IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA SYSCO CHARLOTTE, LLC, ) ) Plaintiff, ) ) v. ) 1:18CV247 ) BRANDY LEE COMER, et al., ) ) Defendants. ) MEMORANDUM OPINION AND ORDER OSTEEN, JR., District Judge Currently before this court are Plaintiff’s motion to remand, (Doc. 8), and Defendants’ motion to dismiss. (Doc. 5.) Plaintiff asks this court to remand the case to state court pursuant to a forum selection clause in the credit agreement between Plaintiff and certain Defendants. Defendants move to dismiss certain of Plaintiff’s claims pursuant to Fed. R. Civ. P. 12(b)(6). For the following reasons, this court finds that Plaintiff’s motion to remand should be denied because Defendants did not waive their right to remove this dispute to federal court. This court further finds that Defendants’ motion to dismiss should be granted in part and denied in part as set forth herein. Case 1:18-cv-00247-WO-LPA Document 20 Filed 03/26/19 Page 1 of 31 I. BACKGROUND & PROCEDURAL HISTORY Plaintiff Sysco Charlotte, LLC sells food and restaurant supplies. (Complaint (“Compl.”) (Doc. 2) ¶ 1.) Defendants are individuals and corporations involved in the restaurant business. (Id. ¶ 6.) Defendant Comer Khori LLC (“Debtor”) took out a line of credit with Plaintiff, secured by certain assets of Debtor. (See Defs.’ Not. of Removal (“Removal Not.”) (Doc. 1) at 38; Doc. 8-1.)1 This line was personally guaranteed by Defendants Brandy Lee Comer and Fareed Al-Khori (collectively, the “Individual Defendants”). (See Compl. Ex. B (Doc. 2-2).)2 Defendants purchased food and other supplies for their restaurant business from Plaintiff using the line of credit. (Compl. (Doc. 2) ¶¶ 7–9.) The sales included “food purchased 1 All citations in this Memorandum Opinion and Order to documents filed with the court refer to the page numbers located at the bottom right-hand corner of the documents as they appear on CM/ECF. 2 The guarantee attached to Defendants’ notice of removal is identical to the document attached to the Complaint. (Compare Removal Not. (Doc. 1) at 38, with Compl. Ex. B (Doc. 2-2).) This guarantee appears to be dated October 2, 2010, lists the trade name “Iron Hen Café,” and is signed by Defendants Comer and Al- Khori. Plaintiff has also filed a copy of a different guarantee dated April 20, 2016 that lists the trade name “Fresh Local Good Food Group,” but this guarantee is signed only by Defendant Comer. (See Doc. 8-2.) Each guarantee lists the legal name of the company as Comer Khori LLC. To the extent relevant to this Memorandum Opinion and Order, this court will refer to the Iron Hen Café guarantee that is signed by each Individual Defendant. - 2 - Case 1:18-cv-00247-WO-LPA Document 20 Filed 03/26/19 Page 2 of 31 under the Federal Perishable Agricultural Commodities Act”, or PACA. (Id. ¶ 10.) According to the Complaint, the Individual Defendants are the managing members of Debtor and each of the following entities: Comer-Khori, LLC3; Ferrell Group LLC; Murray-Comer- Khori, LLC; HJHN Properties, LLC; and Barn 3203, LLC (collectively, the “LLC Defendants”). (Id. ¶¶ 3–4.) The credit agreement4 between Plaintiff and Debtor includes the following provision: The parties agree to designate the federal and state courts of North Carolina as the exclusive place of venue and jurisdiction for any dispute between them; and Customer waives any right Customer may have to transfer or change venue regarding Customer’s obligations to Sysco. Applicant and guarantors agree to waive exemptions from execution and agree 3 Although Plaintiff appears to refer to Debtor and “Comer- Khori, LLC” interchangeably, (see, e.g., Pl.’s Br. Supp. Mot. to Remand (“Pl.’s Remand Br.”) (Doc. 10) at 3), the Complaint lists these entities as separate Defendants. The credit agreement and account statement each use the name “Comer Khori LLC” (d/b/a Fresh Local Good Food Group), (see Docs. 2-1, 8-1), and this court finds no evidence in the record to suggest any involvement by a “Comer-Khori, LLC.” 4 The document is entitled “Terms, Conditions & Security Agreement,” but the agreement refers to itself as the “Credit Agreement” and sets forth payment terms and procedures. (See Doc. 8-1.) The agreement also grants a security interest as collateral. (Id.) This court will refer to the agreement as the “credit agreement” throughout, while recognizing that it also incorporates an agreement regarding security for extensions of credit. - 3 - Case 1:18-cv-00247-WO-LPA Document 20 Filed 03/26/19 Page 3 of 31 that venue shall be proper in any forum selected by Sysco. (Doc. 8-1. (emphasis added).) The personal guarantee contains a similar forum selection clause.5 (Compl. Ex. B (Doc. 2-2).) Plaintiff alleges that Defendants have breached the credit agreement by failing to pay and that Defendants have “appropriated the proceeds of the PACA food to their own use.”6 (Compl. (Doc. 2) ¶ 15.) Plaintiff brings the following claims: 5 The clause states, in relevant part: The parties choose the law of the state specified in the Customer Agreement to govern all aspects of this guaranty and . designate the federal and state courts of that state as the exclusive place of venue and jurisdiction for any dispute between them, and guarantor waives any right they might [or] may have to transfer or change venue regarding guarantor’s obligations to SYSCO. (See Compl. Ex. B (Doc. 2-2).) For purposes of analyzing the motion to remand, this court finds that the forum selection clause in the credit agreement is broader and that, if the credit agreement clause does not compel remand, neither will the guarantee’s forum selection clause. 6 Specifically, PACA requires that merchants who purchase food from suppliers and sell to the public hold sale proceeds in trust “until full payment of the sums owing in connection with such transactions has been received by such unpaid suppliers, sellers, or agents.” 7 U.S.C. § 499e(c)(2); see also R Best Produce, Inc. v. Shulman-Rabin Mktg. Corp., 467 F.3d 238, 241–42 (2d Cir. 2006) (“The purpose of the trust is to increase the legal protection for unpaid sellers and suppliers of perishable agricultural commodities until full payment of sums due have been received by them.” (internal quotation marks and citation omitted). - 4 - Case 1:18-cv-00247-WO-LPA Document 20 Filed 03/26/19 Page 4 of 31 account stated; breach of contract; breach of the implied duty of good faith and fair dealing; unjust enrichment; fraud; constructive fraud; breach of fiduciary duty; conversion; and unfair or deceptive trade practices. (Id. ¶¶ 18–46.) Plaintiff also argues that the Individual Defendants are personally liable for the acts of Debtor and the LLC Defendants based on both piercing the corporate veil and on the individual Defendants’ personal guarantee. (Id. ¶¶ 47–49.) Plaintiff originally filed suit in the District Court of Cabarrus County, and Defendant Brandy Lee Comer later removed the action to this court as a federal-question case. (See Removal Not. (Doc. 1).) Plaintiff filed a motion to remand,7 (Doc. 8), and a brief in support of that motion, (Pl.’s Br. 7 This case was removed to federal court on March 27, 2018, (see Removal Not. (Doc. 1)), and Plaintiff filed its motion to remand on April 26, 2018. Therefore, this court finds that the motion to remand was timely filed within the 30-day period specified in 28 U.S.C. § 1447(c). This court further finds that Plaintiff has not waived its right to seek remand. When “a party undertakes affirmative action in the federal district court, she has acquiesced in the federal court's jurisdiction and waived objection to the removal.” Lanier v. Am. Bd. of Endodontics, 843 F.2d 901, 904 (6th Cir. 1988). However, a district court has “broad discretion” to decide whether a waiver has occurred. Id. at 905. Here, because Plaintiff has merely responded to the motion to dismiss and filed other administrative motions, this court finds that Plaintiff has not acquiesced to jurisdiction and has not waived the right to seek remand. See Lapoint v. Mid- Atl. Settlement Servs, Inc., 256 F. Supp. 2d 1, 3 (D.D.C. 2003) (“[M]erely engaging in offensive or defensive litigation . does not forfeit the right to a remand.”). - 5 - Case 1:18-cv-00247-WO-LPA Document 20 Filed 03/26/19 Page 5 of 31 Supp. Mot. to Remand (“Pl.’s Remand Br.”) (Doc. 10).) Defendants filed a response objecting to remand. (See Doc. 17.) Defendants also moved to dismiss certain claims in the Complaint pursuant to Rule 12(b)(6), (Doc. 5), and submitted a brief in support of that motion, (Defs.’ Br. in Supp. of Mot. to Dismiss (“Defs.’ Br.”) (Doc. 7).) Plaintiff responded opposing the motion to dismiss, (Doc. 12), and Defendants did not file a reply. II. MOTION TO REMAND A. Standard of Review “The burden of establishing federal jurisdiction is placed upon the party seeking removal.” Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). Out of “[d]ue regard for the rightful independence of state governments . [federal courts must] scrupulously confine their own jurisdiction to the precise limits which the statute has defined.” Healy v. Ratta, 292 U.S. 263, 270 (1934). Matters can be removed to federal court only when they could have been brought in federal court in the first instance. See 28 U.S.C. § 1441(a). For example, federal courts have jurisdiction over any case that implicates a question of federal law, and such a case can therefore generally be removed to federal court.