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McCann v. George W. Newman Irrevocable Trust

August 16, 2006

VIRGINIA MCCANN, ON BEHALF OF THE ESTATE OF WILLIAM E. MCCANN, APPELLANT
v.
THE GEORGE W. NEWMAN IRREVOCABLE TRUST; THE BANK OF NEW YORK, AS TRUSTEE OF THE IRREVOCABLE TRUST OF GEORGE W. NEWMAN; MARC JOSEPH, AS TRUSTEE OF THE IRREVOCABLE TRUST OF GEORGE W. NEWMAN; PATRICIA J. THERYOUNG, AS TRUSTEE OF THE IRREVOCABLE TRUST OF GEORGE W. NEWMAN



On Appeal from the United States District Court for the District of New Jersey D.C. Civil Action No. 03-cv-6077 (Honorable Dennis M. Cavanaugh).

The opinion of the court was delivered by: Scirica, Chief Judge.

PRECEDENTIAL

Submitted Pursuant to Third Circuit LAR 34.1(a) April 27, 2006

Before: SCIRICA, Chief Judge, NYGAARD and ALARCÓN*fn1, Circuit Judges.

OPINION OF THE COURT

In this appeal from the District Court's final order granting defendants' motion to dismiss for lack of subject matter jurisdiction, the issue is whether plaintiff established diversity of citizenship based on a change of domicile. We will vacate and remand.

I.

A.

On July 6, 1990, George W. Newman established and funded the George W. Newman Irrevocable Trust to acquire and hold property in Secaucus, New Jersey. Newman named as trustees Patricia Theryoung, Marc Joseph, and the National Community Bank, which was later acquired by the Bank of New York. Newman's development company, Allied Junction Corporation, was to develop the property acquired by the trust into a commercial and transportation center. Newman hired William E. McCann as President, Chief Executive Officer, and Director of Operations of Allied Junction Corporation, which later became Secaucus Connection, L.L.C.

A dispute arose between McCann and the Newman Trust over McCann's compensation. Theryoung and the Bank of New York, as trustees, agreed to settle the dispute by granting McCann an equity interest in the development project. Joseph, the third trustee, filed an action in state court to enjoin the other two trustees from entering the proposed agreement with McCann and from granting McCann any interest in trust property.

McCann died in February 2002 while this and related state court actions were pending. McCann's widow, Virginia, filed an action to intervene on behalf of McCann's estate, which the court denied. The court also dismissed all pending actions because Theryoung and the Bank of New York-the trustees who negotiated the agreement granting McCann an interest in the development project-had since resigned.

On December 23, 2004, McCann's estate filed an action in federal court in New Jersey against the Newman Trust and its trustees, seeking to enforce the proposed agreement. The estate asserted subject matter jurisdiction based on diversity, contending McCann had changed his domicile from New Jersey to New Hampshire prior to his death. Defendants filed a motion to dismiss for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1), contending diversity of citizenship was lacking because all parties were domiciled in New Jersey.*fn2

B.

The material facts regarding McCann's domicile are undisputed. In 1969, he and his wife, Virginia, purchased a house in Short Hills, New Jersey, where they resided for over thirty years. In 1990, they purchased a second house in North Hampton, New Hampshire. In June 2000, they sold their New Jersey house and moved their furniture and personal belongings to New Hampshire. Virginia became a full-time resident of New Hampshire, but McCann rented an apartment in ...


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