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Ferrara v. Munro

United States District Court, D. Connecticut

January 13, 2017



          CHARLES S. HAIGHT, JR. Senior United States District Judge.


         Plaintiffs Louis Ferrara, Melissa Ferrara, and New England Alpacas (collectively, "Plaintiffs") commenced this action against Defendants Ryen Munro and Tripping Gnome Farm, LLC ("Defendants"), seeking contractual damages "arising from the Defendants' refusal to pay the Plaintiffs commission on the Defendants' sale of certain alpaca[s] to non-party Pamela Brewster and her company Stillmeadow Farm, LLC, " located in Stonington, Connecticut.[1] Doc. 1 ("Complaint"), ¶ 1. Because Plaintiffs failed to plead sufficient facts to demonstrate subject matter jurisdiction in their Complaint, the Court ordered the parties to submit Affidavits to establish their citizenship for federal diversity jurisdiction purposes. Doc. 18 (Order, dated November 22, 2016).

         In addition, Plaintiffs were directed to file an affidavit to prove that their claims meet the jurisdictional minimum for diversity of citizenship jurisdiction - exceeding $75, 000, exclusive of interest and costs, 28 U.S.C. § 1332(a).[2] The alleged contractual damages in the action, without attorneys' fees, are "in no event . . . less than fifty five thousand dollars ($55, 000.00), " Doc. 1, ¶ 33. That phrasing, for jurisdictional amount purposes, must be interpreted as no more than $55, 000. Consequently, Plaintiffs must establish that their alleged past attorneys' fees of $25, 000 and/or expected attorneys' fees of $30, 000, id., ¶¶ 35-36, should be considered by the Court when calculating the jurisdictional amount. To be more precise, Plaintiffs must demonstrate a sufficient basis to include attorneys' fees totaling $20, 001 to reach a claim "exceeding $75, 000": $55, 000 in contract damages plus $20, 001 in attorneys' fees, which equals $75, 001.

         In order for the Court to consider these past and/or projected attorneys' fees, Plaintiffs must show that such fees are both "reasonable" in amount and based in law (on contract or statutory language). See, e.g., Givens v. W.T. Grant Co., 457 F.2d 612, 614 (2d Cir. 1972), vacated on other grounds, 409 U.S. 56 (1972); Kimm v. KCC Trading, Inc., 449 F.App'x 85, 86 (2d Cir. 2012).

         In compliance with the Court's Order [Doc. 18], Plaintiffs have submitted a Joint Affidavit [Doc. 22] to establish the citizenship of New England Alpacas and to demonstrate that their claims meet the jurisdictional amount via inclusion of attorneys' fees.[3] Defendant Ryen Munro has filed an Affidavit [Doc. 20] to establish the citizenship of Tripping Gnome Farm, LLC ("TGF"). The Court now considers these Affidavits to determine whether it has subject matter jurisdiction so that the matter may proceed.


         A. Citizenship of the Parties

         In its previous Order [Doc. 18], the Court directed an officer or owner of New England Alpacas to specify what kind of entity it is (e.g, corporation, limited liability company) and to prove its state(s) of citizenship.[4] In response, individual Plaintiffs Melissa Ferrara and Louis Ferrara now jointly assert that they are married and "own and operate" New England Alpacas together. Doc. 22 (Plaintiffs' Amended Affidavit), ¶ 4. Furthermore, they clarify that "New England Alpacas" is simply a "fictitious name" used by them to conduct their business, an alpaca farm in Killingworth, Connecticut. Id. It is neither a corporation nor a limited liability company. "New England Alpacas" is simply a "d/b/a" and "not a separate legal entity." Id.

         Under Connecticut law, "a fictitious or assumed business name, " a d/b/a, "is not a legal entity." America's Wholesale Lender v. Pagano, 87 Conn.App. 474, 477 (2005) (holding that trial court had no subject matter jurisdiction over suit brought by d/b/a, which was not "a person in law or a legal entity with legal capacity to sue"). Indeed, as the Connecticut Supreme Court has recognized:

[I]t appears well settled that the use of a fictitious or assumed business name does not create a separate legal entity . . . [and that] [t]he designation [doing business as] . . . is merely descriptive of the person or corporation who does business under some other name. . . . [I]t signifies that the individual is the owner and operator of the business whose trade name follows his, and makes him personally liable for the torts and contracts of the business.

Monti v. Wenkert, 287 Conn. 101, 135 (2008) (quoting Edmands v. CUNO, Inc., 277 Conn. 425, 454 n. 17 (2006) (citations omitted)). See also Andreoni v. Forest City Enterprises, Inc., 660 F.Supp.2d 254, 259-60 (D. Conn. 2009) (holding that d/b/a defendant "has no legal existence, and thus no citizenship, aside from that of the person or corporation who does business under [its] name") (internal quotation marks omitted).

         Because it is not a legal entity, "New England Alpacas" will be removed as a named Plaintiff in this action. Rather, the name "New England Alpacas" shall appear in the caption as "merely descriptive" of the persons who do business under its name, Melissa Ferrara and Louis Ferrara. See Monti, 287 Conn at 135. The parties whose citizenship is dispositive as Plaintiffs in this action are the two Ferraras. Because the Ferraras were domiciled in Connecticut at the commencement of this action, they are both citizens of Connecticut. Doc. 22, ¶ 3.

         As previously alleged in the Complaint, individual Defendant Ryen Munro is, and was at all relevant times, domiciled in Maine. Doc. 1, ¶ 5. In his Declaration, he avers that he is "a resident and citizen of Yarmouth, Maine." Doc. 20 ("Second Declaration of Ryen Munro"), ¶ 2. He is a citizen of Maine.

         In addition, Defendant Ryen Munro declares that Defendant Tripping Gnome Farm, LLC ("TGF") is a limited liability company and that he and Ursula Munro are the only two members of TGF. Id., ¶¶ 1, 4. Like Ryen Munro, Ursula Munro "is a resident and citizen of Yarmouth, Maine." Id., ¶¶ 4-5. In fact, both Ryen Munro and Ursula Munro reside at the same address: 67 Balsam Lane in Yarmouth, Maine. Id., ¶¶ 2, 4. Because both members of TGF are citizens of Maine, TGF is a citizen of Maine. See, e.g, Bayerische Landesbank, New York Branch v. Aladdin Capital Mgmt., 692 F.3d 42, 49 (2d Cir. 2012) ("a limited liability company . . . takes the citizenship of each of its members").

         Therefore, based on the parties' affidavits, all Plaintiffs are citizens of Connecticut and all Defendants are citizens of Maine. There is complete diversity of citizenship between each Plaintiff and both Defendants. See, e.g., St. Paul Fire and Marine Ins. Co. v. Universal Builders Supply, 409 F.3d 73, 80 (2d Cir. 2005) ("Diversity is not complete if any plaintiff is a citizen of the same state as any defendant.").

         B. Jurisdictional Amount

         1. Contract

         With respect to attorneys' fees and the jurisdictional amount for diversity, Plaintiffs were directed to show that the fees were both reasonable and provided for by contract or state statute. See Givens v. W. T. Grant Co., 457 F.2d 612, 614 (2d Cir. 1972) (citing Wright, Federal Courts § 35, at 119 (1970); 1 Moore's Federal Practice ¶ 0.99 [2] (2d ed. 1964)). The Court first examines Plaintiffs' allegations, by Affidavit, regarding a contractual and/or statutory basis for including such fees in the jurisdictional minimum. "Attorney's fees that a plaintiff may collect under contract or under an applicable fee-shifting statute may be included in computing the jurisdictional minimum." James Wm. Moore, et al., Moore's Federal Rules Pamphlet ¶ 1332.5[2][d] (Matthew Bender 2009). If a basis exists for finding the fees recoverable as a matter of right, the Court will determine whether the amounts presented are reasonable.

         With respect to a contractual basis, Plaintiffs have produced a copy of their alleged "Brokering and Boarding Contract" (the "Agreement") with Defendants. Doc. 22 ("Brokering and Boarding Contract"), at 11. Plaintiffs allege in their Affidavit that the contract "[a]ttached hereto as Exhibit A is a document containing material terms of the agreement we entered with the Defendant" and "[t]ogether with a number of emails exchanged between the parties, these documents memorialize the Contract as alleged in the Complaint." Doc. 22, at ¶ 5. They also state in their Complaint that "[o]n or about June 17, 2011, Munro accepted the Plaintiffs' offer to enter a contract which incorporated the terms of the Plaintiffs' standing Brokering and Boarding Contract, modified by the negotiations between the parties." Doc. 1, ¶ 16.

         The Court notes, however, that there is a disputed issue of fact as to whether the parties actually entered a contract and whether the Agreement Plaintiffs have presented to the Court constitutes a contract between the parties. Defendant Ryan Munro states in his initial Declaration that "[t]he Plaintiffs and the Defendant Tripping Gnome Farm, LLC never agreed on the terms of the Master Contract that was sent" and "[t]his lawsuit is based on the unsigned, draft Master Contract." Doc. 16, ¶¶ 8-9. The alleged "Agreement, " as presented by Plaintiffs, contains only the signatures of Melissa Ferrara and Louis Ferrara. Doc. 22, p. 12. No signature of Ryen Munro, in either his individual capacity or as manager of TGF, appears on that contract.

         Furthermore, Ryen Munro contends that there were separate sales contracts between TGF and "[a] customer of the Plaintiffs" for the sale of three animals; and Plaintiffs were to receive a brokerage commission on the sale of only one animal in those contracts. Doc. 16, ¶ 10. Munro alleges that the sales contracts with the customer, likely Brewster, were negotiated and consummated in Maine. Id.

         "A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000) (citing Malik v. Meissner, 82 F.3d 560, 562 (2d Cir.1996)). It thus follows that the party asserting jurisdiction bears the burden of alleging "a proper basis for jurisdiction in his pleadings and must support those allegations with 'competent proof' if a party opposing jurisdiction properly challenges those allegations." Linardos v. Fortuna, 157 F.3d 945, 947 (2d Cir.1998). Affidavits may be used by either party to challenge or support subject matter jurisdiction. Antares Aircraft, L.P. v. Federal Republic of Nigeria, 948 F.2d 90, 96 (2d Cir.1991), vacated on other grounds, 505 U.S. 1215 (1992). See also Makarova, 201 F.3d at 113 ("In resolving a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), a district court . . . may refer to evidence outside the pleadings.").

         In general, the allegations contained in the complaint are accepted as true and construed in the most favorable light for the complainant. Atlantic Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d Cir.1992); Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed. Cir.1993). However, "a factual challenge to subject matter jurisdiction allows only uncontroverted factual allegations [to be] accepted as true . . . ." Fisher v. F.B.I., 94 F.Supp.2d 213, 216 (D. Conn. 2000) (citing Cedars-Sinai, 11 F.3d at 1583).

         If the facts in suit are viewed most favorably for the Plaintiffs, there was a contract between the parties based on a draft Agreement (Ex. A), which although unsigned, was accepted by Defendants via a series of emails. The Plaintiffs, however, have submitted no emails or "competent proof" in support of their statement regarding emails exchanged between the parties; and Defendant Ryen Munro states in his Affidavit [Doc. 15] that the Agreement [Ex. A], as presented, was never entered into between the parties.[5]

         The existence of the contract thus remains an issue of fact. See, e.g., Baron v. Maxam Initiation Sys., LLC, No. CV095005218S, 2010 WL 745495, at *3 (Conn. Super. Ct. Jan. 26, 2010) ("The existence of a contract is a question of fact to be determined by the trier on the basis of all the evidence."). "The intention of the parties manifested by their words and acts is essential to determine whether a contract was entered into and what its terms were." Finley v. Aetna Life & Cas. Co., 202 Conn. 190, 199 (1987) (citation and internal quotations marks omitted). Based on the facts presented, the Court cannot determine whether the parties intended for emails between them to constitute a binding agreement under the terms of the draft Agreement, whether the parties intended that the Agreement would not become final and binding until a written agreement was fully negotiated and signed by all parties, or whether there was no contract at all. See, e.g., Baron, 2010 WL 745495, at *3. Absent sufficient proof of a binding contract, the Court cannot consider the terms of the alleged contract as the basis under which to include attorneys' fees in calculating the jurisdictional amount.

         However, even if Plaintiffs were able to prove that the Agreement they presented was a contract between the parties, the provision regarding attorneys' fees is, in any event, too narrow to encompass all of the fees Plaintiffs seek to include in the jurisdictional amount. That cited provision regarding attorneys' fees states:

Attorney's Fees: In any legal proceeding arising out of this Agreement, the prevailing party shall be entitled to their reasonable attorney's fees and costs of suit, in addition to any other relief granted by the Court.


         Based on this provision, Plaintiffs assert that the following attorneys' fees should be considered as part of the jurisdictional amount in this action: approximately $6, 200 in fees for their Connecticut attorney's attempts over many months, "prior to the filing of any litigation, " to "negotiate in good faith a non-judicial resolution to this matter with the Defendants' Maine attorney, " Doc. 22, ¶¶14-16; $24, 000 in Connecticut attorneys' fees and $13, 000 in Maine counsel's fees in defending and securing the stay of a declaratory judgment proceeding brought by Defendants in Maine, id., ¶¶ 20-21; $36, 000 in fees by Connecticut counsel in a 2014 action that Plaintiffs commenced in Connecticut Superior Court (the "2014 Action") and failed to pursue after Defendant Ryen Munro was dismissed as a defendant "on procedural grounds, " id., ¶¶ 25-29; $10, 000 in fees by Connecticut counsel in a pursuing a second action in Connecticut state court (the "2015 Action") under Conn. Gen. Stat. § 52-592(a), in which Ryen Munro was also dismissed as a defendant, id., ¶¶ 32-35;[6] and $33, 800 in projected fees in the present action, id. ¶ 36.[7]

         Assuming arguendo for the moment that the Agreement presented was a binding contract between the parties, the Court would employ Connecticut's standard rule of contract construction to interpret the terms of the "Attorney's Fees" provision. Specifically, Connecticut courts "accord the language employed in the contract a rational construction based on its common, natural and ordinary meaning and usage as applied to the subject matter of the contract." Cantonbury Heights Condo. Ass'n, Inc. v. Local Land Dev., LLC, 273 Conn. 724, 735 (2005) (citing Alstom Power, Inc. v. Balcke-Durr, Inc., 269 Conn. 599, 610 (2004)). ...

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