Cummings v. Western Trial Lawyers Ass'n

• Decision Date: 12 March 2001
• Docket Number: No. CIV 00-0086-PHX-ROS.,CIV 00-0086-PHX-ROS.
• Parties: Kate CUMMINGS, a single person, Plaintiff, v. WESTERN TRIAL LAWYERS ASSOCIATION; Doug Bragg, in his official and individual capacity; Susan Guinn, in her official and individual capacity, Defendants.
• Court: U.S. District Court — District of Arizona

133 F.Supp.2d 1144

Kate CUMMINGS, a single person, Plaintiff, v. WESTERN TRIAL LAWYERS ASSOCIATION; Doug Bragg, in his official and individual capacity; Susan Guinn, in her official and individual capacity, Defendants.

No. CIV 00-0086-PHX-ROS.

United States District Court, D. Arizona.

March 12, 2001.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Cheri McCracken, Phoenix, AZ, for Kate Cummings.

D. Dale Haralson, Haralson Miller Pitt & McAnally PC, Tucson, AZ, Mark Clayton Choate, Carol P. LaPlant, Choate & Guinn, San Diego, CA, Dan Stormer, Hadsell & Stormer Inc., Pasadena, CA, for Western Trial Lawyers Ass'n., Doug Bragg, Susan Guinn.

Doug Bragg, Denver, CO, pro se.

ORDER

SILVER, District Judge.

Defendants Western Trial Lawyers Association ("WTLA"), Doug Bragg ("Bragg"), and Susan Guinn ("Guinn") each filed a Motion to Dismiss Plaintiff's Complaint, setting forth the following three arguments: (1) that the Court lacks subject matter jurisdiction; (2) that the venue is improper; and (3) that Plaintiff failed to sufficiently serve process on them.¹ In addition, Defendants Guinn and Bragg allege lack of personal jurisdiction. Defendants' Motions to Dismiss are currently pending before the Court. Having analyzed the written and oral arguments set forth by all the parties to this lawsuit, the Court will partially grant and partially deny Guinn's Motion to Dismiss and will deny the WTLA and Bragg's Motions to Dismiss.

Background

From 1991 until March 31, 1999, Plaintiff was the full-time Executive Director of the WTLA. (Cummings Aff. ¶ 1.) The WTLA paid Plaintiff through May 31, 1999. (Compl. ¶ 6.) During this period, Plaintiff maintained an office in Phoenix, Arizona, and all mail directed to the WTLA through her was routed to a post office in Phoenix. (Cummings Aff. ¶ 2-3.) As Executive Director of the WTLA, Plaintiff was responsible for a variety of duties, including organizing WTLA legal seminars, memberships, and marketing for the association. (Compl. ¶ 7.) Due to the poor attendance at WTLA seminars, the WTLA's financial status grew worse from 1997 through 1999. (Id. ¶¶ 11, 12, 26, 27.)

Bragg became President of the WTLA in July 1998. (Id. ¶ 15.) Plaintiff alleges that from the beginning she and Bragg were at odds over the operations of the WTLA. (Id. ¶¶ 15-33.) Plaintiff alleges that Bragg repeatedly verbally attacked her in front of several WTLA members and other attorneys. For example, Plaintiff alleges that prior to an August 1998 seminar in Denver, Bragg took control of the WTLA treasury by removing all WTLA funds from its Arizona bank account and depositing the funds in Bragg's law firm's trust account in Colorado. (Id. ¶ 21.)

In January 1999, with the assistance of several board members, Plaintiff arranged a meeting to discuss WTLA's financial situation. (Id. ¶ 28.) This prompted Bragg to fax a letter to fifty-two members of the WTLA board, blaming the WTLA's financial problems on Plaintiff and raising serious allegations about Plaintiff's conduct. (Id. ¶ 32.) In the same letter, Bragg canceled Plaintiff's meeting, and resigned as President of WTLA. (Id.)

On or about February 26, 1999, Guinn informed Plaintiff by letter that the WTLA could no longer afford a full-time Executive Director, but offered Plaintiff a part-time position beginning on June 1, 1999. (Id. ¶ 36.) On or about March 5, 1999, Plaintiff received a second letter from Guinn withdrawing the offer of part-time employment. (Id. ¶ 37.)

On January 18, 2000, Plaintiff filed her Complaint setting forth the following allegations arising from her employment with the WTLA.: (1) defamation against Bragg; (2) breach of contract against the WTLA; (3) breach of duty of good faith and fair dealing against the WTLA; (4) intentional infliction of emotional distress against Bragg, Guinn, and the WTLA; (5) intentional interference with a business relationship against Bragg and Guinn; (6) false light against Bragg and Guinn; and (7) quantum meruit against the WTLA.

On June 1, 2000, Guinn filed a Motion to Dismiss. [Doc. # 8.] On June 6, 2000, the WTLA filed a Motion to Dismiss. [Doc. # 14.] On August 1, 2000, Bragg filed a motion to Dismiss. [Doc. # 21.] These three motions are currently pending before the Court.

Discussion

I. Lack of Subject Matter Jurisdiction

In her Complaint, Plaintiff alleges diversity jurisdiction pursuant to 28 U.S.C. § 1332 and supplemental jurisdiction pursuant to 28 U.S.C. § 1367. Plaintiff asserts that she was a resident of Arizona and that the WTLA maintained a principal place of business in Arizona. (Compl. ¶¶ 1-2.) Thus, Plaintiff's Complaint fails to allege complete diversity between the parties. See 28 U.S.C. § 1332; Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68, 117 S.Ct. 467, 136 L.Ed.2d 437 (1996). Because Plaintiff's Complaint relies on diversity jurisdiction, Defendants argue that the Court should dismiss Plaintiff's action for lack of subject matter jurisdiction.

In response to the Motions to Dismiss, Plaintiff established that the WTLA is a nonprofit corporation incorporated under the laws of the state of Nevada and that the WTLA did not maintain its principal place of business in Arizona. (Earl Aff. ¶ 2; Pl. Resp. to Mot. to Dismiss at 3.) At the hearing on the motions, Defendants conceded that Arizona was not the WTLA's principal place of business at the time Plaintiff commenced this lawsuit. See Lew v. Moss, 797 F.2d 747, 750 (9th Cir.1986).

"Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts." 28 U.S.C. § 1653. The burden of establishing diversity jurisdiction lies with the party invoking the jurisdiction in a federal court. Littlefield v. Continental Cas. Co., 475 F.Supp. 887, 889 (C.D.Cal.1979). "In order to avoid dismissal for lack of subject matter jurisdiction, the plaintiff must enlarge the record to show the citizenship of each party as of the date that the complaint was filed." Blue Ridge Ins. Co. v. Stanewich, 142 F.3d 1145, 1148 (9th Cir. 1998) (quoting Dausch v. Rykse, 9 F.3d 1244, 1245 (7th Cir.1993)). Because Defendants no longer dispute that complete diversity existed at the time Plaintiff commenced this lawsuit, the Court, pursuant to Fed.R.Civ.P. 15(a), will allow Plaintiff to file an Amended Complaint based upon a stipulation from Defendants establishing that the WTLA's state of incorporation and its principal place of business are in states other than Arizona. The Court will allow the Plaintiff fifteen days from the date of this Order to Amend the Complaint. If Plaintiff fails to comply with the Court's Order, the Court may dismiss this action. See Ferdik v. Bonzelet, 963 F.2d 1258, 1260 (9th Cir.1992), cert. denied, 506 U.S. 915, 113 S.Ct. 321, 121 L.Ed.2d 242 (1992).

II. Improper Venue

Title 28 U.S.C. § 1391(a), the statute which governs venue in diversity cases, provides:

A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.

28 U.S.C. § 1391(a) (emphasis added). "The overriding purpose of § 1391(a) is to further the convenience of the parties." Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834 (9th Cir.1986) (citing Gardner Engineering Corp. v. Page Engineering Co., 484 F.2d 27, 33 (8th Cir. 1973)). "When the cause of action is personal to the individual defendant, the venue requirement must be met as to that defendant." Hoover Group, Inc. v. Custom Metalcraft, Inc., 84 F.3d 1408, 1410 (Fed.Cir.1996). Based on the factual circumstances of the present action, Plaintiff must establish venue under § 1391(a)(2) and illustrate that a substantial part of the events or omissions giving rise to her claims against each Defendant occurred in Arizona.²

At the hearing on the Motions to Dismiss, Defendants argued that venue would be proper in California or Colorado due to convenience of the Defendants. The Court distinguished between Defendants' Motion to Dismiss for Improper Venue, which is currently pending before the Court, and a Motion to Transfer Venue under 28 U.S.C. § 1404, which Defendants failed to raise. The Court held that it would not rule on a Motion to Transfer because the issue was not fully briefed.

A. Defendant WTLA

Plaintiff has alleged the following claims against the WTLA: (1) breach of contract; (2) breach of good faith and fair dealing (3) intentional infliction of emotional distress;³ and (4) quantum meruit.

The WTLA argues that venue is improper because it is a Nevada corporation which does not have any personal contact with Arizona. (WTLA Mem. at 4.) The WTLA further asserts that venue is only proper in the Southern District of California, the District of Colorado, or the District of Nevada and that its records and a majority of its officers reside in California. (Id. at 4-5.)

The undisputed facts, however, establish that Plaintiff entered into a contractual agreement with the WTLA to perform a majority of her tasks in Arizona. Plaintiff asserts that "[d]uring the entire time, WTLA was headquartered in Phoenix, Arizona and all information printed, published, or marketed regarding WTLA reflected this[.]" (Cummings Aff. ¶ 2.) Thus, because a substantial portion of the events giving rise to Plaintiff's breach of contract, breach of good faith and fair dealing, intentional infliction of emotional distress, and quantum meruit claims against the WTLA occurred in Arizona, venue in Arizona is proper regarding the WTLA. See Decker Coal,...