Kristufek v. Saxonburg Ceramics, Inc.

• Decision Date: 15 July 1994
• Docket Number: No. 3:94CV153-P.,3:94CV153-P.
• Citation: 901 F. Supp. 1018
• Court: U.S. District Court — Western District of North Carolina
• Parties: James P. KRISTUFEK, Plaintiff, v. SAXONBURG CERAMICS, INC., Defendant.

901 F. Supp. 1018

James P. KRISTUFEK, Plaintiff, v. SAXONBURG CERAMICS, INC., Defendant.

No. 3:94CV153-P.

United States District Court, W.D. North Carolina, Charlotte Division.

July 15, 1994.

COPYRIGHT MATERIAL OMITTED

Harry B. Crow, Jr., Monroe, NC, for James P. Kristufek.

James P. Kristufek, Monroe, NC, pro se.

Randel E. Phillips, Moore and Van Allen, Charlotte, NC, David I. Cohen, Robert F. Prorok, Reed, Smith, Shaw & McClay, Pittsburgh, PA, for Saxonburg Ceramics, Inc.

MEMORANDUM OF DECISION AND ORDER

ROBERT D. POTTER, District Judge.

THIS MATTER is before the Court on Defendant's motion to dismiss the amended complaint, filed June 24, 1994.¹ Plaintiff filed its response to the motion to dismiss on June 7, 1994. Defendant filed a reply brief on June 24, 1994.

Also before the Court is Plaintiff's motion to remand, filed June 7, 1994. Defendant filed its response to this motion on June 24, 1994. The Court has carefully reviewed these motions. Based upon this review, the Court makes the following legal conclusions.

In this action, Plaintiff is seeking damages for breach of an employment contract he entered into with Saxonburg Ceramics, Inc. (Saxonburg). Plaintiff is a North Carolina resident. Saxonburg is a Pennsylvania corporation. Saxonburg's corporate offices, and managerial personnel are located in Saxonburg, Pennsylvania which is also the meeting place of its board of directors. Saxonburg collects its outstanding bills, pays its accounts payable (including corporate taxes), makes its purchasing decisions and orders, and approves all employee salary adjustments from its plant in Saxonburg, Pennsylvania. Affidavit of Furman South. Of Defendant's 144 employees, 82 are located in Pennsylvania and 62 in its North Carolina plant.

Plaintiff's amended complaint alleges Defendant, sometime in mid-1986, asked him to relocate to Union County, North Carolina to work in a new manufacturing plant Saxonburg built in the early 1980's. Defendant agreed to this request after receiving "promises by the defendant to the plaintiff which included the promise that the plaintiff, if he moved to Union County, North Carolina, to work for the defendant, would have his job with the defendant until he retired." Amended Complaint, pp. 1, 2 ¶ 7.

Relying upon this promise, Plaintiff agreed to move to Union County, North Carolina where he satisfactorily performed his employment duties until May 15, 1992 when he was dismissed due to corporate "restructuring." Id. at p. 2 ¶ 12.

PLAINTIFF'S MOTION TO REMAND

The Court will first resolve the motion to remand to determine whether this Court properly has jurisdiction over this action.

On May 9, 1994, Defendant removed this breach of contract action pursuant to 28 U.S.C. § 1441(a) from the Union County Superior Court because this action obtains the original jurisdiction conferred upon federal courts by 28 U.S.C. § 1332(a)(1) for persons of diverse state citizenship. Motions to remand cases from federal courts must be granted, and a removed case remanded to the state court from which it arrived "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction...." 28 U.S.C. § 1447(c).

"The diversity statute was designed to reduce the number of cases entering the federal courts solely on the basis of diversity of citizenship." Carolina Carbon and Stainless Products, Inc. v. IPSCO Corp., 635 F.Supp. 305, 306 (W.D.N.C.1986). Accordingly, § 1332 provides original jurisdiction in the federal courts "where the matter in controversy exceeds the sum or value of $50,000 ... and is between citizens of different States...." 28 U.S.C. § 1332(a)(1). "The crucial date for the determination of the Defendant's citizenship is, of course, the date the Complaint was filed." Carolina Carbon, 635 F.Supp. at 307; citing, Mullins v. Beatrice Pocahontas Co., 489 F.2d 260, 261 (4th Cir.1974).

A corporate defendant is "deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business...." 28 U.S.C. § 1332(c)(1). Corporations may have multiple citizenship. Defendant is a Pennsylvania corporation and is plainly a citizen of that state. Thus, the Court must determine whether it is also a citizen of North Carolina. The indices of citizenship which guide this inquiry, known colloquially as the "nerve center" and "bulk of activity" tests, have been considered alternative lines of analysis for determining corporate citizenship. Neither of which is preferable to the other in the Fourth Circuit. Mullins, 489 F.2d at 262.

The Fourth Circuit has suggested that district courts "could advance the ultimate disposition of this question considerably by making findings of fact which are material to both theories." Id. This Court has consistently considered both indicators of corporate citizenship useful in elucidating the question and thus analyzes it by considering both the corporate "nerve center" and the place where the "bulk of activities" occurs in determining it's citizenship. Carolina Carbon, 635 F.Supp. 305.

The "nerve center" test focuses on the "corporation's principal place of business ... where the executive and administrative offices are located, and from which the corporation's officers direct, control, and coordinate its policies and activities." Id. at 307. The "bulk of activities test," not surprisingly, looks to "where the corporation carries out the bulk of its activities as evidenced by the location of its physical assets and daily production or services activities rather than high-level policymaking." Id.

Because of the lack of evidence relevant to the "bulk of activities" test presented in the affidavits and exhibits presently before the Court, it will confine its analysis, roughly speaking, to the "nerve center" standard.² Certainly, this standard fits the facts presented in this case since, "This test was developed for the situation in which a corporation is engaged in multi-state activities with offices or plants in various states." Carolina Carbon, 635 F.Supp. at 307. When examined under the "nerve center" standard, the Court believes Saxonburg's neural hub is in Pennsylvania and that it is therefore a citizen of Pennsylvania within the meaning of § 1332(c).

The only evidence before the Court indicates all decisions vital to Defendant's corporate life; its bill paying and collecting, employment decisions, and planning activities are conducted in Pennsylvania. Defendant's board of directors and its officers are located in that state. Saxonburg's crucial decisions, ranging from long and short range planning to which bills are paid and when, issue from and are made in the Pennsylvania plant. It purchases its manufacturing material and equipment from Pennsylvania and does its accounting for the North Carolina plant there too. The Court therefore finds that Saxonburg's nerve center is in Pennsylvania. Thus, the Court concludes it is a citizen exclusively of Pennsylvania for purposes of § 1332(c). Therefore, since this action obtains original jurisdiction by virtue of the complete diversity of citizenship between the present litigants, the motion to remand must be denied.

THE MOTION TO DISMISS

Rule 12(b)(6) places the burden upon the party seeking dismissal to demonstrate the non-moving party has stated no facts in its complaint which entitle it to relief. In evaluating such a motion, the Court must assume all well pled facts are true and draw all reasonable inferences from those facts in favor of the non-moving party. Miree v. DeKalb County, 433 U.S. 25, 97 S.Ct. 2490, 53 L.Ed.2d 557 (1977); Adams v. Bain, 697 F.2d 1213, 1216 (4th Cir.1982). Consequently, "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45, 46, 78 S.Ct. 99, 101, 102, 2 L.Ed.2d 80 (1957).

In the amended complaint, Plaintiff contends he and Saxonburg had an employment contract which Saxonburg breached when it terminated Plaintiff on May 15, 1992 either because it was a contract for a definite period or was one backed by additional consideration. Defendant moves the Court to dismiss this breach of contract action because Plaintiff's employment status was simply that of an employee terminable at will. Thus, Defendant concludes, since there was neither a contract for a definite duration nor one supported by additional consideration, Plaintiff can state no claim for relief resulting from a breach of an employment contract.

The long-established, firmly settled employment law of North Carolina is "that, `in the absence of an employment contract for a definite period, both employer and employee are generally free to terminate their association at any time and without any reason,' or for an irrational or arbitrary reason." McMurry v. Cochrane Furniture Co., 109 N.C.App. 52, 425 S.E.2d 735, 737 (N.C.App.1993); quoting, Salt v. Applied Analytical, Inc., 104 N.C.App. 652, 655, 412 S.E.2d 97, 99 (1991), disc. rev. denied, 331 N.C. 119, 415 S.E.2d 200 (1992) (citing, Still v. Lance, 279 N.C. 254, 182 S.E.2d 403 (1971); also citing, Coman v. Thomas Mfg. Co., 325 N.C. 172, 175, 381 S.E.2d 445, 447 (1989).³ Thus, "if an employment contract contains no provision concerning the duration of the employment or the means by which it may be terminated, such a contract is terminable at the will of either party, irrespective of the quality of performance by the other party." Iturbe v. Wandel & Goltermann Technologies, Inc., 774 F.Supp. 959, 960 (M.D.N.C.1991). Stated conversely, North Carolina law recognizes that employees and employers are free to terminate their employment relationships for a host of reasons, or no reason at all, unless they have created an employment contract specifying a definite duration of employment. It is not enough to establish an...