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Pioneer Credit Co. v. Whelan

United States District Court, E.D. Kentucky, Northern Division, Ashland

October 31, 2018

PIONEER CREDIT COMPANY, PLAINTIFF,
v.
RICHARD T. WHELAN and FIRST FINANCIAL CREDIT, INC., DEFENDANTS.

          MEMORANDUM OPINION AND ORDER

          HENRY R. WILHOIT. JR. UNITED STATES DISTRICT JUDGE

         This matter is before the Court upon Defendant First Financial Credit, Inc.'s Motion to Dismiss [Docket No. 10]. The matter has been fully briefed by the parties [Docket Nos. 10-1, 16 and 17]. For the reasons set forth herein, the Court finds that it does not have subject matter jurisdiction over this lawsuit and, as such, the Complaint will be dismissed without prejudice.

         I.

         This case arises from Defendant Richard Whelan's employment by Plaintiff Pioneer Credit Company ("Pioneer'), his subsequent resignation and, then, his employment by Defendant First Financial Credit, Inc. ("First Financial").

         Pioneer specializes in providing consumer loans. [Affidavit of Craig Bell, District Manager for Pioneer, Docket No. 1-1, ¶ 3]. In October 2013, Pioneer hired Whelan as Branch Manager of its Morehead, Kentucky location. Id. at ¶ 5. When he was hired, Whelan and Pioneer entered into an Employment Agreement, which included a non-compete provision. [Employment Agreement, Docket No. 1-1].

         On May 18, 2018, Whelan tendered his resigned to Pioneer. His last day of work at Pioneer was May 30, 2Ol8.[Docket No. 1-1, ¶ 6].

         On July 2, 2018, First Financial, a consumer loan company, opened its doors across the parking lot from Pioneer, with Whelan as its manager. Id. at ¶¶ 8-11.

         Pioneer filed this civil action against Whelan and First Financial alleging that Whelan breached the non-compete provision of his Employment contract and misappropriated Pioneer's confidential and proprietary information. [Docket No. 1]. In addition to seeking compensatory and punitive damages, Pioneer seeks to enjoin Whelan from working for First Financial and utilizing the propriety information he allegedly misappropriated from Pioneer. Id.

         The lawsuit was filed in this Court, on the basis of diversity jurisdiction, pursuant to 28 U.S.C. § 1332, which confers federal jurisdiction over cases involving citizens from different states where the amount in controversy exceeds $75, 000.00, exclusive of interests and costs Id.

         Defendant First Financial seeks to dismiss the Complaint, pursuant to Fed.R.Civ.Proc. 12(b)(1), arguing that Pioneer's Complaint fails to allege sufficient facts to establish that the amount in controversy in this matter exceeds $75, 000.00, as required by 28 U.S.C. § 1332.

         II.

         Challenges to subject matter jurisdiction fall into two categories: facial attacks and factual attacks. Fed.R.Civ.P. 12(b)(1); United States v. Ritchie, 15 F.3d 592, 598 (6th Cir.1994), cert. denied, 513 U.S. 868, 115 S.Ct. 188, 130 L.Ed.2d 121 (1994). A facial attack challenges the sufficiency of the pleading itself. On such a motion, the Court must take all of the material allegations in the complaint as true and construe them in the light most favorable to the nonmoving party. Id. (citing Scheuer v. Rhodes, 416 U.S. 232, 235-37, 94 S.Ct. 1683, 40 L.Ed.2d90(1974)).

         In contrast, a factual attack, as is made here, challenges the factual existence of subject matter jurisdiction-i.e., whether the breach of contract, tortious interference, and injunctive relief claims exceed $75, 000. On this form of motion, the Court's inquiry is limited to determining whether the challenged pleadings set forth allegations sufficient to show the Court that it has jurisdiction over the subject matter; "no presumptive truthfulness applies to the factual allegations, and the court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Id. (internal citations omitted); RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1135 (6th Cir.1996).

         In reviewing such a motion, a district court is to probe the facts and assess the validity of its own jurisdiction. In doing so, the Court has wide discretion to consider affidavits and other documents outside the pleadings. Ohio ...


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