Triad Motorsports v. Pharbco Marketing Group

Decision Date20 January 2000
Docket NumberNo. Civ. 1:99CV00275.,Civ. 1:99CV00275.
Citation104 F.Supp.2d 590
CourtU.S. District Court — Middle District of North Carolina
PartiesTRIAD MOTORSPORTS, LLC, Plaintiff, v. PHARBCO MARKETING GROUP, INC., Defendant.

Edward F. Hennessey, IV, Robinson, Bradshaw & Hinson, P.A., Charlotte, NC, for Pharbco Marketing Group, Inc., defendant.

MEMORANDUM OPINION

BULLOCK, District Judge.

This action is before the court on Plaintiff Triad Motorsports' motion to remand and on Defendant Pharbco Marketing Group's motion to dismiss this action pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and, in the alternative, motion to dismiss Plaintiff's second, third, and fourth claims pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. This action began when Plaintiff filed suit against Defendant in the General Court of Justice, Superior Court Division, Forsyth County, North Carolina. Defendant removed this action to federal court on April 7, 1999, alleging federal diversity jurisdiction. Thereafter, on April 14, 1999, Defendant filed a motion to dismiss for lack of personal jurisdiction and, in the alternative, a motion to dismiss three of Plaintiff's four claims for failure to state a claim upon which relief can be granted. On April 28, 1999, Plaintiff moved to remand the case to state court on the ground that Defendant failed to file its notice of removal within the time limit set forth in 28 U.S.C. § 1446(b). For the reasons set forth below, the court will deny Plaintiff's motion to remand. In addition, the court will deny Defendant's motion to dismiss this action for lack of personal jurisdiction as well as Defendant's motion to dismiss Plaintiff's second, third, and fourth claims for failure to state a claim upon which relief can be granted.

FACTS

Plaintiff is a limited liability company organized under the laws of the North Carolina, with its principal place of business in Thomasville, North Carolina. Defendant is a Delaware corporation with its principal place of business in Santa Rosa, California. This matter arises out of Plaintiff's claim that Defendant allegedly breached a written agreement to co-sponsor Plaintiff's racing operation for the 1999 National Association of Stock Car Auto Racing ("NASCAR") season.

In the fall of 1998, Plaintiff and Defendant entered into discussions relating to establishing a sponsorship contract under which Defendant would provide funds to Plaintiff and Plaintiff would provide, in addition to other services and benefits to Defendant, advertising space on its race cars and race equipment. During the course of these discussions, Plaintiff and Defendant negotiated via the telephone, as well as exchanged documents and communications via electronic mail. On January 16, 1999, Mark DeMattei ("DeMattei"), Defendant's president and chairman, visited Winston-Salem, North Carolina, to attend the Winston Cup Preview. The Winston Cup Preview is a charity benefit held in Winston-Salem, North Carolina, during which teams participating in the NASCAR Winston Cup racing circuit exhibit their cars to the public and to the press. One purpose of the Winston Cup Preview is to announce sponsorships, team alliances, and to otherwise generate publicity for race teams and team sponsors. While at the Winston Cup Preview, DeMattei participated in a press conference during which he discussed the Defendant's 1999 sponsorship of the Plaintiff's racing operation. In addition, the Defendant's name and logo were affixed to the Plaintiff's race car which was on display at the Winston Cup Preview. While in North Carolina, DeMattei visited the headquarters of Plaintiff's racing operation and discussed the parties' respective obligations under the alleged contract.

Plaintiff contends that on or about January 15, 1999, Plaintiff and Defendant entered into a written contract, contingent upon approval by Defendant's board of directors, regarding Defendant's sponsorship of Plaintiff's racing operation (the "Sponsorship Agreement"). Thereafter, Plaintiff asserts, on January 24, 1999, DeMattei informed Plaintiff that Defendant's board of directors had approved the Sponsorship Agreement. Defendant, on the other hand, contends that its board of directors did not approve the Sponsorship Agreement. According to Defendant, its board of directors approved a different, revised sponsorship agreement (the "Revised Agreement") and submitted the Revised Agreement to Plaintiff. Thereafter, Defendant contends, Plaintiff never returned an executed copy of the Revised Agreement and negotiations ceased between the parties.

Plaintiff filed this action on March 2, 1999, in the Superior Court of Forsyth County, North Carolina. The complaint and summons were sent via certified mail, return receipt requested, to "Mark DeMattei, President and Chairman of Pharbco Marketing Group, Inc., 3554 Round Barn Boulevard, Suite 204, Santa Rosa, California, 95403." (See Br. in Supp. of Pl.' Mot. to Remand Ex. A). The certified mail envelope was received at that address on March 5, 1999.

Two businesses occupy the office space at 3554 Round Barn Boulevard: the Defendant and the law firm of Kohut & Kohut, L.L.P. Defendant has only two employees, and neither employee was in the office on March 5, 1999. Because nobody from Defendant's office was available to accept delivery of the certified mail envelope, Carrie Foster ("Foster"), a paralegal with the law firm which shares the 3554 Round Barn Boulevard address with Defendant, signed for the certified mail envelope containing the summons and complaint. DeMattei received the copy of the summons and complaint on March 9, 1999.

On April 7, 1999, Defendant filed a notice of removal of civil action pursuant to 28 U.S.C. § 1441, which alleged this court had original jurisdiction pursuant to 28 U.S.C. § 1332. On April 14, 1999, Defendant filed a motion to dismiss this action pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and, in the alternative, motion to dismiss Plaintiff's second, third, and fourth claims pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. Thereafter, on April 28, 1999, Plaintiff moved to remand this matter to state court on the grounds that the notice of removal was not filed within the thirty-day removal period set forth in 28 U.S.C. § 1446(b).

DISCUSSION
I. Plaintiff's Motion to Remand

Section 1441(a) of Title 28 permits a defendant to remove from state to federal court "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). Defendant's notice of removal alleges that this court has original jurisdiction over this action pursuant to 28 U.S.C. § 1332(a)(1).1 The first requirement of diversity jurisdiction under 28 U.S.C. § 1332(a)(1) is complete diversity of state citizenship between plaintiff and defendant. See Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806), and Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978). The second requirement of diversity jurisdiction under 28 U.S.C. § 1332(a)(1) is that the matter in controversy must exceed $75,000.00, exclusive of interest and costs. See 28 U.S.C. § 1332(a)(1).

For purposes of diversity jurisdiction, Section 1332(c)(1) of Title 28 states, "[A] corporation shall be 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). In this case, Defendant is a Delaware corporation with its principal place of business in California.

Plaintiff is a limited liability company organized under the laws of North Carolina. Federal courts considering the issue have held that the citizenship of a limited liability company for diversity purposes is determined by the citizenship of each and all its members. See Cosgrove v. Bartolotta, 150 F.3d 729, 731 (7th Cir.1998) ("The citizenship of an LLC for purposes of ... diversity jurisdiction is the citizenship of its members."). All of Plaintiff's members are citizens of either North Carolina or Louisiana. Because complete diversity of citizenship exists in this case, and the matter in controversy is alleged to exceed $75,000.00 exclusive of interest and costs, this court has original jurisdiction over this action pursuant to the provisions of 28 U.S.C. § 1332(a)(1).

Pursuant to 28 U.S.C. § 1446(a), the Defendant must file "a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal." 28 U.S.C. § 1446(a). Section 1446(b) of Title 28 requires the notice of removal to "be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief." 28 U.S.C. § 1446(b).

Plaintiff contends that Defendant was properly served pursuant to North Carolina Rule of Civil Procedure 4(j)(6) and that service of process was complete when the summons and complaint were signed for on March 5, 1999. Therefore, Plaintiff asserts, the thirty-day removal period expired on April 5, 1999.2 Consequently, Plaintiff argues, because Defendant's notice of removal was filed on April 7, 1999, thirty-three days after allegedly proper service of process, this action was improvidently removed and should be remanded to state court.

Defendant relies on Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 119 S.Ct. 1322, 143 L.Ed.2d 448 (1999), and argues that, because no agent or officer of Defendant was properly served with a copy of the summons and complaint in...

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