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Consistent with general principles for determining federal jurisdiction, diversity of citizenship must exist at the time the action is commenced. 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. 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.
Appellee US citizen was awarded monetary damages in his action against appellant dual citizen for breach of contract. The district court also granted appellee's motion for turnover of appellant's property in satisfaction of the judgment. Appellant claimed lack of jurisdiction under the alien provision because he was a dual citizen of the US and France and was domiciled in France and that his property was exempt from turnover and forced sale under the state constitutional and statutory homestead exemptions.
Under the circumstances, did diversity and subject matter jurisdiction exist, thereby justifying the award in favor of appellee?
On appeal, the court held that diversity of citizenship had to exist at the time an action was commenced and citizenship was based on domiciliary. It found that there was no clear error in the district court's determination that appellant was domiciled in Texas when the action was filed and when he removed it to federal court and accordingly diversity and subject matter jurisdiction existed. The court also held that a homestead exemption could be lost or abandoned by a removal under circumstances clearly indicating an intent to not return and found that appellant's establishment of a homestead in France was an abandonment of his Texas property and the homestead exemption.