ORIGINAL

Case 1:16-cv-08954-LLS Document 30 Filed 07/26/17 Page 1 of 8

USDCSDNY
.DOCUMENT
UNITED STATES DISTRICT COURT ELECTRONICALLY FILED .
SOUTHERN DISTRICT OF NEW YORK DOC #: _ _ _ _~__,.--=--
GUY AROCH, DATE Fll.ED : ?fUh7

Plaintiff,
--
- against - 16 Civ. 8954 (LLS)

JEFFREY YOHAI, MEMORANDUM & ORDER

Defendant.

Plaintiff Guy Aroch ("Aroch") invokes this court's

jurisdiction under 28 U.S.C. 1332, alleging that he and

defendant Jeffrey Yohai ("Yohai") are citizens of different

states, Aroch being a citizen of New York and Yohai a citizen of

California. Yohai disputes that he is a citizen of California,

and moves to dismiss the action for lack of subject matter

jurisdiction, claiming that he too is a citizen of New York.

BACKGROUND

Aroch commenced this action on November 17, 2016 by filing

a complaint to recover on a promissory note for which he alleges

Yohai is in default. Compl. (Dkt. No. 1) ~ 5. Subject matter

jurisdiction was predicated under 28 U.S.C. 1332, which grants

original jurisdiction to the district courts over civil actions

that are, among other things, between citizens of different

states. Id. ~ 1. The complaint, however, alleged only the

parties' residence, not their citizenship. Id. ~~ 3-4. 1

1 See Adrian Family Partners I, LP v. ExxonMobi1 Corp., 79 f, App'x 489, 491

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By order entered on November 22, 2016, Aroch was directed

to "file an affidavit or an amended complaint establishing the

citizenship of the parties, or the complaint may be dismissed

for lack of jurisdiction." Mem. & Order (Dkt. No. 4) at 3. Aroch

then filed an amended complaint in which he alleged that he is a

citizen of New York and that Yohai is a citizen of California.

Am. Compl. (Dkt. No. 5) <j[<j[ 3-4.

Claiming to be a citizen of New York and not of California,

Yohai moved to dismiss the action for lack of subject-matter

jurisdiction under Fed. R. Civ. P. 12 (b) (1).

In response to Yohai's motion to dismiss, Aroch moved for

jurisdictional discovery of Yohai. The court granted Aroch's

motion, "limited to determination of defendant's domicile when

this action was commenced." Mem. Endorsement (Dkt. No. 17).

After conducting jurisdictional discovery, Aroch opposed the

motion to dismiss, arguing that the evidence shows that when the

action was commenced Yohai was a citizen of California, and not

of New York. Opp. (Dkt. No. 20) at 3-7.

DISCUSSION

The evidence submitted on this motion 2 shows that Yohai

(2d Cir. 2003) (summary order) ("It is well established that 'a statement of
residence, unlike domicile, tells the court only where the parties are living
and not of which state they are citizens.'"), quoting John Birch Soc'y v.
Nat' 1 Broad. Co., 377 F.2d 194, 199 (2d Cir. 1967).

2 "On a Rule 12(b) (1) motion challenging the district court's subject matter
jurisdiction, the court may resolve the disputed jurisdictional fact issues

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maintains two residences, in New York and California, and

conducted business in both. As stated in the printout from Marin

West's website that Aroch submitted, "Jeff and his family divide

their time between residences in the New York City and Los

Angeles." Abraham Decl. (Dkt. No. 19) '3I 6, Ex. E.

"For the most part, 'residence and domicile are two

perfectly distinct things.'" United States v. Venturella, 391

F.3d 120, 125 (2d Cir. 2004), quoting Delaware, L. & W.R. Co. v.

Petrowsky, 250 F. 554, 560 (2d Cir. 1918). "One may have more

than one residence in different parts of this country or the

world, but a person may have only one domicile. A person may be

a resident of one locality, but be domiciled in another." Id.,

quoting Rosario Vo INS, 962 Fo2d 220, 224 (2d Cir. 1992) 0 For

purposes of diversity jurisdiction, only domicile matters.

An individual's citizenship, within the meaning of the diversity

statute, is determined by his domicile. See, e.g., Linardos v.
Fortuna, 157 F.3d 945, 948 (2d Cir. 1998). Domicile is "the
place where a person has his true fixed home and principal
establishment, and to which, whenever he is absent, he has the
intention of returning." Id. at 948 (internal quotation marks
omitted). At any given time, a person has but one domicile. See,
~' Rosario v. INS, 962 F.2d 220, 224 (2d Cir. 1992). Domicile
is established initially at birth and is presumed to continue
in the same place, absent sufficient evidence of a change. See
Linardos v. Fortuna, 157 F.3d at 948.

To effect a change of domicile, "'two things are indispensable:

First, residence in a new domicil; and, second, the intention
to remain there. The change cannot be made, except facto et

by referring to evidence outside of the pleadings, such as affidavits, and if

necessary, hold an evidentiary hearing." Zappia Middle E. Constr. Co. v.
Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir. 2000), citing Cargill Int'l
S.A. v. M/T Pavel Dybenko, 991 Fo2d 1012 1 1019 (2d Giro 1993) o

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animo. Both are alike necessary. Either without the other is

insufficient.'" Id. (quoting Sun Printing & Publishing Ass'n v.
Edwards, 194 U.S. 377, 383, 24 S. Ct. 696, 48 L. Ed. 1027 (1904)).
Questions as to a person's "intent to change, or not to change,
his domicile from [one state] to [another]" are "factual"
questions. Katz v. Goodyear Tire & Rubber Co., 737 F.2d 238, 244
(2d Cir. 1984). A party alleging that there has been a change
of domicile has the burden of proving the "required . . . intent
to give up the old and take up the new [domicile], coupled with
an actual acquisition of a residence in the new locality," and
must prove those facts "by clear and convincing evidence," Id.
at 243-44 (internal quotation marks omitted).

Palazzo v. Corio, 232 F.3d 38, 42 (2d Cir. 2000) (brackets and

ellipsis in Palazzo).

The parties do not dispute that Yohai was born in New York

and was domiciled in New York prior to late 2014. They dispute

whether since that time Yohai effectuated a change to his

domicile that made him a citizen of California when this action

was commenced on November 17, 2016. The burden of proof to

establish a change of domicile is on Aroch, and if the balance

of the evidence is equal, the presumption of continuity is not

overcome.

"In cases in which 'there is evidence indicating the party

has more than one residence, or the residence is unclear, the

court should focus on the intent of the party.'" Wiest v.

Breslaw, 01 Civ. 5663 (LMM), 2002 WL 413925, at *3 (S.D.N.Y.

Mar. 15, 2002), quoting Nat'l Artists Mgmt. Co. v. Weaying, 769

F. Supp. 1224, 1227 (S.D.N.Y. 1991). "Declarations of intent by

the person whose domicile is in question are given heavy, but

not conclusive, weight."~' quoting Hamilton v. Accu-Tek, 13

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F. Supp. 2d 366, 370 (E.D.N.Y. 1998).

Evidence of Change to California

In 2015 Yohai founded Marin West, a real estate development

company located in Los Angeles, California. Since that time,

Yohai has maintained a residence in California. Yohai owns his

California home through an entity he controls.

When this action was commenced, Yohai resided in California

with his wife 3 and daughter. Yohai's wife is a film maker whose

company is located in California. Yohai's daughter was born in

California, is enrolled in school in California, and has a

primary care physician in California. Yohai employed a nanny

who, around the time this action was commenced, lived in

California.

Yohai owns four vehicles located in California, and an

additional vehicle owned by Marin West for use by its employees

is also located in California. Three vehicles registered in

Yohai's wife's name are located in California.

Yohai owns five limited liability companies organized in

California, and much of his business is conducted from

California. Between 2014 and 2016 Yohai and several of his

companies had lines of credit with California based banks.

Approximately nine months before this action was commenced,

3
Thei~ ctivorce proceeding~ are underway in (unBurpriBingly) California.

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Yohai, while visiting Florida, executed a personal guarantee

that stated his home address in California to secure a loan for

one of his New York real estate projects. It directed that all

future notices under the personal guarantee be sent to his

California address.

Less than two months before this action was commenced,

Yohai sent the promissory note at issue in this action to Aroch

by e-mail; the e-mail's signature block lists Yohai's California

address.

Evidence of Domicile in New York

Yohai was born in New York and maintains a residence and

business interests in New York. He has a New York driver license

and had a New York real estate salesperson license that expired

in December of 2015, which he claims he is the process of

renewing. He is registered to vote in New York.

Since founding Marin West in 2015, Yohai continues to

maintain a residence and business interests in New York. His New

York home is owned by a company controlled by his wife and her

family.

Yohai's declaration under oath states that "As of the date

of the filing of the Complaint, I was spending a majority of my

time in the State of New York, and I intend to continue doing

so. When I am absent from New York, it is always my intention to

return here." Yohai Reply Decl. (Dkt. No. 23) ! 3.

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Yohai's tax returns for 2015, the last year prior to this

action's November 17, 2016 commencement, show that Yohai filed a

Resident Income Tax Return in New York and a Nonresident or

Part-Year Resident return in California. His tax returns also

show that he spent a majority of that year in New York. Yohai's

declaration states that "My tax returns for 2016, which are

currently being prepared, will show the same information as that

described above and on the attached portions of my 2015

returns." Id. ! 6.

Yohai's wife and daughter have lived in both New York and

in California, as has Yohai. Yohai's wife has worked in both New

York and California. Yohai's nanny has lived in both New York

and California.

A vehicle owned by Yohai's New York company travels back

and forth between New York and California. Yohai has access to a

car in New York that is garaged at his New York address and

registered in his mother-in-law's name.

Yohai owns several companies based in New York, has an

office in New York, and is involved in numerous real estate

projects in New York.

* * *
That Yohai was domiciled in New York prior to late 2014 is

undisputed. The evidence that he changed his domicile to

California before this action was commenced is at best

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inconclusive, and insufficient to overcome the presumption of

continuity of his New York domicile. Clear and convincing

evidence is required for that purpose. Palazzo, 232 F.3d at 42;

Katz v. Goodyear Tire & Rubber Co., 737 F.2d 238, 243-44 (2d

Cir. 1984).

CONCLUSION

Yohai's motion to dismiss the action for lack of subject

matter jurisdiction (Dkt. No. 7) is granted.

So ordered.

Dated: New York, New York

July 26, 2017

~~~.s~~
LOUIS L. STANTON
U.S.D.J.

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