United States District Court, E.D. Pennsylvania
F. KELLY, Sr. J.
Presently before the Court is Defendant Kenneth D.
Fernandez-Prada's ("Fernandez -Prada") Motion
to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6),
Plaintiff Liberty Fencing Club LLC's ("Liberty
Fencing") Response to Defendant's Motion to Dismiss,
and Defendant's Reply Brief in Further Support of His
Motion to Dismiss the Amended Complaint. For the reasons
noted below, Defendant's Motion is denied.
Fencing is a limited liability company that provides fencing
lessons, training, coaching facilities, tournaments, and
other activities to a variety of clients. (Id.
¶¶ 1, 6.) Marshal Davis ("Davis"), a
"top active coach" at Liberty Fencing, and
Fernandez-Prada were close friends for a number of years.
(Id. ¶¶ 3, 7, 9.) Arising out of that
close friendship, Davis hired Fernandez-Prada to work for
Liberty Fencing as a coach. (Id. ¶ 3.)
April 16, 2013, Liberty Fencing and Fernandez-Prada entered
into a "Coach Agreement, " ("Coach
Agreement" or "Agreement") where
Fernandez-Prada agreed to provide private and paired fencing
lessons to Liberty Fencing customers as an independent
contractor. (Id. ¶ 10.) The Coach Agreement
also allowed Fernandez-Prada to provide lessons and coaching
to Swarthmore College, as well as to the general public, but
that Liberty Fencing would receive a portion of the profits.
(Id. ¶ 11.) The Agreement had a term of five
years and would terminate on April 16, 2018. (Id.
¶ 12.) Fernandez-Prada agreed to perform the duties and
responsibilities in the Agreement, which included
"giving lessons on his own time, making his own schedule
. . . and giving lessons in accordance with his own
program." (Coach Agreement § 1(b).) The Agreement
further stated that "Coach is free to follow his own
pattern of work." (Id.)
Coach Agreement also contained a number of covenants that are
relevant to the Amended Complaint. The Agreement contained a
"Covenant Not to Compete, " which provides that
Coach agrees that during the Term and, for an additional
period of two (2) years thereafter, he shall not directly or
indirectly, as an employee of any person or entity (whether
or not engaged in business for profit), individual
proprietor, partner, agent, consultant, independent
contractor, stockholder, officer, director, joint venturer,
investor, lender or in any other capacity whatsoever,
participate, directly or indirectly in the Company business,
except on Company's behalf within fifty miles of the
Premises and any other or subsequent location at which the
Company's business is being conducted.
(Id. § 5(a).) Regarding a covenant of
"Nondisclosure, " Fernandez-Prada agreed that, for
two years following the term, he would not
reveal, disclose or make known to any third party, or use for
his own benefit or for the benefit of any third party, any
confidential or other proprietary information relating to
Company, Company's services, the markets, clients,
customers, suppliers, contacts or current or planned business
operations of Company, or any of Company's shareholders,
subsidiaries or affiliates (the "Confidential
Information"), whether or not obtained with the
knowledge and permission of Company and whether or not
developed, devised or otherwise created in whole or in part
by the efforts of the Company.
(Id. § 5(b) (emphasis omitted).) Lastly, the
Agreement contained a "Non-Solicitation" provision,
where Fernandez-Prada agreed that following a two-year period
after the term, he would not
recruit or solicit any employee, customer, former customer,
customer family member, or supplier of Company, or otherwise
induce such employee, customer, former customer, customer
family member, or supplier to leave the employment of Company
or to cease doing business with Company, as applicable, or to
become an employee of or otherwise be associated or do
business or take fencing classes or lessons with Coach or any
individual, club, company, firm, corporation, business, or
institution with which Coach is or may become associated in
any capacity. Customers include anyone who at any time
participated in any lessons, classes, camps, or competitions
at the Company and/or on its Premises.
(II § 5(c).)
signing the Coach Agreement, Fernandez-Prada regularly taught
fencing classes at Liberty Fencing approximately two to three
days per week. (Am. Compl. ¶ 17.) He also gave private
fencing lessons to Liberty Fencing students and began
traveling with customers to provide coaching at tournaments
held around the country, which is a concept known as
"strip coaching." (Id.)
to Liberty Fencing, it developed an elite fencing program
with exponential growth in the first twenty months
Fernandez-Prada began working there. (Id. ¶
18.) Around January 2015, however, Fernandez-Prada informed
Davis of a job opportunity in London and his intent to
terminate the Agreement three years early. (Id.
¶ 22.) Liberty Fencing claims that despite
Fernandez-Prada's "plans" to go to London for a
job opportunity, he remained in the area and thus could have
honored the Coach Agreement by continuing to coach at Liberty
and around the same time, Fernandez-Prada accompanied
"two of [Liberty Fencing's] most valuable
students/customers" to a national tournament run by USA
Fencing. (Id. ¶ 28.) While at these
tournaments, coaches would follow the "Strip Coaching
Policy, " (id.; Ex. 4 ("Strip Coaching
Policy")), which Liberty Fencing claims both
Fernandez-Prada and Davis jointly drafted. (Id.
¶¶ 28, 29.) The Strip Coaching Policy was "the
official [Liberty Fencing] policy for all coaches and
students. . . ." and "[a]ll coaches, including
[Fernandez-Prada], agreed to be bound by the terms of
[it]." (Id. ¶ 29.) Under the Strip
Coaching Policy, students would pay Liberty Fencing, who in
turn would pay coaches a portion of the proceeds.
(Id. ¶ 30.) Liberty Fencing alleges that during
the entirety of the aforementioned tournament,
Fernandez-Prada solicited payment directly from a student and
the student's father in direct violation of the Strip
Coaching Policy. (Id. ¶ 31.) Liberty Fencing
claims it was never paid a portion of the proceeds by either
the student (or his father) or Fernandez-Prada. (Id.
Fencing also avers that in the same timeframe,
Fernandez-Prada affiliated himself with Zeljkovic Fencing
Academy ("ZFA"), a direct competitor that is
located only six miles away from Liberty Fencing.
(Id. ¶ 34.) According to Liberty Fencing, Davis
found out that Fernandez-Prada had fabricated his London job
opportunity in an effort to join, compete, and promote ZFA,
all of which was in direct violation of the Coach Agreement.
(Id. ¶ 35, 44.) Liberty Fencing claims
Fernandez-Prada's affiliation with ZFA lasted until at
least December 2015, and that he registered himself as a
member of ZFA on the USA Official Fencing Membership List
from August 1, 2015 through July 31, 2016. (Id.
¶¶ 38, 39.) In addition, Liberty Fencing contends
that Fernandez-Prada sent emails to current and former
Liberty Fencing students to join ZFA and/or take lessons or
coaching directly from him, which constitutes solicitation of
Liberty Fencing students. (Id. ¶ 36, 41.) He
also appeared on Facebook alongside former Liberty Fencing
customers who were dressed in ZFA apparel. (Id.
¶ 37.) Lastly, Liberty Fencing alleges Fernandez-Prada
shared confidential information about Liberty Fencing's
fencers, proprietary coaching information and techniques,
details about his coaching relationship and exit from Liberty
Fencing, as well as the operations, philosophies, strategies,
tactics, and coaching knowledge of Liberty Fencing.
(Id. ¶ 40.)
April 10, 2017, Liberty Fencing filed an Amended Complaint
against Fernandez-Prada alleging breach of contract and
unjust enrichment. (Am. Compl.) Liberty Fencing claims this
Court has subject matter jurisdiction over the case by the
way of diversity of citizenship pursuant to 28 U.S.C. §
1332(a). (Id. ¶ 4.) On May 2, 2017,
Fernandez-Prada filed the instant Motion to Dismiss Pursuant
to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). Specifically,
Fernandez-Prada contends that we lack subject matter
jurisdiction over the Amended Complaint because Liberty
Fencing cannot meet the amount in controversy requirement in
28 U.S.C. § 1332(a). (Def's Mem. Support Mot. to
Dismiss at 5.) He also argues that Liberty Fencing's
claims of breach of contract and unjust enrichment fail as a
matter of law and should be dismissed pursuant to Federal
Rule of Civil Procedure 12(b)(6). (Id. at 1.)
Rule 12(b)(1) Standard
"The 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 citizens of different states." 28 U.S.C.
§ 1332(a). The diversity statute requires that there be
complete diversity between the parties, meaning that
"each defendant is a citizen of a different State from
each plaintiff." Owen Equip. & Erection Co. v.
Kroger, 437 U.S. 365, 373 (1978). The statute further
requires that the amount in controversy exceed $75, 000 in
order to properly invoke diversity jurisdiction. 28 U.S.C.
§ 1332(a); Auto-Owners Ins. Co. v. Stevens &
Ricci Inc., 835 F.3d 388, 394-95 (3d Cir. 2016). The
party asserting subject matter jurisdiction bears the burden
of proving its existence. Lincoln Ben. Life Co. v. AEI
Life, LLC, 800 F.3d 99, 105 (3d Cir. 2015) (citing
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.3
(2006)); Morgan v. Gay, 471 F.3d 469, 474 (3d Cir.
may challenge the court's subject matter jurisdiction
under Federal Rule of Civil Procedure 12(b)(1). "At
issue in a Rule 12(b)(1) motion is the court's 'very
power to hear the case.'" Petruska v. Gannon
Univ., 462 F.3d 294, 302 (3d Cir. 2006) (quoting
Mortensen v. First Fed. Sav. and Loan Ass'n, 549
F.2d 884, 891 (3d Cir. 1977)) (footnote omitted). A motion
filed under Rule 12(b)(1) may take two forms: (1) a facial
attack, where the party contesting subject matter
jurisdiction attacks the face of the complaint; or (2) a
factual attack, where the existence of subject matter
jurisdiction is attacked as a matter of fact. See
id. n.3. "A facial attack concerns an alleged
pleading deficiency[, ] whereas a factual attack concerns the
actual failure of a plaintiffs claims to comport factually
with the jurisdictional prerequisites." Lincoln
Ben., 800 F.3d at 105 (internal quotation marks and
alterations omitted); Constitution Party of Pa. v.
Aichele, 757 F.3d 347, 358 (3d Cir. 2014).
party files a Rule 12(b)(1) motion that mounts a facial
attack to subject matter jurisdiction, a court may consider
only "the allegations of the complaint and documents
referenced therein and attached thereto, in the light most
favorable to the plaintiff." Gould Elecs. Inc. v.
United States, 220 F.3d 169, 176 (3d Cir. 2000). In
reviewing a factual attack, on the other hand, a court
"may consider evidence outside the pleadings, " ii,
but there is "no presumptive truthfulness attache[d] to
plaintiffs allegations, " Mortensen, 549 F.2d
should be noted that in deciding a Rule 12(b)(1) motion on
the allegation that the amount in controversy does not meet
the jurisdictional minimum, "the sum claimed by the
plaintiff controls if the claim is apparently made in good
faith." St. Paul Mercury Indem. Co. v. Red Cab
Co., 303 U.S. 283, 288 (1938) (footnotes omitted).
Additionally, in determining whether a case involves the
jurisdictional amount, it must be '"apparent, to a
legal certainty, that the plaintiff cannot recover the amount
claimed, or if, from the proofs, the court is satisfied to a
like certainty that the plaintiff never was entitled to
recover that amount.'" Samuel-Bassett v. KIA
Motors Am., Inc., 357 F.3d 392, 397 (3d Cir. 2004)
(quoting Red Cab, 303 U.S. at 289).
Rule 12(b)(6) Standard
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) tests the sufficiency of a complaint. Kost v.
Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). Pursuant to
Rule 12(b)(6), the defendant bears the burden of
demonstrating that the plaintiff has failed to set forth a
claim from which relief may be granted. Fed.R.Civ.P.
12(b)(6); see also Lucas v. City of Phila., No.
11-4376, 2012 WL 1555430, at *2 (E.D. Pa. May 2, 2012)
(citing Hedges v. United States, 404 F.3d 744, 750
(3d Cir. 2005)). In evaluating a motion under Rule 12(b)(6),
the court must view any ...