United States District Court, W.D. Kentucky, Louisville Division
MANAGEMENT REGISTRY, INC. PLAINTIFF
CLOUD CONSULTING PARTNERS, INC. d/b/a CLOUD CPI DEFENDANT
MEMORANDUM OPINION AND ORDER
H. McKinley Jr., Senior Judge
matter is before the Court on Defendant’s Motion to
Dismiss and, in the Alternative, Motion for Transfer of Venue
[DN 6] and Plaintiff’s Motion to Remand [DN 7]. Fully
briefed, these matters are ripe for decision. For the
following reasons, Defendant’s Motion to Transfer Venue
is GRANTED and Plaintiff’s Motion to
Remand is DENIED.
Management Registry Inc. (“MRI”) is a business,
incorporated in Kentucky with its principal place of business
in Louisville, Kentucky, that provides employees for
employers in various industries. [DN 1-2 ¶¶
1–2]. Defendant Cloud Consulting Partners, Inc.
(“CCP”) is a business, incorporated in California
with its principal place of business in Rancho Mirage,
California, that provides human resources management
services. [Id. ¶¶ 3–4]. In March
2017, MRI contacted CCP about services that CCP could
potentially provide to MRI to increase MRI’s
efficiency. [Id. ¶ 5]. At the end of April
2017, MRI and CCP executed a Master Consulting Services
Agreement and Statement of Work (the “Agreement”)
which was authored by CCP. [Id. ¶¶
pertinent part, the Agreement required that “any
dispute or claim arising under this Agreement between the
Parties shall first be referred to mediation administered by
the American Arbitration Association at its Los Angeles,
California hearing location before resorting to
arbitration.” [Id. ¶ 8; DN 1-2 at 26].
Further, the Agreement stated that it would “in all
respects, be interpreted, construed, enforced and governed by
and under the laws of the State of California.” [DN 1-2
the Agreement, CCP was to provide MRI with remote services.
MRI alleges that CCP failed to deliver a laundry list of
services that were assured under the Agreement. [Id.
¶ 24]. Further, MRI claims that CCP issued fraudulent
invoices requesting payment for services never rendered.
[Id. ¶¶ 18, 20, 25]. MRI, under the
mistaken belief that the contracted services had been
performed, paid CCP-$80, 000 between two invoices.
[Id. ¶¶ 20, 25]. On March 8, 2018, MRI
contacted CCP directly and notified CCP that substantial
services were not performed. [Id. ¶ 22].
March 26, 2019, MRI filed a civil against CCP in the
Jefferson Circuit Court, Jefferson County, Kentucky. MRI
asserts five causes of action against CCP: Conversion (Count
I), Breach of the Duty of Loyalty (Count II), Fraud, Deceit,
and Misrepresentation (Count III), Unjust Enrichment (Count
IV), and Common Law Fraud (Count V). [Id.
¶¶ 30–57]. MRI seeks at least $80, 000 in
compensatory damages in addition to other categories of
damages. [Id. at 13]. On May 6, 2019, CCP filed a
Notice of Removal in the Western District of Kentucky-CCP
removed the action based on diversity jurisdiction. [DN 1].
Three days later, CCP filed its Motion to Dismiss and, in the
Alternative, Motion for Transfer of Venue. [DN 6].
Thereafter, MRI filed both an opposition to CCP’s
Motion as well as a Motion to Remand. [DN 16; DN 7].
Motion to Remand
filed a Motion to Remand claiming that CCP’s removal
was improper. [DN 7]. The Court addresses this Motion first
as it concerns the Court’s ability to consider
preliminary matter, a civil case brought in a state court may
be removed by a defendant to federal court if it could have
been brought there originally. 28 U.S.C. § 1441(a). In
order for a defendant to remove a case to federal court based
upon diversity jurisdiction, there must be complete diversity
of citizenship both at the time the case is commenced and at
the time that the notice of removal is filed. See
Jerome–Duncan, Inc. v. Auto–By–Tel
L.L.C., 176 F.3d 904, 907 (6th Cir. 1999); 28 U.S.C.
§ 1332(a). “The party invoking federal court
jurisdiction-in this case, [Defendant], as removing party-has
the burden of demonstrating by competent proof that the
complete-diversity and amount-in-controversy requirements are
met.” Cleveland Housing Renewal Project v. Deutsche
Bank Trust Co., 621 F.3d 554, 559 (6th Cir. 2010)
(citing Hertz Corp. v. Friend, 559 U.S. 77 (2010)).
does not take issue with the Court’s ability to
exercise jurisdiction but instead asserts that CCP failed to
timely file the notice for removal. [DN 7; DN 7-1]. As such,
MRI argues that remand is appropriate. [Id.]. Under
28 U.S.C. § 1446(b)(1), a defendant shall file a notice
of removal within thirty days after receiving the initial
pleadings. “In applying 28 U.S.C. § 1446(b) to
this case, state law governs the service of process.”
Everett v. Am. Life Ins. Co., No. 1:16-CV-00083,
2016 WL 4746214, at *1 (W.D. Ky. Sept. 12, 2016) (citing
Murphy Bros., Inc. v. Michetti Pipe Stringing Inc.,
526 U.S. 344, 353 (1999)). The crux of the parties’
disagreement hinges on what date service of process was
properly executed according to Kentucky law.
maintains that on March 19, 2019, CCP’s California
attorney, Mr. Roman Whittaker, waived formal service upon the
corporation by advising that he would serve as the agent for
service of process. [DN 7-1 at 6]. Thereafter, on March 26,
2019, MRI filed the Complaint and emailed a copy thereof with
the Summons to Mr. Whittaker. [DN 7-3 at 1]. That being the
case, MRI argues that CCP’s Notice of Removal, filed
May 6, 2019, was outside of the thirty-day timeframe during
which a case may be properly removed. [DN 7-1 at 7]. MRI
spends much of its Motion arguing that Kentucky law controls
effective service of process and that a party may waive
service of process by agreement. CCP does not dispute either
point. [DN 10 at 5]. However, CCP states that at no point did
Mr. Whittaker agree to waive service of process and that MRI
has no evidence to the contrary. [DN 10 at 5]. Instead, CCP
argues that service of process was not effectuated until
either April 16 or April 17, 2019. [Id. at 4]. More
pointedly then, the issue is whether CCP agreed to waive
service of process in this case.
failed to provide any evidence of CCP’s waiver of
service of process. MRI relies on a single statement from
CCP’s California counsel Mr. Whittaker that states:
“I may be served as the agent for service of process
for [CCP].” [DN 7-2 at 1]. This statement, as is
obvious from the text, is nothing more than Mr. Whittaker
informing MRI on whom it may serve process. In addition, MRI
conveniently leaves out several additional facts which
controvert its position. First, MRI takes the position that
“[CCP] failed to raise any objection, whatsoever, to
receipt of service, nor to the indication contained within
the Complaint that [CCP] had, indeed, waived formal
service.” [DN 7-1 at 6]. However, the facts prove
otherwise. On April 5, MRI stated in an email that Mr.
Whittaker had, by his prior statement, agreed to waive
service. [DN 10-5 at 2]. Mr. Whittaker thereafter explained
what his earlier statement clearly indicated-he served as
CCP’s registered agent for service of process and would
accept service on its behalf. [Id.]. In no uncertain
terms, Mr. Whittaker stated: “I never agreed to accept
nor consider your email as proper service.”
[Id.]. In response to this clear indication of
CCP’s position, MRI thereafter had an additional
summons issued that was properly served through
Kentucky’s long-arm statute on April 16, 2019.
there is absolutely no evidence of CCP’s agreement to
waive service, service was not properly executed on March 26,
2019. Accordingly, CCP’s Notice of Removal, filed on
May 6, 2019, was timely. MRI’s Motion to Remand is
Motion to Dismiss and, in the Alternative, to Transfer
moves the Court to dismiss MRI’s claims against it
pursuant to Federal Rules of Civil Procedure 12(b)(2), (3),
and (6). [DN 6; DN 6-1]. CCP spends nearly eight pages of its
memorandum focused on the argument that the parties’
agreement requires arbitration of MRI’s claims against
it and thus warrants dismissal. [DN 6-1 at 8–15]. The
Court, for reasons that will become clear, first ...