Opinion
Civil Action No. 03-CV-1491
September 8, 2003
MEMORANDUM
Presently before the Court is the Motion to Dismiss of Defendants John Deal Coatings, Inc. and James Quinn (collectively "Defendants") and Plaintiff's Response. For the following reasons, Defendants' motion will be granted in part and denied in part.
John Deal Coatings, Inc. is incorrectly labeled JDC, Inc. in the caption.
I. BACKGROUND
Plaintiff Michael Sudofsky ("Sudofsky" or "Plaintiff"), a Pennsylvania resident, is a former employee of Defendant John Deal Coatings, Inc. ("JDC"). JDC is a Tennessee corporation with its principal place of business in Tennessee. Defendant James Quinn ("Quinn") is a Tennessee resident and officer of JDC.
In December of 1999, Sudofsky alleges he and the Defendants entered into negotiations regarding JDC's employment of the Plaintiff as a sales manager. Quinn allegedly represented JDC during some of the negotiations. Plaintiff alleges that during the negotiations Defendants represented to him that the compensation package would be similar to that of his predecessor. Sudofsky alleges Defendants agreed to pay him a base salary of $150,000 with a guaranteed bonus of $30,000 and a commission structure that would allow him to earn approximately $350,000. Sudofsky further alleges the commission structure was to be negotiated shortly after he began work for JDC. Sudofsky accepted JDC's offer of employment.
In June 2001 Sudofsky alleges he approached Defendant Quinn during a business trip to Philadelphia about negotiating the commission structure agreed to in December 1999. Sudofsky states he informed Quinn that unless an agreement was reached he would look for alternate employment. Sudofsky alleges as a result of that conversation Quinn orally agreed to a commission structure. In January 2002 JDC terminated Plaintiff's employment.
Sudofsky alleges he was never paid any of the agreed upon commissions or bonuses discussed during the negotiations in 1999 or with Quinn in June 2001. Sudofsky further alleges JDC deferred his income on several occasions in 2000 and 2001 and has yet to pay the deferred salary. Sudofsky claims as a result of the Defendants' misrepresentations of the sales position and compensation package, he rejected a sales position with a European manufacturer of laminated products, an opportunity Sudofsky claims Defendants were aware of. Plaintiff further alleges he incurred great expense in relocating his family to Tennessee based on the misrepresentations of the Defendants.
Plaintiff filed this action in the Pennsylvania Court of Common Pleas, Philadelphia County on December 30, 2002. On March 7, 2003, Defendants timely removed the action to this Court. Plaintiff's claims against JDC and Quinn individually include breach of contract (Count I), violation of Pennsylvania Wage Payment and Collection Law ("PWPCL") (Count II), misrepresentation (Count III), negligent misrepresentation (Count IV), unjust enrichment (Count V), conversion (Count VI), interference with contract (Count VIII), interference with prospective economic advantage (Count DC), and a suit for an accounting (Count X).
Plaintiff's complaint does not include a Count VII. The Court will reference the claims as they are labeled by the Plaintiff.
II. CLAIMS AGAINST QUEVN
Individual Defendant Quinn argues that the claims against him should be dismissed on the grounds that the Court lacks personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2); insufficiency of service of process pursuant to Fed.R.Civ.P. 12(b)(5); and failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6). As failure to establish personal jurisdiction over Quinn would be dispositive of all the claims against him I will address personal jurisdiction first.
District courts have personal jurisdiction over nonresident defendants to the extent authorized under the law of the forum state in which the district court sits. North Perm Gas v. Corning Natural Gas Corp., 897 F.2d 687, 690 (3rd Cir. 1990). Pennsylvania permits the exercise of personal jurisdiction over nonresident defendants through its long arm statute so long as the exercise of jurisdiction is within the constitutional limits required by the Due Process Clause. See 42 Pa.Cons.Stat.Ann. § 5322(b); Remick v. Manfredy, 238 F.3d 248, 255 (3rd Cir. 2001). Due process requires the nonresident have minimum contacts with the forum state and that the exercise of jurisdiction comport with "traditional notions of fair play and substantial justice."Remick, 238 F.3d at 255 (citing International Shoe Co. v. Washington, 326 U.S. 310, 320 (1945)).
A court may exercise personal jurisdiction over a nonresident in one of two ways, general or specific jurisdiction. Id. General jurisdiction is based upon the defendant's "continuous and systematic" contacts with the forum and exists even if the plaintiff's cause of action arises from the defendant's non-forum related activities. Id. Specific jurisdiction is when the plaintiff's cause of action arises out of the defendant's forum-related activities, such that the defendant "should reasonably anticipate being haled into court " in that forum. Id. (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). A determination of specific jurisdiction is claim specific, requiring a due process analysis for each claim. Id.
Defendant Quinn states he is a citizen of Tennessee and officer of JDC. See Affidavit of James Quinn ("Quinn Affidavit"). Quinn states his visit to Pennsylvania in June 2001 visit was unrelated to any of the claims raised by the Plaintiff in his complaint. Id. Quinn also states that his involvement in the negotiation of Plaintiff s employment only occurred in Tennessee. Id. Quinn argues his limited contacts with the forum on a matter unrelated to Plaintiff's claims are insufficient to confer personal jurisdiction over him. Quinn further argues any contacts with the forum were as an officer of JDC and therefore an improper basis for personal jurisdiction.
Once a defendant raises the question of personal jurisdiction the burden falls upon the plaintiff to come forward with sufficient facts to prove "by a preponderance of the evidence that jurisdiction is proper."Carteret Savings Bank v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992). As the record before this Court is devoid of allegations that Defendant Quinn has systematic and continuous contacts with Pennsylvania sufficient for this Court to exercise general jurisdiction, my focus is on whether the Court has specific jurisdiction over Quinn for any of the claims asserted by the Plaintiff.
Plaintiff argues this Court has jurisdiction over Quinn for Count II (violation of the PWPCL), Counts IE (misrepresentation), Count IV (negligent misrepresentation), Count VIII (interference with Contract) and Count IX (interference with prospective economic advantage) under 43 Pa. C.S.A. § 5322(a). As specific jurisdiction requires a claim specific analysis, I will evaluate each claim individually.
In his opposition, Plaintiff refers to Count VII., As previously noted there is no Count VII in Plaintiff's complaint.
1. The Pennsylvania Wage Payment and Collection Law Claim
Plaintiff argues that Quinn is personally liable for JDC's violation of the PWPCL for JDC's failure to pay the deferred salary and promised bonuses and commissions. Plaintiff argues this violation may serve as a basis for personal jurisdiction.
A violation PWPCL law alone is an insufficient basis for this Court to extend personal jurisdiction over Quinn. Central Pa. Teamsters Pension Fund v. Burten, 634 F. Supp. 128 (E.D. Pa. 1986); see also Sneberger v. BTI Americas, Inc., 1998 WL 826992 at *4 (E.D.Pa.). There must also exist sufficient contacts with the forum related to the cause of action for the exercise of jurisdiction to be proper. Remick v. Manfredy, 238 F.3d 248, 255 (3rd Cir. 2001). Only violations of the PWPCL occurring within the Commonwealth are a proper basis for jurisdiction. Burten, 634 F. Supp. at 132.
The purpose of the PWPCL is to allow employees to recover wages and other benefits that are due from employers pursuant to agreements between the parties. Tener v. Hoag, 697 F. Supp. 196, 197 (W.D.Pa.1988). The WPCL provides in part: "Every employer who by agreement . . . agrees to pay or provide fringe benefits or wage supplements . . . must pay or provide the fringe benefits or wage supplements, as required, . . . within ten days after such payments are required to be made directly to the employee, or within sixty days of the date when proper claim was filed by the employee in situations where no required time for payment is specified." 43 P.S. § 260.3(b)
In support of personal jurisdiction Plaintiff alleges that Quinn travel to Pennsylvania in June 2001 and orally misrepresented to Plaintiff a commission schedule agreement in order to induce the Plaintiff to remain in the JDC's employ. It also alleged by the Plaintiff that during the negotiations in December 1999 Quinn misrepresented the sale position in order to induce the Plaintiff to come work for JDC.
None of the alleged contacts however relate to Plaintiff's PWPCL claim. Plaintiff has offered no evidence that Defendant Quinn acted in Pennsylvania to violate the statute. There are no allegations that Quinn intended to violate the statute or that Quinn was aware that JDC's alleged failure to pay Sudofsky's wages was a violation of Pennsylvania law for which he could be held personally liable and subject to the jurisdiction of Pennsylvania courts. See e. g. Central Pa. Teamsters Pension Fund v. Burten, 634 F. Supp. 128 (E.D. Pa. 1986). Plaintiff has failed to produce evidence of minimum contacts sufficient to permit this Court to exercise personal jurisdiction over the Defendant as to the PWPCL claim.
2. Misrepresentation Claims
Plaintiff also argues this Court may exercise jurisdiction over Defendant Quinn in relation to his misrepresentation claims. Plaintiff argues that the misrepresentations made by Quinn in June 2001 are sufficient to establish personal jurisdiction over Quinn. Plaintiff argue that these actions constitute sufficient minimum contacts with the forum.
Defendant Quinn argues that Plaintiff has only identified one contact with the forum, his business tip in June 2001. Quinn states that during this visit he did not discuss Plaintiff's employment or the commission structure. See Quinn Affidavit. In addition, Quinn argues any contacts with the forum were as a corporate officer or agent of JDC and cannot be used to confer personal jurisdiction. Id.
In rebuttal, Plaintiff submits his own affidavit that contradicts Quinn's. Plaintiff states Quinn did discuss the commission structure during the June 2001 visit and orally agreed to a structure. See Affidavit of Michael Sudofsky. Plaintiff also argues the corporate officer shield is inapplicable to Quinn as he is alleged to have committed several common law torts in his corporate capacity.
Although I must accept Plaintiff's allegations as true, once "the defendant raises the question of personal jurisdiction, the plaintiff bears the burden to prove, by a preponderance of the evidence, facts sufficient to establish personal jurisdiction." Carteret Savings Bank v. Shushan, 954 F.2d 141, 146 (3rd Cir. 1992). Plaintiff has failed to meet this burden. His only evidence of jurisdiction is his affidavit. However, the single event relied upon by the Plaintiff is insufficient to permit a finding that Quinn should have reasonably anticipated being haled into Court in this jurisdiction. As Plaintiff has presented no other evidence that Quinn has minimum contacts with the forum related to his misrepresentation claims, in either an individual or corporate capacity, he has failed to demonstrate by a preponderance of the evidence that this Court has personal jurisdiction over Quinn as to those claims.
3. Interference with Contract Claims
Plaintiff also alleges that Quinn interfered in his employment contract with JDC by undermining his authority and misrepresenting the position and compensation in order to benefit Quinn's position at JDC. Plaintiff also alleges that Quinn caused him to give up a prospective contract relationship with another employer by misrepresenting the JDC opportunity during the negotiations in December 1999. There is no evidence however that any of these alleged activities occurred in Pennsylvania. Defendant Quinn states his participation in the negotiations was limited to Tennessee and Plaintiff does not dispute this. Plaintiff has offered no evidence of minimum contacts to support this Court's exercise of personal jurisdiction in relation to these claims.
For the reasons discussed above, I conclude the Plaintiff has produced insufficient evidence for this Court to exercise personal jurisdiction over Defendant Quinn. Therefore, all claims against Defendant Quinn will be dismissed without prejudice pursuant to Fed.R.Civ.P. 12(b)(2).
II. CLAIMS AGAINST JDC
Defendant JDC does not challenge the legal sufficientcy of the breach of contract or PWPCL claims. In addition Defendant JDC does not challenge this Court's exercise of personal jurisdiction over JDC. JDC argues that pursuant to Fed.R.Civ.P. 12(b)(6) Sudofsky has failed to state a claim for misrepresentation, negligent misrepresentation, unjust enrichment, conversion, interference with current and prospective contracts and for an accounting. All of Plaintiff s claims however share the same factual basis, the events surrounding Defendant JDC's recruitment and retention of the Plaintiff. Plaintiff's claims are alternative theories of recovery based on the same factual circumstances. It would serve no purpose at this early point in the litigation to limit Plaintiff's avenues of recovery when the underlying facts and events for all claims are the same. The allegations that support Counts I and II are, under the different theories advanced by the Plaintiff, a sufficient basis to withstand a 12(b)(6) motion to dismiss all of the claims asserted by the Plaintiff against JDC. Therefore Defendants' Motion to Dismiss Counts III (misrepresentation), IV (negligent misrepresentation), V (unjust enrichment), VI (conversion), VIII (interference with contract), DC (interference with prospective economic advantage) and X (an accounting) will be denied.
An appropriate order follows.
ORDER
AND NOW this ___ day of September, 2003, IT IS HEREBY ORDERED that:
1. Defendants' Motion to Dismiss all claims against Defendant James Quinn pursuant to Fed.R.Civ.P. 12(b)(2) is GRANTED WITHOUT PREJUDICE; and
2. Defendants' Motion to Dismiss Counts III-VI and VIII-X as to Defendant JDC pursuant to Fed.R.Civ.P. 12(b)(6) is DENIED.