INTERNATIONAL TOWER SUPPLY, LLC v. MOSKOWITZ et al

Filing 27

OPINION. Signed by Judge Joseph H. Rodriguez on 8/11/2016. (dmr)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
INTERNATIONAL TOWER SUPPLY, LLC, :

Plaintiff,

:

v.

:

Hon. Joseph H. Rodriguez
Civil Action No. 15-2680
OPINION

MICHAEL MOSKOWITZ,
:
CLAUDIA SURACE,
MCALISTER STEEL & TOWER SUPPLY, :
MCALISTER WELDING &
FABRICATING,
:
Defendants.

:

This matter is before the Court on a motion to dismiss the Complaint
filed by Defendants [Doc. 19] and on the Court’s Order to Show Cause why
the matter should not be remanded for want of federal subject matter
jurisdiction [Doc. 23]. Oral argument was heard on August 10, 2016 and
the record of that proceeding is incorporated here. Because this Court lacks
subject matter jurisdiction, the matter must be remanded to State court.
Background
Plaintiff International Tower Supply, LLC filed this action in State
court seeking equitable and legal relief for alleged violations of its March
14, 2014 Employment Agreement1 with Defendant Moskowitz. Allegedly,
Moskowitz was the majority owner of International Tower until his
1

Compl., Ex. B.
1

majority interest was purchased by Blue Diamond, LLC with the express
understanding that Moskowitz would remain a minority owner and
employee of International Tower, resulting in an Operating Agreement 2
dated February 28, 2014 between Plaintiff and Blue Diamond, LLC and
Defendant Moskowitz. (Compl., ¶¶ 11-13.) Further, pursuant to a March 19,
2014 Promissory Note,3 Moskowitz was obligated to pay International
Tower $35,000 plus yearly interest of 5% in twenty-four monthly
installments beginning April 1, 2015. International Tower terminated
Moskowitz’s employment by letter dated February 20, 2015. (Compl. ¶ 46,
Ex. E.)
Plaintiff has alleged that, while in its employ, Moskowitz diverted
money owed to International Tower to himself or an entity formed by him
or Defendant Surace. (Compl., ¶¶ 33, 34.) In addition, Plaintiff alleges that
Moskowitz, through Surace and the McAlister Defendants, acted in direct
competition with International Tower and solicited its customers and
employees in violation of paragraph 11 of the Employment Agreement,
resulting in loss of revenue for International Tower. (Compl., ¶¶ 35-42.)
Count One of the Complaint is against Moskowitz for breach of the
Employment Agreement and Operating Agreement and seeks injunctive
2
3

Compl., Ex. A.
Compl., Ex. C.
2

relief and damages. Count Two alleges that Surace and the McAlister
Defendants intentionally and/or negligently interfered in the two
agreements between International Tower and Moskowitz, and claims
injunctive relief and damages. Count Three states Moskowitz breached the
implied duty of good faith and fair dealing inherent in the agreements and
seeks damages for the breach. Count Four seeks damages for Moskowitz’s
breach of fiduciary duty owed to Plaintiff. Count Five is for breach of
contract by Moskowitz in that he has failed to pay the $35,000 allegedly
owed under the promissory note. Count Six alleges breach of contract in
that Moskowitz has failed to relinquish his ownership interest in
International Tower as called for by the Operating Agreement. Finally,
Count Seven seeks damages from Moskowitz for his alleged breach of
International Tower’s “contractual expectations.”
Applicable Standards
Federal Rule of Civil Procedure 12(b)(6) allows a party to move for
dismissal of a claim based on “failure to state a claim upon which relief can
be granted.” Fed. R. Civ. P. 12(b)(6). A complaint should be dismissed
pursuant to Rule 12(b)(6) if the alleged facts, taken as true, fail to state a
claim. Fed. R. Civ. P. 12(b)(6). When deciding a motion to dismiss
pursuant to Rule 12(b)(6), ordinarily only the allegations in the complaint,
matters of public record, orders, and exhibits attached to the complaint, are
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taken into consideration. 1 See Chester County Intermediate Unit v. Pa.
Blue Shield, 896 F.2d 808, 812 (3d Cir. 1990). It is not necessary for the
plaintiff to plead evidence. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 446
(3d Cir. 1977). The question before the Court is not whether the plaintiff
will ultimately prevail. Watson v. Abington Twp., 478 F.3d 144, 150 (2007).
Instead, the Court simply asks whether the plaintiff has articulated “enough
facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007).
“A claim has facial plausibility 2 when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (citing Twombly, 550 U.S. at 556). “Where there are wellpleaded factual allegations, a court should assume their veracity and then

1“Although

a district court may not consider matters extraneous to the
pleadings, a document integral to or explicitly relied upon in the complaint
may be considered without converting the motion to dismiss into one for
summary judgment.” U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383,
388 (3d Cir. 2002) (internal quotation marks and citations omitted)
(emphasis deleted). Accord Lum v. Bank of Am., 361 F.3d 217, 221 n.3 (3d
Cir. 2004) (citations omitted).
2This plausibility standard requires more than a mere possibility that
unlawful conduct has occurred. “When a complaint pleads facts that are
‘merely consistent with’ a defendant’s liability, it ‘stops short of the line
between possibility and plausibility of ‘entitlement to relief.’’” Id.
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determine whether they plausibly give rise to an entitlement to relief.”
Iqbal, 556 U.S. at 679.
The Court need not accept “‘unsupported conclusions and
unwarranted inferences,’” Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir.
2007) (citation omitted), however, and “[l]egal conclusions made in the
guise of factual allegations . . . are given no presumption of truthfulness.”
Wyeth v. Ranbaxy Labs., Ltd., 448 F. Supp. 2d 607, 609 (D.N.J. 2006)
(citing Papasan v. Allain, 478 U.S. 265, 286 (1986)); see also Kanter v.
Barella, 489 F.3d 170, 177 (3d Cir. 2007) (quoting Evancho v. Fisher, 423
F.3d 347, 351 (3d Cir. 2005) (“[A] court need not credit either ‘bald
assertions’ or ‘legal conclusions’ in a complaint when deciding a motion to
dismiss.”)). Accord Iqbal, 556 U.S. at 678-80 (finding that pleadings that
are no more than conclusions are not entitled to the assumption of truth).
Further, although “detailed factual allegations” are not necessary, “a
plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’
requires more than labels and conclusions, and a formulaic recitation of a
cause of action’s elements will not do.” Twombly, 550 U.S. at 555 (internal
citations omitted). See also Iqbal, 556 U.S. at 678 (“Threadbare recitals of
the elements of a cause of action, supported by mere conclusory statements,
do not suffice.”).

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Thus, a motion to dismiss should be granted unless the plaintiff’s
factual allegations are “enough to raise a right to relief above the
speculative level on the assumption that all of the complaint’s allegations
are true (even if doubtful in fact).” Twombly, 550 U.S. at 556 (internal
citations omitted). “[W]here the well-pleaded facts do not permit the court
to infer more than the mere possibility of misconduct, the complaint has
alleged-but it has not ‘shown’-‘that the pleader is entitled to relief.’” Iqbal,
556 U.S. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).
However, in the absence of subject matter jurisdiction, the Court
cannot consider the motion of the Defendants, and “[i]f at any time before
final judgment it appears that the district court lacks subject matter
jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c); Boyer v.
Snap-on Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990).
Invoking diversity jurisdiction, 28 U.S.C. § 1332(a)(1), Defendants
removed the case to this Court. See 28 U.S.C. § 1441(a), (b). For diversity
jurisdiction to exist, no defendant in a civil action may be a citizen of the
same state as any plaintiff. See 28 U.S.C. § 1332(a)(1). Because this matter
began in State court, diversity must have existed both when the Complaint
was filed and when the matter was removed. 14B Charles A. Wright &
Arthur R. Miller, Federal Practice and Procedure § 3723 & n. 15 (4th ed.
2009) (collecting cases). The removing party must establish federal
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jurisdiction. Hertz Corp. v. Friend, 559 U.S. 77, 96-97 (2010). In
determining whether diversity exists, “the court may . . . insist that
jurisdictional facts be established . . . by a preponderance of evidence.”
McNutt v. General Motors Acceptance Corp. of Indiana, 298 U.S. 178, 189
(1936).
Finally, “[a] civil action otherwise removable solely on the basis of the
jurisdiction under section 1332(a) of this title may not be removed if any of
the parties in interest properly joined and served as defendants is a citizen
of the State in which such action is brought.” 28 U.S.C. § 1441(b)(2). 4

“Because a party who urges jurisdiction on a federal court bears the
burden of proving that jurisdiction exists, a removing party who charges
that a plaintiff has fraudulently joined a party to destroy diversity of
jurisdiction has a ‘heavy burden of persuasion.’” Boyer v. Snap-on Tools
Corp., 913 F.2d 108, 111 (3d Cir. 1990) (citation omitted). “[J]oinder is
fraudulent where there is no reasonable basis in fact or colorable ground
supporting the claim against the joined defendant, or no real intention in
good faith to prosecute the action against the defendant or seek a joint
judgment. . . . If there is even a possibility that a State court would find that
the complaint states a cause of action against any one of the resident
defendants, the federal court must find that joinder was proper and remand
the case to state court.” Id.
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Conclusion
As discussed during oral argument, it is undisputed Plaintiff is a
citizen of New Jersey, as are the McAlister Defendants. Accordingly, there
is no diversity of citizenship and the case must be remanded. An agreed
upon Order accompanies this Opinion.
Dated: August 11, 2016

/s/ Joseph H. Rodriguez
JOSEPH H. RODRIGUEZ
USDJ

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