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City of Syracuse v. Loomis Armored Us

December 15, 2011

CITY OF SYRACUSE, PLAINTIFF,
v.
LOOMIS ARMORED US, LLC, DEFENDANT.



The opinion of the court was delivered by: Mae A. D'Agostino, U.S. District Judge:

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

On June 8, 2011, Plaintiff filed a complaint in New York State Supreme Court, Onondaga County, alleging causes of action for breach of contract and negligence. On July 1, 2011, Defendant removed the action to this Court pursuant to 28 U.S.C. § 1446, asserting that the Court possesses jurisdiction over the matter pursuant to 28 U.S.C. § 1332(a) by virtue of the fact that complete diversity exists between the parties and the amount in controversy exceeds $75,000. On July 8, 2011, Defendant filed a motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing that the complaint is time barred and that it fails to state any prima facie claims for relief. Thereafter, on July 21, 2011, Plaintiff filed a motion to remand the action back to state court.

Currently before the Court is Plaintiff's motion to remand this action back to New York State Supreme Court, Onondaga County.

II. BACKGROUND

Plaintiff is a municipal corporation duly organized under the laws of the State of New York, with its principal place of business located at City Hall, 233 East Washington Street, Syracuse, New York 13202. See Dkt. No. 1-3 at ¶ 1. Defendant is a limited liability company organized under the laws of the State of Texas, with its principal place of business located at 2500 City West Boulevard, Suite 900, Houston, Texas 77042. See id. at ¶ 2.

In or about February of 1995, Plaintiff contracted with Armored Motor Service of America, Inc. ("AMSA") for the collection of money from Plaintiff's single space parking meters located throughout the City of Syracuse. See id. at ¶ 6. Plaintiff contracted with AMSA again in 2000 for the same services. See id. at ¶ 7. "Sometime in 2003, AMSA merged with and/or was bought by [Defendant] and [Defendant] took over responsibility for collecting [Plaintiff's] parking meter money." See id. at ¶ 8. According to the complaint, when Defendant and AMSA merged, Defendant "assumed all of AMSA's liabilities under the aforementioned meter collection contracts with [Plaintiff]." See id. at ¶ 9. Plaintiff claims that Defendant retained the majority of AMSA's employees after this agreement. See id. at ¶ 10.

Eventually, Defendant submitted additional bids to handle Plaintiff's parking meter collection work in 2004, 2006 and 2010, and was awarded contracts with Plaintiff for each of those bids. See id. at ¶ 12.

From 1998 through 2010, Plaintiff claims that Sean McGuigan, first AMSA's and then Defendant's employee, stole coins from Plaintiff's parking meters with the assistance of a third party, Ronald Mancuso. See id. at ¶ 15. Plaintiff claims that Mr. McGuigan was Defendant's only or primary coin collector assigned to collect from its meters during the relevant time period. See id. at ¶ 17. Plaintiff alleges that it lost approximately $2,900,000 in revenue as a result of Mr. McGuigan's theft. See id. at ¶¶ 33, 44. Beginning in 2005, Plaintiff began phasing out the individual parking meters and replaced them with computerized parking stations, which allowed Plaintiff to track the exact amount of money deposited by a customer in the parking station at any given time. See id. at ¶¶ 34, 36. Plaintiff noticed that, as a result of phasing out the individual meters, revenues from its parking meters began to increase in 2006. See id. at ¶ 37. Thereafter, in February of 2010, the Federal Bureau of Investigation informed Plaintiff that Mr. McGuigan and Mr. Mancuso had stolen money from its parking meters. See id. at ¶ 38.

Plaintiff commenced this action on June 8, 2011 in New York State Supreme Court, Onondaga County. In its complaint, Plaintiff asserts seven causes of action against Defendant. These causes of action include (1) breach of contract (pertaining to Defendant's purported contractual liability for the loss or theft of the coins); (2) breach of contract (pertaining to Defendant's contractual liability for "failing to safeguard the key used to open the coin collection cart as required by the contract"); (3) negligence (pertaining to Defendant's failure to "implement and/or impose reasonable safeguards to protect the money"); (4) negligence (pertaining to Defendant's failure to "use reasonable care in collecting, safekeeping, and/or delivering plaintiff's money"); (5) negligence (pertaining to Defendant's failure "to properly supervise McGuigan"); (6) negligence (pertaining to Defendant's "negligent retention of McGuigan"); and (7) negligence (pertaining to Defendant's "negligent entrustment" of the collection cart key to Mr. McGuigan). See id. at ¶¶ 39-78.

Although not named in the caption of the complaint, Plaintiff also asserted two breach of contract and five negligence causes of action against AMSA, which parallel the claims asserted against Defendant. See id. at ¶¶ 79-118. Defendant asserts, and Plaintiff does not appear to argue otherwise, that AMSA was never "properly joined and served" with the complaint.

III. DISCUSSION

Plaintiff raises several grounds in support of its motion to remand. Specifically, Plaintiff argues that (1) "Defendant AMSA's exclusion from the caption was a simple, clerical mistake and not a fatal error that deprives this Court of its power to determine jurisdiction and the propriety of removal[;]" (2) AMSA's status as an inactive corporation is irrelevant to the Court's analysis since it last transacted business in New York State; and (3) "[a]n issue of fact exists as to whether defendant Loomis assumed the rights and responsibilities of defendant AMSA; therefore, defendant AMSA must remain a party to the action thereby defeating Loomis' claim of complete diversity." See Dkt. No. 10-2 at 5-7.*fn1 In response, Defendant argues that (1) complete diversity exists because AMSA was never ...


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