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May 6, 2005.


The opinion of the court was delivered by: WILLIAM CONNER, Senior District Judge


Plaintiffs Steven Frisone and David Roberts commenced this action against defendants Pepsico, Inc. ("Pepsico") and South Beach Beverage Company, Inc. ("SoBe"), (collectively, the "defendants") alleging: (1) fraud; (2) fraudulent inducement; (3) breach of contract; and (4) breach of a covenant of good faith and fair dealing. Plaintiffs also request an accounting. Plaintiffs assert that this Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332, because diversity of citizenship exists between the parties and the amount in controversy exceeds $75,000, exclusive of interests and costs. Defendants now move pursuant to FED.R.CIV.P. 12(b)(1) to dismiss the Complaint for lack of subject matter jurisdiction and, alternatively, pursuant to FED.R.CIV.P. 56 for summary judgment. For the reasons stated hereinafter, defendants' motion to dismiss is granted.


  I. Undisputed Factual Information

  Plaintiffs Steven Frisone and David Roberts are residents of Connecticut and were residents of Connecticut at the time this action was commenced. (Defs. Rule 56.1 Stmt. ¶ 1.) SoBe is a Delaware corporation with an office in Norwalk, Connecticut, both currently and at the time this action was commenced. (Id. ¶ 2.) Pepsico is a corporation with a principal place of business in New York. (Complt. ¶ 3.)

  On or about January 5, 2001, Pepsico purchased the assets of South Beach Beverage Company, LLC and formed defendant SoBe. (Defs. Rule 56.1 Stmt. ¶ 8.) Frisone and Roberts were employed by SoBe at all times relevant to this action as Treasurer and Controller, respectively. (Id. ¶ 9.) Neither plaintiff had any ownership interest in SoBe. (Id. ¶ 10.) Plaintiffs worked for Janet Banker, the Chief Financial Officer of SoBe from January of 2001 to September of 2003. (Id.) In approximately April of 2001, Banker met with plaintiffs individually to discuss the SoBe Long-Term Incentive Plan ("SoBe LTIP"). (Id. ¶ 11.) Banker used a nine-page written presentation to explain the SoBe LTIP and copies of this presentation were given to plaintiffs. (Id. ¶ 12.)

  The SoBe LTIP had a three-year vesting period and a payout based on the appreciation of the value of SoBe at the end of the three years. (Id. ¶ 14.) Under the SoBe LTIP, certain key employees were awarded Stock Appreciation Rights ("SARs") which were calculated based upon a multiplier of their salary in 2001. (Id. ¶ 17.) The SoBe LTIP set forth the specific formula that would be used to measure the appreciation of the value of SoBe, which would then be used to calculate the payments made to eligible employees based upon their SARs award. (Id. ¶ 18.) The SoBe LTIP provided that the voluntary or involuntary termination of employment prior to the end of the three-year period would result in the forfeiture of all SARs. (Id. ¶ 19.)

  On approximately March 19, 2002, Banker informed Frisone that his position at SoBe may be eliminated, but that she would try to find him a position within the Pepsico organization. (Id. ¶ 20.) In approximately April of 2002, Frisone's job responsibilities were reduced because a major portion of the accounts receivable function was taken over by Pepsi Bottling Group Shared Services. (Id. ¶ 21.) In July 2002, Frisone voluntarily left his employment with SoBe to accept a position with another company. (Id. ¶ 22.)

  In approximately October 2002, Roberts was offered and accepted a position as Group Manager, Co-Pack Accounting at Pepsi-Cola North America ("PCNA"). (Id. ¶ 23.) Regarding Roberts's SARs award, the SoBe LTIP provided that any potential payment would be pro-rated because of his transfer to PCNA. (Id. ¶ 24.) On June 6, 2003. Roberts resigned from his employment with PCNA to accept a position with Honeywell. (Id. ¶¶ 26, 27.)

  Pursuant to the terms of the SoBe LTIP, in approximately February of 2004, three years after the formation of SoBe, participants that were still working for SoBe, PCNA or Pepsico received payments representing the increases in value of their SARs during that three-year period. (Id. ¶ 28.) According to the formula set forth in the SoBe LTIP, the net gain in the value of SoBe at the end of the three years was approximately $970.00 per SAR. (Id. ¶ 29.) Plaintiffs did not receive any payments under the SoBe LTIP because they were not employed at that time by SoBe, PCNA or Pepsico. (Id. ¶ 30.) If Frisone and Roberts had remained employed by either SoBe, PCNA or Pepsico in February of 2004 they may have received payments no greater than $37,000 and $32,000, respectively. (Id. ¶ 31.) Plaintiffs admit that they do not believe anyone at SoBe intentionally made statements that were known to be false when made. (Id. ¶ 32.)

  II. The Parties' Factual Allegations

  A. Jurisdiction

  1. Defendants' Factual Allegations

  Defendants maintain that SoBe's executive management have always worked in the Norwalk, Connecticut office and continue to do so today. (Defs. Rule 56.1 Stmt. ¶ 3.) Defendants also maintain that SoBe's marketing efforts, product development, public relations and general business operations are conducted primarily out of the Norwalk offices. (Id. ¶ 3, 4.) According to defendants, at the time this action was commenced, approximately seventy-five percent of SoBe's employees worked in the Norwalk office, including, inter alia, most of the senior employees, such as marketing managers, sales managers, a brand director, the senior operations manager and the national quality manager. (Id. ¶ 5.) Defendants maintain that as of the end of 2003, any SoBe employees working outside of the ...

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