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Katz v. Mogus

September 7, 2007

HOWARD KATZ, PLAINTIFF,
v.
JOE ROBERT MOGUS AND ALL THAT GLITTERS,INC., PRO SE, DEFENDANTS.



The opinion of the court was delivered by: Dora L. Irizarry, United States District Judge

MEMORANDUM AND ORDER

In this breach of contract action, pro se defendants Joe Robert Mogus and All That Glitters, Inc. ("Defendants") move for dismissal on the grounds of lack of subject matter jurisdiction and improper venue. For the reasons stated below, Defendants' motion to dismiss based on lack of subject matter jurisdiction is denied. Notwithstanding that venue in this district is improper, the court declines to dismiss the instant action based on improper venue and instead directs that this case be transferred to the Southern District of New York.

I. Background

Plaintiff Howard Katz ("Plaintiff") is in the business of selling jewelry to retail businesses that, in turn, re-sell the jewelry to individual customers. Plaintiff is a domiciliary of Brooklyn, New York, and he transacts business in New York City. Defendant All That Glitters, Inc., a company incorporated by defendant Mogus outside of New York,*fn1 is a jewelry retailer. Mogus is apparently the sole owner and employee of All That Glitters, Inc.

For about twelve years, Plaintiff and Defendants engaged in the sale and purchase of jewelry. Plaintiff would give Defendants certain jewelry items according to the terms of signed memoranda. Under their contractual arrangement, Defendants would either sell the jewelry and pay part of the profits to Plaintiff, or Defendants would return the jewelry to Plaintiff.

Plaintiff now claims that he gave Defendants certain jewelry items, allegedly valued at approximately $151,000, that Defendants failed to return or pay for as agreed.

II. Discussion

A. Subject Matter Jurisdiction

Under the diversity statute, "[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between--(1) Citizens of different States; [or] (2) citizens of a State and citizens or subjects of a foreign state."*fn2 28 U.S.C. § 1332(a) (2007). "A party invoking the jurisdiction of the federal court has the burden of proving that it appears to a 'reasonable probability' that the claim is in excess of the statutory jurisdictional amount." Tongkook Am. Inc. v. Shipton Sportswear Co., 14 F.3d 781, 784 (2d Cir. 1994). There is "a rebuttable presumption that the face of the complaint is a good faith representation of the actual amount in controversy." Scherer v. The Equitable Life Assurance Soc'y of the United States, 347 F.3d 394, 397 (2d Cir. 2003) (citation omitted). To overcome the presumption, a party need only "show 'to a legal certainty' that the amount recoverable does not meet the jurisdictional threshold." Id. (citation omitted).

Plaintiff alleges that the amount Defendants owe him under their contract is approximately $151,000. (Compl. ¶ 9.) Defendants deny that the amount in question exceeds $75,000 and ask the court "to require Plaintiff, Mr. Katz to provide this court with some proof, a modicum of proof, that the contended amount, (alleged amount owed) does actually qualify in that exceeds 75,000 dollars." (Doc. #43, filed 12/13/2006.) Defendants further state that "Mr. Katz never also sent a bill to my business All That Glitters Inc - he refused to send a bill." (Doc. #43, filed 12/13/2006.) These statements do not demonstrate "to a legal certainty" that Plaintiff cannot recover $151,000. Therefore, Defendants' motion to dismiss for lack of subject matter jurisdiction is denied.

B. Other Jurisdictional Issues

Defendants challenge venue as improperly laid in the Eastern District of New York (the "EDNY"). Plaintiff concedes that the EDNY is not a proper venue, and consents to have this case transferred to the Southern District of New York (the "SDNY"), where, according to Plaintiff, venue is proper. Defendants do not appear to dispute that the SDNY is a proper venue, though this is not entirely clear. (See Doc. #42, filed 12/18/2006.)

If venue is improper, the court "shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. ยง 1406(a). In the interest of justice, this court declines to dismiss the instant action and opts to transfer it to a district where venue is proper. Before transferring the action to the SDNY as Plaintiff requests, however, the court must first determine (1) whether Defendants are ...


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