A Little Bit More on Diversity of Citizenship and Donative Trusts

A Little Bit More on Diversity of Citizenship and Donative Trusts

       In a recent decision, only in passing, a Federal District Court addressed how the citizenship of a donative trust is assessed for purposes of diversity jurisdiction. North American Mechanical, Inc. v. Walsh Construction Company II, LLC, No. 12-CV-598, 2015 WL 5530190 (E.D. Wisc. Sept. 18, 2015).

       This case involves a dispute as to the completion of certain work involving the remodeling expansion of a hospital facility. The case, brought on the federal courts diversity jurisdiction, would turn in part upon the citizenship of the LLC. Based upon our filings with the court, the citizenship of that LLC was comprised of two trusts and one LLC. In reliance upon Hicklin Eng’g, L.C. v. Bartell, 439 F.3d 346, 348 (7^th Cir. 2006), the North American Mechanics court simply observed: “the citizenship of a trust is that of the trustee.” Based upon the fact that the trustee of each trust was domiciled in Illinois, that citizenship was, through the trust, attributed to Walsh Construction.

       No consideration was given as to whether the citizenship of the beneficiaries of the trust should be as well considered.