D&G Group, S.R.I. v. H.A. Import USA et al

Filing 16

OPINION re: 7 MOTION to Dismiss. filed by Pasquale Morello. For the reasons given above, defendant's motion to dismiss this action is denied. This opinion resolves the item listed as document number seven in this case. SO ORDERED. (See Opinion.) (Signed by Judge Thomas P. Griesa on 2/18/2015) (ajs)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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D&G GROUP, S.R.I.,
Plaintiff,
14-CV-2850 (TPG)
-againstOPINION

H.A. IMPORT USA et al.,
Defendants.

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Italian company D&G Group, SRI brings this breach of contract
action against American company HA. Import USA, Inc. and individually
named defendant Pasquale Morello. The claims arise under state law and
the United Nations Convention on Contracts, which the United States has
ratified.
Defendant Morello, proceeding pro se, moves to dismiss the
complaint, arguing that plaintiff inflated the amount in controversy in
order to satisfy the requirements for diversity jurisdiction. For the
following reasons, defendant Morello's motion to dismiss the complaint is
denied.
Factual Allegations
Plaintiff D&G Group, SRI is an Italian company with its principal
place of business in Italy. Compl.

~

4. Defendant HA Import, USA, Inc. is

a United States corporation with its principal place of business in
California. Compl.

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5. Defendant Morello is a resident of New York State.

Compl. ~ 6. From November of 2012 until April of 2013, defendants
ordered food products from plaintiff to be shipped from Italy to New York
City. Compl. ~ 10. Defendants agreed to pay plaintiff the value of the
goods, which were "worth more than $86,000." Compl. ~ 10. Defendant
Morello contracted with plaintiff individually and "never asserted that he
was merely acting as an officer of HA Import USA, Inc." Com pl.

~

13.

In August of 2012, defendant Morello tendered partial payment for
the goods by personal check in the amount of $10,000. Compl.

~ 14.

In

January of 2014, plaintiff submitted a letter to defendants demanding
payment for an outstanding balance of $96,521.29. Compl. ~ 15.
Defendants have refused to tender payment on the outstanding principal
balance and have not offered to return the goods. Compl.

~~

16-17.

Plaintiff brings suit for breach of contract pursuant to Article 74 of the
United Nations Convention on Contracts for the International Sale of
Goods and pursuant to New York law. Compl.

~~

18-25. Plaintiff seeks

$96,521.29 plus interest. Compl. at 4.
Defendant Morello moves to dismiss the action for lack of subject
matter jurisdiction, arguing that the amount in controversy is less than
$75,000. Dkt. # 7.
Discussion
Defendant moves under Federal Rule of Civil Procedure 12(b)(1) to
dismiss the case for lack of subject matter jurisdiction. In deciding a
motion to dismiss pursuant to Rule 12(b)(1), the court will accept the

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factual allegations in the complaint as true and draw all reasonable
inferences in the plaintiff's favor. See Aurecchione v. Schoolman Transp.
Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005).
As to the motion, one basis of federal jurisdiction is diversity of
citizenship. 28 U.S.C. § 1332. The amount in controversy must exceed
$75,000. Id. § 1332(a). Federal courts also have jurisdiction over treaty
matters. Federal courts have jurisdiction over all civil actions arising under
the treaties of the United States. 28 U.S.C. § 1331. The United Nations
Convention on Contracts for the International Sale of Goods ("CISG") is a
multilateral treaty between several sovereign states, including the United
States and the Italian Republic. Delchi Carrier SPA v. Rotorex Corp., 71
F.3d 1024, 1028 (2d Cir. 1995). The CISG provides a private right of action
enforceable in federal court. Id., see also Hanwha Corp. v. Cedar
Petrochemicals, Inc., 760 F. Supp. 2d 426, 430 (S.D.N.Y. 2011). Among
other things, the CISG provides for damages where there is a breach of
contract involving the sale of goods. CISG art. 74, reprinted in 15 U.S.C.
App.
Finally, 28 U.S.C. § 1367 provides federal courts with "supplemental
jurisdiction" over state law claims "forming the same case or controversy"
as claims over which the federal courts otherwise have jurisdiction. 28
U.S.C. § 1367. Claims will "'form part of the same case or controversy' if
they 'derive from a common nucleus of operative fact."' Shahriar v. Smith
& Wollensky Rest. Grp., Inc., 659 F.3d 234, 245 (2d Cir. 2011) (quoting

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Briarpatch Ltd .. L.P. v. Phoenix Pictures. Inc., 373 F.3d 296, 308 (2d
Cir.2004)).
Defendant Morello's motion to dismiss should be denied because
plaintiff has shown two grounds for federal court jurisdiction in this
matter. First, plaintiff has correctly invoked this court's diversity of
citizenship jurisdiction. The complaint alleges, and the court accepts as
true, that the parties in this case are citizens of the Italian Republic
(plaintiff), the State of California (defendant HA Import, USA, Inc.), and the
State of New York (defendant Morello). Thus, there is complete diversity of
citizenship among them. Moreover, the complaint alleges an amount in
controversy of $96,521.29.
Second, plaintiff brings its breach of contract claims pursuant to
both the United Nations Convention on Contracts, and also pursuant to
state law. Because federal courts have jurisdiction over all civil actions
arising under the treaties of the United States, plaintiff has successfully
invoked this court's jurisdiction pursuant to 28 U.S.C. § 1331. Plaintiff
also asserts a valid claim under state contract law. The court has
supplemental jurisdiction over the state law claim because it shares a
common nucleus of operative facts to the treaty law claim. Thus, even if
diversity jurisdiction were lacking, as defendant argues, this court has
subject matter jurisdiction over the case by virtue of the treaty-law claim
and supplemental jurisdiction over the state-law claim.

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Defendant Morello moves to dismiss this action claiming that
plaintiff "inflated the invoice in question so that they can place a lawsuit
in federal court." Dkt. 7 at 2. Defendant also argues that the amount in
controversy should be reduced by $14,000 to reflect a down payment he
made. Dkt. # 7 at 2. The claim of "inflated invoice" has no substance aside
from the allegation regarding the $14,000. Moreover, even if the court were
to apply this $14,000 deduction, the amount in controversy would still be
$82,521.29, in excess of the amount required for diversity jurisdiction.
Thus, plaintiff has adequately invoked this court's diversity jurisdiction
pursuant to 28 U.S.C. § 1332.
Conclusion
For the reasons given above, defendant's motion to dismiss this
action is denied. This opinion resolves the item listed as document number
seven in this case.

SO ORDERED
Dated: New York, New York
February 18, 2015

Thomas P. Griesa
U.S. District Judge

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