United States District Court, W.D. Missouri, Western Division
FERNANDO J. GAITAN, Jr., District Judge.
Currently pending before the Court is Defendant Philipp Vitti's Motion to Dismiss for Lack of Jurisdiction (Doc. # 3), Plaintiff 504 Tavern LLC's and Shawn Nelson's Motion to Stay Fed.R.Civ.P. 12(b)(6) Proceedings (Doc. # 8), Vitti's Motion to Dismiss for Lack of Jurisdiction (Doc. # 14), plaintiffs' Motion for Discovery on a Limited Basis (Doc. # 19), the parties' Joint Motion to Continue Fed.R.Civ.P. 26(f) Conference and Submit Discovery Plan (Doc. # 21), Vitti's Motion for Sanctions (Doc. # 22) and plaintiffs' Motion for Extension of Time to Complete Service of Process (Doc. # 34).
Shawn Nelson was the owner of a 504 Tavern LLC, located at 504 Westport Road, Kansas City, Missouri. Philipp Vitti was hired by plaintiffs to be the operations manager of 504 Tavern. On November 1, 2011, Vitti signed a management contract. This agreement required Vitti to attend to the daily operations, maintain compliance with the liquor laws and pay the bills for the Tavern. After approximately six weeks on the job, the owners noticed that there were some serious problems with the business, such as a failure to document employees on a legitimate payroll account, failure to pay utility bills in a timely manner, failure to engage in proper accounting and failure to pay insurance premiums. In mid-December, the owners met with Vitti to discuss the problems and to remind him of his obligations under the contract. In early February 2012, Vitti took an unexplained and unauthorized absence from the business. When Vitti failed to return after a month, the ownership of the Tavern decided to terminate his contract on February 28, 2012. Plaintiffs allege that shortly after he was notified that he had been terminated, Vitti withdrew several thousands of dollars from the Tavern's bank account. Plaintiffs allege that after Vitti was terminated, they discovered that he had not been paying the utility bills for the Tavern or making the necessary sales tax payments to the State. Plaintiffs also allege that after Vitti left, they discovered that during February 2012, he had taken approximately $17, 000 from 504 Tavern's bank account and used the money to fund a completely unrelated business located in Orlando, Florida, called "Liquid." Plaintiffs also allege that while in Florida, Vitti stole and misappropriated the identity of 504 Tavern LLC and the members of 504 Tavern LLC in order to set up business accounts for "Liquid." Plaintiffs allege that Vitti accomplished this by forging Shawn Nelson's signature numerous times in order to induce Heartland Payroll Processing Corporation to process transactions for the Florida business. Plaintiffs have asserted claims against Vitti, Robert Sippio and BEPEC, LLC for breach of contract, conversion of funds, fraud, identity theft, negligence, breach of fiduciary duty, unjust enrichment, civil conspiracy RICO and the Fair Credit Reporting Act.
Defendants have moved to dismiss the Amended Complaint on the ground that there is no diversity jurisdiction and alternatively that there is no federal question jurisdiction.
To survive a motion to dismiss under 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A pleading that merely pleads "labels and conclusions" or a "formulaic recitation" of the elements of a cause of action, or "naked assertions" devoid of "further factual enhancement" will not suffice. Id . (quoting Twombly). "Determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950. Under Fed.R.Civ.P. 12(b)(6) we must accept the plaintiff's factual allegations as true and grant all reasonable inferences in the plaintiff's favor. Phipps v. FDIC , 417 F.3d 1006, 1010 (8th Cir. 2005).
It should also be noted that Fed.R.Civ.P. 9(b)'s pleading requirements are also applicable in this case. In H & Q Properties, Inc. v. Doll, No. 8:13CV38, 2014 WL 2919139 (D.Neb. June 26, 2014), the Court stated, "[t]he particularity requirements of Rule 9(b) apply to allegations of... fraud...when used as predicate acts for a RICO claim....However, the particularity requirements of Rule 9(b) do not apply to allegations of the other elements of a RICO claim." Id. at *4 (internal citations and quotations omitted).
A. Motions to Dismiss for Lack of Jurisdiction
Defendant Vitti states that the Court should dismiss this action because the parties are not completely diverse. Vitti states that he is a citizen of the same state as one of the plaintiffs. Additionally, Vitti argues that there is no federal question jurisdiction because plaintiffs have failed to state a claim for Civil Conspiracy RICO or the Fair Credit Reporting Act.
1. Diversity Jurisdiction
A. Citizenship of Defendant Vitti.
Plaintiffs assert that all the defendants, including Vitti are Florida citizens. However, Vitti argues that he is a citizen of Missouri, and thus there is no diversity of citizenship, because 504 Tavern is a Missouri corporation. In Damon v. Groteboer , 937 F.Supp.2d 1048 (D.Minn. 2013), the Court stated
There are two requirements to establish a domicile: (1) physical presence in a state; and (2) intent to remain there indefinitely....Domicile is determined at the time the action is instituted....[T]he Eighth Circuit held that [t]here are rebuttable presumptions  that the place where a person actually lives is his domicile and  that a domicile, once established, continues until a change is shown, so that the burden of proving a change of domicile rests on the party alleging it....[t]he presumption is in favor of an original or former domicile as against an acquired one, and of a domestic as against a foreign one, and that [p]roof of a change of domicile must be clear and convincing.
Id. at 1065 (internal citations and quotations omitted). In Cooney v. Usher, No. 4:12-CV-38-JAR, 2012 WL 484697, *2 (E.D.Mo.Feb.14, 2012), the Court stated that in determining a party's citizenship these are some factors which courts consider: "the party's current residence, voter registration and voting practices, location of real estate and personal property, location of brokerage and bank accounts, membership in unions, fraternal organizations, churches, clubs, and other associations, place of employment or business, driver's license and automobile registration, and payment of taxes." The Court noted that "[n]o single factor is conclusive." Id.
Defendant Vitti filed an affidavit in support of the Motion to Dismiss stating that his permanent residence is located in Kansas City, Missouri in a home owned by his mother. He states that nearly all of his personal property is located at that house, except for his clothing and computer. Vitti states that he is registered to vote in Missouri, the Missouri Department of Revenue sends all official mail to that address, he receives personal correspondence at the Missouri address and he has a bank account in Missouri. Plaintiff states that in 2012, he began working temporary jobs in the service industry, first in Florida and then in Connecticut. He states that while he has been living in Connecticut, he has not bought or leased real estate, registered to vote or established a primary care physician. Vitti states that although he currently lives in Connecticut, he does not consider this to be his home state and has no intention to remain in Connecticut after his employment there is finished. (Vitti Affid. Doc. 15, Ex. 2). Thus, defendants argue that plaintiffs have failed to meet their burden to show that Vitti is a citizen of the state of Florida.
Plaintiffs argue that Vitti is domiciled in Florida because Vitti's mother told the process server, Robert Vick, that her son was living in Florida and she did not have any contact information for him. (Robert Vick Affid. Doc. 18, Ex. 1). Plaintiffs assert that this statement illustrates an intention of Vitti to stay in Florida and not return to Missouri. Plaintiffs also argue that Vitti represented in court papers filed in Florida in February and March 2012 that he had a Florida address and that he was the registered agent of a Florida company. Plaintiffs argue that the facts show that Vitti changed in domicile from Missouri to Florida in 2012. Plaintiffs also argue that at a minimum they should be allowed to conduct limited discovery in order to resolve the conflicting accounts regarding diversity jurisdiction that have been submitted to the Court.
The Court finds that plaintiffs, as the parties asserting jurisdiction, have failed to carry their burden to show that defendant Vitti is not domiciled in Missouri. In Joyce v. Armstrong Teasdale LLP, No. 4:08-CV-1390(CEJ), 2010 WL 3613942, *1 (E.D. Mo.Sept. 7, 2010), the Court noted that "[a] person's domicile persists until a new one is acquired. Holmes v. Sopuch , 639 F.2d 431, 434 (8th Cir.1981). Transitory absence from the state does not diminish the person's domicile in that state unless it becomes his intention to indefinitely reside at that new location. Id." Vitti's affidavit establishes that although he has had temporary positions in both Florida and Connecticut, he had no intention to remain in either of these states and he considers Missouri to be his permanent domicile. Thus, because Vitti's domicile was originally Missouri and because he has only had transitory absences from the state and never evidenced an intent to acquire a new domicile, the Court finds that Vitti retained his Missouri domicile. Because plaintiff 504 Tavern, LLC is also a Missouri corporation, the Court finds that there is a lack of diversity between the parties.
Plaintiffs had sought leave to conduct limited discovery regarding these jurisdictional issues and depose Vitti, his mother and Robert Vick, the process server. However, the Court finds that there is no factual dispute regarding Vitti's residence or his intentions, thus the Court determines that this issue is capable of resolution without conducting jurisdictional discovery. Accordingly, the Court hereby DENIES plaintiffs' Motion for Leave to Conduct Limited Discovery Regarding Jurisdictional Issues (Doc. # 19). Having determined that there is no diversity jurisdiction the Court will proceed to analyze whether federal question jurisdiction exists.
2. Federal Question Jurisdiction
Defendants argue that the Court also lacks jurisdiction over this case because plaintiffs' Amended Complaint has failed to state either a RICO claim or a Fair Credit Reporting Act claim. If these two federal claims are dismissed, defendants argue that the entire case ...