Sehringer v. Big Lots, Inc.

• Decision Date: 03 October 2007
• Docket Number: No. 3:07-CV-354-4-25TEM.,3:07-CV-354-4-25TEM.
• Citation: 532 F.Supp.2d 1335
• Parties: Ernest SEHRINGER, Plaintiff, v. BIG LOTS, INC., etc., Defendant.
• Court: U.S. District Court — Middle District of Florida

Page 1335

532 F.Supp.2d 1335

Ernest SEHRINGER, Plaintiff, v. BIG LOTS, INC., etc., Defendant.

No. 3:07-CV-354-4-25TEM.

United States District Court, M.D. Florida, Jacksonville Division.

October 3, 2007.

COPYRIGHT MATERIAL OMITTED

Debbie K. Winicki, Robert J. Winicki, Winicki Law Firm, PA, Jacksonville, FL, for Plaintiff

John Andrew Devault, III, Kevin Bayly Cook, Bedell, Dittmar, Devault, Pillans & Coxe, PA, Jacksonville, FL, for Defendant.

ORDER

HENRY LEE ADAMS, JR., District Judge.

Before the Court is the Honorable Thomas E. Morris Magistrate Judge's report and recommendation (Dkt.25). and the record herein. Defendant has filed an objection to the report and. recommendation (Dkt.26). Upon consideration, the Court finds as follows:

Standard

Determining whether the Court can exercise personal jurisdiction over a nonresident defendant requires a two-part analysis. First, a Court must determine whether the Florida long-arm statute provides a basis for personal jurisdiction. If so, the Court must determine whether sufficient minimum contacts exist between the defendant and the forum state so as to satisfy "traditional notions of fair play and substantial justice" under the Due Process Clause of the Fourteenth Amendment. Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253, 256 (11th Cir.1996) (internal citations and quotations omitted).¹ As stated in Meier ex rel. Meier v. Sun Intern. Hotels. Ltd., 288 F.3d 1264, 1272 (11th Cir.2002):

Generally, a foreign parent corporation is not subject to the jurisdiction of a forum state merely because a subsidiary is doing business there. Consolidated, 216 F.3d at 1293. "On the other hand, if the subsidiary is merely an agent through which the parent company conducts business in a particular jurisdiction or its separate corporate status is formal only and without any semblance of individual identity, then the subsidiary's business will be viewed as that of the parent and the latter will be said to be doing business in the jurisdiction through the subsidiary for purposes of asserting personal jurisdiction." Charles A. Wright & Arthur R. Miller. Federal Practice and Procedure § 1069.4 (3d ed.2002) (citations omitted). In order to establish jurisdiction over the [Defendants], therefore. Plaintiff must persuade the court that the Florida Subsidiaries are the entities through which the [Defendants] conduct substantial business activity in Florida. Consolidated at 1293-94.

Analysis

Defendant objects primarily to the Magistrate Judge's findings regarding the sufficiency of service of process and whether it has subjected itself to personal jurisdiction in this Court. To support its arguments. Defendant first objects to the finding that it exerts substantial operational control of Big Lots Store's Inc.'s locations and also the finding that there is a strong unity of financial interest between Big Lots, Inc. and its subsidiary retail stores.

A review of the report and recommendation demonstrates that the Magistrate Judge's findings on' these points did not depend on any one specific fact. Rather, the Magistrate Judge considered, inter alio, Big Lots, Inc. Form 10-K, Pension Plan and Big Lots, Inc.'s 1996 Performance Incentive Plan. Rather than considering the documents in isolation, the Magistrate Judge considered the "collective activities" of Defendant when determining that Big Lots Stores. Inc. is a vehicle through which Big Lots. Inc. conducts its business. This Court agrees that these activities satisfy Florida's long arm statute.

Similarly, these activities constitute sufficient minimum contacts between the Defendant and Florida so as to satisfy "traditional notions of fair play and substantial justice" under the Due Process Clause of the Fourteenth Amendment. As noted in the Report and Recommendation, this suit arises from an alleged breach of contract regarding stock options provided by Big Lots, Inc. Defendant operates more than a hundred retail stores in Florida and markets its wares to Florida citizens. Further, the Court agrees that the burden on Defendant to defend this action here is slight and Florida has an interest in this action.

Defendant also objects to the Magistrate Judge's failure to consider its May 14, 2007 Memorandum. According to Defendant, its six page Motion to Dismiss filed in State Court did not contain a memorandum of legal authority despite the fact that it included "some citation" and an affidavit in support of the requested relief. The Court is unsure how a pleading containing legal citation could not be considered to include a memorandum of legal authority. Both this memorandum and Plaintiff's opposition thereto are due to be stricken.

Defendant also contends that the "Magistrate Judge allowed Plaintiff to inject a new agency theory" into the case. The proper response, of course, to an opposition that addresses matters beyond the original pleading is the filing of a motion to strike. The Court simply should not be expected to entertain multiple memoranda from each side dealing with the same matter. Moreover, the Magistrate Judge's ailing did not depend on a "new theory."

Defendant also complains that service on an employee of its subsidiary's registered agent is improper. The Court agrees with the Magistrate Judge that sufficient operational control over Defendant's subsidiary existed; substitute service was permissible in this case.

Lastly, regarding Defendant's request to dismiss Count 11, this Court agrees with the Magistrate Judge that the relevant remedies and claims are not inconsistent so as to warrant dismissal. The dismissal request is due to be denied. In sum, after independent review of the record and upon consideration of Judge Morris's report and recommendation, the Court adopts the report and recommendation in all respects. Accordingly, it is ORDERED:

1. Plaintiff's Objection to the Magistrate Judge's Report and Recommendation (Dkt.26) is overruled; the Report and Recommendation (Dkt.25) is adopted and incorporated by reference:

2. The Motion to Dismiss and Quash Service of Process (Dkt.3) is DENIED:

3. Plaintiff's Motion for an Order Directing Clerk to Issue Summons (Dkt.16) is DENIED as moot;

4. Plaintiff's Request for an Evidentiary Hearing (Dkt.14) is DENIED; and

5. The Clerk is directed to STRIKE the Defendant's Memorandum in Support of. Defendant's Motion to Dismiss (Dkt.11) as well as Plaintiff's Opposition (Dkt.13) to same from the record.

REPORT & RECOMMENDATION¹

THOMAS E. MORRIS, United States Magistrate Judge.

This case comes before the Court on Defendant's Motion to Dismiss Complaint and Quash Service of Process (Doc. # 3), Plaintiff's Opposition to Defendant's Motion to Dismiss Complaint and Quash Service of Process and Plaintiff's Request for Evidentiary Hearing (Doc. # 8, Opposition), Defendant's Memorandum in Support of Defendant's Motion to Dismiss Complaint and Quash Service of Process (Doc. # 11), Plaintiff's Opposition to Defendant's Memorandum in Support of Defendant's Motion to Dismiss Complaint and Quash Service of Process and Plaintiff's Renewed Request for Evidentiary Hearing (Doc. # 13); and Plaintiff's Motion for an Order Directing Clerk to Issue Summons (Doc. # 16). This matter has been referred to the undersigned for a report and recommendation to the District Judge.

Background Facts

The instant breach of contract action was originally filed in the Circuit Court, Fourth Judicial Circuit, in and for Duval County, Florida, on April 4, 2007. (Complaint plaint, Doc. # 2). The action was removed to this Court on April 30, 2007. (See Doc. # 1). Plaintiff is a former district manager for twelve Big Lots retail stores located in and between Jacksonville and Daytona Beach, Florida. (Doc. # 8 at 2). Big Lots Stores, Inc. is a wholly-owned subsidiary of Big Lots, Inc., an Ohio corporation. (Affidavit of Charles W. Haubiel, II, (hereinafter "Haubiel Affidavit") Doc. # 3 at 2, 4). While so employed, Plaintiff became eligible to receive incentive compensation "in the form of non-qualified stock options under the Big Lots, Inc. 1996-Performance Incentive Plan, as amended." (Doc. # 8 at 2). During the years 2000-2005, Plaintiff physically received 5,700 stock option grants within in the state of Florida. (Doc. # 8 at 2). Plaintiff estimates the value of these stock options to be approximately $120,000. (Doc. # 8 at 3).

After approximately ten years of service, Plaintiff retired from his position at Big Lots in September 2006. (Doc. # 8 at 2-3). In early 2007, Plaintiff requested Big Lots, Inc. allow him to exercise his stock options. (Doc. # 8 at 4). On March 23, 2007, Plaintiff's counsel received a letter denying Plaintiff's request to exercise his stock options. (Id.). The denial was based on language contained in the 1996 Performance Incentive Plan, which provided "that nonqualified stock options may be exercised by a Plan participant only during a period not exceeding three (3) months after the Plan Participant's employment with Big Lots is terminated for any reason ...." (Doc. # 8 at 4). Plaintiff argues that his employment was never "terminated" because he voluntarily retired from his position, therefore the three month time limit does not apply. (Doc. # 8 at 4).

Defendant Big Lots, Inc. seeks (1) dismissal of the complaint for lack of personal jurisdiction; (2) to quash service of process as insufficient; and, alternatively, (3) dismissal of Count II of Plaintiff's complaint requesting declaratory judgment, (See Doc. # 3). Defendant Big Lots, Inc. asserts that as an Ohio corporation, which does not "operate, conduct, engage in or carry on business in Florida" and does not maintain a registered agent in Florida, it is not subject to personal jurisdiction in Florida. (Doc. # 3 at 2, 5). Plaintiff contends, inter alia, that Big Lots, Inc. exercises operational control over Big Lots Stores, Inc., and therefore Defendant is subject to Florida's long arm statute. (See Doc. # 8).

On April 5,...