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Raymond Loubier Irrevocable Trust v. Loubier

United States Court of Appeals for the Second Circuit

October 25, 2016, Argued; June 1, 2017, Decided

Docket No. 15-802-cv

Opinion

 [*721]  REENA RAGGI, Circuit Judge:

The parties in this action are involved in an inheritance dispute pertaining to the assets of the now deceased Raymond Loubier, as conveyed to various revocable and irrevocable trusts in his name and that of his wife Noella Loubier. Two of the Loubiers' irrevocable trusts, as well as a contingent trust beneficiary, Gervais A. Loubier, invoke diversity jurisdiction to sue Noella Loubier and two of the Loubiers' revocable trusts for alleged [**2]  breach of fiduciary duty. Plaintiffs here appeal from a judgment entered in the United States District Court for the District of Connecticut (Warren W. Eginton, Judge) on March 3, 2015, dismissing the case for lack of subject matter jurisdiction in light of plaintiffs' failure to demonstrate complete diversity. See 28 U.S.C. § 1332. The district court's diversity determination was based on its understanding that Noella Loubier, a Florida citizen, is on both sides of the case caption because not only is she an individually named defendant and the trustee of the defendant revocable trusts, but also she was purportedly the trustee of the plaintiff Raymond Loubier Irrevocable Trust.

We need not here decide whether the presence of the same person, in two different capacities, on both sides of a case caption, defeats diversity because the challenged judgment here rests on a misapprehension as to the particular irrevocable trusts named as plaintiffs. Plaintiffs bear some responsibility for confusion on this and other issues. Nevertheless, it is useful at the outset to clarify the identity of the party trusts.

The irrevocable trust agreements attached to the complaint are dated February 25, 2000, and name Roland [**3]  Loubier as their sole trustee ("2000 Irrevocable Trust Agreements"). In an affidavit filed in support of dismissal, Noella Loubier stated that these 2000 Irrevocable Trust Agreements were supplanted by the Raymond Loubier Irrevocable Trust Agreement dated January 29, 2003, and the Noella Loubier Irrevocable Trust Agreement dated August 18, 2005, for both of which she is named trustee. In opposing dismissal, plaintiffs asserted that the Loubiers' 2000, 2003, and 2005 irrevocable trust agreements are distinct and that the intended party plaintiffs here are, indeed, the couple's 2000 irrevocable trusts. For purposes of this appeal, defendants accept plaintiffs' characterization of the 2000 Irrevocable Trust Agreements as "the intended and proper party plaintiffs," Appellees' Br. 4 n.2, and agree that the trustee of both these trusts is Roland Loubier, who appears to be a citizen of Canada.2

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858 F.3d 719 *; 2017 U.S. App. LEXIS 9643 **; 2017 WL 2366498

RAYMOND LOUBIER IRREVOCABLE TRUST, NOELLA LOUBIER IRREVOCABLE TRUST, ESTATE OF GERVAIS A. LOUBIER, Plaintiffs-Appellants, —v.— NOELLA LOUBIER, RAYMOND LOUBIER REVOCABLE TRUST, NOELLA LOUBIER REVOCABLE TRUST, Defendants-Appellees.1

Subsequent History: Dismissed by, On remand at Raymond Loubier Irrevocable Trust v. Loubier, 2018 U.S. Dist. LEXIS 45950 (D. Conn., Mar. 21, 2018)

Prior History:  [**1] On appeal from a judgment of dismissal entered in the United States District Court for the District of Connecticut (Eginton, J.) based on the lack of subject matter jurisdiction, the parties dispute whether, for purposes of determining diversity, the citizenship of the party trusts is properly identified by reference only to that of their trustees or also to that of all beneficiaries. Because the plaintiff trusts are traditional common law fiduciary agreements, and, further, because they are not separate juridical entities under the relevant state law of Florida, we conclude that the citizenship of their trustees controls a diversity determination.

Disposition: VACATED AND REMANDED.

CORE TERMS

trusts, citizenship, irrevocable trust, diversity, entities, revocable trust, own name, shareholders, diversity jurisdiction, purposes, state law, legal entity, fiduciary relationship, district court, grantor, parties, quotation, spouse, subject matter jurisdiction, unincorporated, partnership, accounting, marks, contingent beneficiary

Civil Procedure, Jurisdiction, Diversity Jurisdiction, Citizenship, Citizenship, Individuals, Appeals, Standards of Review, Clearly Erroneous Review, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, De Novo Review, Business & Corporate Compliance, Trusts, Estate, Gift & Trust Law, Trusts