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Itnamerica v. Nutmeg Senior Rides, Inc.

United States District Court, D. Maine

September 8, 2015

ITNAMERICA, Plaintiff,
v.
NUTMEG SENIOR RIDES, INC. f/k/a ITNNORTHCENTRALCONNECTICUT, Defendant.

ORDER ON DEFENDANT'S MOTION TO DISMISS

NANCY TORRESEN, Chief District Judge.

Before the Court is the Defendant's motion to dismiss (ECF No. 11) the Plaintiff's Complaint pursuant to Federal Rule of Civil Procedure 12(b)(1). For the reasons stated below, the motion is DENIED.

BACKGROUND

This matter arises out of a contract dispute between ITNAmerica (the "Plaintiff") and ITNNorthCentralConnecticut, which now operates under the name Nutmeg Senior Rides, Inc. (the "Defendant"). Compl. ¶¶ 1, 35, 38, 52 (ECF No. 1). According to the allegations in the Complaint, the Plaintiff is a Maine nonprofit corporation that provides transportation services for seniors by working with local affiliates in different areas across the country. Compl. ¶ 2. The Defendant is a nonprofit corporation that offers "rides for seniors and adults with visual[] impairments in ten towns in North Central Connecticut." Compl. ¶¶ 3, 10, 38.

In September of 2007, the parties entered into an Affiliate Community Agreement (the "Agreement") with a five year term. Compl. ¶¶ 9, 16.[1] The Agreement gave the Defendant access to the Plaintiff's "proprietary software and programs, " including the Plaintiff's ITNRides software that "serve[d] both as a research database and as an operational support system." Compl. ¶¶ 12, 13. The Agreement required the Defendant to use this proprietary software "solely in connection with the provision of ITNA Programs and Services." Compl. ¶ 14.

The Defendant agreed to pay the Plaintiff annual affiliate fees, which included an annual base fee and an adjusted fee based on the number of members and rides provided. Compl. ¶ 15. The Agreement also contained a non-compete provision preventing the Defendant from operating a community-based transportation service for seniors in North Central Connecticut for a period of one year following the termination or expiration of the Agreement. Compl. ¶ 20.

In March of 2012, the relationship between the parties began to deteriorate when they began discussions on the terms of a new agreement. Compl. ¶ 27. At this time, the Defendant began to express reservations concerning the Plaintiff's "strategic vision and overall financial well-being." Compl. ¶ 28. On September 25, 2012, the Plaintiff notified the Defendant that its affiliate fees would increase beginning October 1, 2013. Compl. ¶ 29. The parties continued discussions over the course of the next year. Compl. ¶ 30.

On September 20, 2013, the Defendant notified the Plaintiff that it was "suspend[ing] payment of affiliate fees to [the Plaintiff] until further notice" and that it intended "to continue providing rides to individuals in the community." Compl. ¶ 31. Thereafter, the Defendant ceased paying affiliate fees to the Plaintiff. Compl. ¶¶ 32, 34. From the fall of 2013 to December of 2014, the parties unsuccessfully attempted to resolve their dispute. Compl. ¶¶ 32-33. On December 12, 2014, the Defendant sent a letter to the Plaintiff stating that the Plaintiff had elected not to renew the "original affiliation agreement" with the Defendant a "few years ago" and that the Defendant planned to "move forward independently" and continue operating in North Central Connecticut. Compl. ¶ 35. The Plaintiff states that it never elected not to renew the Agreement. Compl. ¶ 36. Rather, the Plaintiff claims that the Agreement was in fact still binding on the parties in December of 2014-and remains so today-because neither party effectively terminated the Agreement. Compl. ¶¶ 36-37.

PROCEDURAL HISTORY

On March 11, 2015, the Plaintiff filed a Complaint against the Defendant in this Court. In lieu of filing an answer, the Defendant moved pursuant to Federal Rule of Civil Procedure 12(b)(1) to dismiss all of the counts against it, alleging that this Court lacks subject matter jurisdiction because the Plaintiff's action does not satisfy the amount in controversy requirement under 28 U.S.C. § 1332. Def.'s Mot. to Dismiss 1. The Plaintiff filed a response in opposition, Pl.'s Opp'n to Def.'s Mot. to Dismiss 8 ("Pl.'s Opp'n") (ECF No. 12), and an affidavit from Plaintiff's President Katherine Freund. June 3, 2015 Aff. of Katherine Freund ¶ 1 (ECF No. 12-1). In its reply, the Defendant argues that the Plaintiff has still failed to meet its burden of establishing the requisite amount in controversy. Def.'s Reply 1 (ECF No. 13).

LEGAL STANDARD

"Federal courts are courts of limited jurisdiction, " restricted to hear matters "authorized by Constitution and statute." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Federal Rule of Civil Procedure 12(b)(1) permits a party to move to dismiss a complaint on the grounds that the court lacks subject matter jurisdiction. It is the plaintiff's burden to establish that federal jurisdiction is proper. Abdel-Aleem v. OPK Biotech LLC, 665 F.3d 38, 41 (1st Cir. 2012).

DISCUSSION

Under 28 U.S.C. § 1332, federal "district courts... have original jurisdiction [over] all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, " and diversity of citizenship exists. 28 U.S.C. § 1332(a). The well-established rule for ...


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