Montgomery v. National Association of Postal Supervisors

Filing 63

MEMORANDUM OPINION AND ORDER Signed by the Honorable Robert M. Dow, Jr. on 8/29/2017. Mailed notice(cdh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JEAN A. MONTGOMERY,
Plaintiff,
v.
CHARLES SCIALLA, WILLIAM
SIMPSON, SCIALLA ASSOCIATES,
INC. and NATIONAL ASSOCIATION
OF POSTAL SUPERVISORS,

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Case No. 15-cv-10840
Judge Robert M. Dow, Jr.

Defendants.
MEMORANDUM OPINION AND ORDER
Plaintiff Jean A. Montgomery, a former postal service supervisor, brings suit against
Defendants Charles Scialla, William Simpson, Scialla Associates, Inc. (“Scialla Associates”),
and the National Association of Postal Supervisors (“NAPS”) to redress Defendants’ alleged
violation of a contract (or contracts) to provide legal representation to Plaintiff in her appeal
before the Merit Systems Protection Board (“MSPB”). Before the Court is Defendants’ motion
to dismiss for failure to state a claim [57]. Because the Court has detected flaws in Plaintiff’s
pleading of jurisdictional facts, it denies Defendants’ motion [57] without prejudice. Plaintiff
shall have until September 27, 2017 to file a third amended complaint that contains sufficient
jurisdictional allegations. Plaintiff is given leave to file a motion for jurisdictional discovery, if
she believes that such a motion is necessary to enable her to file a third amended complaint
correcting the errors identified herein.
I.

Background
Plaintiff Jean A. Montgomery was a long-term employee of the U.S. Postal Service,

eventually reaching the rank of customer service manager at the Englewood neighborhood post

office in Chicago, Illinois. See [47] at ¶ 4. On April 2, 2012, Plaintiff was served with a Notice
of Proposed Removal from the Postal Service based on charges of Failure to Report an Accident
and Failure to Perform Assigned Duties, and she was ultimately removed. Id. at ¶ 27. Plaintiff
challenged her removal before the MSPB, and, by way of her membership in NAPS, Plaintiff
was represented in a hearing before that body by William Simpson of Scialla Associates. Id.
¶¶ 6, 36. Plaintiff alleges that Charles Scialla, the president of Scialla Associates, also filed
documents on her behalf in the MSPB proceeding. Id. ¶¶ 5, 51, 53. According to Plaintiff,
neither Simpson nor Scialla is an attorney. Id. at ¶ 45. In February 2013, an administrative
judge upheld Plaintiff’s termination as lawful. Proceeding pro se, Plaintiff requested that the full
MSPB review the administrative judge’s decision; the MSPB upheld the decision in October
2013. See Montgomery v. Donahoe, 602 F. App’x 638, 640 (7th Cir. 2015). The MSPB’s
decision was affirmed by the United States Court of Appeals for the Federal Circuit. See
Montgomery v. U.S. Postal Serv., 566 F. App’x 968 (Fed. Cir. 2014) (per curiam), cert. denied,
135 S. Ct. 426 (2014), reh’g denied, 135 S. Ct. 777 (2014).1
On December 2, 2015, Plaintiff brought suit against NAPS and Scialla Associates under
42 U.S.C. §§ 1983, 1985, and 1986 to redress Defendants’ alleged denial of fair representation to
Plaintiff at a January 16, 2013 hearing before the MSPB. [1]. NAPS and Scialla Associates
eventually moved to dismiss [21], and the Court granted the motion on December 7, 2016. [46].
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In addition to her direct appeal to the Federal Circuit, Plaintiff has filed numerous other lawsuits and
appeals concerning the merits of her termination (and also concerning the judges who rendered decisions
in these cases): Montgomery v. Donahoe, No. 13-cv-7137, 2014 WL 11395173 (N.D. Ill. July 11, 2014)
(Zagel, J.), aff’d, 602 F. App’x 638 (7th Cir. 2015), reh’g denied (Apr. 2, 2015), cert. denied sub nom.
Montgomery v. Brennan, 135 S. Ct. 2909 (2015), reh’g denied, 136 S. Ct. 23 (2015); Montgomery v.
Brennan, No. 15-cv-4635, Docket Entry [21] (N.D. Ill. Sept. 21, 2015) (Zagel, J.), aff’d, No. 15-3567 (7th
Cir. Jan. 26, 2016); Montgomery v. Brennan, No. 16-cv-533, 2017 WL 951352 (N.D. Ill. March 8, 2017)
(Pallmeyer, J.); see also Montgomery v. Wood, 15-cv-6604, Docket Entry [6] (N.D. Ill. Aug. 27, 2015)
(Bucklo, J.), aff’d, No. 15-3098 (7th Cir. March 4, 2016), cert. denied, 137 S. Ct. 71 (2016); Montgomery
v. Manrose, No. 15-cv-11083, Docket Entry [5] (N.D. Ill. Dec. 15, 2015) (Gottschall, J.), aff’d, No. 161041 (7th Cir. July 13, 2016).

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In doing so, the Court granted Plaintiff leave to file an amended complaint with the following
instructions:
Plaintiff shall have until January 9, 2017 to file an amended complaint for statelaw breach of contract only, to the extent that Plaintiff can do so consistent with
this opinion. In her amended complaint, Plaintiff must allege a basis for this
Court to exercise diversity jurisdiction over Defendants, or the case will be
dismissed for lack of subject matter jurisdiction. Plaintiff should also identify:
(a) the parties to each alleged contract; (b) whether the contract was oral or
written; (c) when the contract was made; (d) the relevant terms of the contract;
(e) how the contract was breached; and (f) how Plaintiff was damaged as a result
of the breach.
See [46] at 1–2. Plaintiff filed a “second amended complaint” by the deadline imposed by the
Court [47], adding two new defendants in the process: Charles Scialla and William Simpson. In
brief, the second amended complaint alleges that Defendants breached a contract (or contracts,
the complaint is not clear) to provide Plaintiff with “legal representation” before the MSPB.
Defendants again have moved to dismiss, arguing that Plaintiff’s second amended complaint
fails to adequately allege a breach of contract by any Defendant. See [57], [59].
II.

Discussion
The Court has already explained to Plaintiff that federal district courts are “courts of

limited jurisdiction.” Healy v. Metro. Pier & Exposition Auth., 804 F.3d 836, 845 (7th Cir.
2015). They have original “federal question” jurisdiction over “all civil actions arising under the
Constitution, laws, or treaties of the United States.”

28 U.S.C. § 1331.

They also have

“diversity” jurisdiction over all civil actions in which two requirements are met. First, there
must be complete diversity of citizenship between all named plaintiffs and all named defendants.
See 28 U.S.C. § 1332(a); Howell v. Tribune Entertainment Co., 106 F.3d 215, 217 (7th Cir.
1997) (complete diversity of citizenship means that “none of the parties on either side of the
litigation may be a citizen of the state of which a party on the other side is a citizen”) (citing
Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806)). The second requirement is
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that the matter in controversy must “exceed[] the sum or value of $75,000, exclusive of interest
and costs.” 28 U.S.C. § 1332(a).
The Seventh Circuit requires “scrupulous adherence to the limitations on the subjectmatter jurisdiction of the federal courts.” Meyerson v. Harrah’s E. Chi. Casino, 299 F.3d 616,
617 (7th Cir. 2002) (per curiam). In other words, “jurisdiction is a threshold requirement that
must be satisfied before a court can pass judgments on the merits.” Rawlins v. Select Specialty
Hosp. of Nw. Indiana, Inc., 2014 WL 1647182, at *2 (N.D. Ill. Apr. 23, 2014) (citations
omitted); see also Smith v. Am. Gen. Life & Accident Ins. Co., 337 F.3d 888, 892 (7th Cir. 2003)
(the court has an independent obligation to satisfy itself that federal subject matter jurisdiction
exits before proceeding to the merits even where the parties have not questioned the existence of
jurisdiction). In a case filed in federal court, the plaintiff—as the proponent of federal subject
matter jurisdiction—has the burden to prove its existence.

See Meridian Sec. Ins. Co. v.

Sadowski, 441 F.3d 536, 540 (7th Cir. 2006) (citing McNutt v. General Motors Acceptance Corp.
of Ind., 298 U.S. 178, 189 (1936)); Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 447–
48 (7th Cir. 2005).
Plaintiff’s second amended complaint relies on diversity of citizenship for federal
jurisdiction. Regarding the parties to the action, the second amended complaint contains the
following allegations:


At all times herein mentioned, Plaintiff Jean Montgomery * * * was a resident of
Cook County, Illinois, and was employed by the United States Postal Service in the
State of Illinois for almost 45 years, and was last employed as the Manager of
Customer Service at the Englewood Post Office when she was terminated.



At all times herein mentioned, Defendant Charles Scialla * * * was a resident of
Fairfield, New Jersey, and is the president of Defendant Scialla Associates, Inc.



At all times herein mentioned, Defendant William Simpson * * * was a resident of
Philadelphia, Pennsylvania, and is an employee of Defendant Scialla Associates, Inc.

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

At all times herein mentioned, Defendant Scialla Associates, Inc. * * * was and is
believed and alleged hereon to be a corporation duly organized and existing under the
laws of another state, and operating within the jurisdiction of this Court.



At all times herein mentioned, Defendant National Association of Postal Supervisors
* * * was and is believed and alleged hereon to be a corporation duly organized and
existing under the laws of another state, having its headquarters and principal offices
in Alexandria, Virginia and operating within the jurisdiction of this Court.

[47] at ¶¶ 4–8. These allegations fail to properly allege the citizenship of Plaintiff and all four
defendants for a number of reasons.
First, Plaintiff only alleges that she, Charles Scialla, and William Simpson were
“resident[s]” of particular states: Illinois, New Jersey, and Pennsylvania, respectively. To
invoke diversity jurisdiction, however, a natural person must be alleged to be a citizen of a state,
not a resident of a state.

Meyerson, 299 F.3d at 617 (“residence and citizenship are not

synonyms and it is the latter that matters for purposes of the diversity jurisdiction”); see also
Heinen v. Northrop Grumman Corp., 671 F.3d 669, 670 (7th Cir. 2012) (an allegation of
“residence” is deficient). Rather, the citizenship of an individual is determined by domicile,
which is established by residence plus an intent to remain. Miss. Band of Choctaw Indians v.
Holyfield, 490 U.S. 30, 48 (1989); Myrick v. WellPoint, Inc., 764 F.3d 662, 664 (7th Cir. 2014)
(“Citizenship means domicile (the person’s long term plan for a state of habitation) rather than
just current residence.”); Heinen, 671 F.3d at 670 (“residence may or may not demonstrate
citizenship, which depends on domicile—that is to say, the state in which a person intends to live
over the long run”); accord Dakuras v. Edwards, 312 F.3d 256, 258 (7th Cir. 2002). Documents
attached to the second amended complaint do not fill the gaps in Plaintiff’s jurisdictional
allegations here, because they merely indicate that Charles Scialla may have maintained multiple
business addresses within New Jersey over the years and that William Simpson maintained a
business address in Pennsylvania during the MSPB appeal.

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Accordingly, Plaintiff must

investigate and allege the citizenship of these individuals (as well as allege her own citizenship)
in order to proceed.
The second amended complaint also fails to indicate the citizenship of the two corporate
defendants. For the purpose of determining citizenship, a corporation is a citizen of “any State
and foreign state by which it has been incorporated and of the State or foreign state where it has
its principal place of business.” 28 U.S.C. § 1332(c); see also Hertz Corp. v. Friend, 559 U.S.
77, 80 (2010) (“the phrase ‘principal place of business’ refers to the place where the
corporation’s high level officers direct, control, and coordinate the corporation’s activities”).
Looking first at Scialla Associates, Plaintiff has failed to even attempt to allege the
state(s) of this entity’s citizenship. With regard to state of incorporation, Plaintiff alleges only
that Scialla Associates “is believed and alleged hereon to be a corporation duly organized and
existing under the laws of another state.” This allegation is plainly inadequate; it tells the Court
nothing about where Scialla Associates is incorporated. Is it a state other than the three already
mentioned? Is it a state other than the one listed in the preceding paragraph—Pennsylvania? Is
it a state other than Illinois? This allegation also is unacceptable because it is improperly based
(at least in part) on information and belief. See, e.g., America’s Best Inns, Inc. v. Best Inns of
Abilene, L.P., 980 F.2d 1072, 1074 (7th Cir. 1992) (allegations concerning a party’s citizenship
based only “on information and belief” are insufficient); Plum, PBC v. Watershed Foods, LLC,
2016 WL 9051167, at *1 (C.D. Ill. Jan. 6, 2016) (“Asserting jurisdiction on the basis of
‘information and belief’ is insufficient to invoke diversity jurisdiction.”). Indeed, when alleging
citizenship, Federal Rule of Civil Procedure 11 imposes a “duty of reasonable precomplaint
inquiry not satisfied by rumor or hunch.” See Bankers Trust Co. v. Old Republic Ins. Co., 959
F.2d 677, 683 (7th Cir. 1992) (citations omitted); Multi-M Int’l, Inc. v. Paige Med. Supply Co.,

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142 F.R.D. 150, 152 (N.D. Ill. 1992) (jurisdictional allegations made on information and belief
must be ignored). In addition to these deficiencies, the second amended complaint is silent on
the state where Scialla Associates maintains its principal place of business. Although later
allegations in the second amended complaint indicate that at some point in time this entity had an
address in Fairfield, New Jersey, the Court cannot conclude from this allegation alone that
Scialla Associates is a citizen of New Jersey.
Looking next to NAPS, Plaintiff has done a slightly better, but still insufficient, job in
alleging the citizenship of this entity. Plaintiff has alleged that NAPs maintains its “headquarters
and principal offices” in Virginia. Yet with regard to state of incorporation, Plaintiff again
inadequately alleges on belief that NAPS is organized under the laws of “another state.”
In light of these deficient citizenship allegations, the Court cannot be satisfied that it has
diversity jurisdiction over this matter. In order to proceed, Plaintiff must file a third amended
complaint that identifies the citizenship of all named parties and demonstrates that no defendant
is a citizen of the state in which she is a citizen. Plaintiff must make such allegations after a
reasonable inquiry, perhaps into records maintained by certain secretaries of state or by way of
conducting limited jurisdictional discovery if necessary.2

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As an additional matter, Plaintiff’s third amended complaint must also put forth sufficient allegations to
demonstrate that she meets the $75,000 amount-in-controversy requirement for diversity jurisdiction. In a
case where the plaintiff seeks money damages, “[t]he amount in controversy is ‘whatever is required to
satisfy the plaintiff’s demand, in full, on the date the suit begins.’” Fulcrum Fin. Advisors, Ltd. v. BCI
Aircraft Leasing, Inc., 354 F. Supp. 2d 817, 824 (N.D. Ill. 2005) (citation omitted). The plaintiff must
make “a good faith claim in excess of $75,000.00 in order to create federal jurisdiction.” Id. Plaintiff’s
second amended complaint alleges that Defendants’ “breaches” caused her to lose her position with the
Postal Service and that she has “sustained damages far in excess of the sum of $75,000.” See [47] at
¶¶ 55–56. When the jurisdictional amount in controversy is uncontested, courts generally “accept the
plaintiff’s good faith allegation of the amount in controversy unless it ‘appear[s] to a legal certainty that
the claim is really for less than the jurisdictional amount.’” McMillian v. Sheraton Chi. Hotel & Towers,
567 F.3d 839, 844 (7th Cir. 2009) (quoting Rexford Rand Corp. v. Ancel, 58 F.3d 1215, 1218 (7th Cir.
1995)). Accordingly, absent challenge by Defendant or a showing of bad faith, the Court will accept
Plaintiff’s amount-in-controversy allegations. Defendants’ motion to dismiss, however, argues that
Plaintiff has failed to sufficiently allege damages in her second amended complaint. See [59] at 10–11.

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As a final note, the Court reiterates its prior instructions to Plaintiff with regard to her
claim(s) for breach of contract. A claim for breach of contract must “allege[] enough facts to put
[a defendant] on fair notice of the ‘contractual duty’ it breached.” Peerless Network, Inc. v. MCI
Commc’n Servs., Inc., 2015 WL 2455128, at *7 (N.D. Ill. May 21, 2015). Plaintiff’s second
amended complaint alleges that she entered into “written and oral agreements” with all
Defendants “whereby Defendants would and did represent her on the appeal before the” MSPB.
See [47] at ¶ 38. She further alleges that the written and oral agreements between her and NAPS,
Charles Scialla, and Scialla Associates “reassured” her “that she was being represented by
attorneys licensed to practice law.” Id. at ¶ 39. Plaintiff has not attached any contracts or other
relevant writings to her complaint.
The Court takes this opportunity to remind Plaintiff that she must allege facts that
plausibly support the four elements of a breach of contract claim: “(1) the existence of a valid
and enforceable contract; (2) substantial performance by the plaintiff; (3) a breach by the
defendant; and (4) resultant damages.” Angelopoulos v. Keystone Orthopedic Specialists, S.C.,
2016 WL 4945012, at *6 (N.D. Ill. Sept. 16, 2016) (internal citation and quotation marks
omitted). In her third amended complaint, Plaintiff should identify with enough specificity to
provide each of the four Defendants with fair notice of her breach of contract claim or claims:
(a) the parties to each alleged contract; (b) whether the contract was oral or written; (c) when the
contract was made; (d) the relevant terms of the contract; (e) how the contract was breached; and
(f) how Plaintiff was damaged as a result. As it currently stands, Plaintiff’s second amended
complaint does not contain all of this information. Plaintiff is reminded that if she asserts the
Plaintiff therefore has notice of a challenge to the amount-in-controversy allegations as currently pled,
and she potentially may encounter a similar challenge in a renewed motion to dismiss if these allegations
remain unchanged in her third amended complaint. If challenged by Defendant in any appropriate
manner, “[a] plaintiff is required to supply ‘competent proof’ of the amount in controversy.” Enbridge
Pipelines (Illinois) L.L.C. v. Moore, 633 F.3d 602, 605 (7th Cir. 2011) (quoting McNutt, 298 U.S. at 189).

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existence of an oral contract or contracts, she ultimately bears the burden of proving “the terms
of the agreement and the definite and certain nature of the terms.” Hegele v. Hegele, 1998 WL
832659, at *3 (N.D. Ill. Nov. 17, 1998) (citing In re Estate of Kern, 142 Ill. App. 3d 506, 514
(1st Dist. 1986); Panko v. Advanced Appliance Serv., 55 Ill. App. 3d 301, 310 (1st Dist. 1977)).
IV.

Conclusion
For the reasons explained above, the Court denies without prejudice Defendants’ motion

[57] to dismiss Plaintiff’s second amended complaint. Plaintiff shall have until September 27,
2017 to file a third amended complaint containing sufficient jurisdictional allegations. Plaintiff
is given leave to file a motion for jurisdictional discovery if she believes that such a motion is
necessary to enable her to file a third amended complaint correcting the errors identified herein.

Dated: August 29, 2017

_________________________________
Robert M. Dow, Jr.
United States District Judge

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