Mohr v. Margolis, Ainsworth & Kinlaw Consulting

• Decision Date: 13 June 2006
• Docket Number: No. 05-1354-JTM.,05-1354-JTM.
• Citation: 434 F.Supp.2d 1051
• Parties: Merleta MOHR, Plaintiff, v. MARGOLIS, AINSWORTH & KINLAW CONSULTING, INC., Defendant.
• Court: U.S. District Court — District of Kansas

434 F.Supp.2d 1051

Merleta MOHR, Plaintiff, v. MARGOLIS, AINSWORTH & KINLAW CONSULTING, INC., Defendant.

No. 05-1354-JTM.

United States District Court, D. Kansas.

June 13, 2006.

COPYRIGHT MATERIAL OMITTED

Gaye B. Tibbets, Paul M. Mzembe, Hite, Fanning & Honeyman, LLP, Wichita, KS, for Plaintiff.

Diane S. Worth, Ryan M. Peck, Morris, Laing, Evans, Brock & Kennedy, Chtd., Wichita, KS, Randolph R. Lowell, Willoughby & Hoefer, P.A., Columbia, SC, for Defendant.

MEMORANDUM AND ORDER

MARTEN, District Judge.

This matter comes before the court on the defendant's Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6) (Dkt. No. 11) and Motion to Dismiss or, in the alternative, To Transfer Venue (Dkt. No. 13). Defendant advances several grounds on which dismissal or transfer may be appropriate. The issues before the court are: 1) whether plaintiff states a claim for malicious prosecution and the tort of outrage; 2) whether plaintiff satisfies the requirements of venue; 3) whether the first-to-file rule requires this court to defer to a pending state action in South Carolina; and 4) whether transfer of venue is appropriate. After reviewing the parties' arguments, the court denies defendant's motions.

I. BACKGROUND

Plaintiff Merleta Mohr is a Kansas resident.

Defendant Margolis, Ainsworth & Kinlaw Consulting, Inc., (hereafter "MAK") is a consulting business located in South Carolina that specializes in providing computer software products and services primarily to the utility industry, specifically billing software. MAK has done business with the City of Wichita, Kansas Gas in Topeka or other Kansas utilities entities directly or through subcontractor Indus, another nationwide company. Plaintiff believes that MAK continues to solicit business from Kansas-based utilities or utilities that serve in Kansas. Plaintiff also believes that MAK continues to do business with the City of Wichita through Indus. Defendant denies that it had customers or business in Kansas at the time plaintiff commenced this lawsuit.

Ms. Mohr became a MAK employee on or about June 3, 2002. Ms. Mohr was initially hired as a Business Development Manager and functioned as a salesperson for MAK until the last quarter of 2004. Ms. Mohr claims she was hired as an executive, though MAK claims that this was in name only. Plaintiff worked from her home in Wichita and was MAK's sole employee in Kansas. She was tasked with selling MAK's services on a nationwide basis.

Throughout her employment with defendant, plaintiff was a Kansas resident. Her offer letter designated her place of employment as her home in Wichita, Kansas. During plaintiff's employment, because she was a Kansas resident, defendant paid state income and unemployment taxes for her in Kansas. After her employment was terminated, Ms. Mohr could have collected unemployment benefits in Kansas. Plaintiff claims she has never signed an employment contract.

On or about April 20, 2005, MAK terminated Ms. Mohr's employment. The reason for the termination is partially in dispute. On the same date, MAK terminated three other employees. MAK offered plaintiff a severance package via e-mail, which plaintiff read in her home state of Kansas. Plaintiff informed MAK's president Scott Ainsworth the next day, on April 21, that she had suffered a death in the family and needed to tend to family matters before considering the severance package he had offered. She asked for time to tend to her family before responding to the severance offer. Defendant's president did not object.

In an e-mail on April 26, 2005, defendant's president stated that they noted emails had been deleted from the MAK server when the e-mail's had been downloaded. Ainsworth asked that plaintiff keep copies of any MAK materials and not destroy them as stipulated in plaintiff's employment agreement. Ainsworth noted: "We consider all documents, files, etc to be confidential MAK material. I would ask that if you have copies of any and all MAK material, that you do not destroy them ..."

After reading the e-mail on April 27, plaintiff called defendant's president and emailed him to assure him that she had been out of town for a funeral and had not been using her laptop nor had she destroyed or used "any other material from the MAK server or the MAK laptop in [her] possession." Ainsworth did not object. In an e-mail dated April 28, 2005, plaintiff stated that she would respond to the severance package by the following Monday or Tuesday. The parties have not included any e-mails indicating plaintiff provided such a response.

On May 13, 2005, defendant's president sent an e-mail to plaintiff noting that he had not heard from plaintiff in a while. A week later, in an e-mail on May 20, 2005, Ainsworth stated that he had not heard from plaintiff and wanted to finalize the severance package and return of the laptop computer. Within four days, on May 24, 2005, plaintiff's counsel sent defendant a demand letter, stating that plaintiff would return the laptop and all MAK materials if defendant would advance the postage. The letter also formally complained of gender discrimination and retaliation in plaintiff's pay and termination. MAK representatives acknowledged by fax that the firm had received the letter offering to return the laptop computer, and they were "reviewing it." After acknowledging receipt of plaintiff's offer to return the computer, MAK did not advance postage for the laptop.

Instead, on June 1, 2005, defendant filed against plaintiff a five-count state court action in South Carolina. MAK sought declaratory judgment and injunctive relief. MAK alleged violation of the South Carolina Trade Secrets Act, breach of duty of loyalty, and conversion. MAK claimed that it had "demanded that the laptop be returned and Plaintiff had refused;" that plaintiff had acted "wilfully and wantonly and in violation of Defendant's rights" in retaining the laptop; that plaintiff had intentionally misappropriated trade secrets; that she "had intentionally and wilfully misappropriated and withheld propriety and confidential information;" and that she was "wrongfully and willfully detaining MAK's property" and was exercising "ownership, possession and control."

Defendant's counsel mailed a copy of the lawsuit to plaintiff's counsel in Kansas but did not serve the lawsuit on plaintiff. When plaintiff's counsel received a copy of the lawsuit, she asked defendant's counsel why MAK filed suit. Plaintiff's counsel alleges that defendant's counsel admitted the suit was filed solely to secure jurisdiction in South Carolina.

Plaintiff's counsel sent an e-mail on June 8 complaining about the false allegations in the South Carolina lawsuit, stating that he would not accept service and that plaintiff had already offered to return the laptop. After the June 8 e-mail from plaintiff's counsel, the original South Carolina lawsuit was never served. Plaintiff's counsel claims there were no ongoing settlement discussions after June 15, 2005, so this could not be the reason that the lawsuit was not served.

Approximately two weeks after MAK filed the South Carolina action, plaintiff returned the laptop and several other items to MAK. However, MAK claims that plaintiff still has not returned all of its property, such as a printer.

On or about November 28, 2005, Ms. Mohr filed in this court a four-count complaint alleging a federal statutory claim and a state statutory claim relating to her employment with MAK. She also asserted two common law claims relating to MAK's assertion of its legal rights in the South Carolina action. She later amended her complaint to assert a violation of Title VII against defendant MAK only.

On or about December 27, 2005, the Kansas Secretary of State served MAK via mail. On or about January 9, 2006, MAK amended the South Carolina action to withdraw the claims related to MAK's computer that was in plaintiff's possession, despite the fact that defendant claims it has not received "all" of its property. Defendant amended its original South Carolina state court lawsuit to delete all counts except a one-count declaratory judgment action. On or about January 10, 2006, MAK personally served the amended summons and complaint on Ms. Mohr, and that action remains pending.

II. PARTIAL MOTION TO DISMISS

A. Standard

"A Rule 12(b)(6) motion to dismiss will be granted only if it appears beyond a doubt that the plaintiff is unable to prove any set of facts entitling [him] to relief under [his] theory of recovery." Poole v. County of Otero, 271 F.3d 955, 957 (10th Cir.2001) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). "The court must accept all the well-pled allegations of the complaint as true and must construe them in the light most favorable to the plaintiff." Boyd v. Runyon, No. 94-1557-JTM, 1996 WL 294330, at *1 (D.Kan. May 23, 1996) (citing Williams v. Meese, 926 F.2d 994 (10th Cir.1991)). "The [c]ourt, however, need not accept as true those allegations that are conclusory in nature, i.e., which state legal conclusions rather than factual assertions." Fugate v. Unified Gov't of Wyandotte, 161 F.Supp.2d 1261, 1263 (D.Kan. 2001) (citing Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir.1991)).

B. Analysis

1. Malicious Prosecution

Defendant asks this court to dismiss plaintiff's malicious prosecution claim because plaintiff cannot show probable cause, actual malice or that the proceedings terminated in plaintiff's favor.

Under Kansas law, a claim of malicious prosecution requires the following elements: 1) defendant initiated, continued or procured civil or criminal proceedings against the plaintiff; 2) in so doing, the defendant acted without probable cause; 3) defendant acted with malice; 4) the proceeding terminated in favor of the plaintiff; and 5) plaintiff sustained damages as such. Fillmore v. Ordonez, 829 F.Supp. 1544, 1561 (D.Kan.1993) aff'd by 17 F.3d 1436 (10th Cir.1994) (citations omitted). South...