On May 12, 2010, Virginia Noel, a Georgia resident, commenced an action in federal district court against Liberty Bank of Arkansas, based on diversity of citizenship and an alleged amount in controversy exceeding $75,000. Virginia sued in her capacity as both trustee and beneficiary of a trust, and alleged that the bank committed multiple errors in transfers of investment securities owned by the trust. Virginia sought equitable relief in the form of an accounting and production of documentation, along with damages discovered by the accounting.
The bank moved to dismiss based on lack of subject matter jurisdiction, arguing that: (1) Virginia’s complaint failed to make specific allegations demonstrating that the amount in controversy exceeded $ 75,000; and (2) there was not complete diversity of citizenship because the situs of the trust was Arkansas (where the bank was also located).
The district court held that, while a request for a general accounting does not always meet the amount in controversy requirement, here Virginia had sufficiently demonstrated that the amount in controversy exceeded $ 75,000 by specifically asking the court to determine the cause of transfer errors that allegedly resulted in overdeliveries of assets from three different mutual funds valued at $120,000, $2,800,000, and $370,000, and by providing account records from the bank and the trust that showed discrepancies in the asset transfers.
On diversity of citizenship, the court held that Virginia, a Georgia resident, had standing to sue in her capacity as both trustee and as beneficiary for an accounting and was entitled to bring a diversity action in either capacity on the basis of her own personal citizenship. The court held that diversity existed where Virginia was a citizen of Georgia and Liberty Bank was an Arkansas entity. The court noted that it was her citizenship, and not the trust situs, that determined diversity, therefore diversity was not defeated.
