Opinion
Cause No. IP02-0191-C-H/K
November 1, 2002
ENTRY ON PLAINTIFF'S MOTION TO DISMISS COUNTERCLAIM COUNTS V AND VI
This diversity case presents a contract dispute between plaintiff Thomson Multimedia, Inc. and a former employee, defendant Don C. Vassel, who has filed several counterclaims. Thomson Multimedia has moved to dismiss Counts V and VI of the counterclaims under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. The two claims are based on New York law, which Thomson Multimedia contends does not apply to this case.
Count V alleges violation of New York common law defining a "prima facie" tort.
See Burns Jackson Miller Summit Spitzer v. Lindner, 451 N.E.2d 459, 467 (N.Y. 1983). Count VI alleges violation of the New York anti-discrimination statute.
N.Y. Executive Law § 297 (McKinney 2002). As an alternative, Thomson Multimedia contends that even if New York law applies, Vassel has failed to state sufficiently a claim for a "prima facie tort" under that law. As explained below, the court finds that under the facts as pled, New York law could apply to the two counts in question. Indiana choice of law rules apply the law of the place of the tort and New York was identified as the place where the two alleged torts occurred. As also explained below, the court does not find the claim for a prima facie tort, considered in light of Federal Rules of Civil Procedure Rule 8, to warrant dismissal under Rule 12(b)(6). Plaintiff's motion to dismiss the two counterclaim counts is denied.
Discussion For purposes of a motion to dismiss under Rule 12(b)(6), the court takes as true the factual allegations of the party asserting the claims and draws all reasonable inferences in favor of that party. Veazey v. Communications Cable of Chicago, Inc., 194 F.3d 850, 853 (7th Cir. 1999). "Dismissal under Rule 12(b)(6) is proper only if the plaintiff could prove no set of facts in support of his claims that would entitle him to relief." Chavez v. Illinois State Police, 251 F.3d 612, 648 (7th Cir. 2001).
I. Application of New York Law
Thomson Multimedia asserts that New York law does not apply to Counts V and VI of Mr. Vassel's counterclaim and that since both counts are limited to New York law, they fail to state a claim. The question of whether New York law may be applied to this case brought in Indiana must be decided using Indiana choice of laws rules. Jean v. Dugan, 20 F.3d 255, 260-61 (7th Cir. 1994) (federal court applies the forum state's choice of law rules).
Indiana choice of law rules for torts were defined by the Indiana Supreme Court in Hubbard Manufacturing Co. v. Greeson, 515 N.E.2d 1071, 1073-74 (Ind. 1987). Courts first look to the traditional rule that the law to be applied is the law of the state where the tort was committed, i.e., the state where the last act needed to make the defendant liable for the alleged wrong took place. Id. at 1073. But in cases where the place of the tort "is an insignificant contact" or "bears little connection to the legal action," courts should consider other factors "such as: 1) the place where the conduct causing the injury occurred; 2) the residence or place of business of the parties; and 3) the place where the relationship is centered." Id. at 1073-74.
A "prima facie tort," under New York Law, is intentional infliction of harm "by an act or series of acts that would otherwise be lawful." Burns Jackson, 451 N.E.2d at 467. Mr. Vassel asserts that his prima facie tort claim is "based principally on Thomson's agents' abusive conduct in the [November 14, 2001] meeting held in New York." Response to Motion to Dismiss at 3; see also Albiero v. City of Kankakee, 122 F.3d 417, 419 (7th Cir. 1997) (in opposing motion to dismiss, "plaintiff may supplement the complaint with factual narration in an affidavit or brief"). New York is the place where the alleged tort occurred, which would justify application of New York law under Hubbard. There is no need to reach the secondary factors identified in Hubbard, but even these lend support for application of New York law under the facts as pled. New York was the place where the injury allegedly occurred, a place of business of the parties, and, arguably, "the place where the relationship is centered."
Since there is no need to go past the first step of the Hubbard rules, the court does not rule at this time on where the relationship between the parties was centered. The court previously ruled that an Indiana venue was proper because "a substantial part of the events and omissions giving rise to the claim occurred in Indianapolis." Entry on Defendant's Motion to Dismiss or Change Venue at 4. That holding did not amount to a finding that the relationship was centered in Indianapolis.
Count VI of Mr. Vassel's counterclaim alleges violation of a New York state law that provides, in part: "Any person claiming to be aggrieved by an unlawful discriminatory practice shall have a cause of action in any court of appropriate jurisdiction for damages . . . and such other remedies as shall be appropriate . . ." N.Y. Executive Law § 297(9) (McKinney 2002). In Count VI, Mr. Vassel appears to allege that Thomson Multimedia unlawfully discriminated against him on the basis of race when it terminated him at a meeting in New York on November 14, 2001. Answer and Counterclaims, ¶ 31 and 40; Response to Motion to Dismiss at 3. Again, under the facts as pled, the place of the alleged tort is New York, and that location bears a significant relationship to the alleged wrong. Under Hubbard, New York law should apply to the alleged facts.
As pled by Mr. Vassel, New York law applies to the allegations of both Count V and Count VI of the counterclaim. There is no basis for dismissal of the claims on grounds of inapplicability of New York law.
II. Sufficiency of Pleading a "Prima Facie Tort"
Thomson Multimedia also contends that Mr. Vassel's allegations of a prima facie tort are insufficient to establish a claim and that the pleading of a prima facie tort is inconsistent with other claims made by Mr. Vassel. Whether Mr. Vassel has stated a claim under New York law will be determined by applying the Federal Rules of Civil Procedure. Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 427 (1996) ("federal courts sitting in diversity apply state substantive law and federal procedural law").
While Thomson Multimedia cites a number of New York cases where prima facie tort claims were dismissed based on failure to plead specific elements of the tort, "the Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon which he bases his claim. To the contrary, all the Rules require is 'a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47 (1957); Fed.R.Civ.P. 8(a)(2); see also Colton v. Swain 527 F.2d 296, 305 (7th Cir. 1975) (state requirements for proper form of complaint are not controlling in federal actions). The Federal Rules of Civil Procedure do not require that specific elements of a claim be pled. Bennett v. Schmidt, 153 F.3d 516, 518 (7th Cir. 1998) (reversing dismissal of action). Mr. Vassel's pleadings are sufficient to put Thomson Multimedia on notice that it will need to defend a prima facie tort claim against it based, at least in part, on the actions of its agents at the November 14, 2001, meeting held in New York. This meets the requirements of Federal Rule of Civil Procedure 8(a) for pleading a claim and presents no cause for dismissal. Thomson Multimedia can use discovery to obtain further details of the alleged claim.
Thomson Multimedia contends that Mr. Vassel's prima facie tort claim is inconsistent with his allegations of other torts. New York's highest court has established that to avoid "double recoveries," a prima facie tort cannot be found where "a traditional tort has been established." Farmingdale Union Free Sch. Dist. v. Farmingdale Classroom Teachers Ass'n, 343 N.E.2d 278, 285 (N.Y. 1975).
But that rule applies only to an eventual judgment. The Federal Rules of Civil Procedure allow a party to "state as many separate claims or defenses as the party has regardless of consistency. . . ." Fed.R.Civ.P. 8(e)(2) (emphasis added). Mr. Vassel specifically presented the prima facie tort claim "[i]n the alternative."
Answer and Counterclaims ¶ 54. The court sees no reason to dismiss the claim because it might be inconsistent with other claims presented by Mr. Vassel.
Conclusion
Accordingly, Thomson Multimedia's Motion to Dismiss Amended Counterclaim Counts V and VI is denied.