Thursday, January 31, 2013
Have the Illinois Courts Eliminated Charging Orders in Single-Member LLCs?
In a recent decision by the Federal District Court for the Central District of Illinois, it considered the rights of the receiver over limited partnerships controlled by, apparently, married taxpayers. Its reasoning, however, may lead to the conclusion that the charging order is ineffective in a single-member LLC in Illinois. United States v. Zabka, ___ F. Supp. 2d ___, 2012 WL 5246918 (C.D. Ill. Sept. 11, 2012).
Federal tax liens were assessed against Robert and Deborah Zabka for numerous years of their personal tax liability. Judgment having been entered in favor of the government, the matter before the Court involved the appointment of a receiver to collect, manage and ultimately sell the Zabka’s property in order to satisfy the federal tax liens. One argument made by the Zabkas was that the federal receiver must comply with the Illinois charging order statute under the Limited Partnership Act, namely 805 Ill. Comp. Stat. 215/703. This statute expressly provides that it is the “exclusive remedy” of a judgment-creditor.
In rejecting that argument, the Court noted that the government’s lien attached to all of the Zabka’s property, which “property and rights to property included their 100 percent ownership interest in the Limited Partnerships.” 2012 WL 5246918, *5. The Court went on to note that the statutory language addresses the rights of a judgment-creditor of “a” (i.e., a singular) partner or transferee. From there, the Court wrote:
The plain language of that statute – which refers to a judgment-creditor of an individual partner – demonstrates that it was designed to protect other partners in a partnership when one, but perhaps not all of the partners, have become encumbered with a judgment-creditor. In that respect, the Court finds that the state statute is irrelevant to the circumstances of the instant case because the Government’s federal tax lien attached to the Zabka’s 100 percent ownership interest of the Limited Partnerships.
By this reasoning, if a judgment-debtor is the sole member of an LLC, the judgment-creditor is not restricted to a charging order. Whether, in that situation, the judgment-creditor is able to seize the entirely of the LLC transferable interest, thereby becoming an assignee of all the economic benefits of the venture, seize as well the management rights in the company or something else, is left to be determined. What is clear, however, is that the dangerous step of eliminating the charging order in the single-member LLC, simply because it is a single-member LLC, appears to have been taken.
Monday, January 28, 2013
The Passing of Henry VIII
Today is the anniversary of the death, in 1547, of King Henry VIII. By coincidence, today is as well the anniversary of the birthday of his father, King Henry VII.
Although historians can and do dispute the issue, in many respects he was a lousy king. On two occasions he sent England to war in France; in both instances the gains were minimal while the costs were huge. He as well underwrote several campaigns, including those of Maxmillian, the Holy Roman Emperor, further depleting the quite healthy treasury left him by Henry VII. Meanwhile, England’s greatest military victory during his reign, the Battle of Flodden Field, was won by Thomas Howard, Earl of Surrey, thereby earning him the return of Dukedom of Norfolk lost after his family fought for the wrong side (i.e., that of Richard III) at the Battle of Bosworth.
Henry fancied that at least northern Europe was a tri-part division of power between England, France and the Holy Roman Emperor. While the Treaty of London, structured by Cardinal Welsey, would reflect this division, the reflection was possible only because the Holy Roman Empire and France accommodated the fiction. In fact, there were two great powers in Europe, France and the Holy Roman Empire. England, while economically important, was not a significant diplomatic power.
Having condemned Luther as a heretic in his Defense of the Seven Sacraments, earning him from the Papacy the title Defender of the Faith, when it became convenient to do so in order to achieve the desired annulment of his marriage to Catherine of Aragon, Henry separated the English Church from communion with Rome. Unwilling to accept even silent dissent from his policies, he would procure the executions of numerous men of conscience including St. John Fisher and St. Thomas More.
While the now iconic portrait of Henry painted by Hans Holbein the Younger shows a man of dynamism and vigor (btw, what we have are copies; the original was lost when the Whitehall palace burned), in many respects he was just not that great a king.
Friday, January 25, 2013
Kentucky Court of Appeals Holds That Bank Has No Duty to Non-Customer
In a just rendered decision, the Court of Appeals has rejected the suggestion that it alter Kentucky law to provide that a bank has a duty of care to a third party who is not the bank’s customer. Ahlan Wa Sahlan Hospitality Company d/b/a Holiday Inn Express v. United Citizens Bank of Southern Kentucky, Inc., No. 2011-CA-001349-MR (Ky. App. Jan. 25, 2013).
Moss was employed by Ahlan Wa Sahlan Hospitality Company (“Hospitality”), the operator of a Holiday Inn Express, as its manager. In that capacity, Moss was authorized to receive and negotiate checks on behalf of Hospitality. In August of 2009, he opened an account at Citizens Bank, and began to deposit checks made payable to Hospitality into that account, from which the funds were used for his personal purposes. Over an approximately 8-month period he embezzled some $51,571.42.
Hospitality sued Citizens Bank alleging it had failed to exercise ordinary and reasonable care regarding Hospitality’s funds in that it should have attempted to identify the relationship between Hospitality and Moss. This claim was dismissed by the trial court for failure to state a cause of action, from which this appeal followed.
As it had at the trial court, Citizens Bank argued that under Kentucky law, a bank does not have a duty of care to third parties who are neither its customers or account holders. Implicit in the decision is that Hospitality had its banking relationship elsewhere and had no other contact with Citizens Bank.
After reviewing the law, including a pair of unpublished federal decisions indicating that Kentucky courts would not find the existence of such duty and the laws of other jurisdictions a similar effect, the court affirmed the determination that Citizens Bank had no duty to Hospitality in not being its customer or client. Rather, observed the Court of Appeals, “Creation of such a duty appears to be a matter more properly left to the purview of the General Assembly.”
Sunday, January 20, 2013
Here is a link to the decision throwing out the latest"birther" challenge to President Obama.
Dismissal of Birther Complaint
Dismissal of Birther Complaint
Tuesday, January 15, 2013
Kentucky Court of Appeals Interprets “As Is” Provision of Auto Sales Contract
A recent decision of the Kentucky Court of Appeals has given full force and effect to a “as is” limitation set forth in a contract for the purchase/sale of an automobile. Roberts v. Lanigan Auto Sales, No. 2010-CI-000950-MR, 2013 WL 44020 (Ky. App. Jan. 4, 2013).
Roberts purchased an automobile from Lanigan Auto Sales; he would later claim that a representative of Lanigan told him that the vehicle had not been damaged or involved in a wreck. After closing on the sale, Roberts had the vehicle inspected by a third party, who determined that it had been involved in an accident and suffered damage. Roberts brought suit against Lanigan, asserting a violation of the Kentucky Consumer Protection Act (KRS §§ 367.110-367.360). Lanigan defended on the basis of an “as is” provision in the purchase/sale agreement with Roberts. On the basis thereof, the trial court dismissed the action for failure to state a claim, and Roberts appealed.
After reviewing the UCC as adopted in Kentucky (as well as its official comments) and related case law, the court held that an “as is” provision requires the buyer to make their own assessment as to the value and condition of the product being sold. In that it is the obligation of the buyer to make that assessment, there cannot stand a claim for fraud as to those matters in that it is not the representation of the seller that is being relied upon by the buyer in making the sale. Ergo, the dismissal of Roberts’ was affirmed.
The Court of Appeals did note that an “as is” clause does not bar all potential claims, including those based upon express or implied warranty, citing in support thereof KRS § 355.2-316(3)(a).
Today marks the anniversary of the coronation, in 1559, of Queen Elizabeth I, she to be the last of the Tudor dynasty. It almost didn’t happen.
King Henry VII, the first of the Tudor monarchs, was, as described by the great Tudor historian G.R. Elton, a political solution to a dynastic problem; he was not clearly the closest claimant to the throne. He was, however, the successful leader at the Battle of Bosworth at which Richard III, who had seized the throne from the never-crowned Edward V (one of the two “Princes of the Tower”), was killed. Henry’s reign would be punctuated with several significant rebellions.
Upon the death of Henry VII, power did transfer easily to his son Henry VIII. That had not been, however, the plan. Henry had an older brother, Arthur, who was to inherit the throne; for that reason he had been engaged and ultimately married to Catherine of Aragon, daughter of Ferdinand and Isabella of Spain. After Arthur’s death, likely from tuberculosis, Catherine was engaged and then ultimately married to Henry, a situation that would set up the later dispute over the “Divorce.”
That marriage would ultimately sour on the fact that only one of the children of Henry and Catherine survived infancy, that being Mary. England was not, it was feared, ready to be ruled by a queen. The only example of it doing so, that being the reign of the Empress Matilda (daughter of King Henry I) was referred to as the “Anarchy.” Seeking to perpetuate the dynasty and avoid the possibility of civil war after his death, Henry pursued the Divorce (it was actually what we would refer to today as an annulment) so that he could marry Anne Boleyn.
The Divorce could not easily be had consequent to at least a pair of factors. Initially, on theological grounds, the basis for the Divorce was weak. Politically, Eleanor’s nephew, Charles V, was now King of both Spain, the Netherlands and as well Holy Roman Emperor. He was able, successfully, to delay any decision on the divorce, it depriving Henry of the one thing he did not have, namely time. Ultimately, Henry would schism the English church from Roman communion (an act which earned for Henry his very own bull of excommunication). The marriage to Catherine of Aragon then being annulled by Thomas Cramer, Archbishop of Canterbury, Henry proceeded to marry Anne Boleyn. She, already pregnant at the time of the marriage, would be the mother of Elizabeth. Elizabeth would be their only child. Henry was now in no better position than he was before; two potential female heirs to the throne did not address the perceived need for a male heir. Anne’s fortunes would ultimately be destroyed consequent to a series of events whose genesis is still greatly debated, but it is clear that the charges of adultery and incest for which she was convicted and executed were entirely fabricated.After Anne, Henry quickly married Jane Seymour, and she shortly thereafter became pregnant, ultimately delivering a son who would survive infancy. That child was Edward VI. Jane would die of complications from childbirth.
While Henry would go on to marry three more times, namely to Anne of Cleves, Catherine Howard and Catherine Parr, none of them would have children by him.
Upon Henry’s death, the child Edward VI succeeded to the throne. Never, however, reaching his majority, the so-called reign of Edward VI is best understood as the reign of his counsel, dominated through much of his existence by his uncle Edward Seymour, he acting under the title of “Lord Protector.” It was during the reign of Edward that the English church moved from schism from the Catholic Church into the hallmarks of Protestant theology. With Edward’s death, likely from tuberculosis, approaching, members of the council feared that Mary, his oldest sister, would come to the throne and impose Catholicism instead of the recently adopted Protestant-influenced Anglicanism. These views led to an attempted revolt pursuant to which Lady Jane Grey was placed on the throne. Lady Jane Grey was a Tudor by means of descent from Margaret Tudor, sister of Henry VIII, and wife of Sir Charles Brandon, Duke of Suffolk. That revolt, spanning nine days, was ultimately unsuccessful, and Mary was able to take her place on the throne. Mary would die, however, without children.
Which brings us back to Elizabeth. As the second female child of Henry VIII, she was after Mary the heir apparent to the throne. She was, however, clearly Protestant, especially when contrasted with Mary’s strict Catholicism. Elizabeth had as well been involved (to what degree remains a matter in dispute) in a number of palace intrigues and revolts against Mary, actions which nearly led to her death. At the time of Mary’s passing from any number of causes (it is fairly clear she suffered from Type 2 diabetes), there had already been drafted the warrant of execution for Elizabeth. Her sister, Queen Mary, would, however, die without signing it, allowing Elizabeth to come to the throne.
So all Elizabeth needed to get to the throne was her grandfather’s victory at Bosworth, her uncle Arthur’s death, the divorce of Henry and Catherine so he could marry Anne Boleyn, the young death of her half-brother Edward, the rejection of Lady Jane Grey’s rebellion, the death without issue of her older half-sister Mary and surviving the threatened death sentence for her part in rebellion against Mary.
Elizabeth would never marry, and the Tudor dynasty would end with her death in 1603. It would be succeeded by the Stuarts, descendants of Henry VII through his daughter Mary who had married the King of Scotland.
Friday, January 11, 2013
Corporations are Not “People” for Purposes of the Carpool Lane
According to a story in today’s ABA Weekly News Journal, a recent effort to qualify to use a carpool lane in California on the basis that a corporation constituted the passenger has been rejected.
The published story provides in part:
Jonathan Frieman handed a California Highway Patrol officer incorporation papers from the passenger seat in October, when he was pulled over for the apparent vehicle-occupancy violation, the San Francisco Chronicle reports. But the officer was not convinced that a corporate passenger was present in Frieman's vehicle and told the 56-year-old San Rafael resident he would have to tell it to the judge.
Despite the assistance of an attorney, who argued on Frieman's behalf at a Monday hearing that freeway signs requiring "2 or more persons" in car pool lanes are unconstitutionally vague, a Marin County Superior Court judge wasn't convinced either.
Rejecting the argument by attorney Ford Greene, traffic referee Frank Drago said the underlying purpose of the law shows why a corporation, even if a person, is not a passenger.
"Common sense says carrying a sheath of papers in the front seat does not relieve traffic congestion," Drago told Frieman. "And so I'm finding you guilty."
Monday, January 7, 2013
No Respondeat Superior Liability for Employee
Accident Absent Proof Employee Was Commuting to Work
In a December 7, 2012 decision, the Kentucky Court of Appeals upheld summary judgment granted in favor of the employer against whom respondeat superior liability for an auto accident was asserted. Collins v. Appalachian Research and Defense Fund of Kentucky, Inc., __ S.w.3d __, 2012 WL 6061749 (Ky. App. Dec. 7, 2012).
Marilyn Neumann, an attorney, was employed by the Appalachian Research and Defense Fund of Kentucky, Inc. (“Appalred”). On February 11, 2008, she was involved in an automobile accident in which both she and the plaintiff Collins “suffered significant and permanent injuries.” Collins brought suit against numerous parties including Appalred, that claim being based upon respondeat superior and the assertion that at the time of the accident Neumann was engaged in work on behalf of Appalred.
Consequent to her injuries, Neumann was unable to provide a clear answer as to the chain of events the morning of the accident, and was specifically unable to address whether she had already visited one courthouse on company business. She had, it appears undisputed, dropped her son at school, been to two banks on her father’s behalf and delivered documents to her father’s house. Neumann had also called her office, explaining that she was running errands and would be later arriving.
After reciting the rule set forth in the Restatement (Third) of Agency § 7.07 as to an employer’s liability for employee conduct and the Steelvest standard for the grant of summary judgment, the decision of the trial court was upheld:
Neumann unequivocally testified that she was conducting personal errands on the morning of the accident, none of which benefitted Appalred in any regard. Kentucky law is clear that to hold Appalred vicariously liable under the doctrine of respondeat superior, Neumann must have been engaged in activity that furthered Appalred's business or interests, without deviation by Neumann to pursue her own personal benefit. Under the applicable legal framework and the facts herein, the doctrine of respondeat superior simply has no application herein. We agree with the trial court that it would have been impossible for Collins to offer evidence at trial in support of his claim regarding the vicarious liability of Appalred. As such summary judgment was proper.
2012 WL 6061749, *5 (citation omitted).
Friday, January 4, 2013
Stacked Arbitration Agreements Held Unenforceable as Unconscionable
In a recent decision of the Eastern District of Kentucky, it was held that the an estate would not be required to arbitrate its legal malpractice claims against a pair of law firms. Bruszewski v. Motley Rice, LLC, 2012 WL 6691643 (E.D. Ky. Dec. 21, 2012).
Thomas Bruszewski retained Provost Umphrey Law Firm, LLP, out of Texas, to represent him in connection with a suit seeking damages for his asbestosis and mesothelioma. The engagement agreement contained an agreement to arbitrate any disputes arising out of that representation, that arbitration to take place in Houston, Texas pursuant to the rules of JAMS. Provost subsequently brought in the South Carolina firm of Motley Rice, LLC as co-counsel. Thomas Bruszewski having passed away in the interim, his former spouse and executrix, Donna, partially completed and returned, but did not sign, the engagement agreement with Motley Rice. It as well contained an agreement to arbitrate. Ultimately, suit was never filed within the statute of limitations on behalf of the Bruszewskis, and Donna initiated a legal action against the two firms. They, in turn, sought to compel arbitration of the dispute.
One curious aspect of the agreement with Motley Rice was that it provided for arbitration in accordance with South Carolina law. Apparently the drafter of this provision elected to ignore a South Carolina statute that express excludes attorney-client representation agreements from the scope of the South Carolina arbitration act. S.C. Code Ann. § 15-48-10(b)(3). Still, the court found that the agreement could be enforceable under the Federal Arbitration Act, the transaction at issue involving interstate commerce.
Ultimately, the court found that the agreements to arbitrate would not be enforced. Applying the rules of procedural and substantive unconscionability as set forth by the Kentucky Supreme Court in Schnuerle v. Insight Comm. Co., L.P., 376 S.W.3d 561, 576 (Ky. 2012), the court first set aside the arbitration agreement with Motley Rice on the basis that the plaintiff had no meaningful choice when it came to that agreement. Rather, Motley Rice had been associated into the case by Provost Umphrey without her prior knowledge or specific consent. 2012 WL 6691643, *4. Further, it found that the arbitration clause, located under a heading “Termination of Representation,” was “misleading” at best. The court did not address the argument that the agreement to arbitrate with Motley Rice was invalid for the agreement having never been signed by Donna Bruszewski.
As to both agreements, the court found substantive unconscionability. With respect to her dispute with Provost, the plaintiff was required to arbitrate in Houston, Texas under the rules of JAMS. Conversely, any arbitration with Motley would be under only the Federal Arbitration Act. Ultimately, there was the risk of incompatible procedures in different forum:
Requiring Plaintiff to arbitrate her claims relating to the Defendants’ joint representation in two separate arbitrations in distant locations would be most oppressive in this instance. Moreover, to do so would place Plaintiff at a substantial disadvantage to prove her claims. There is a substantial likelihood that the Plaintiff would be subjected to inconsistent resolutions of her claim by the two arbitrators. Particularly that each is governed by different rules. Rather than promoting the goals of arbitration, the effect of these provisions is to create an oppressive and overly burdensome process stacked against the Plaintiff. Accordingly, the court finds these arbitration provisions unconscionable and Defendants’ motions to compel arbitration is denied.
Clearly the burden is upon joint-providers who desire arbitration of disputes to reconcile their agreements to arbitrate in order to avoid a repeat of this situation.
A Partnership Must be Represented by Counsel
Although this holding is less than clear as to the background facts, a recent decision of the Eastern District of Kentucky has affirmed the rule that a partnership must, in federal court, be represented by counsel. Kloeber v. Montie’s Resources, LLC, 2012 WL 6652520 (E.D. Ky. Dec. 20, 2012).
While the facts of this suit are not made express in the ruling, it is clear that one of the defendants, the Bartolomea and Lisa Montanari Family Limited Partnership, at one time had counsel, but that counsel withdrew, and no subsequent counsel made an appearance on the partnership’s behalf. Apparently an answer to the complaint was filed by the partnership, but that answer was not made by legal counsel (who signed the answer is not indicated in the opinion). On the basis that:
The partnership may not represent itself for it is well settled that corporations, partnerships, and associations cannot appear in federal court except through a licensed attorney.,
the answer was ordered stricken and default judgment under FRCP 55(b)(2) was ordered entered.
Partnership or Limited Partnership Subject to Requirement
of Charging Order Not a Necessary Party
In a recent decision of the Illinois Court of Appeals, it considered and rejected the suggestion that, if a charging order is to be entered against a judgment-creditor’s interest in a partnership or a LLC, that partnership or LLC must itself be a party to the action. Bank of America, N.A. v. Freed, ___ N.E.2d ___, 2012 WL 6725894 (Ill. App. I Dist., Dec. 28, 2012). My thanks to Jay Adkisson for identifying this decision.
The Bank of America sought to enforce a guarantee given by Laurance Freed and DDL LLC, Freed’s affiliate company. After a judgment in the bank’s favor, charging orders were entered against 72 limited liability companies and limited partnerships in which either Freed or DDL had an interest. In addition, the trial court ordered foreclosure on all of those charging orders and the appointment of a receiver in connection therewith.
In opposition to these actions, the:
Defendants assert that the LLCs and limited partnerships where “necessary parties” that must be joined in the litigation before the charging orders can be entered.
Having reviewed the terms of the charging order provisions of the Illinois LLC and Limited Partnership Acts, the court determined that it is not necessary that the LLCs or limited partnerships be parties to the action and that the entry of the charging orders would not impact upon the rights of or governance with respect to those organizations. Rather:
… charging orders on distributional interests do not affect the rights or interests of the LLC to the degree necessary to require that it be made a party. Under the Illinois Limited Liability Company Act (Act), a charging order only gives the judgment creditor the right to receive distributions to which the member would otherwise be entitled, and if the charging order is foreclosed, the purchaser would have only the rights of a transferee of distributional interests. Under section 30-1(a) of the Act, a member of an LLC “is not a co-owner of, and has no transferable interest in, property of a limited liability company.” Further, section 30-5 of the Act provides that a transfer of a distributional interest in an LLC does not give the transferee any rights as a member but only the right to receive distributions by the LLC, while section 30-10 provides that transferee may become a member only if all other members consent. A “transferee who does not become a member is not entitled to participate in the management or conduct of the limited liability company’s business, require access to information concerning the company’s transactions, or inspect or copy any of the company’s records.” Therefore, an Illinois LLC has no interest that is affected when a charging order is entered on a judgment debtor’s distributional interest because the party in whose favor the charging order is entered is not an owner of the LLC and has no authority over the LLC’s affairs and can only receive distributions. Hence, the LLC has no interest to be protected and need not be made a party. (citations omitted)
Fortunately, this question need never arise in Kentucky. Recent amendments to the various charging order statutes provide, inter alia, that the LLC/limited partnership/partnership need not be a party to the action. See, e.g., KRS § 275.260(6) (“The [LLC] is not a necessary party to an application for a charging order.”).
Thursday, January 3, 2013
Decet Romanum Pontificem
Today is the anniversary of the issuance by Pope Leo X in 1521 of the papal bull Decet Romanum Pontificem, pursuant to which the threatened excommunication of Martin Luther as set forth in Exsurge Domine was implemented. The excommunication remains in full force and effect today.
Correction to Annual Report Given Retroactive Effect
In a recent decision by the District Court for the Western District of Kentucky (Judge Simpson), it was confirmed, in accordance with the statutory dictate, that a correction to a document filed with the Kentucky Secretary of State, in this case the annual report, will be given retroactive effect. Cass JV, LLC v. Host International, Inc., 2012 WL 6569318 (W.D. Ky. Dec. 17, 2012).
The defendants (the author of this blog and his firm represent certain of the defendants in this action) had removed the action to federal court. Based upon an asserted lack of diversity jurisdiction in that there were both defendants and plaintiffs deemed citizens of Kentucky, the plaintiffs sought a remand. The basis for that remand was that the annual report of one of the defendants, itself an LLC, in turn listed as one of its members another LLC, it having Kentucky citizenship. Upon the defendant’s investigation, it was determined that this annual report was erroneously filed, the Kentucky citizen having only an option to acquire an interest in the LLC; as of the time of filing of the action, that option had not been exercised. On that basis, a corrected annual report was filed with the Kentucky Secretary of State.
The Kentucky Business Entity Filing Act, at KRS § 14A.2-090(3), addressing the effect of a corrected document, provides:
Articles of correction shall be effective on the effective date of the document they correct except as to persons relying on the uncorrected document adversely affected by the correction. As to those persons, articles of correction shall be effective when filed.
In supplemental pleadings in opposition to the motion to remand, this corrected annual report was identified to the District Court, along with the statutory dictate that the correction have retroactive effect. In partial reliance thereon, the motion to remand was denied.
Putting the Shepherds and the Magi in the Manger
As part of my continuing rant about the necessity of carefully considering each form of business organization and their underlying statutes, I have published:
Putting the Shepherds and the Magi in the Manger – The Problem of False Isomorphism, 15 J. Passthrough Entities 49 (Nov./Dec. 2012)
The article is available for download from SSRN and is as well posted on the SKO website.
Here is a link to the SSRN posting: http://ssrn.com/abstract=2190658
I have posted on SSRN (downloads are free) and on the SKO website the submission draft of:
The link to the SSRN posting is: http://ssrn.com/abstract=2190657
This version of the articles does not contain the edits from the N.Ky. L. Rev.
The Kentucky Uniform Statutory Trust Act (2012): A Review, __ Northern Kentucky Law Review __ (2012-13) (forthcoming)
The link to the SSRN posting is: http://ssrn.com/abstract=2190657
This version of the articles does not contain the edits from the N.Ky. L. Rev.
Wednesday, January 2, 2013
Federal Diversity Jurisdiction – Citizenship of a Federal Prisoner
A recent decision of the U.S. District Court for the Western District of Kentucky has addressed a small but interesting point of diversity jurisdiction, namely the citizenship of a prisoner of the federal court system. Hardison v. Denison, 2012 WL 6643288 (W.D. Ky. Dec. 20, 2012).
Hardison, formerly a resident of Kentucky, but now incarcerated in Pennsylvania, sought to bring in federal court an action for legal malpractice against several Kentucky attorneys. Ultimately, the question would turn upon whether one who is incarcerated is deemed a citizen of the jurisdiction in which the incarceration is taking place.
The citizenship of an individual is that in the jurisdiction in which he is domiciled, with domicile being that place in which the individual plans to make their home indefinitely or from which they have an absence of intent to make their home elsewhere. 2012 WL 6643288, *2, citing Miss. Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 48 (1989) and Deasy v. Louisville & Jefferson County Metro. Sewer Dist., 47 F. App’x 726, 728 (6th Cir. 2002). Further, there is a rebuttable presumption that:
A prisoner does not acquire a new domicile when he or she is incarcerated in a different state; instead he or she maintains his or her pre-incarceration domicile. Id., quoting Purdom v. Gettleman, 2008 WL 695258, *3 (E.D. Ky. March 12, 2008).
Hardison alleged he had no intent of returning to Kentucky, and identified a variety of other states in which he might, after his period of incarceration ends, move. However, he was able to offer no definite plans with respect to doing so. Pennsylvania was not identified as an option for where he might go after release. In the absence of firm plans as to where he would be going, the court held, inter alia, that he had not rebutted the presumption that his domicile, and therefore citizenship, remains in Kentucky. Ultimately:
Thus, the fact that Plaintiff now resides in Pennsylvania by virtue of being incarcerated there, has not extinguished Kentucky as his domicile because Plaintiff has no intention to remain in Pennsylvania once his incarceration ends.
Complete diversity being absent, the suit was dismissed.
A Pope by any Other Name
Today marks the anniversary of the election in 533 of Mercurius to the position of Bishop of Rome. Upon his election he chose the regal name of John II. The interesting point is that he was the first Pope to elect a regal name different than his own. Having been named after the Roman god Mercury, he did not think it proper to reign as the Pope with a pagan name; hence the election of a regal name and that of one of the apostles.