Turner v. Harvard MedTech of Nev., LLC

620 F.Supp.3d 569

Marcus TURNER, Plaintiff, v. HARVARD MEDTECH OF NEVADA, LLC, andKuldarshan S. Padda, Defendants.

No. 1:22-CV-83-DAE

United States District Court, W.D. Texas, Austin Division

Signed August 8, 2022

Jennifer Brown Trillsch, Alexius Miller, Jones Spross PLLC, Austin, TX, for Plaintiff.

Paul S. Padda, Paul Padda Law, PLLC, Las Vegas, NV, T. Wade Jefferies, The Law Firm of T. Wade Jefferies, Austin, TX, for Defendants.

ORDER: (1) GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION; (2) MOOTING MOTION TO DISMISS FOR IMPROPER VENUE; AND (3) TRANSFERRING CASE TO DISTRICT OF NEVADA

David Alan Ezra, Senior United States District Judge

The matter before the Court is Defendants Harvard MedTech of Nevada, LLC ("HMT") and Kuldarshan S. Padda's ("Padda") Motion to Dismiss for Lack of Personal Jurisdiction or, Subject Thereto, Motion to Dismiss for Improper Venue or, in the Alternative, for Transfer to the District of Nevada. (Dkt. # 5.) The Court finds these matters suitable for disposition without a hearing. After careful consideration of the memoranda in support of and in opposition to the motions, the Court, for the reasons that follow, GRANTS IN PART and DENIES IN PART the motion to dismiss for lack of personal jurisdiction, DENIES AS MOOT the motion to dismiss for improper venue, and TRANSFERS the case to the District of Nevada.

BACKGROUND

On December 8, 2021, Plaintiff Marcus Turner filed suit in the 353rd Judicial District Court of Travis County, Texas. (Dkt. # 1-1.) Plaintiff's original petition alleges that in October 2020, he and Defendant Padda negotiated the essential terms of Plaintiff's upcoming employment with HMT, the result of which was an oral employment agreement ("Employment Agreement"). (Id. at 5.) According to Plaintiff, pursuant to the terms of the Employment Agreement, he would begin contracting services through the end of the year on a part-time basis based on compensation pending. (Id.) In exchange for duties typical of a Chief Technology Officer/Senior Vice-President of Technology, Plaintiff alleges that he was to receive a market-value salary for the 2021 calendar year and a stock option with a four-year earn in at a .25 percent per year basis, as well as paid time off and reimbursement of business travel and other out-of-pocket expenses. (Id.)

Thereafter, in December 2020, Plaintiff contends that Defendants represented that they could not afford to pay market rates to Plaintiff, but that he could be onboarded as a "(TX) IT TECH" in order to provide him with health insurance. (Dkt. # 1-1 at 5.) Plaintiff further alleges that Defendants also promised to adjust his salary to market rate by the end of June 2021, to take effect in July 2021, in accordance with their oral October 2020 Employment Agreement. (Id. at 5-6.) Based on these promises, Plaintiff alleges that he assumed a full-time role for Padda and HMT in January 2021, working in excess of 40 hours per week. (Id. at 6.) According to Plaintiff, he was introduced by Padda to other staff as Chief Technology Officer and Senior Vice President of Technology. (Id.) Plaintiff also received a partial salary of $11,829.96 for his work from January to June 2021. (Id.)

In June 2021, Plaintiff alleges that Defendants adjusted his salary to $175,000 per year—less than the market rate—but promised that his salary would again be adjusted to market rate in September 2021, to take effect in October 2021, and to write a check for the difference between the market rate salary earned between January and August 2021. (Dkt. # 1-1 at 6.) According to Plaintiff, he also accepted Defendants' oral offer to increase Plaintiff's stock grant by one point. (Id.)

In July 2021, Plaintiff alleges his relationship with Defendants deteriorated and that he endured verbal abuse from Padda. (Id.) Plaintiff contends that in late July 2021, he informed Defendants that he would not continue his employment in 2022 due to verbal abuse and that HMT had a toxic culture. (Id.) However, Plaintiff alleges he did not immediately terminate the relationship due to the significant compensation owed to him based on the Employment Agreement. (Id. at 6-7.)

According to Plaintiff, on September 16, 2021, his employment abruptly ended in a termination letter by Defendants. (Dkt. # 1-1 at 7.) Plaintiff contends, however, that the termination letter erroneously stated that Plaintiff had resigned on August 23, 2021. (Id.) Plaintiff alleges that he did not resign and that he continued to work up until he was terminated by Defendants. (Id.) Plaintiff asserts that Defendants have failed and refused to pay him the full compensation he was promised and owed, as well as failed to reimburse him for submitted expenses and for paid time off. (Id.)

Defendants dispute the facts alleged in Plaintiff's petition. Defendants maintain that Plaintiff did in fact resign his employment in an email sent to Padda on September 2, 2021, which memorialized his earlier termination in August 2021. (Dkt. # 5 at 2.) Defendants also contend that Plaintiff sought unemployment benefits from the Texas Workforce Commission ("TWC"), which identified Plaintiff's employer as "Advanstaff, Inc." ("Advanstaff"), and not HMT, and stated that he was fired from assignment. (Id. at 3.)

Plaintiff's petition alleges claims against Defendants for breach of contract and for declaratory judgment. (Dkt. # 1-1.) On January 31, 2022, Defendants removed the case to this Court on the basis of diversity jurisdiction. (Dkt. # 1.) Plaintiff's petition states that he is a citizen of Texas, residing in Travis County, Texas. (Dkt. # 1-1 at 4.) Plaintiff also alleges that HMT is a Nevada limited liability company with its principal place of business in Nevada, and that Padda is a citizen of the state of Nevada. (Id.)

On February 22, 2022, Defendants filed the instant motion to dismiss for lack of personal jurisdiction, or for improper venue, or in the alternative, for transfer to the District of Nevada. (Dkt. # 5.) On March 8, 2022, Plaintiff filed a response in opposition (Dkt. # 7)¹; Defendants filed a reply on March 18, 2022 (Dkt. # 9.)

APPLICABLE LAW

Defendants move to dismiss pursuant to both Rules 12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure. (Dkt. # 5.)

A. Rule 12(b)(2)

Federal Rule of Civil Procedure 12(b)(2) governs dismissal for lack of personal jurisdiction. Fed. R. Civ. P. 12(b)(2). Under Rule 12(b)(2), a plaintiff bears the burden of establishing personal jurisdiction and must establish a prima facie case of personal jurisdiction. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994). The Court "may resolve a jurisdictional issue by reviewing pleadings, affidavits, interrogatories, depositions, oral testimony, exhibits, any part of the record, and any combination thereof." Command-Aire Corp. v. Ontario Mech. Sales & Serv. Inc., 963 F.2d 90, 95 (5th Cir. 1992). The Court accepts as true all uncontroverted allegations in the complaint, and conflicts between affidavits must be resolved in the plaintiff's favor. Wilson, 20 F.3d at 648 (quoting Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990)). A prima facie case of personal jurisdiction may be overcome if the defendant "present[s] a compelling case that . . . render[s] jurisdiction unreasonable." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The Court must find it has personal jurisdiction over a defendant before making any decision as to the merits. Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 430, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007).

B. Rule 12(b)(3)

Federal Rule of Civil Procedure 12(b)(3) allows a party to move to dismiss an action for "improper venue." Fed. R. Civ. P. 12(b)(3). Once a defendant raises improper venue by motion, "the burden of sustaining venue will be on [the] Plaintiff." Cincinnati Ins. Co. v. RBP Chem. Tech., Inc., No. 1:07-CV-699, 2008 WL 686156, at *5 (E.D. Tex. 2008). "Plaintiff may carry this burden by establishing facts that, if taken to be true, establish proper venue." Id. (citations omitted). The Court "must accept as true all allegations in the complaint and resolve all conflicts in favor of the plaintiff." Mayfield v. Sallyport Glob. Holdings, Inc., No. 6:16-CV-459, 2014 WL 978685, at *1 (E.D. Tex. 2014) (citing Ambraco, Inc. v. Bossclip, B.V., 570 F.3d 233, 237-38 (5th Cir. 2009)). In determining whether venue is proper, "the Court may look beyond the complaint to evidence submitted by the parties." Ambraco, 570 F.3d at 238. If venue is improper, the Court must dismiss, "or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a); Fed. R. Civ. P. 12(b)(3).

ANALYSIS

Defendants first move to dismiss Plaintiff's complaint for lack of personal jurisdiction against HMT and Padda pursuant to Rule 12(b)(2). (Dkt. # 5 at 4.) In support of their argument, Defendants assert that Plaintiff's employer was Advanstaff and not HMT, as Plaintiff indicated in his paperwork to the TWC. (Id.) Defendants further maintain that HMT does not maintain systematic or continuous ties to Texas, and that HMT is a Nevada limited liability company with its principal place of business in Nevada. (Dkt. # 5 at 5.) Defendants also contend that Padda is neither Plaintiff's employer, nor has he ever set foot in the state of Texas for any purpose related to Plaintiff's association with HMT. (Id.) Defendants instead contend that Plaintiff would routinely travel to Nevada for meetings and that he resigned while in that state. (Id.)

Plaintiff responds that the Court has specific and general jurisdiction over Defendants given that Defendants' contacts with the state of Texas produced the subject contract at issue, and that they were continuous and systematic. (Dkt. # 7 at 9.) Regarding Advanstaff, Plaintiff contends that this company only administered the payroll and benefits while Plaintiff...