Lewis v. Hill
| Docket Number | Civil Action 19-12500-DPW |
| Decision Date | 24 July 2023 |
| Parties | STEVEN P. LEWIS, Plaintiff, v. MATTHEW A. HILL, MARGIE JOANNE HILL, DAVID ROBERT MOORE, JEFFREY STOLLER, AND CLOSEDRPLA HOLDINGS, INC., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
1. Transfer under 28 U.S.C. § 1406(a) and § 1631 .......... 17
2. Transfer under 28 U.S.C. § 1404(a) ..................... 19
1. Venue Availability ..................................... 36
2. Claims against Dr. Hill, Mr. Moore, and Mr. Stoller .... 40
3. Claims against Mr. Hill and Closed RPLA ................. 44
Plaintiff Steven Lewis is the minority shareholder and a former employee of OpenALPR Technology, Inc. (“OpenALPR”), a software startup founded by Defendant Matthew Hill, who is the company's majority shareholder and board chair. Mr. Lewis became an OpenALPR sales representative by an agreement with the company, through Mr. Hill. By a separate stock purchase agreement with the company, through Mr. Hill, Mr. Lewis acquired shares in OpenALPR. Mr. Lewis originally brought this action in Massachusetts state court alleging breach of fiduciary duty and aiding and abetting breach of fiduciary duty against Mr. Hill and several other affiliated parties. The defendants removed the case to this court.
In this court, the defendants press motions to dismiss the Complaint as a way to terminate further travel of the case. For his part, Mr. Lewis has failed to take steps to recalibrate the litigation to assure proper alignment of the parties in some other jurisdiction in which personal jurisdiction could properly be exercised and permit his case to proceed further in its entirety.
Consequently, I raised sua sponte - after notice and an opportunity to be heard by all parties - the question whether to transfer this case in its entirety to the United States District Court for the Middle District of Florida where it appears the matter can be fully litigated against all parties now before this court. The parties, however, have declined to move from their formally stated positions or even make a docket submission formally advising the court of that declination.
With full consideration of the implications of transfer for the private interests of parties having disparate resources, I have determined to transfer this poorly pled case, awkwardly joining vaguely identified claims as to inadequately differentiated defendants, to the Middle District of Florida. This will not only serve the public interest in efficient deployment of available judicial resources, it will also permit Mr. Lewis an opportunity to pursue his several claims in a single court appropriate to hear them. In this Memorandum and Order, I provide my reasons for taking this initiative by detailing at length my evaluation of the arguments presented by the defendants, who - for their part - have carefully and strategically avoided asking for transfer as an alternative to dismissal, although both are manifestly available.
The alleged facts, as set forth in the Complaint and developed further in underlying documents, the authenticity of which is not disputed, cf. Rivera v. Centro Medico de Turabo, Inc., 575 F.3d 10, 15-16 (1st Cir. 2009), are as follows.
Plaintiff Steven Lewis, a Massachusetts resident, is a minority shareholder and former officer and director of OpenALPR, a software company incorporated in Florida. [Dkt. No. 1-3 ¶¶ 1, 8, 21; see Stock Purchase Agreement, Dkt. No. 9-4 at introductory paragraph (identifying OpenALPR as Florida corporation with address in Michigan); Sales Rep Agreement, Dkt. No. 9-6 at Art. 14 (listing Michigan address for OpenALPR).]
Defendant Matthew Hill, an Alabama resident, is the founder, majority shareholder, president, secretary, treasurer, and chairman of the board of ClosedRPLA Holdings, Inc. -formerly known as OpenALPR. [Dkt. No. 1-3 ¶¶ 2, 6, 20]
Defendant Closed RPLA Holdings, Inc. is a Florida corporation, with a principal place of business in Jacksonville, Florida. [Id. ¶ 6]
Defendant Dr. Margie Joanne Hill is Defendant Matthew Hill's wife and an Alabama resident. [Id. ¶¶ 3, 19] Defendant David Robert Moore is Defendant Matthew Hill's father-in-law, Dr. Hill's father, and, as alleged in the Complaint, a South Carolina resident. [Id. ¶¶ 4, 19; but see Declaration of David Moore in Support of Rule 12(b)(2) Motion, Dkt. 9-9 ¶ 4 ().] These two defendants, together with Defendant Matthew Hill, are the new directors of ClosedRPLA. [Dkt. No. 13 ¶¶ 19-20, 23]
Defendant Jeffrey Stoller, a Florida resident, is an attorney who was representing OpenALPR and ClosedRPLA during the events at issue. [Id. ¶¶ 5, 19, 21-22]
In January 2016, Mr. Lewis joined OpenALPR, then owned solely by Mr. Hill, as a sales representative and board director. [Id. ¶ 7] Mr. Lewis entered into a “Sales Rep Agreement” with OpenALPR, through Mr. Hill, defining the compensation he was to receive. The Sales Rep Agreement, which is undated, commenced on January 13, 2016. [Dkt. No. 9-6 at Art. 11] The Sales Rep Agreement contains a “Governing Law” provision that provided, “This Agreement shall be construed and enforced according to the laws of the State Florida [sic] and any dispute under this Agreement must be brought in this venue and no other.” [Id. at Art. 17]
In April 2016, Mr. Lewis and Mr. Hill agreed on an equity plan, which they reduced to writing in December 2017 as a “Stock Purchase Agreement” between Mr. Lewis and OpenALPR, through Mr. Hill. [Dkt. No. 1-3 ¶ 8; see Dkt. No. 9-4] According to the equity plan, OpenALPR's stock consisted of 1,000 shares, all of which had previously been issued to Mr. Hill. [Dkt. No. 9-4 at Art. 6.1] Under the plan, Mr. Lewis purchased 200 shares, for a penny per share, [id. at Art. 2.1], to vest on the following schedule: 1) 50 shares immediately; 2) 50 shares on the earlier of January 1, 2018 or $700,000 in company revenue; 3) 50 shares on the earlier of January 1, 2019 or $1.2 million in revenue; and 4) 50 shares on the earlier of January 1, 2020 or $1.7 million in revenue. [Id. at Art. 5.3] The plan also provided a repurchase right under which OpenALPR could repurchase, for the price of a penny a share, any or all shares belonging to Mr. Lewis that had not yet vested upon “his. . . cessation of Service” to the company. [Id. at Art. 5.1.] Mr. Lewis and Mr. Hill, on behalf of OpenALPR, agreed that “interpretation, performance, and enforcement” of the Stock Purchase Agreement would be “governed by the laws of the State [sic] of Massachusetts without giving effect to that State's choice of law or conflict-of-laws rules.” [Id. at Art. 8.3]
By the end of the first quarter of 2018, of the 1,000 shares, 800 had been issued to Mr. Hill, 100 had been issued to Mr. Lewis under the equity plan, and the final 100 had been purchased by Mr. Lewis but not yet distributed, subject to the equity plan's vesting schedule. [Dkt. No. 1-3 ¶ 9]
Mr. Hill started negotiations to sell OpenALPR near the end of the first quarter of 2018 - presumably in late March or early April 2018, although the Complaint does not specify a date or month. [Id. ¶ 10] At that point, Mr. Hill is alleged to have begun discussing a potential customer relationship with Brekford Traffic Solutions, a subsidiary of Novume Solutions. [Id.]
Around the same time, things became rocky for Mr. Lewis at work. In April 2018, Mr. Hill sought to reduce Mr. Lewis's...
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