United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER DENYING DEFENDANT'S OCTOBER 18,
2016 MOTION TO DISMISS
Corbett O'Meara United States District Judge
matter came before the court on defendant Jeno Guttman's
October 18, 2016 motion to dismiss. Plaintiff LBCMT filed a
response November 14, 2016; and Defendant filed a reply brief
November 28, 2016. Pursuant to Local Rule 7.1(f)(2), no oral
argument was heard.
is a limited liability company; and its sole member is U.S.
Bank National Association (“Trustee”), as trustee
for the Registered Holders of LB-UBS Commercial Mortgage
Trust 2007-C3, Commercial Mortgage Pass-Through Certificates,
Series 2007-C3 (“Trust”). Trustee is a national
banking association, and its article of association designate
its main office in Cincinnati, Ohio.
Trust was created pursuant to a Pooling and Service Agreement
dated July 11, 2007 (“PSA”). The PSA defines the
Trust as a “common law” trust and vests the
Trustee with full title to, and control over, the Trust's
assets. The “beneficiaries” of the Trust do not
“have any right to vote or in any manner otherwise
control the operation and management of the Trust Fund, or
the obligations of the parties hereto . . . .”
Plaintiff's Ex. A. § 11.03(b). The PSA further
provides, “No Certificate holder shall have any right
by virtue of any provision of the [PSA] to institute any
suit, action or proceeding in equity or at law upon or under
or with respect to this Agreement of any Mortgage Loan . . .
.” Id. § 11.03(c). Thus, under the PSA,
the Trustee has complete control over the Trust's assets;
and the certificate holders have none.
filed this suit and asserted subject matter jurisdiction
based on diversity of citizenship. Defendant Guttman filed
this motion to dismiss, alleging that the court lacks
jurisdiction because Plaintiff, a Delaware limited liability
corporation, has failed to state the citizenship of each of
the trust beneficiaries.
purposes of diversity of citizenship, “a limited
liability company . . . has the citizenship of its
members.” Newman-Green, Inc. v.
Alfonzo-Larrain, 490 U.S. 826, 828 (1989). In this case
plaintiff LBCMT's sole member is Trustee, and Trustee is
a national banking association. A national banking
association, for purposes of diversity, is deemed a citizen
of “the State in which its main office, as set forth in
its articles of association, is located.” Wachovia
Bank v. Schmidt, 546 U.S. 303, 307 (2006); 28 U.S.C.
Navarro Savings Ass'n v. Lee, 446 U.S. 458
(1980), the United States Supreme Court held that a trustee
is the real party to a case if he “possesses certain
customary powers to hold, manage, and dispose of assets for
the benefit of others.” Id. at 464. The Court
differentiated between a trustee and a beneficiary because
the beneficiary, unlike the trustee, could “neither
control the disposition of this action nor intervene in the
affairs of the trust . . . .” Id. at 464-65.
The trustees in Navarro, like the Trustee in this
case, were authorized under the document creating the trust
“to take legal title to trust assets, to invest those
assets for the benefit of the shareholders, and to sue and be
sued in their capacity as trustees.” Id. at
We conclude that these respondents are active trustees whose
control over the assets held in their names is real and
* * *
They have legal title; they manage the assets; they control
the litigation. In short, they are real parties to the
controversy. For more than 150 years, the law has permitted
trustees who meet this standard to sue in their own right,
without regard to the citizenship of the ...