United States District Court, E.D. Pennsylvania
COMPLETE BUSINESS SOLUTIONS GROUP, INC. A/K/A “FAST ADVANCE FUNDING” Plaintiff,
PROTECTION LEGAL GROUP, LLC, MARK D. GUIDUBALDI & ASSOCIATES, LLC, CORPORATE BAILOUT, LLC, SANFORD J. FEDER, ESQ., and MARK D. GUIDUBALDI, ESQ. Defendants.
MEMORANDUM AND ORDER
me are Plaintiff Complete Business Solutions Group's
(“CBSG”) First and Second Amended Complaints
against Defendants Protection Legal Group, LLC,
(“PLG”); Mark D. Guidubaldi, Esquire; and related
defendants. CBSG alleges that Defendants interfered
with CBSG's contractual relationship with various
merchants. Defendants filed a motion to dismiss CBSG's
First Amended Complaint pursuant to Federal Rule of Civil
Procedure 12(b)(1) alleging that CBSG has failed to establish
subject matter jurisdiction and pursuant to Rule 12(b)(6)
alleging that CBSG failed to state a claim upon which relief
can be granted. Instead of filing a response to
Defendants' motion to dismiss, CBSG filed a Second
Amended Complaint. Defendants subsequently filed a motion to
strike CBSG's Second Amended Complaint as an unauthorized
filing. CBSG has now responded to both the motion to dismiss
and motion to strike. For the following reasons, I will
strike CBSG's Second Amended Complaint and grant
Defendants' motion to dismiss CBSG's First Amended
FACTS AND PROCEDURAL HISTORY
lends money to small business merchants and purchases future
accounts receivables from them, essentially providing a cash
advance to those merchants. The merchants repay CBSG by
allowing CBSG to automatically withdraw from the
merchant's designated bank account on a set time table.
Several of the merchants who had entered into agreements with
CBSG retained Defendants to represent them in renegotiating
their obligations with CBSG. CBSG alleges that Defendants
actively pursued those merchants and interfered with the
contractual relations between CBSG and the merchants,
including instructing merchants “to cease allowing
[CBSG's] withdrawals of funds and to instead allow
Defendants operating under the name of Protection Legal Group
(PLG) to retrieve said funds, and to administer said
funds.” See Pl.'s Br. in Opp. to Defs'
Mot. to Dismiss and Mot. to Strike, at 4.
filed its original complaint on August 5, 2016, and then
filed its First Amended Complaint pursuant to Federal Rule of
Civil Procedure 15(a)(1)(A) on August 26, 2016, prior to
Defendants' responsive pleading. On October 26, 2016,
Defendants filed this motion to dismiss. On November 15,
2016, CBSG filed a Second Amended Complaint. This amended
complaint was filed without Defendants' consent or leave
Motion to Strike
Rule of Civil Procedure 15(a)(1) provides that a party may
amend his pleading once as a matter of course at any time
before a responsive pleading is filed, provided that it is
done within 21 days of service or within 21 days of a Rule
12(b) motion. Subsequently, the plaintiff may amend its
pleading only with the opposing party's written consent
or the court's leave. Fed.R.Civ.P. 15(a)(2).
argues that its Second Amended Complaint was filed in
accordance with Rule 15 as it was filed within 21 days of
Defendants' Motion to Dismiss. CBSG is wrong. The First
Amended Complaint was filed properly under Rule 15(a);
however, an amendment is allowed as a matter of course only
once. Because CBSG's Second Amended Complaint does not
comply with Rule 15(a)(2), it will be stricken. See
Johnson v. Trans Union, LLC, 2013 WL 218789, at *2 (E.D.
Pa. May 21, 2013).
Motion to Dismiss under 12(b)(1)
moves to dismiss this action under Federal Rule of Civil
Procedure 12(b)(1) asserting that it should be dismissed for
lack of subject matter jurisdiction because complete
diversity does not exist between the parties. See 28
U.S.C. § 1332. “Federal courts are courts of
limited jurisdiction, and when there is a question as to our
authority to hear a dispute, it is incumbent upon the courts
to resolve such doubts, one way or the other, before
proceeding to a disposition on the merits.”
Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412,
418 (3d Cir. 2010)) (citations and quotations omitted).
jurisdiction does not exist unless each defendant is
a citizen of a different State from each
plaintiff.” Owen Equip. & Erection Co. v.
Kroger, 437 U.S. 365 373 (1978)) (emphasis in original).
The citizenship of an LLC is determined by the citizenship of
each of its members for purposes of diversity jurisdiction.
Zambelli, 592 F.3d at 420. Where an LLC is a party,
the citizenship of the LLC “‘must be traced
through however many layers of partners or members there may
be' to determine the citizenship of the LLC.”
Id. at 420 (citing Hart v. Terminex
Int'l, 336 F.3d 541, 543 (7thCir. 2003)).
Moreover, diversity of citizenship must have existed at the
time the complaint was filed. Smith v. Sperling, 354
U.S. 91, 93 n.1 (1957).
has its principal place of business in Pennsylvania. PLG is
an LLC organized under the laws of the State of Illinois.
See Declaration of Mark D. Guidubaldi, attached to
Defs' Mot. to Dismiss as Ex. 1. Defendants contend that
CBSG failed to properly plead diversity jurisdiction as it
failed to set forth the members of PLG. Defendants assert
that PLG is a multi-jurisdictional law firm with members
authorized to practice law in various states, including
Pennsylvania. More specifically, Defendants point to William
P. Harrington, Jr., Esquire, alleging that he is a member of
PLG and a citizen of Pennsylvania. If any member of PLG is a
citizen of Pennsylvania, then diversity is defeated.
party asserting diversity jurisdiction bears the burden of
proof.” McCann v. Newman Irrevocable Trust,
458 F.3d 281, 286 (3d Cir. 2006) (citing McNutt v. Gen.
Motors Acceptance Corp., 298 U.S. 178, 189 (1936)).
“A party generally meets this burden by proving
diversity of citizenship by a preponderance of the
evidence.” Id. In responding to
Defendants' claim that it failed to properly plead
diversity jurisdiction, CBSG notes that due diligence failed
to uncover the citizenship of PLG members. CBSG points out
that PLG is not registered with the Illinois Supreme Court,
does not have a registered trade name, and has not filed a
listing of all members of its law firm with the Illinois
Supreme Court. Moreover, PLG's letterhead merely states
“Licensed in Illinois.” CBSG's assertion that
“due diligence” has failed to uncover the
citizenship of PLG does not satisfy the burden of proving by
a preponderance of the evidence that diversity exists.
Defendants have shown that Mr. Harrington, an attorney
licensed in Pennsylvania, is a member of PLG. In support
thereof, Defendants have provided a declaration from William
P. Harrington, Jr., in which Mr. Harrington asserts that he
is “a member of Mark D. Guidubaldi & Associates,
LLC d/b/a Protection Legal Group (“PLG”), and as
such I have provided legal counsel in the Commonwealth of
Pennsylvania for PLG clients that have legal matters that
concern Pennsylvania law or before Pennsylvania
courts.” See Declaration of William P.
Harrington, Jr., attached to Defs' Mot. to Dismiss as Ex.
2. Mr. Harrington goes on to state “[a]t all times
relevant to this matter and as a member of PLG, I have
provided legal representation, and advice with respect to PLG
clients, cases, and matters arising in and within the
jurisdiction of Pennsylvania.”Id. CBSG takes
issue with the fact that Mr. Harrington's declaration is
unsworn; however, because he is a member of the Pennsylvania
bar with the attendant responsibility of candor to the court,
I accept Mr. Harrington's declaration as truthful.