Velger v. Carr

23. Velger v. Carr

Citation: 532 Fed.Appx. 134 (3d Cir. 2013), No. 12-2184

Relevant Facts

• Earl Robert Velger filed suit against Darwin Carr, individually and as Trustee of the Live by Faith Irrevocable Trust.

• The dispute involved state law claims regarding trusts and personal property.

• Velger claimed Carr held citizenship in Michigan; Carr claimed citizenship in the Virgin Islands.

• The District Court dismissed for lack of subject matter jurisdiction, finding diversity was not complete because the trust was a citizen of Michigan.

Legal Issues

Whether complete diversity of citizenship existed for federal jurisdiction under 28 U.S.C. § 1332(a); and how the citizenship of a trust should be determined for diversity jurisdiction purposes.

Positions of the Parties

Velger: Complete diversity existed; Carr’s individual citizenship as a Virgin Islands resident created diversity.

Carr: Trust citizenship (not individual trustee citizenship) controls; the trust was a citizen of Michigan where beneficiaries resided.

Decision of the Court

VACATED and REMANDED for further proceedings.

Reasons for the Decision

• For diversity jurisdiction purposes, the citizenship of both the trustee and the beneficiary should be considered in determining the citizenship of a trust.

• The District Court erred in basing the jurisdiction determination solely on trust citizenship.

• Additional proceedings were necessary to clarify citizenship status for jurisdictional purposes.