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LoMonaco v. E. Aaron Enterprises

August 22, 2006

ANTHONY LOMONACO AND AJL ENTERPRISES, INC., PLAINTIFF,
v.
E. AARON ENTERPRISES, INC., GRANT PAPER COMPANY, INC., AARON DIRECT, ALLIANCE PULP & PAPER, AND PRIORITY PAPERS, D/B/A THE AARON GROUP OF COMPANIES, DEFENDANTS.



The opinion of the court was delivered by: Sifton, Senior Judge.

MEMORANDUM OPINION AND ORDER

Plaintiffs Anthony LoMonaco ("LoMonaco") and AJL Enterprises, Inc. ("AJL") commenced this action on April 19, 2006 by filing a complaint in the Supreme Court of the State of New York, Suffolk County, against defendants E. Aaron Enterprises, Inc., Grant Paper Company, Inc., Aaron Direct, Alliance Pulp & Paper, and Priority Papers, d/b/a the Aaron Group of Companies ("the Aaron Group") alleging that defendants breached a contract with the plaintiffs by failing to make certain payments called for under the contract. Specifically, plaintiffs seek $969,500.00 and other appropriate relief for damage caused by defendants' breach. On May 23, 2006, defendants removed this action to federal court alleging diversity jurisdiction pursuant to 28 U.S.C. §1332(a). Defendants filed their Answer and Counterclaim on June 6, 2006, alleging breach of contract, unjust enrichment, and fraudulent inducement, among other claims. Now before this Court is defendants' motion to transfer the action to the Eastern District of Pennsylvania ("EDPA"). For the reasons set forth below, the defendants' motion to transfer venue is denied.

BACKGROUND

The following facts are drawn from the parties' submissions in connection with this motion. Disputes are noted.

Plaintiff LoMonaco is an individual domiciled in Suffolk County, New York. Plaintiff AJL Enterprises, Inc. is a corporation incorporated in New York and with its principal place of business in New York. The defendants are an affiliated group of corporations doing business as the Aaron Group. Mindy Aaron, Secretary and Treasurer of the Aaron Group, states that all the corporate defendants are incorporated in Pennsylvania and their principal place of business is in Pennsylvania. Plaintiffs state in their Complaint that the Aaron Group does business in New York. The Aaron Group alleges in its Answer that "certain of the corporate entities have customers located in New York."

Plaintiff LoMonaco entered into the agreement with the defendants which forms the basis of this lawsuit on April 9, 2003. Under the agreement, the Aaron Group hired LoMonaco to act, individually and through his wholly owned company, AJL, as a sales representative for the Aaron Group. The agreement also expressed the Aaron Group's intention to establish an office in New York City.

Counsel for plaintiffs states in his Certification in opposition to this motion that defendants initiated the contract by soliciting the plaintiff in New York. Mindy Aaron says in her Certification in support of the motion that the agreement was drafted in Pennsylvania and executed by the Aaron Group in Pennsylvania. She also states that LoMonaco "had some negotiations over the telephone with Gene Aaron (who lives and works in Pennsylvania)." LoMonaco notes that solicitation by the defendants occurred over an extended period of time. He also states that the principal negotiator for the Aaron Group, Drew Aaron, who operated corporate defendant Aaron Direct through a home office in New York, negotiated in person and via telephone in New York State. Drew Aaron operated corporate defendant Aaron Direct through a home office in New York. Mindy Aaron states that "Aaron Direct is a trade name for Defendant E. Aaron Enterprises, Inc. and . . . is not a separate legal entity," and that plaintiff's conversations with Drew Aaron about the agreement "were reported to and overseen by employees at Defendants' corporate offices in Pennsylvania."

The agreement became effective on May 19, 2003, after the parties executed the agreement, when LoMonaco terminated his employment with a competitor of the Aaron Group.

The plaintiff's primary duties were performed in New York State in a home office, and most of plaintiff's accounts were located in New York. LoMonaco met with Drew Aaron exclusively in New York at Aaron's New York home office. In addition, LoMonaco met with customers in several States within his sales territory, including Pennsylvania. Mindy Aaron says in her Certification that "[a]ll administrative support for LoMonaco's activities was performed in Pennsylvania." Plaintiff states that the Aaron Group employed a liaison, Maryann Dorff between LoMonaco and corporate headquarters in Pennsylvania, located in New York.

Evidence of work performed by LoMonaco is located in both New York and Pennsylvania. All of plaintiff's records documenting his employment with the Aaron Group are presently located in New York. According to Mindy Aaron, documentation in Pennsylvania includes correspondence with customers, records of sales processing and support, billing, order information, and records of disputes with clients brought in by LoMonaco.

The parties dispute the extent to which LoMonaco performed pursuant to the agreement between May 19, 2003 and April 19, 2004. Defendants do not dispute LoMonaco's statement that he was compensated for services rendered during this period. LoMonaco claims that the Aaron Group breached the agreement on April 20, 2004, resulting in damage to plaintiffs, and that the Aaron Group owes LoMonaco and AJL the sum of $969,500.

DISCUSSION

28 U.S.C. § 1404(a) provides:

For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or ...


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