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Laufen International, Inc. v. Larry J. Lint Floor & Wall Covering

April 9, 2010

LAUFEN INTERNATIONAL, INC., PLAINTIFF,
v.
LARRY J. LINT FLOOR & WALL COVERING, CO., INC., JOHN G. POPELY AND EDWARD LINT. DEFENDANT.



The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge

MEMORANDUM OPINION AND ORDER OF COURT

Pending now before the Court is the MOTION TO DISMISS, filed by Defendant John G. Popely (Doc. # 7), with memorandum of law in support (Doc. # 8), and PLAINTIFF'S RESPONSE TO JOHN G. POPELY'S MOTION TO DISMISS (Doc. # 13). The motion is ripe for disposition.

STATEMENT OF THE CASE

Plaintiff brings this diversity cause of action against the Defendants pursuant to 28 U.S.C. § 1332(a), alleging five counts: 1) fraud and concealment, 2) conspiracy, 3) breach of fiduciary duty, 4) interference with contractual relations, and 5) breach of contract. See Doc. # 1. The following facts are taken from the complaint.

Plaintiff Laufen International, Inc. is a corporation organized and existing under the laws of Oklahoma, and has its principal place of business in Miami , Florida. Id. at ¶ 1. Defendant Larry J. Lint Floor & Wall Covering Co., Inc., is a company organized and existing under the laws of the Commonwealth of Pennsylvania and has its principal place of business in Westmoreland County, Pennsylvania. Id. at ¶ 2. Defendant Popely is a resident and citizen of Ohio, while Defendant Edward Lint is a resident and citizen of Pennsylvania. Id. at ¶¶ 3 & 4.

The claims within the complaint arise from the previous commercial relationship of the parties. Defendant Larry J. Lint Floor & Wall Covering is a merchant in the business of selling flooring, carpets, and tiles. Id. at ¶ 8. In 2007, Defendant Larry J. Lint Floor & Wall Covering received a line of credit from Plaintiff to purchase goods and materials. Id. at ¶¶ 10 - 13. In accordance with purchase orders submitted by it, from June 30, 2007 through November 18, 2008, Defendant Larry J. Lint Floor & Wall Covering received goods from Plaintiff for sale. Id. at ¶ 14. The goods provided by Plaintiff have yet to be paid for by Defendant Larry J. Lint Floor & Wall Covering, with a total being owed of $1,177,318.46, not including interest, which was also agreed upon under the terms of the credit agreement. Id. at ¶¶ 18 - 19.

Defendant Edward Lint is alleged to be the owner, officer, managing agent, employee and/or authorized representative of Defendant Larry J. Lint Floor & Wall Covering. Id. at ¶ 23. Defendant Popely was formerly employed by Plaintiff, during which time he "had the responsibility, with others, for the Larry J. Lint Floor & Wall Covering account." Id at ¶ 24. Plaintiff believes and avers that Defendant Popely now works for Defendant Larry J. Lint Floor & Wall Covering. Id. at ¶ 25. More particularly, Plaintiff alleges that beginning in or around March of 2008, Defendant Lint requested certain unauthorized credits and financial concessions from Defendant Popely, who was employed by Plaintiff at the time, in exchange for a payment of $30,000.00 per year for six years. Id. at ¶¶ 26 - 29. The complaint further alleges that Defendant Popely agreed to this arrangement, and improperly authorized financial credits and concessions for Defendant Larry J. Lint Floor & Wall Covering's account with Plaintiff without Plaintiff's knowledge and consent. Id. It these facts from which the five counts of the complaint stem.

STANDARD OF REVIEW

Rule 8 of the Federal Rules of Civil Procedure provides that a claim for relief must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Rule 8 requires a showing, rather than a blanket assertion, of entitlement to relief, and "'contemplates the statement of circumstances, occurrences, and events in support of the claim presented' and does not authorize a pleader's 'bare averment that he wants relief and is entitled to it.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 n.3 (2007) (quoting 5 Wright & Miller, Federal Practice and Procedure § 1202, pp. 94, 95 (3d ed. 2004)). "Each allegation must be simple, concise, and direct." Fed. R. Civ. P. 8(d).

A motion to dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure challenges the legal sufficiency of the complaint. The court must accept as true all well-pleaded facts and allegations, and must draw all reasonable inferences therefrom in favor of the plaintiff. However, as the United States Supreme Court made clear in Twombly, the "factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (citations omitted). Thus, "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id.

The United States Supreme Court reaffirmed Twombly in Ashcroft v. Iqbal, --U.S.--, 129 S.Ct. 1937 (2009), and expressly extended the Twombly pleading standard to matters outside the realm of antitrust law. When a complaint contains well-pled factual allegations, "a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. at 1950. However, a court is "not bound to accept as true a legal conclusion couched as a factual allegation." Id. Moreover, "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 1949.

LEGAL ANALYSIS

Under 28 U.S.C. § 1332(a), district courts "have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest, and is between ... citizens of different States." Complete diversity requires that, in cases with multiple plaintiffs or multiple defendants, no plaintiff be a citizen of the same state as any defendant. See e.g., Zambelli Fireworks Manufacturing Co. v. Wood, 592 F.3d 412, 419 (3d Cir. 2010). The key inquiry in such matters thus turns upon the citizenship of each party to the action. Id.

The federal diversity jurisdiction statute provides that "a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." 28 U.S.C. ยง 1332(c)(1). In response to what had become divergent and increasingly complex variations among the Circuit Courts of Appeals in the interpretation of the statutory phrase "principal place of business", the United States Supreme Court recently held that a corporation's "principal place of business" refers to the place where a corporation's officers direct, control, and coordinate the corporation's activities. Hertz v. Friend, -- U.S. --, 130 S.Ct. 1181 (2010). The Court further held that a principal place of business should normally be the ...


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