute that Bason had spent the vast majority of her time in Israel since at least 2017.

The court rejected Lanaras’s reliance on older real-estate records, documents associating Bason with New York residences, and evidence concerning Bason’s former husband. It also found that a 2019 unsigned agreement referring to New York as a possible forum did not establish New York domicile. An affidavit filed in another case was immaterial because Bason was not a party to that case, and subject-matter jurisdiction cannot be created by the parties’ consent.

Although Bason had connections to both New York and Israel, including taxes, bank accounts, telephone numbers, and driver’s licenses in both places, the court concluded that her life was based in Israel. It therefore held that the court lacked diversity jurisdiction under Section 1332(a).

Disposition

Judge Lorna G. Schofield granted the motion to dismiss for lack of subject-matter jurisdiction and dismissed the case. The court denied the application at Docket No. 62 to begin discovery as moot, directed the Clerk of Court to close all open motions, and closed the case.