Opinion
Civil Action No. 06-1398.
July 7, 2006
ORDER — MEMORANDUM
AND NOW, this day of July, 2006, upon consideration of Plaintiff's Motion to Remand to State Court (Doc. No. 5), Defendant's response thereto, and Plaintiff's reply, IT IS HEREBY ORDERED that said Motion is DENIED. IT IS FURTHER ORDERED that Defendant's Motion to Dismiss Plaintiff's Complaint (Doc. No. 3) is GRANTED as uncontested and Plaintiff's Complaint is DISMISSED in its entirety.
Plaintiff, Strategic Staffing Group, Inc. ("Strategic Staffing"), filed its Complaint in the Court of Common Pleas for Montgomery County asserting claims for fraud and breach of contract against Defendant Harris Friedell. Defendant filed a Notice of Removal in this Court asserting diversity jurisdiction pursuant to 28 U.S.C. § 1332, as well as a Motion to Dismiss Plaintiff's Complaint. Plaintiff then filed a Motion to Remand to State Court (Doc. No. 5) asserting that this Court lacked subject matter jurisdiction. Plaintiff has not responded to Defendant's Motion to Dismiss, but submitted, on June 23, 2006, a Reply Memorandum in Support of the Motion to Remand.
Contrary to this Court's policies and procedures, Plaintiff did not file a motion for leave to file a reply. While the Reply was nevertheless considered, it did not affect the Court's ruling.
I. PLAINTIFF'S MOTION TO REMAND TO STATE COURT
The Court first considers Plaintiff's Motion to Remand. Plaintiff asks that this action be remanded because its Complaint sought relief for two claims in the alternative, each seeking an amount not in excess of $50,000. It argues that these figures cannot be aggregated and that, as such, pursuant to 28 U.S.C. § 1447, this Court lacks subject matter jurisdiction because the jurisdictional requirement that the amount in controversy exceed $75,000 has not been met.
The Complaint alleges the following facts. Plaintiff, Strategic Staffing, provides temporary and permanent staffing to other businesses for an hourly rate. (Compl. ¶ 3.) The company is incorporated in New York and does business in New Jersey and Pennsylvania. (Id. ¶ 1.) Before October 28, 2005, Defendant Harris Friedell was the Chief Operating Officer ("COO") of Strategic Staffing. (Id. ¶ 6.) He had a verbal contract with Plaintiff which included a condition that he perform his duties in a professional manner, and one of such duties was to review invoices that were sent to the companies Plaintiff provided with workers. (Id. ¶¶ 7, 9.) Plaintiff alleges that the Defendant failed to complete the review of invoices, lied to the company's President and Director about whether he had performed the work, and, indeed, sought to sabotage Strategic Staffing and start his own competing business. (Id. ¶¶ 12-14.) The unissued invoices were discovered in the desk Friedell used prior to his resignation. (Id. ¶ 15.)
Plaintiff has had to devote substantial resources to recovering payment on the unissued invoices. (Id. ¶¶ 16-17.) Further, it has lost receivable financing because of its disrupted balance and collections information, and the companies who hire temporary workers from Strategic have had problems verifying billing and scheduling data. (Id. ¶¶ 18-20.) The Complaint asserts one count of fraud, maintaining that Friedell knew of his duties to Strategic Staffing, failed to perform those duties, and lied to his superiors about whether he had done so. For the fraud count, Plaintiff seeks "an amount not in excess of $50,000.00 together with costs of suit, interest and such other relief as the Court deems equitable and just." The Complaint also asserts one count of breach of contract, maintaining that Friedell failed to send out invoices as per his duties as COO, and that in doing so he breached his verbal contract with Strategic Staffing. For this count, too, Plaintiff seeks "an amount not in excess of $50,000.00 together with costs of suit, interest and such other relief as the Court deems equitable and just."
"[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction . . . may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). Original jurisdiction exists for a district court when there is complete diversity and the amount in controversy exceeds $75,000, exclusive of interests and costs. 28 U.S.C. § 1332(a). When a motion to remand is before a court, the removal statute is to be strictly construed, such that any uncertainties as to whether federal jurisdiction is proper require that a case be remanded. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990). The Defendant, as the party asserting jurisdiction, bears the burden of demonstrating that the district court has jurisdiction. See Packard v. Provident Nat'l Bank, 994 F.2d 1039, 1045 (3d Cir. 1993).
Plaintiff argues that the amount in controversy does not exceed $75,000. In determining the amount in controversy, the complaint itself serves as the Court's basis as to what Plaintiff may recover. Angus v. Shiley Inc., 989 F.2d 142, 145 (3d Cir. 1993). Plaintiff contends that its two claims cannot be aggregated to meet the jurisdictional minimum because they were pled in the alternative. In its Complaint, however, Plaintiff made no indication it was doing so: Plaintiff did not use the words "in the alternative," nor does the Complaint impliedly preclude recovery on both counts. Further, Defendant notes that Plaintiff's Civil Cover Sheet, filed with the Complaint, fails to indicate the amount in controversy. Plaintiff had the opportunity to designate the case as one with a total amount in controversy of less than $50,000, in which case the matter would qualify for arbitration, but failed to do so. Plaintiff responds that though it erroneously failed to check the relevant box on the Civil Cover Sheet, the Complaint clearly sought arbitration because each Count sought less than $50,000. The Court does not find Plaintiff's argument compelling: its failure to check the correct box was not dispositive on the amount-in-controversy issue, but merely served as ancillary evidence that Plaintiff did not seek to limit its total relief to an amount not in excess of $50,000. The Complaint cannot be reasonably read as seeking relief for the two counts in the alternative, but instead as seeking total relief of up to $100,000.
Diversity of citizenship is not disputed.
A plaintiff who seeks to plead in the alternative "must use a formulation from which it can be reasonably inferred that this is what they were doing." Holman v. Indiana, 211 F.3d 399, 407 (7th Cir. 2000).
A general rule prohibits the aggregation of claims that are alternative bases of recovery for the same harm, however. Suber v. Chrysler Corp., 104 F.3d 578, 588 (3d Cir. 1997). While claims that are not pled in the alternative are not necessarily fit for aggregation, Plaintiff's claims of fraud and breach of contract, each seeking relief up to $50,000, may be aggregated because they allege distinct harms and Plaintiff may prevail on each. See C.D. Peacock, Inc. v. The Neiman Marcus Group, Inc., No. Civ. A. 97-5713, 1998 U.S. Dist. LEXIS 2945 (E.D. Pa. Mar. 9, 1998) (holding that a tortious interference with contract claim and a tortious interference with business relations claim could be aggregated to satisfy the jurisdictional amount because the claims had different elements and sought relief for subtly different harms, which took place on different temporal scales). Plaintiff's fraud claim and its breach of contract claim require different elements of proof. Further, the breach of contract claim speaks solely to the violation of the verbal agreement that Defendant had with Plaintiff during his employment. The fraud claim, however, addresses the harm resulting from Defendant's affirmative misrepresentations — that is, persisting problems for Strategic Staffing in recovering payments on unissued invoices. The relief sought for the two claims should therefore be aggregated. Accordingly, it is not apparent from the pleadings that the plaintiff cannot recover the jurisdictional amount. The Motion to Remand is thus denied, because the Defendant has met its burden of demonstrating that the jurisdictional amount is met.
For breach of contract under Pennsylvania law, a plaintiff must plead and prove "(1) the existence of a contract to which the plaintiff and defendant were parties; (2) the essential terms of the contract; (3) a breach of the duty imposed by the contract and (4) that damages resulted from the breach." Halstead v. Motorcycle Safety Foundations, Inc., 71 F. Supp. 2d 455, 458 (E.D. Pa. 1999). In contrast, a claim for fraud must allege: "(1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance." Manning v. Temple Univ., No. Civ. A. 03-4012, 2004 WL 3019230, at *10 (E.D. Pa. Dec. 30, 2004).
II. DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT
Having determined that federal jurisdiction exists, the Court turns to Defendant's Motion to Dismiss. Defendant moves to dismiss Plaintiff's Complaint pursuant to Fed.R.Civ.P. 12(b)(2) and 12(b)(3), or, in the alternative, pursuant to Fed.R.Civ.P. 12(b)(6) or Fed.R.Civ.P. 56. Although the Motion to Dismiss was filed on April 3, 2006, Plaintiff has not responded, nor has it provided a reason for such failure. The Court, therefore, grants the Motion to Dismiss the Complaint as uncontested. See E.D. Pa. Local R. Civ. P. 7.1(c) ("Failure to respond to a properly filed motion within the time set forth in this rule permits the court to treat the motion as uncontested."); Smith v. Resorts, USA, Inc., No. Civ. A. 99-2685, 1999 U.S. Dist. LEXIS 17614, at *9-10 (E.D. Pa. Nov. 10, 1999) (granting motions to dismiss as uncontested pursuant to Local Rule 7.1(c)).