United States District Court, M.D. Florida, Tampa Division
D. MERRYDAY, UNITED STATES DISTRICT JUDGE.
October 2013, Stericycle agreed to provide Scrap King with
several thousand pounds of “recycleable material”
each month. (Doc. 2 at 7-11, the Stericyle-Scrap King
contract) Under the contract, “recycleable
material” excludes “regulated medical
waste.” (Doc. 2 at 7) Alleging that Stericyle furnished
regulated medical waste, A&M M s Processing sued
Stericyle in state court for breach of contract, fraudulent
inducement, and negligence. Stericycle removes (Doc. 1) the
action and invokes diversity jurisdiction. Arguing that
A&M “lacks standing” to sue Stericycle for
breach of contract and fraudulent inducement and arguing that
the “independent tort rule” bars the negligence
and fraudulent inducement claims, Stericyle moves (Doc. 8) to
dismiss “the complaint” with prejudice under Rule
12(b)(6), Federal Rules of Civil Procedure.
Breach of contract
moving under Rule 12(b)(6) to dismiss the complaint,
Stericycle argues that A&M is not the real party in
interest to this action. (Doc. 8 at 5, for example, stating
that “A&M does not have standing to sue Stericycle
for breach of contract”) Rule 17 requires prosecution
of an action by the “real party in interest, ”
that is, the owner of the right “enforced through the
litigation.” Moore's Federal Practice,
Vol. 4 § 17.10 (Matthew Bender 3d ed.). In a diversity
action, state law determines the real party in interest.
United States v. 936.71 Acres of Land, More or Less, in
Brevard Cty., 418 F.2d 551, 556 (5th Cir. 1969).
Illinois law, which governs the claim for breach of contract
(Doc. 2 at 9), a contracting party, a third-party
beneficiary, or an assignee can sue for breach of
contract. Neither a contracting party nor a
third-party beneficiary, A&M can sue only if an assignee.
A contractual assignment clause states:
This Agreement shall be binding upon and inure solely to the
benefit of the parties and their permitted assigns. . . . .
Neither party shall assign this Agreement without the other
party's prior written consent.
(Doc. 2, the Stericyle-Scrap King contract at 3) Because the
complaint contains no allegation that Scrap King assigned the
contract to A&M and that Stericyle consented in writing
to the assignment, A&M fails to state a claim for breach
of contract and cannot sue Stericycle for breach of the
Stericycle-Scrap King contract.
parties agree that Florida law governs a tort claim in this
action. Under Florida law, a defendant fraudulently induces a
plaintiff to contract by knowingly misrepresenting a material
fact on which the defendant intended the plaintiff to rely
and on which the plaintiff reasonably relied in contracting.
Johnson v. Davis, 480 So.2d 625, 627 (Fla. 1985).
Because Scrap King, not A&M, contracted with Stericyle,
A&M fails to state a claim for fraudulent inducement and
cannot sue Stericycle for fraudulent inducement.
Amount in controversy
establish that the amount in controversy exceeds $75, 000,
Stericycle's notice of removal appears to rely
exclusively on damages attendant to A&M's claims for
breach of contract and fraudulent inducement. (Doc. 1 at 4-7)
Because A&M is not the real party in interest to the
claims for breach of contract and fraudulent inducement,
Stericycle cannot rely on damages from those claims to
establish the amount in controversy. Ryan v. Flame
Refractories, Inc., 759 F.Supp. 774, 777-78 (S.D. Ala.
1991) (Butler, J.) (citing Myers v. Long Island Lighting
Co., 623 F.Supp. 1076 (E.D.N.Y. 1985) (Wexler, J.)). No
later than APRIL 21, 2017, Stericycle must submit a
memorandum that shows the amount in controversy from
A&M's negligence claim more likely than not exceeded
$75, 000 on February 2, 2017, the day of removal. The
memorandum, supported by a record showing of fact, must not
exceed ten pages. Determination of Stericycle's motion to
dismiss the negligence claim is DEFERRED until Stericyle
proffers evidence sufficient to invoke diversity
jurisdiction. The failure to timely proffer evidence that the
amount in controversy from the negligence claim exceeded $75,
000 on February 2, 2017, will result in the remand of this
action without further notice. If Stericycle's memorandum
warrants a response, an order will direct A&M to respond.
Motion to ...