Apex Tool Grp., LLC v. Dmtco, LLC

Decision Date07 November 2014
Docket NumberCase No. 3:13-cv-00372
PartiesAPEX TOOL GROUP, LLC, Plaintiff, v DMTCO, LLC, et al., Defendants.
CourtU.S. District Court — Southern District of Ohio

District Judge Thomas M. Rose

Magistrate Judge Michael R. Merz


Before the Court is Defendants' Motion to Dismiss (Doc. No. 22). Plaintiff filed a Memorandum in Opposition ("Response," Doc. No. 25). Defendant did not file a Reply and the time to do so is now exhausted.

This case was referred to a magistrate judge on May 22, 2014. (Preliminary Pretrial Order, Doc. No. 17.) Motions to dismiss involuntarily are classified as dispositive under 28 U.S.C. § 636(b) and Fed. R. Civ. P. 72, requiring a recommended disposition from a Magistrate Judge to whom they are referred.

As of October 30, 2013, the time of the filing of the Complaint, Plaintiff Apex Tool Group "Apex," was a Delaware limited liability company, with its principal place of business located in Maryland, and registered to do business in the State of Ohio. (Complaint, Doc. No. 1, PageID 2.) Defendants DMTCO, LLC, "DMTCO," was an Ohio limited liability company maintaining its principal place of business in the State of Ohio. Id. at PageID 3. Additionally,Defendants named in their individual capacity, Defendants Newland, Lovelace, and Stevens ("Individual Defendants"), were domiciled in the State of Ohio. Defendant Equipment Group Investments Ltd. ("EGI"), is and was at the time a Texas limited partnership, and "Doe" defendants, are listed as those whose names and addresses are currently unknown. Id. Plaintiff asserts that this Court has personal jurisdiction over Defendants as they conduct business in Ohio and have each committed acts and/or business transactions within the State of Ohio. Id. at PageID 3-4. In addition, the Court has subject matter jurisdiction over the claims asserted pursuant to 28 U.S.C. §§ 1332 and 1367. Id. at PageID 4.

Federal courts are courts of limited jurisdiction; they are empowered to hear only those cases which are within the judicial power of the United States as defined in the United States Constitution and as further granted to them by Act of Congress. Aldinger v. Howard, 427 U.S. 1, 15 (1976). Therefore there is a presumption that a federal court lacks jurisdiction until it has been demonstrated. Turner v. President, Directors and Co. of the Bank of North America, 4 U.S. 8 (1799). Facts supporting subject matter jurisdiction must be affirmatively pleaded by the person seeking to show it. Bingham v. Cabot, 3 U.S. 382 (1798). The burden of proof is on the party asserting jurisdiction if it is challenged. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 182-83_(1935). A federal court is further obliged to note lack of subject matter jurisdiction sua sponte. Answers in Genesis of Ky., Inc. v. Creation Ministries Int'l, Ltd., 556 F.3d 459, 465 (6th Cir. 2009).

Plaintiff states that there is diversity among parties and that they seek to recover damages in excess of $75,000, exclusive of interest and costs. (Complaint, Doc. No. 1, PageID 2-3, ¶¶ 210, 16.) Venue is proper in the Dayton location of court as each of the Individual Defendants resides within this district. Additionally, a substantial part of the events or omissions giving riseto the underlying claims of the Complaint occurred in this judicial district. Id. at PageID 4, ¶¶ 17-19. Thus, subject matter jurisdiction is proper in this district pursuant to 28 U.S.C. § 1332 and 1367, as is venue in the Dayton location of courts pursuant to 28 U.S.C. § 1391 and S.D. Ohio Civ. R. 82.1(b) and (c). Id.

Statement of Law

In a diversity action such as this, the district court is obliged to apply the choice of law rules of the State in which it sits. Klaxon v. Stentor Electric Mfg. Co., 313 U.S. 487, 491 (1941); Boyd v. LaMaster, 927 F.2d 237 (6th Cir. 1991); Macurdy v. Sikov & Love, P.A., 894 F.2d 818 (6th Cir. 1990). A federal court exercising diversity subject matter jurisdiction over state law claims must apply state substantive law to those claims. 28 U.S.C. § 1652; Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938). In applying state law, the Sixth Circuit follows the law of the State as announced by that State's supreme court. Savedoff v. Access Group, Inc., 524 F.3d 754, 762 (6th Cir. 2008); Ray Industries, Inc. v. Liberty Mut. Ins. Co., 974 F.2d 754, 758 (6th Cir. 1992); Miles v. Kohli & Kaliher Assocs., 917 F.2d 235, 241 (6th Cir. 1990). "Where the Ohio Supreme Court [state supreme court] has not spoken, our task is to discern, from all available sources, how that court would respond if confronted with the issue." In re Akron-Cleveland Auto Rental, Inc., 921 F.2d 659, 662 (6th Cir. 1990); Bailey v. V & O Press Co., 770 F.2d 601 (6thCir. 1985); Angelotta v. American Broadcasting Corp., 820 F.2d 806 (6th Cir. 1987). The available sources to be considered if the highest court has not spoken include relevant dicta from the state supreme court, decisional law of appellate courts, restatements of law, law review commentaries, and the "majority rule" among other States. Bailey, 770 F.2d at 604. "Where a state's highest court has not spoken on a precise issue, a federal court may not disregard adecision of the state appellate court on point, unless it is convinced by other persuasive data that the highest court of the state would decide otherwise." Puckett v. Tennessee Eastman Co., 889 F.2d 1481, 1485 (6th Cir. 1989); accord Northland Ins. Co. v. Guardsman Products, Inc., 141 F.3d 612, 617 (6th Cir. 1998); Melson v. Prime Ins. Syndicate, Inc., 429 F.3d 633, 636 (6th Cir. 2005). This rule applies regardless of whether the appellate court decision is published or unpublished. See Talley v. State Farm Fire & Cas. Co., 223 F.3d 323, 328 (6th Cir. 2000); Puckett, 889 F.2d at 1485; Ziegler v. IBP Hog Market, 249 F.3d 509, 517 (6th Cir. 2001).

Respondent's Motion is made under Fed. R. Civ. P. 12(c). In ruling on a motion for judgment on the pleadings, the Court must accept all well-pleaded material allegations of the complaint as true. JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir. 2007); Ziegler, 249 F.3d at 511-12; Paskvan v. City of Cleveland Civil Serv. Comm'n., 946 F.2d 1233, 1235 (6th Cir. 1991), citing Beal v. Missouri Pacific R.R., 312 U.S. 45, 51 (1941). The Court must then decide whether the moving party is entitled to judgment as a matter of law. Lavado v. Keohane, 992 F.2d 601, 605 (6th Cir. 1993). This is the same standard applied in deciding a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). Tucker v. Middleburg-Legacy Place, 539 F.3d 545, 549 (6th Cir. 2008); EEOC v. J. H. Routh Packing Co., 246 F.3d 850, 851 (6th Cir. 2001). When a defendant attaches to a motion for judgment on the pleadings documents which are referenced in but not attached to the complaint, the court may consider the motion as being made under Rule 12(c), rather than converting it to a motion for summary judgment. Weiner v. Klais & Co., 108 F.3d 86 (6th Cir. 1997).

Under Fed. R. Civ. P. Rule 12(c), a party may move for judgment on the pleadings after the pleadings have closed, but not so that trial is delayed. The standard of review for ruling on a motion on the pleadings brought under Rule 12(c) is equivalent to the standard of review for amotion brought under Rule 12(b)(6) for failure to state a claim upon which relief may be granted. Fritz v. Charter Twp. of Comstock, 592 F.3d 718, 722 (6th Cir. 2010); see also Mixon v. Ohio, 193 F.3d 389, 399-400 (6th Cir. 1999); Kline v. Mortg. Elec. Sec. Sys., 2014 U.S. Dist. LEXIS 124406, *8 (S.D. Ohio 2014)(Rice, J.). "The purpose of a motion under Rule 12(b)(6) is to test the formal sufficiency of the statement of the claim for relief; it is not a procedure for resolving a contest about the facts or merits of the case." Wright & Miller, FEDERAL PRACTICE AND PROCEDURE: Civil 2d § 1356 at 294 (1990); see also Gex v. Toys "R" Us, 2007 U.S. Dist. LEXIS 73495, *3-5 (S.D. Ohio, Oct. 2, 2007); Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993), citing Nishiyama v. Dickson County, Tennessee, 814 F.2d 277, 279 (6th Cir. 1987). Stated differently, a motion to dismiss under Fed. R. Civ. P. 12(b)(6) is designed to test, whether as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the complaint is true. Mayer, 988 F.2d at 638, citing Nishiyama, 814 F.2d at 279.

The test for dismissal under Fed. R. Civ. P. 12(b)(6) has recently been re-stated by the Supreme Court:

Factual allegations must be enough to raise a right to relief above the speculative level, see 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed.2004)("[T]he pleading must contain something more ... than ... a statement of facts that merely creates a suspicion [of] a legally cognizable right of action"), on the assumption that all the allegations in the complaint are true (even if doubtful in fact), see, e.g., Swierkiewicz v. Sorema N. A., 534 U.S. 506, 508, n. 1, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002); Neitzke v. Williams, 490 U.S. 319, 327, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989)(" Rule 12(b)(6) does not countenance ... dismissals based on a judge's disbelief of a complaint's factual allegations"); Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) (a well-pleaded complaint may proceed even if it appears "that a recovery is very remote and unlikely").

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).

[W]hen the allegations in a complaint, however true, could not raise a claim of entitlement to relief, "'this basic deficiency should ... be exposed at the point of minimum expenditure of time and money by the parties and the court.'" 5 Wright & Miller § 1216, at 233-234 (quoting Daves v. Hawaiian Dredging Co., 114 F. Supp. 643, 645 (D. Hawaii 1953) ); see also Dura [Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 125 S.Ct. 1627, 161

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