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Asteria Vives v. Frank Rodriguez

January 31, 2012


The opinion of the court was delivered by: Dalzell, J.


Plaintiff Asteria Vives ("Asteria") sues defendants Frank ("Frank") and Miguelina ("Miguelina") Rodriguez,*fn1 asserting claims for breach of contract, unjust enrichment, conversion, fraud, and intentional infliction of emotional distress ("IIED"). Frank is Asteria's brother, while Miguelina is Frank's wife and Asteria's sister-in-law. Asteria's claims arise out of an alleged agreement between her and the defendants that provided the defendants would act for a fee as the straw purchasers and re-sellers of a house Asteria wanted to dispose of. According to Asteria, after selling the house, the defendants refused to turn over the balance from the sale of the property as they had agreed to do.

Miguelina filed what she styled a "motion for summary judgment" last year, as to which Asteria filed a response in opposition and Frank filed a memorandum in support.*fn2 In large part, however, Miguelina's motion reiterates arguments presented in a prior motion to dismiss that we denied without prejudice. Perhaps more importantly, the parties have not yet engaged in discovery, and have neither jointly submitted a stipulation of undisputed facts nor individually enumerated the factual claims that they can support with specific citations to the record. While the parties make cursory references to the record, the bulk of their arguments concerns the sufficiency of Asteria's claims and the appropriateness of this Court as the forum in which to litigate those claims.

Notwithstanding the manner in which it is styled, we will construe Miguelina's submission as a motion to dismiss predicated on plaintiff's failure to state a claim and this Court's lack of subject matter jurisdiction, and will evaluate it pursuant to Fed. R. Civ. P. 12(b)(1) and (6). For the reasons enunciated below, we will grant this motion in part, dismissing Asteria's claims for fraud, conversion, and intentional infliction of emotional distress.

I. Factual Background

In ruling on a motion to dismiss under Rule 12(b)(6),*fn3 a court must "'accept all factual allegations in the complaint as true and give the pleader the benefit of all reasonable inferences that can be fairly drawn therefrom.'" Ordonez v. Yost, 289 Fed. Appx. 553, 554 (3d Cir. 2008) (quoting Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993)). In the course of our inquiry, we "'consider only allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim,'" Brown v. Daniels, 128 Fed. Appx. 910, 913 (3d Cir. 2005) (quoting Lum v. Bank of America, 361 F.3d 217, 222 n.3 (3d Cir. 2004)). A document forms the basis of a claim if it is "integral to or explicitly relied upon in the complaint." In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (emphasis and internal quotation marks omitted). We will thus review the factual allegations of Asteria's complaint.

According to Asteria, she is a resident of Historic LaMott, Pennsylvania, while Frank and Miguelina reside in Orlando, Florida. Pl.'s Compl. ¶¶ 4-5. Asteria entered into an agreement with Frank and Miguelina on June 1, 2006, in which Frank and Miguelina agreed to serve as the straw purchasers of 7322 Butcher Street, Lamott, Pennsylvania (the "property") on Asteria's behalf. The agreement provided that: (1) Asteria would provide all funds for purchasing the property and pay for all rehabilitation costs and tax and insurance obligations arising out of the transaction; (2) Frank and Miguelina would pay the net proceeds to Asteria after the property's eventual re-sale; and (3) Asteria would pay Frank and Miguelina a fee of $500.00 upon this sale. Id. ¶¶ 9-10. Frank purchased the property on June 14, 2006 for $55,000, with funds Asteria provided. Id. ¶¶ 11-12. On August 7, 2006, Frank and Miguelina agreed to act as straw sellers of the property for Asteria, and sold the property on August 10, 2006 for $95,000.00. Id. ¶¶ 13-14.

Asteria alleges that between October 26, 2006 and May 27, 2007, she repeatedly demanded -- by telephone, e-mail, and mail -- that Frank and Miguelina "tender the remaining balance from the sale." Id. ¶ 15. Frank and Miguelina responded with a series of excuses for their inability to turn over this balance, finally stating on May 20, 2007 that they would issue a secured payment of $35,000.00 to Asteria if she would provide them with an affidavit stating that she was no longer "using Defendant Frank Rodriguez's power of attorney." Id. ¶¶ 17-18. On May 22, 2007, Asteria provided Frank with an affidavit stating that his "power of attorney [had been] terminated". Nonetheless, Frank and Miguelina continued to ignore Asteria's demands for payment and have not tendered the net balance from the sale of the property, which Asteria contends amounts to $37,159.60. Id. ¶¶ 19-21.

Asteria claims that shortly after Frank and Miguelina received payment for the August 10, 2006 sale of the property, they satisfied the mortgage on their Florida home in large part using the net proceeds from the sale. Id. ¶ 27. According to Asteria, "Frank and Miguelina Rodriguez's promise to immediately and promptly turn over the balance of the sale of 7322 Butcher Street, Historic LaMott, Pennsylvania 19027 to Plaintiff was a material misrepresentation, with scienter, that was part and parcel of a fraudulent scheme to unlawfully secure capitalization for the satisfaction of their Florida mortgage." Id. ¶ 28.

Asteria seeks compensatory damages of $37,159.60 on her claims for breach of contract, unjust enrichment, conversion, and fraud. Id. at 4-6. She also seeks punitive damages of $371,000.00 under Count IV for fraud, and punitive damages of $250,000.00 and compensatory damages of $250,000.00 under Count V for intentional infliction of emotional distress. Id. at 7.

II. Analysis

Section 1332(a)(1) provides that "[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between -- (1) citizens of different States," and Rule 12(b)(1) states that "a party may assert the following defenses by motion: (1) lack of subject-matter jurisdiction." Our Court of Appeals has explained that when a challenge is made to diversity jurisdiction based on failure to satisfy § 1332's amount-in-controversy requirement,

The [party claiming jurisdiction] bears the burden of showing that the case is properly before the federal court. Where the parties dispute the underlying facts concerning the jurisdictional amount requirement, the [party claiming jurisdiction] must prove by a preponderance of the evidence that the amount in controversy exceeds $75,000. Thereafter, or if the underlying jurisdictional facts are not in dispute, a federal court must decide whether it appears to a "legal certainty" that the plaintiff is not entitled to recover an amount exceeding the jurisdictional requirement.

Chrin v. Ibrix, Inc., 293 Fed. Appx. 125, 127 (3d Cir. 2008) (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938)).

When a court considers a motion to dismiss pursuant to Rule 12(b)(6), on the other hand, the test "'is whether, under any reasonable reading of the pleadings, the plaintiff may be entitled to relief.'" Kundratic v. Thomas, 407 Fed. Appx. 625, 627 (quoting Holder v. City of Allentown, 220 F.2d 188, 194 (3d Cir. 1993)) (brackets in original). A plaintiff may not pass this test merely by offering "labels and conclusions" in the complaint, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007), and similarly "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice," Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). Instead, a complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level," Twombly, 550 U.S. at 555, so that there is "more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 129 S. Ct. at 1949. Essentially, a plaintiff must provide "enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of" the necessary element. Twombly, 550 U.S. at 556.

Miguelina advances six arguments in her motion, to wit:

(1) once Asteria's legally insufficient claims are removed from consideration, we lack subject matter jurisdiction over this action; (2) there is no cause of action against her; (3) the gist of the action doctrine bars Asteria's fraud and intentional infliction of emotional distress claims; (4) the fraud and intentional infliction of emotional distress claims against Miguelina are insufficiently stated; (5) Asteria has not stated a claim for punitive damages; and (6) this Court should abstain from exercising jurisdiction over this matter under the Colorado River doctrine. We will consider each argument in turn.

A. Miguelina's Challenge to Subject Matter Jurisdiction

Miguelina suggests that "[t]his Court lacks subject-matter jurisdiction over this case because, when Vives' legally-deficient claims for fraud, intentional infliction of emotional distress, and punitive damages are removed from consideration, the amount in controversy does not exceed the amount required by 28 U.S.C. § 1332." Miguelina's Mem. in Supp. of Mot. ("Miguelina Mem.") at 3. Asteria responds that "each of Plaintiff's substantive claims are meritorious and greatly exceed the $75,000.00 minimum amount necessary to satisfy the requirements of 28 U.S.C. Section 1332." Pl.'s Resp. at 5.

As noted above, where the "underlying jurisdictional facts are not in dispute," a court generally resolves a challenge to diversity jurisdiction by determining "whether it appears to a 'legal certainty' that the plaintiff is not entitled to recover an amount exceeding the jurisdictional requirement." Chrin, 293 Fed. Appx. at 127. This situation is somewhat different from the ordinary context in which a Rule 12(b)(1) motion is asserted, however, in that Miguelina claims that we lack jurisdiction in part because Asteria's claimed damages are legally unavailable and in part because her claims are legally insufficient.

As Judge Joyner some time ago explained, When determining whether the amount in controversy has been satisfied . . . federal courts examine plaintiff's damage claims at the time that the action is commenced and the amount in controversy for jurisdictional purposes must be ascertained by the requests in the pleadings without consideration of success on the merits. Once that determination is made and the federal ...

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