Angelich v. Medtrust, LLC , 910 F. Supp. 2d 128 ( 2012 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
GEORGE DAVID ANGELICH,
Plaintiff,
v.
Civil Action No. 12-1508 (JEB)
MEDTRUST, LLC,
Defendant.
MEMORANDUM OPINION
Plaintiff George Angelich was a clinical psychologist with Defendant MedTrust, LLC,
from 2009 until his dismissal in September 2011. Although his Complaint is somewhat unclear,
Plaintiff’s employment appears to have been terminated following an official investigation of
some kind, though he was never informed of its nature or results. He thus brought this suit
against MedTrust, alleging wrongful discharge, breach of contract, tortious interference with a
business expectancy, defamation, and intentional infliction of emotional distress. Defendant now
moves to dismiss, asserting defects in personal and subject-matter jurisdiction, service of
process, and venue. Although a number of Defendant’s procedural arguments are correct,
because the interests of justice favor transfer rather than dismissal and because both parties
appear to concede that venue and personal jurisdiction would be proper in the Eastern District of
Virginia, the Court will transfer the case there.
I. Background
According to the Complaint, which must be presumed true for purposes of this Motion,
Angelich worked for MedTrust on a contract with the Department of Defense from October 2009
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to September 2011. See Compl., ¶¶ 1, 7. MedTrust is a medical staffing company that provides
contract employees to commercial and governmental entities. Id., ¶ 8. Plaintiff was employed as
a clinical psychologist, serving at Fort Belvoir and Fort Myer, both of which are located in
Northern Virginia. Id., ¶¶ 7-8. While employed by MedTrust, he successfully applied for a
permanent position with the Department of Defense. Id., ¶¶ 9-10. The offer was later withdrawn
pending an official investigation, the nature and results of which Plaintiff was never made aware.
Id., ¶¶ 9-13. MedTrust subsequently informed Plaintiff by e-mail that his employment would be
terminated on September 30, 2011. Id., ¶ 16.
Plaintiff’s description of the investigation’s background is difficult to follow, but he
appears to believe that it concerned allegations that he had sexually harassed a coworker. Id., ¶¶
17-27. On September 13, 2012, Plaintiff brought this action against MedTrust, alleging five
common-law causes of action. Id. at 1. Defendant then filed the instant Motion to Dismiss
under Fed. R. Civ. P. 12(b), which the Court now considers.
II. Analysis
Defendant argues that Plaintiff’s suit should be dismissed for lack of personal jurisdiction
(Fed. R. Civ. P. 12(b)(2)), subject-matter jurisdiction (12(b)(1)), appropriate service of process
(12(b)(5)), and venue (12(b)(3)). In considering each argument, the Court must “treat the
complaint's factual allegations as true . . . and must grant plaintiff ‘the benefit of all inferences
that can be derived from the facts alleged.’” Sparrow v. United Air Lines, Inc., 216 F.3d 1111,
1113 (D.C. Cir. 2000) (quoting Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979))
(internal citation omitted); see also Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253
(D.C. Cir. 2005). The Court need not accept as true, however, “a legal conclusion couched as a
factual allegation,” nor an inference unsupported by the facts set forth in the Complaint.
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Trudeau v. Fed. Trade Comm’n, 456 F.3d 178, 193 (D.C. Cir. 2006) (citing Papasan v. Allain,
478 U.S. 265, 286 (1986)) (internal quotation marks omitted).
While analysis of the threshold jurisdictional issues Defendant presents “necessarily
precedes a ruling on the merits, the same principle does not dictate a sequencing of jurisdictional
issues,” which is committed to the sound discretion of the district court. Ruhrgas AG v.
Marathon Oil Co., 526 U.S. 574, 584 (1999). The Court, accordingly, will address Defendant’s
arguments in the order in which they appear in its Motion, beginning with service of process and
then proceeding to discuss subject-matter jurisdiction, personal jurisdiction, and venue.
A. Service of Process
Defendant first argues that Plaintiff’s claim should be dismissed for insufficient service
of process under Fed. R. Civ. P. 12(b)(5). See Mot. at 2. Adequate service of process requires
“more than notice to the defendant,” Omni Capital Int’l, Ltd. v. Rudolf Wolff & Co., Ltd., 484
U.S. 97, 108 (1987), and Plaintiff bears the burden of proving that Defendant was properly
served. See Fed. R. Civ. P. 4(c)(1); Light v. Wolf, 816 F.2d 746, 751 (D.C. Cir. 1987).
Rule 4(h)(1) allows a corporation to be served “in a manner authorized in the state where
the district court is located” or “in a manner authorized in the state where service [was] made.”
Id. Defendant asserts that “Plaintiff simply mailed the Summons and Complaint via certified
mail to ‘MedTrust,’” a method of service it alleges was improper under the laws of both the
District of Columbia, where this Court is located, and Texas, where Defendant was served. See
Mot. at 3-4.
District of Columbia Rule 4(c)(3) allows a corporation to be served by “certified mail,
return receipt requested.” Id. Process, however, must be served upon an “officer, a managing or
general agent, or any other agent authorized by appointment or by law to receive service of
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process.” D.C. Rule 4(h)(1). Likewise, Tex. R. Civ. P. 106 allows a corporation to be served by
registered mail, but requires that service be addressed to a person authorized to accept service,
including the “president[,]… vice presidents[,] . . . and the registered agent of the corporation.”
See Tex. Bus. Corp. Act art. 2.11(A). Texas law further requires that service be made by
someone who is not “a party to or interested in the outcome of the suit.” See Tex. R. Civ. P. 103.
Under Texas law, the plaintiff’s attorney is considered an interested party. See, e.g., Coleman v.
Sentinel Transp., LLC, No. 09-1510, 2009 WL 3834438, at *3 (S.D. Tex. 2009) (holding
plaintiff’s attorney was “a person ‘interested in the outcome’ of [the] suit, which makes service
ineffective under Texas law”); Jackson v. United States, 138 F.R.D. 83, 88 (S.D. Tex. 1991)
(“Plaintiff’s attorney is an agent of [Plaintiff and] . . . does possess an economic interest in the
outcome of the dispute,” rendering him unable to serve process under Texas law) .
Plaintiff does not contest that service here was improper under Texas law, but maintains
that it satisfied D.C. law. See Opp., ¶¶ 9-11. Plaintiff argues that because the “green card” (the
card attached to certified mail that is returned to the sender upon delivery) specified that delivery
was to be made to the “President of MedTrust,” and because he paid for “restricted delivery”
(which ordinarily goes only to a specific addressee or authorized agent), he properly served
Defendant under D.C. law. Id., ¶¶ 9-10. Defendant disagrees, pointing out that the green card
merely serves as proof of delivery for the sender, and that the address on the envelope controls.
See Rep. at 2-3. Defendant further notes that the Summons and Complaint were actually
delivered to a receptionist, who could not have been a person authorized to accept service under
D.C. Rule 4(h)(1). Id. MedTrust is correct. Whether or not Plaintiff paid for proper service, it is
clear he did not obtain it. The Court finds, accordingly, that Plaintiff has not properly served
Defendant by mail here because his mailing failed to address a specific party authorized to
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receive service under either D.C. or Texas law and was sent by his attorney, who was ineligible
to serve process under Texas law.
While a court has the authority to dismiss an action outright on the basis of insufficient
service of process, “the court can, in its sound discretion, ‘direct that service be effected within a
specified time,’” quashing the defective service without dismissing the case. Wilson v.
Prudential Financial, 332 F. Supp. 2d 83, 89 (D.D.C. 2004). “While the court does not look
lightly on failure to comply with the notice requirements of Rule 4,” id., choosing to quash
service in lieu of dismissing the case is appropriate where “dismissing the plaintiff’s case . . .
would potentially subvert justice and unfairly prejudice the plaintiff, . . . [and the defendant
would] not be prejudiced by affording the plaintiff the opportunity to comply with Rule 4.”
Candido v. District of Columbia, 242 F.R.D. 151, 164 (D.D.C. 2007); see also S.J. v. Issaquah
School Dist. No. 411, 470 F.3d 1288, 1293 (9th Cir. 2006) (“the district court has discretion to
dismiss an action or quash service” where service is insufficient); Marshall v. Warwick, 155 F.3d
1027, 1030 (8th Cir. 1998) (appellate court “review[s] for abuse of discretion the decision to
dismiss the complaint” for insufficient service); Kreimerman v. Casa Veerkamp, S.A. de C.V.,
22 F.3d 634, 645 (5th Cir. 1994) (same); Umbenhauer v. Woog, 969 F.2d 25, 30 (3d Cir. 1992)
(“Upon determining that process has not been properly served on a defendant, district courts
possess broad discretion to either dismiss plaintiff’s complaint . . . or to simply quash service of
process.”). Dismissal is generally “inappropriate when there exists a reasonable prospect that
service may yet be obtained.” Umbenhauer, 969 F.2d at 30.
Here, where Defendant has actual notice of Plaintiff’s claim, where there is a “reasonable
prospect that service may yet be obtained,” and where no prejudice would inure to Defendant
from quashing service, the Court sees no reason to dismiss the case. While Plaintiff has failed to
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properly serve Defendant, his errors were minor in nature, and “[i]t is too late in the day and
entirely contrary to the spirit of the Federal Rules of Civil Procedure for decisions on the merits
to be avoided on the basis of such [a] mere technicalit[y]. ‘The federal rules reject the approach
that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome
and accept the principle that the purpose of pleading is to facilitate a proper decision on the
merits.’” Foman v. Davis, 371 U.S. 178, 181-82 (1967) (quoting Conley v. Gibson, 355 U.S. 41,
48 (1957)). The Court will, therefore, quash Plaintiff’s prior service and order that service be
properly effected by January 18, 2013.
B. Subject-Matter Jurisdiction
Defendant next argues that even if service may be cured, Plaintiff’s case must be
dismissed under Fed. R. Civ. P. 12(b)(1) because this Court lacks subject-matter jurisdiction.
See Mot. at 7. Plaintiff bears the burden of proving that the Court has such jurisdiction. See
Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992); U.S. Ecology, Inc. v. U.S. Dep’t of
Interior, 231 F.3d 20, 24 (D.C. Cir. 2000). A court has an “affirmative obligation to ensure that
it is acting within the scope of its jurisdictional authority.” Grand Lodge of Fraternal Order of
Police v. Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 2001). For this reason, “‘the [p]laintiff’s
factual allegations in the complaint . . . will bear close[] scrutiny.” Id. at 13-14 (quoting 5A
Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1350 (2d ed. 1987)).
Federal district courts have original jurisdiction over, inter alia, claims between citizens
of different states where the matter in controversy exceeds $75,000. See 28 U.S.C. § 1332(a).
Defendant argues that Angelich has not satisfied this monetary requirement. See Mot. at 7.
While Plaintiff’s descriptions of his damages could undoubtedly have been clearer – and the
Court trusts that they will be in the future – Plaintiff still satisfies the amount-in-controversy
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requirement of § 1332(a). At the very least, if Plaintiff’s allegations regarding tortious
interference with his business expectancy were believed, he would likely be entitled to his
expected salary as a full-time clinical psychologist with the Department of Defense. Plaintiff
alleges that this salary alone exceeds $75,000, and the Court must accept this as true for purposes
of Defendant’s Motion. This amount, in addition to whatever additional damages Plaintiff may
have incurred in conjunction with his other claims, is sufficient to satisfy the amount-in-
controversy requirement. Because Plaintiff can show complete diversity and an amount in
controversy greater than $75,000, this Court does have subject-matter jurisdiction and will deny
Defendant’s 12(b)(1) challenge.
C. Personal Jurisdiction and Venue
Defendant also asserts that it is not subject to this Court’s personal jurisdiction and that
venue does not lie in this District, so dismissal or transfer to the Eastern District of Virginia is
proper under Rules 12(b)(2) and 12(b)(3). See Mot. at 12-17. To this Court, both personal
jurisdiction and venue appear to be close questions. Even if venue was proper and personal
jurisdiction existed in this District, however, transfer would still be within this Court’s discretion
under 28 U.S.C. § 1404(a). Defendant rightly concedes that both venue and personal jurisdiction
would lie in the Eastern District of Virginia, see Mot. at 17, and Plaintiff does not appear to
contest transfer there. The Court, then, will take the litigants at their word: assuming but not
deciding that venue and personal jurisdiction are proper in this District, the Court nonetheless
agrees that transfer to the Eastern District of Virginia is in the interests of justice and
convenience and is thus appropriate under § 1404(a).
Transfer from an improper venue is available under a separate venue statute, 28 U.S.C. §
1406(a), “whether the court in which it was filed had personal jurisdiction over the defendants or
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not . . . in accord with the general purpose . . . of removing whatever obstacles may impede an
expeditious and orderly adjudication of cases and controversies on their merits.” Goldlawr, Inc.
v. Heiman, 369 U.S. 463, 466-67 (1962). Other courts have routinely applied the Goldlawr
framework to permit transfers under § 1404(a) as well without regard to personal jurisdiction and
venue. See Naartex Consulting Corp. v. Watt, 722 F.2d 779, 789 (D.C. Cir. 1983) (“A court may
transfer a case to another district even though it lacks personal jurisdiction over the defendants.”)
(citing Goldlawr, 369 U.S. at 466-67); Corke v. Sameiet M.S. Song of Norway, 572 F.2d 77, 80
(2d Cir. 1978) (“the court has power [under § 1404(a)] to transfer the case even if there is no
personal jurisdiction over the defendants, and whether or not venue is proper . . . if a transfer
would be in the interest of justice”) (internal quotation marks omitted). In a similar situation
involving forum non conveniens, the Supreme Court has held that “where subject-matter or
personal jurisdiction is difficult to determine, and forum non conveniens considerations weigh
heavily in favor of [transfer], the court properly takes the less burdensome course.” Sinochem
Intern. Co. Ltd. v. Malaysia Intern. Shipping Corp., 549 U.S. 422, 436 (2007).
Transfer under § 1404(a) is proper where the plaintiff could have originally brought the
case in the transferee district, and “the convenience of parties and witnesses [and] the interests of
justice” favor transfer. See 28 U.S.C. § 1404(a). Such decisions are committed to the sound
discretion of the district court. See Stewart Org., Inc., v. Ricoh Corp., 487 U.S. 22, 29 (1988).
Defendant concedes that venue and personal jurisdiction are proper in the Eastern District of
Virginia, clearing the first statutory hurdle, and it lists a number of factors suggesting that it
would indeed be in the interests of convenience and justice to have the case heard there. See
Mot. at 16-17. For example, Defendant notes that “the operative allegations in this lawsuit
occurred in Virginia,” and “Plaintiff was hired by MedTrust to work at Fort Belvoir, located in
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Fairfax County, Virginia . . . [and] only worked at either Fort Belvoir or Fort Myer, located in
Arlington County, Virginia.” Id. Defendant likewise observes that the permanent position with
the Department of Defense – the very business expectancy with which Plaintiff alleges MedTrust
interfered – was to be located in Virginia. Id. Defendant further points out that “all of the
witnesses and evidence will be located in Virginia,” “the expense of trying a case in the District
of Columbia . . . may be substantial,” and “the inconvenience to Plaintiff is small, given that he
worked [in] and commuted to Virginia daily and desired to continue working there.” Id. Finally,
Virginia law will govern all of Plaintiff’s claims. Id. Plaintiff does not take issue with any of
these assertions, suggesting he consents to such a transfer. See Opp., ¶ 33.
“Generally, the interest of justice requires transferring such [a case] to the appropriate
judicial district, rather than dismissing [it].” Williams v. GEICO Corp., 792 F. Supp. 2d 58, 64
(D.D.C. 2011) (citing Goldlawr, 369 U.S. at 466-67). “Given the presumption in favor of
transfer over dismissal,” where all of the relevant events and witnesses are and were located in
Virginia and Virginia law will govern the action, the Court concludes that the interests of justice
do indeed require transfer. Id. That both parties appear to consent to such transfer suggests that
considerations of convenience favor transfer as well. The Court, therefore, will order that this
case be transferred to the Eastern District of Virginia, where both parties concede that personal
jurisdiction and venue will be proper.
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III. Conclusion
For the foregoing reasons, the Court will issue an Order consistent with this Opinion this
day, granting in part and denying in part Defendant’s Motion, and transferring this case to the
Eastern District of Virginia.
/s/ James E. Boasberg
JAMES E. BOASBERG
United States District Judge
Date: December 19, 2012
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