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Overton & Sons Tool & Die Co., Inc. v. Precision Tool, Die & MacHine Co., Inc.

United States District Court, S.D. Indiana, Indianapolis Division

April 28, 2014

OVERTON & SONS TOOL & DIE CO., INC., Plaintiff,
v.
PRECISION TOOL, DIE & MACHINE CO., INC., doing business as NTH WORKS, Defendant.

ENTRY ON MOTION TO DISMISS, TRANSFER, OR STAY

TANYA WALTON PRATT, District Judge.

This matter comes before the Court on Precision Tool, Die & Machine Co., Inc.'s ("Precision") Motion to Dismiss, or in the Alternative, Motion to Transfer, or in the Alternative, Motion to Stay (Dkt. 7). Overton & Sons Tool & Die Co., Inc. ("Overton") brought suit against Precision, alleging that Precision breached two separate agreements between the parties. For the reasons set forth below, Precision's Motion is DENIED.

I. BACKGROUND

For the purposes of a motion to dismiss, the Court must accept the complaint's well-pleaded allegations as true and draw all favorable inferences for the plaintiff. Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 618 (7th Cir. 2007). In January 2013, Precision solicited quotes for an order of dies to be used in the construction of cable abutments. After multiple communications and a series of evolving quotes, Precision accepted Overton's final quote in February 2013. Overton acknowledged Precision's purchase order in an email Order Acknowledgement. At that time, Overton promised delivery by April 30, 2013. From February to mid-March, Precision made additional changes to the project specifications.

Each quote provided by Overton (and the Order Acknowledgment) stated that Overton had the right to "adjust price and delivery if any changes or additions to the project specifications" were requested by Precision. On March 11, 2013, Overton informed Precision that it would be impossible to meet the original deadline of April 30th due to Precision's changes. Shortly thereafter, Precision informed Overton that it was terminating the contract. As of the date of the purported termination, Precision had paid Overton $17, 490.90 of the original contract price. After the termination of the first agreement, Precision entered into a second agreement with Overton, agreeing to pay Overton $10, 000.00 for design drawings. However, despite delivering the requested drawings, Overton has not been paid under the terms of this subsequent agreement.

On August 16, 2013, Overton filed a complaint in this Court, requesting $167, 418.00 in damages arising from Precision's alleged breach of the two agreements. This amount included the balance of the full contract price, which Overton characterizes as "lost revenues and profits" under the original contract terms, and $10, 000.00 for the drawings delivered to Precision. On September 4, 2013, Precision filed their lawsuit in the Western District of Kentucky. Two days later, Precision filed the instant Motion to Dismiss, or in the Alternative, Motion to Transfer, or in the Alternative, Motion to Stay. Additional facts will be addressed below as necessary.

II. LEGAL STANDARD

A motion to dismiss under Rule 12(b)(1) challenges the court's subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). The burden of proof is on the party asserting jurisdiction. Sapperstein v. Hager, 188 F.3d 852, 855 (7th Cir. 1999). In determining whether subject matter jurisdiction exists, the court must accept all well-pleaded facts alleged in the complaint and draw all reasonable inferences from those facts in the plaintiff's favor. Id. A court ruling on a motion to dismiss under Rule 12(b)(1) also "may properly look beyond the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists." Capitol Leasing Co. v. F.D.I.C., 999 F.2d 188, 191 (7th Cir. 1993). Because "[j]urisdiction is the power to declare law, '" a district court may not proceed in its absence. Hay v. Ind. State Bd. of Tax Com'rs, 312 F.3d 876, 879 (7th Cir. 2002) (citing Ruhrgas v. Marathon Oil Co., 526 U.S. 574, 577 (1999)).

III. DISCUSSION

A. Motion to Dismiss

This motion to dismiss under Rule 12(b)(1) challenges whether the amount in controversy meets the requirement of 28 U.S.C. § 1332(a). Under 28 U.S.C. § 1332, district courts maintain original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000.00, exclusive of interest and costs, and is between citizens of different states. 28 U.S.C. § 1332(a)(1). However, in order for this Court to exercise jurisdiction over diverse parties, the plaintiff must plead sufficient facts to satisfy the amount in controversy component. To survive a motion to dismiss for lack of subject matter jurisdiction, a plaintiff need only show the existence of facts that could, consistent with the complaint's allegations, establish jurisdiction. Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443 (7th Cir. 2009) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992); Lac Du Flambeau Band of Lake Superior Chippewa Indians v. Norton, 422 F.3d 490, 495 (7th Cir. 2005)).

A party challenging the amount in controversy may make either a facial or factual challenge to jurisdiction. Facial challenges to jurisdiction require only that the Court look to the complaint to see if the plaintiff has sufficiently alleged a basis of subject matter jurisdiction, whereas a factual challenge occurs where the complaint is formally sufficient, but the contention is that there is in fact no subject matter jurisdiction. Id. at 443-444. In the context of a facial challenge, the Court does not look beyond the allegations of the complaint, which are taken as true for purposes of the motion. Id. at 444. A facial challenge to jurisdiction succeeds "[o]nly if it is legally certain that the recovery (from plaintiff's perspective) or cost of complying with the judgment (from defendant's) will be less than the jurisdictional floor...." LM Ins. Corp. v. Spaulding Enters. Inc., 533 F.3d 542, 547 (7th Cir. 2008) (quoting Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006)). However, where the defendant launches a factual challenge to jurisdiction, the Court may properly look beyond the jurisdictional allegations of the Complaint and view whatever evidence has been submitted on the issue to determine whether jurisdiction in fact exists. Id. "[I]f the facts place the district court on notice that the jurisdictional allegation probably is false, the court is duty-bound to demand proof of its truth." Apex Digital, Inc., 574 F.3d at 444 (quoting Kanzelberger v. Kanzelberger, 782 F.2d 774, 777 (7th Cir. 1986)).

Precision argues that it is making a facial challenge to jurisdiction, arguing that the facts alleged in Overton's Complaint do not support a recovery of an amount in excess of $75, 000.00. However, Precision also attaches exhibits to its motion in support of an argument that the true amount in controversy between Overton and Precision does not meet the jurisdictional threshold, which constitutes a factual challenge to jurisdiction. Regardless of whether the Court treats ...


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