Middleton, et al v. Stephenson, et al

J. Hoyt Stephenson incorporated National Financial Systems Management, Inc. (NFSM) in Utah. The same day, the NFSM Employee Stock Ownership Plan was created. The Plan has always owned 100% of NFSM’s stock. Stephenson was one of the Plan’s trustees. In June 2006, Stephenson, along with his wife and children, moved from Utah to Wyoming, and as a result, Stephenson became a Wyoming citizen. About a year later, Stephenson sold one of his companies, National Financial Systems, Inc. (NFS) to NFSM. Then he sold another one, Metronomics Inc. to NFSM. In June 2009, Stephenson and his family went back to Utah. The issue before the Tenth Circuit in this case centered on whether Stephenson became a Utah citizen when he moved back. Brent Middleton, the Stock Plan's trustee, and several others (all Utah citizens), brought several federal-law claims Stephenson in the federal district court. Stephenson fought back with state-law counterclaims and a third-party complaint asserting state-law claims against multiple third-party defendants. The district court dismissed those counterclaims and third-party claims, concluding that it lacked diversity jurisdiction to hear them because Stephenson also was from Utah. The Tenth Circuit concluded that the district court did not clearly err in finding that Stephenson was a Utah citizen. View "Middleton, et al v. Stephenson, et al" on Justia Law