Dahl v. Gladstone Technology, Partners, LLC
Dahl v. Gladstone Technology, Partners, LLC
Opinion of the Court
MEMORANDUM OPINION
Plaintiff Owen Dahl brings this diversity action against 'his former employers,
I. FACTUAL ALLEGATIONS
On November 1, 2012, Dahl, a resident of Washington, contracted with Defendant Gladstone Technology, a Pennsylvania limited liability company in the business of developing computer software to be used in the financial services industry. Under the terms of the parties’ service' agreement, Dahl, a' valuation expert, was to oversee the development and commercial release of a product called Gladstone Evaluation Index Software. In exchange, Gladstone Technology Partners promised him a 30% share of ownership in Gladstone.
Dahl contends that Gladstone never issued the 30% share of stock as promised in
On May 28, 2015, Defendant Kreuter, in his capacity as Chairman of Gladstone Technology, LLC, notified Dahl by letter that his employment with Gladstone was being terminated “for Cause.”
Dahl filed suit in the U.S. District Court for the Western District of Washington, after which the case was transferred to this Court and consolidated, by stipulation, with a case Gladstone had filed against Dahl in this Court.
II. LEGAL STANDARD
Pursuant to Federal Rule of Civil Procedure 12(b)(6), dismissal of a complaint for failure to state a claim upon which relief can be granted is appropriate where a plaintiffs “plain statement” lacks enough substance to show that he is entitled to relief.
III. DISCUSSION
The service agreement at issue includes a choice of law and a choice of venue provision. The choice of law provision states that the agreement “shall be construed by the law of Pennsylvania for all purposes of conflicts of law.”
A. Count IV: Wrongful Termination in Violation of Washington Public Poli-
Dahl alleges that his termination violates Washington public policy. Although employment in Washington is either contractual or “at-will,” meaning either party may end the relationship for any reason, a claim may arise if an employee can demonstrate: “(1) the existence of a ‘clear public policy* (clarity element), (2) whether ‘discouraging the conduct in which [the employee] engaged would jeopardize the public policy* (jeopardy element), (3) whether the ‘public-policy-linked conduct caused the dismissal’ (causation element), and (4) whether the employer is ‘able to offer an overriding justification for the dismissal’ (absence of justification element).”
The SAC does not allege that the claimed policy, relating as it does in this case to a complaint about non-payment pursuant to a contractual agreement,. is “grounded in the constitution, a statute, or a prior court decision” as required under Washington, law,
B. Count VI: Tortious Interference with Contract
Under Pennsylvania law, to prevail on a claim for tortious interference with existing contractual relationships, a plaintiff must prove: “1) the existence of a contractual or prospective contractual or economic relationship between the plaintiff and a third party; 2) purposeful action by the defendant, specifically intended to harm an existing relationship or intended to prevent a prospective relationship from occurring; 3) the absence, of privilege or justification on the part of the defendant; and 4) legal damage.”
Dahl alleges that Gladstone Associates, Kreuter, and Lally intentionally interfered with his performance under, the service agreement when they refused to issue the agreed-upon shares.
C. Count VIII: Shareholder Oppression and Petition for Judicial Dissolution
A member in a Pennsylvania LLC may petition a court for an order dissolving the company if “it is not reasonably practicable to carry on the company’s activities and affairs in conformity with the certificate of organization and the operating agreement.”
Dahl alleges that “Gladstone Technology is, and at all relevant times hereto was, a Pennsylvania limited liability company,” and that, by virtue of his ownership of Gladstone shares, he was a member of Gladstone.
D. Count IX: Injunction for the Inspection of Books and Records
Under Pennsylvania’s Limited Liability Company Act, LLC members have a statutory right to inspect partnership books.
IV. CONCLUSION
For the reasons set forth herein, the Motion to Dismiss will be granted as to Count IV, Wrongful Termination in violation of Washington Public Policy.
. For the purposes of the Motion to Dismiss, the factual allegations in the SAC are presumed to be true: Bell Atl. Corp. v. Twombly, 550 U.S. 544, 589, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Because the facts as stated in the SAC are identical to those alleged in the Amended Complaint, the factual background is drawn from the Court’s August 26, 2016 Memorandum Opinion, granting in part Defendants' Motion to Dismiss.
. The service agreement states: "As compensation for the services to be rendered by Dahl hereunder, Dahl shall receive limited member units in Company (the "U[n]its”) equaling approximately thirty (30%) percent of all the outstanding Units in the Company.” See SAC, Ex. A.
. Dahl attached the parties’ service agreement to the SAC. The Court can consider this document on a motion to dismiss pursuant to Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764, 772 (3d Cir. 2013).
. SAC ¶ 1.
. id.
. Id., Ex. B.
. Id. ¶ 54.
. The suit brought by Gladstone alleges, inter alia, breach of contract, breach of fiduciary duty, and unfair competition. See Civil Action No. 15-4252, Doc. No. 9.
. The First Amended Complaint asserted claims for violation of Washington state wage law, violation of Pennsylvania’s Wage Payment and Collection Law, breach of contract, wrongful termination in violation of Washington public policy, conversion, tortious interference with contract, shareholder oppression and petition for judicial dissolution, an injunction for the inspection of books and records, and a declaratory judgment.
. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).
. ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994); Fay v. Muhlenberg Coll., No. 07-4516, 2008 WL 205227, at *2 (E.D. Pa. Jan. 24, 2008).
. Twombly, 550 U.S. at 555, 564, 127 S.Ct. 1955.
. Id. at 570, 127 S.Ct. 1955.
. Id. at 562, 127 S.Ct. 1955 (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1984)) (internal quotation marks omitted).
. Id. (quoting McGregor v. Indus. Excess Landfill, Inc., 856 F.2d 39, 42-43 (6th Cir. 1988)).
. SAC, Ex. A ¶ 14.2.
. See DeLage Landen Fin Servs., Inc., v. Rasa Floors, LP, No. 09-00533, 2009 WL 564627 at *11 n. 12 (E.D. Pa. 2009).
. Rose v. Anderson Hay & Grain Co., 184 Wash.2d 268, 358 P.3d 1139, 1143 (2015)
. Becker v. Cmty. Health Sys., Inc., 184 Wash.2d 252, 359 P.3d 746, 749 (2015) (“We maintain a strict clarity requirement in which the plaintiff must establish that the public policy is clearly legislatively or judicially recognized.”).
. Id.
. SAC ¶ 81.
. Roberts v. Dudley, 140 Wash.2d 58, 993 P.2d 901, 905-06 (2000), as amended (Feb, 22, 2000).
. Acumed LLC v. Advanced Surgicial Serv., 561 F.3d 199, 212 (3d Cir. 2009).
. The service agreement was entered into by Dahl and Gladstone Technology. Although Defendants briefly raised the argument that Gladstone Technology is not a third party for purposes of pleading a tortious interference with contract claim in their prior motion to dismiss, Defendants did not renew the argument in the most recent round of motion practice and therefore the Court will consider Gladstone Technology a third party for purposes of this claim.
. SAC ¶ 98-99.
. Id. Ex. A, ¶ 10.2.
. Id. ¶ 53,
. See 15 Pa. C.S. § 8871(a)(4)(ii).
. SAC ¶¶ 104, 107.
. Id. ¶¶ 7, 24.
. Id. ¶ 102.
. Id. Ex. A, ¶ 6.2,
. Ignelzi v. Ogg, Cordes, Murphy and Ignelzi, LLP., 78 A.3d 1111, 1113 (Pa. Super. 2013); 15 Pa. C.S.A. § 8446(b) (“On reasonable notice, a partner may inspect and copy during regular business hours, at a reasonable location specified by the partnership, any record maintained by the partnership regarding the partnership's business, financial condition and other circumstances,”).
. SAC ¶ 113.
. Id. ¶ 114.
. Plaintiff has had three opportunities to plead his claims, and has not requested a fourth. Accordingly, because multiple attempts to remedy deficiencies have been unsuccessful, the Court finds that amendment would be futile. Dismissal of Plaintiff’s claim will be with prejudice. See Haberle v. Officer Daniel Troxell, No. 5:15-CV-02804, 2016 WL 1241939, at *1 (E.D. Pa. Mar. 30, 2016) (citing Phillips v. Cty. of Allegheny, 515 F.3d 224, 245 (3d Cir. 2008)) ("While leave to amend must be afforded even when not requested, that is not the case when amendment would be futile,").
Reference
- Full Case Name
- Owen DAHL v. GLADSTONE TECHNOLOGY, PARTNERS, LLC
- Status
- Published