PNC Bank, N.A. v. Mac Meetings & Events, LLC
| Decision Date | 01 July 2020 |
| Docket Number | Case No. 4:18-CV-1967-SPM |
| Court | U.S. District Court — Eastern District of Missouri |
| Parties | PNC BANK, NATIONAL ASSOCIATION, Plaintiff/Judgment Creditor/Garnishor, v. MAC MEETINGS & EVENTS, LLC, et al., Defendants/Judgment Debtors, and CISCO SYSTEMS, INC., Garnishee. |
This matter is before the Court on Cisco Systems, Inc.'s Motion to Transfer Venue pursuant to 28 U.S.C. § 1404(a). (Doc. 45). The motion has been fully briefed. All parties have consented to the jurisdiction of the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). (Doc. 31). For the following reasons, the motion will be granted.
On November 21, 2018, Plaintiff PNC Bank, National Association ("PNC") filed a complaint against Defendants MAC Meetings & Events, LLC ("MAC Meetings") and 801 N Second Street, LLC ("801 N. Second St."), alleging that Defendants owed Plaintiff money based on an unpaid note and a breached credit card agreement. (Doc. 1). On December 21, 2018, this Court entered a Final Consent Judgment in favor of PNC, and against Defendants, in the amount of $4,142,067.39. (Doc. 12).
In an attempt to collect on its judgment against Defendants, PNC served a third party, Garnishee Cisco Systems, Inc. ("Cisco"), with garnishment interrogatories, pursuant to Federal Rule of Civil Procedure 69 and Rule 90.13 of the Missouri Supreme Court Rules. (Doc. 16-3). In its answers to those garnishment interrogatories, Cisco denied owing any debt to MAC Meetings. (Doc. 19). PNC then filed Exceptions and Objection to the Answers to the Garnishment Interrogatories (the "Exceptions"). (Doc. 20). In those Exceptions, PNC alleged that Cisco currently owes MAC Meetings in excess of $9 million in unpaid compensation, fees, charges, and unreimbursed expenses related to meeting and event planning services MAC Meetings provided to Cisco.
After Cisco moved to dismiss the Exceptions, the Court, acting sua sponte, raised questions regarding its subject matter jurisdiction over the garnishment action and requested supplemental briefing on the issue of subject matter jurisdiction. (Doc. 32). PNC filed a brief in which it argued that the Court has subject matter jurisdiction over this action pursuant to its ancillary enforcement jurisdiction and that the Court also has original and independent subject matter jurisdiction over the garnishment proceeding pursuant to 28 U.S.C. § 1332(a)(1), because there is a diversity of citizenship between the PNC and Cisco and the amount in controversy exceeds $75,000. (Doc. 34). Cisco submitted a brief in which it argued that the Court does not have ancillary enforcement jurisdiction over the garnishment action and that PNC had not satisfied its burden of showing an independent basis for subject matter jurisdiction in light of the absence of jurisdictional allegations in the Exceptions. (Doc. 33).
PNC subsequently requested, and was granted, leave to file amended exceptions and objections to the answers to garnishment interrogatories to address jurisdictional issues and issues raised by Cisco in its previously-filed motion to dismiss. (Doc. 37). After PNC filed amended exceptions and the Court identified a deficiency in the allegations regarding citizenship, PNC filed its Second Amended Exceptions and Exceptions to Garnishment Interrogatories Submitted onBehalf of Garnishee Cisco Systems, Inc. (the "Second Amended Exceptions"). (Doc. 41). In light of the filing of the Second Amended Exceptions, the Court denied Cisco's prior motion to dismiss as moot.
In the Second Amended Exceptions, PNC alleges that it is a national banking association with its main office in Delaware, and that it is therefore a citizen of Delaware for purposes of 28 U.S.C. §§ 1332(a)(1) and 1348. (Second Am. Exceptions, Doc. 41, at ¶ 1). PNC alleges that Cisco is a corporation organized under the laws of California, with its principal place of business in California, and is therefore a citizen of the State of California for purposes of 28 U.S.C. § 1332(a)(1). (Id. at ¶ 3). It alleges that MAC Meetings is a limited liability company organized under the laws of the State of Missouri; that MAC Meetings' members consist of two individual citizens of Missouri and one individual citizen of Illinois; and that MAC Meetings therefore a citizen of Missouri and Illinois. (Id. at ¶ 4). It also alleges that 801 N. Second Street is a limited liability company organized under the laws of the State of New York; that its members are MAC Meetings and an individual who is a citizen of New York; and that 801 N. Second Street is therefore a citizen of Missouri, Illinois, and New York. (Id. at ¶ 5).
As it did in the original Exceptions, PNC takes exception and objects to Cisco's answers to garnishment interrogatories to the extent that Cisco asserts that it is not indebted to MAC Meetings. (Id. at ¶ 23). PNC alleges the following: Over a period of over fifteen years, MAC Meetings performed meeting and event planning services for Cisco, pursuant to or in accordance with certain written, oral, and/or implied agreements, under which Cisco agreed to compensate MAC Meetings and reimburse MAC Meetings for certain expenses incurred. (Id. at ¶ 11). PNC identifies several specific written agreements between Cisco and MAC Meetings related to the meeting and event planning services, including a Services Agreement dated November 1, 2001, and an Outsourcing Agreement dated October 27, 2006, as amended in 2007 and 2009, as well as various purchase orders, statement of work forms, and service request forms. (Id. at ¶ 12).
The Services Agreement and the Outsourcing Agreement (collectively, the "Agreements") are attached as exhibits to the Second Amended Exceptions. The Services Agreement states that it is made between Cisco and MAC Meetings. (Ex. A-1 to Second Am. Exceptions ("Services Agreement") at p.1). The Services Agreement includes a clause stating, inter alia:
In the Second Amended Exceptions, PNC alleges that MAC Meetings has performed various meeting and event planning services for Cisco for which Cisco has failed to properly compensate and/or reimburse MAC Meetings. (Second Am. Exceptions, at ¶ 13). MAC Meetings retained an outside consultant to conduct an independent analysis of the total indebtedness owed to MAC Meetings by Cisco, and the consultant concluded that MAC Meetings is owed at least $9,835,016.00 by Cisco. (Id. at ¶ 14). In mid-December, MAC Meetings forwarded a copy of the audit to Cisco, along with documents relied on by the consultant. (Id. at ¶ 15). Over the next nine months, representatives of MAC Meetings and Cisco engaged in discussions in an effort to reach a mutual agreement on the alleged indebtedness, but in August 2018, Cisco broke off communications. (Id. at ¶¶ 16-17). PNC asserts six claims in its Second Amended Exceptions: (1)Breach of Written Contract; (2) Breach of Oral Contract; (3) Breach of Implied Contract; (4) Action on Account; (5) Quantum Meruit; and (6) Unjust Enrichment.
On January 8, 2020, Cisco filed the instant Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) (Doc. 45), along with a motion to stay proceedings pending the Court's decision on the motion to transfer venue (Doc. 47). The Court granted the motion to stay. (Doc. 53). PNC subsequently filed a memorandum in opposition to the motion to transfer venue (Doc. 54), and Cisco filed a reply (Doc. 60).
The Court will first address the question of whether it has subject matter jurisdiction over this garnishment action. "'Federal courts are courts of limited jurisdiction,' possessing 'only that power authorized by Constitution and statute.'" Gunn v. Minton, 568 U.S. 251, 256 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). "[J]urisdiction issues will be raised sua sponte by a federal court when there is an indication that jurisdiction is lacking, even if the parties concede the issue." Dieser v. Cont'l Cas. Co., 440 F.3d 920, 923 (8th Cir. 2006) (quoting Thomas v. Basham, 931 F.2d 521, 523 (8th Cir. 1991)). The Court previously raised concerns about its subject matter jurisdiction, noting an apparent split in authority regarding whether a federal court's ancillary jurisdiction to enforce its own judgments extends to a garnishment proceeding that—like this one—involves substantial disputed questions of fact and/or law that are completely unrelated to the original lawsuit, such that the garnishment proceeding appears to be entirely new case.
After review of the parties' briefs and PNC's amended pleadings, the Court finds that it need not reach the difficult and close question of whether this Court's ancillary jurisdiction extends to the garnishment action, because this Court has jurisdiction over the garnishment action based on diversity of citizenship pursuant to 28 U.S.C. § 1332(a)(1). To invoke diversity jurisdiction, the parties must be citizens of different states, and the amount in controversy...
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