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Flora v. Everest Wealth Management, Inc.

United States District Court, D. Maryland

September 26, 2017

SARAH FLORA, Plaintiff,
v.
EVEREST WEALTH MANAGEMENT, INC., Defendants.

          MEMORANDUM

          Ellen Lipton Hollander, United States District Judge

         Sarah Flora, plaintiff, filed suit in the Circuit Court for Baltimore County on May 4, 2017 (ECF 2), which she subsequently amended. ECF 3. As amended, the suit contains multiple claims against plaintiffs former employers, Everest Wealth Management, Inc. (“EWM”) and Everest Investment Advisors, Inc. (“EIA”)[1] (collectively, “Everest”), as well as several other defendants: Philippe A. Rousseaux, Jr., Everest's founder and former President of EWM and EIA; Lorena Rodriguez, Rousseaux's wife and an officer of EWM; and John G. Anthony, an employee of Everest. ECF 3, ¶¶ 1-8. Flora alleges that defendants failed to pay all commissions due to her in connection with her sale of insurance products for Everest (Id. ¶¶ 19-20), and that Everest ultimately fired her to avoid paying plaintiff what she had earned. Id. ¶ 57.

         In particular, plaintiff alleges a violation of the Maryland Wage Payment and Collection Law, Md. Code (2016 Repl. Vol.), §§ 3-501 et seq. of the Labor and Employment Article (“L.E.”) (Count I, id. ¶¶ 15-26); Violation of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”) (Count II, ¶¶ 27-33); Breach of Contract (Count III, ECF 3, ¶¶ 34-41); Fraudulent Misrepresentation (Count IV, id. ¶¶ 42-49); Misrepresentation or Concealment (Count V, id. ¶¶ 50-55); Wrongful Discharge (Count VI, id. ¶¶ 56-64); Quantum Meruit (Count VII, id. ¶¶ 65-68); and Unjust Enrichment (Count VIII, id. ¶¶ 69-70). Further, plaintiff seeks a declaratory judgment nullifying her non-compete agreement with Everest (Count IX, id. ¶¶ 71-77).

         On the basis of the FLSA claim, defendants timely removed the case to federal court on June 14, 2017, pursuant to 28 U.S.C. §§ 1331, 1367, and 1441. ECF 1 (“Notice of Removal”), ¶¶ 8-9. On June 20, 2017, defendants answered the complaint and asserted five counterclaims. ECF 14 (“Answer and Counterclaims”) at 17-21. The counterclaims present questions under Maryland law. Id.

         Now pending are plaintiffs Motion to Remand (ECF 18) and Motion for Leave to Voluntarily Dismiss with Prejudice Count II (ECF 19, “Motion to Dismiss”). Defendant opposes both motions. ECF 24 (“Opposition to Remand”); ECF 25 (“Opposition to Dismissal”). Plaintiff has replied to the Opposition to Remand. ECF 26 (“Reply”). As discussed, infra, the parties have also submitted exhibits.

         No hearing is necessary to resolve the motions. See Local Rule 105.6. For the reasons that follow, I shall grant both motions.

         I. Background[2]

         Plaintiff was hired by Everest in December 2013 to sell insurance products. ECF 3, ¶¶ 5, 6, 16. As part of her employment, she was entitled to a commission from her sales. Id. ¶ 16. According to plaintiff, Everest owes her more than $90, 000 in unpaid commissions. Id. ¶ 20. Plaintiff also asserts that over the course of her employment, Everest reduced her commission percentage and her benefits, in contravention of Everest's original representations. Id. ¶¶ 46-48. On March 6, 2017, Everest fired plaintiff (id. ¶ 7), which plaintiff avers was “intentionally calculated to circumvent the Wage Payment Law and deprive Ms. Flora of substantial compensation.” Id. ¶ 61.

         II. Discussion

         Plaintiff has moved voluntarily to dismiss, with prejudice, the FLSA claim in Count II. ECF 19 at 2. She also seeks a remand to the Circuit Court for Baltimore County, on either of two theories: (1) that her employment agreement with defendants contains a forum selection clause providing for venue in the Circuit Court for Baltimore County (ECF 18-1 at 4); and (2) if the FLSA claim is dismissed, this Court should exercise its discretion to remand the remaining claims and counterclaims to State court, as there is no basis for federal jurisdiction. Id. at 5.

         In response, defendants argue: (1) the agreement containing the forum selection clause pertains only to plaintiffs non-compete agreement with defendants, and not other employment matters (ECF 24 at 2); (2) the forum selection clause in the agreement should not be read to refer exclusively to a state court geographically located in Baltimore County (id. at 6-7); (3) this Court should not allow plaintiff to dismiss her federal claim and remand because doing so would reward forum manipulation (ECF 25 at 2); (4) even if plaintiffs FLSA claim were dismissed, this Court retains jurisdiction on the basis of diversity of citizenship (ECF 24 at 3-4); and (5) under 28 U.S.C. § 1367(c), this Court may exercise supplemental jurisdiction as to the various claims, notwithstanding the forum selection clause. Id. at 7-10.

         At issue here is the forum selection clause, the right of the plaintiff to dismiss her federal claim, the jurisdictional basis for the non-federal claims and counterclaims, and the discretion of this Court to remand the case to the Circuit Court for Baltimore County. In brief, if the forum selection clause applies, this case should be remanded (or, technically, dismissed, see discussion infra). If the forum selection clause does not apply and the plaintiff may not dismiss or abandon her federal claim, jurisdiction remains proper in this Court. If the plaintiff may dismiss or abandon her federal claim but diversity jurisdiction exists, jurisdiction remains proper in this Court. But, if the plaintiff may dismiss or abandon her federal claim and there is no diversity of citizenship, this Court may remand the remaining claims to the state court at its discretion.

         Because the questions of dismissal and remand can be decided without regard to the forum selection clause, I need not consider that contention.[3]

         A. Voluntary Dismissal

         Plaintiff styles her motion to dispose of her FLSA claim as a “motion to voluntarily dismiss with prejudice.”[4] ECF 19 at 1. In effect, the motion is more accurately characterized as a motion to amend the complaint by abandoning the FLSA claim under Fed.R.Civ.P. 15. See Skinner v. First Am. Bank of Virginia, 64 F.3d 659 (Table), 1995 WL 507264, at *2 (4th Cir. 1995) (“Because Rule 41 provides for the dismissal of actions, rather than claims, Rule 15 is technically the proper vehicle to accomplish a partial dismissal.” (citation omitted)); see also Elat v. Ngoubene, 993 F.Supp.2d 497, 519 (D. Md. 2014) (“The proper mechanism for a plaintiff to withdraw some, but not all, claims is to file a motion to amend pursuant to Fed.R.Civ.P. 15.”); 8 Moore's Federal Practice - Civil § 41.21 (Matthew Bender 3d ed.) (“Rule 41(a) may not be employed to dismiss fewer than all of the claims against any particular defendant. This is because a voluntary dismissal under Rule 41(a)(1) or (2) terminates an action, which means the totality of all component claims, i.e., legal causes of action, asserted against a single defendant.” (footnotes and citations omitted) (emphasis in original)).

         Rule 15(a)(2) allows a party to amend a pleading with the opposing party's written consent or with leave of court. The Rule instructs courts to “freely give leave when justice so requires.” But, “leave to amend is not to be granted automatically. Disposition of a motion to amend is within the sound discretion of the district court.” Deasy v. Hill, 833 F.2d 38, 40 (4th Cir. 1987) (citation omitted).

         In considering whether to grant leave to amend, district courts must consider several factors: “(i) undue prejudice to opposing party, (ii) undue delay, (iii) bad faith or dilatory motive, and (iv) futility of amendment.” Shilling v. Nw. Mut. Life Ins. Co., 423 F.Supp.2d 513, 518 (D. Md. 2006) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). The Fourth Circuit has “interpreted Rule 15(a) to provide that 'leave to amend a pleading should be denied only when the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the amendment would have been futile.'” Laber v. Harvey, 438 F.3d 404, 426 (4th Cir. 2006) (citations omitted).

         Defendants protest plaintiffs proposed dismissal of her FLSA claim by calling it “blatant forum shopping.” ECF 25 at 1. Defendants do not assert that they will suffer any undue prejudice from the dismissal of the FLSA claim itself; rather, they seem to oppose the motion only insofar as dismissal of the federal question might lead to remand to the State court. Id. at 2. Although the issue of remand is related to the existence of plaintiffs FLSA claim, the two are not inextricably linked.

         Plaintiff filed her Motion to Dismiss within one month after defendants removed the case. Defendants have not suggested undue delay, and clearly there is none. See Shilling, 423 F.Supp. 2d. at 519 (“Plaintiff filed his motion less than a month after Defendants removed the case and, therefore, has not caused undue delay.”). And, simply seeking a return to State court is not evidence of “bad faith.” See Id. (‚ÄúDefendants have offered no evidence that Plaintiffs actions in adding and later moving to dismiss his . . . claim were prompted by any ill motive toward Defendants, such as a desire to force them to incur ...


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