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Corning Data Services, Inc. v. Kermick

July 18, 2007

CORNING DATA SERVICES, INC., PLAINTIFF,
v.
ALLEN KERMICK, DEFENDANT.



The opinion of the court was delivered by: Michael A. Telesca United States District Judge

DECISION and ORDER

INTRODUCTION

Plaintiff Corning Data Services, Inc. ("Corning") brings this action pursuant to diversity jurisdiction against Defendant Allen Kermick ("Kermick"), its former employee, seeking damages for lost profits, restitution of salary, expense reimbursements and cost of the use of company assets and equipment. Specifically, Corning alleges that there was a "double-breach" of the duty of loyalty owed to it by Kermick, and that while he was earning his $105,000 per year salary as a Solutions Consultant for Corning, Kermick was also working on behalf of at least one of Corning's competitors.

On May 31, 2007, Kermick filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rules of Civil Procedure 12(b)(1), or in the alternative, because of improper venue, to transfer the action to the United States District Court for the District of New Hampshire. Kermick alleged that the amount in controversy requirement under 28 U.S.C. § 1332 was not satisfied and diversity jurisdiction was lacking in this District. Corning filed a timely memorandum in opposition to Kermick's motion. For the reasons set forth below, I hereby deny Kermick's motion to dismiss for lack of subject matter jurisdiction, and deny his request to transfer this action to the United States District Court for the District of New Hampshire.

BACKGROUND

Corning is a New York corporation headquartered in Corning, New York. On June 5, 2006, Corning employed Kermick as a "Solutions Consultant" responsible for marketing and promoting Corning's products and services to existing and potential customers. In exchange for these and other services, Corning agreed to pay Kermick an annual salary of $105,000. Kermick was to also receive additional benefits such as reimbursement for business and travel expenses, 15 days of Paid Time Off upon hire, and other valuable, company-paid benefits. Kermick has lived and worked in New Hampshire for many years, including the period during which he was employed by Corning. Kermick submitted his travel expenses, work expenses, and time records to Corning's New York headquarters on a weekly basis for processing.

Kermick prepared his work presentations from his home in New Hampshire and maintained telephone and electronic communications with his supervisor, Dave Linderman, Corning's HR and technical support personnel, and other Corning managers, all of whom were in New York. There is a dispute as to how many times Kermick was actually in New York during the 9 months that he was employed by Corning. Corning alleges that Kermick was in New York no less than six times whereas Kermick alleges that he was there only on two occasions.

Corning alleges that in January 2007, Kermick became an employee of Whitebread Technologies ("Whitebread") and failed to notify Corning of his new employment until March 9, 2007. On March 9, 2007, Kermick sent an email to Linderman giving two weeks' notice of his intent to resign from employment with Corning. Kermick's resignation was effective on March 15, 2007.

Corning brought this action on April 18, 2007, alleging that Kermick violated his Employment Agreement and his fiduciary duties to Corning by working for Whitebread before his employment had ended with Corning. Specifically, Corning alleges that there was a six-week overlap of Kermick's employment with Whitebread working for Corning.

DISCUSSION

I. Kermick's Motion to Dismiss

Rule 12(b) of the Federal Rules of Civil Procedure provides that every defense, in law or fact, to a claim of relief in any pleading, whether a claim or counterclaim can be asserted in a responsive pleading. Rule 12(b)(1) provides that a pleader can make a defensive motion for lack of jurisdiction over the subject matter, in place of a responsive pleading. "[F]ederal Courts are courts of limited jurisdiction" Delaware v. Van Arsdall, 475 U.S. 673, 692 (1986), and under the realm of subject matter jurisdiction, the Federal Courts have two types of jurisdictions authorized by Congress and the Constitution: federal question jurisdiction and diversity jurisdiction.

Under federal question jurisdiction, Federal Courts are authorized to hear disputes that arise pursuant to a federal law.

28 U.S.C. § 1331. Under diversity jurisdiction, Federal Courts are authorized to hear disputes between citizens of different states, provided the amount in controversy is greater than $75,000. 28 U.S.C. § 1332. In the instant case, Kermick brings a motion to dismiss ...


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