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ALLMAN v. MCGANN

April 3, 2003

JAMES ALLMAN, PLAINTIFF,
v.
KEVIN D. MCGANN, MICHAEL CIPICCHIO, AND SCOTT D. SULLIVAN, DEFENDANTS.



The opinion of the court was delivered by: Charles Ronald Norgle, Sr., Judge, United States District Court

OPINION AND ORDER

Before the court is Defendant, Michael Cipicchio's ("Cipicchio") motion to dismiss Plaintiff, James Allman's ("Allman") complaint for lack of personal jurisdiction brought pursuant to Federal Rule of Civil Procedure 12(b)(2). For the following reasons, Cipicchio's motion is granted.

I. BACKGROUND*fn1

Allman is seeking to recover commissions allegedly owed for work performed as an employee of a subsidiary of MCI WorldCom Network Services, Inc. ("WorldCom"). Allman, a citizen of the State of Illinois, began working for a subsidiary of WorldCom in March of 1991. Allman was employed as a major account executive and was compensated for his services by way of salary, commissions and bonuses, as set forth in MCI's Major Account Executive Compensation Plan ("the Comp Plan"). Altman resigned his employment with WorldCom effective November 2, 2001. Altman alleges that at the time of his resignation, his commissions report indicated that he was owed $700,339.49, in addition to unreported commissions for October and November of 2001, an amount which WorldCom has not paid.

Initially, in order to seek redress for his grievance, Allman filed suit against WorldCom. This case was filed in the United States District Court for the Northern District of Illinois, Eastern Division, and was assigned to the Honorable Matthew F. Kennelly. See Allman v. WorldCom. Inc., docket number 01 C 9741. In that case, WorldCom filed a motion to dismiss and compel arbitration. WorldCom's motion to dismiss and compel arbitration was rendered moot as a result of Allman's motion to voluntarily dismiss the case pursuant to Federal Rule of Civil Procedure 41(a). Thereafter, Allman proceeded to arbitrate his claim; however, as a result of WorldCom's petition for bankruptcy pursuant to Chapter 11 of the Bankruptcy Code, the arbitration proceedings were stayed. Impatient with the progress of his arbitration as a result of the bankruptcy stay, Allman filed the present case against various individual officers of WorldCom, including Kevin D. McGann, Michael Cipicchio, and Scott D. Sullivan (collectively "the Defendants").*fn2

This court initially dismissed the present case for failure to properly plead subject matter jurisdiction. Thereafter, Allman filed an amended complaint, properly pleading subject matter jurisdiction pursuant to 28 U.S.C. § 1332 (a)(1). In Count I of the amended complaint, Allman contends that the Defendants' failure to pay his final commission resulted in a violation of the Illinois Wage Payment and Collection Act, 820 Ill. Comp. Stat. 115/1 et seq. ("IWPCA"). Count II of the amended complaint seeks attorney fees under the IWPCA. Lastly, in Count III of the amended complaint, Allman contends that the Defendants tortiously interfered with his employment contract rights.

Returning to the facts underlying Allman's claims for relief, in regard to commissions, WorldCom maintained a commissions bank account for Allman in WorldCom's Commissions Accounting department. WorldCom regularly provided Allman with commissions reports detailing the amounts held in Allman's commissions account. Under the Comp Plan, Allman would receive a maximum of $25,000 per month from commissions, with any amount of commission in excess of $25,000 to be held in Allman's commissions bank account. In the event that Allman's commissions for a given month were less than $25,000, funds would be taken out of Allman's commissions account and applied to assure a monthly commission of $25,000. Furthermore, in the event of termination, Allman would continue to receive a maximum of $25,000 per month from commissions until his commissions account was exhausted.

Cipicchio, a citizen of the State of Mississippi, was, and is, employed by MCI as Vice President of Corporate Processing Services. Cipicchio performs his duties on behalf of WorldCom from an office located in Mississippi. In that position Cipicchio has responsibility for administering WorldCom's compensation plans and commission accounting. Prior to Allman's resignation. Cipicchio caused an audit to be performed on the accounts of approximately 50 major account executives, including Allman. Allman alleges that the Defendants directed WorldCom to "intentionally and purposefully" freeze many of the commission bank accounts that had been the subject of the internal audit, including Allman's account. Allman contends that the Defendants knew of WorldCom's obligation to pay Allman under the Comp Plan and that the Defendants purposefully prevented the payment of Allman's final compensation, resulting in a violation of the IWPCA and tortious interference with Allman's employment contract rights.

Cipicchio has responded to Allman's amended complaint by filing a motion to dismiss for lack of personal jurisdiction, which the court now addresses.

II. STANDARD OF DECISION

Once a defendant has challenged a court's exercise of personal jurisdiction, through a motion to dismiss for lack of personal jurisdiction, the plaintiff has the burden of demonstrating that the court's exercise of personal jurisdiction over a defendant is proper. See RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1995). "In deciding a motion to dismiss for lack of personal jurisdiction, the court may receive and consider affidavits from both parties." Glass v. Kemper Corp., 930 F. Supp. 332, 337 (N.D. Ill. 1996) (citing Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987)). "The court resolves factual disputes in the pleadings and affidavits in favor of the plaintiff, but takes as true facts contained in the defendant's affidavit that remain unrefuted by the plaintiff." Id. (citing Nelson v. Park Industries, Inc., 717 F.2d 1120, 1123 (7th Cir. 1983)).

III. DISCUSSION

"A federal district court exercising diversity jurisdiction has personal jurisdiction, of course, `only if a court of the state in which it sits would have such jurisdiction.'" RAR. Inc. v. Turner Diesel. Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997) (citing Klump v. Duffus, 71 F.3d 1368, 1371 (7th Cir. 1995). This federal district court, sitting in diversity, will have personal jurisdiction over a non-resident defendant only where: 1) Illinois statutory law properly grants jurisdiction; 2) the exercise of personal jurisdiction would not violate Illinois constitutional law due process requirements; and 3) the exercise of personal jurisdiction would not violate the United States constitutional law due process requirements. See Central States, Southeast and Southwest Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 946 (7th Cir. 2000).

In this case, the three inquiries may be collapsed into one, with an analysis of whether the exercise of personal jurisdiction would violate the United States constitutional law due process requirements as the pivotal inquiry. See Klump, 71 F.3d at 1371 (indicating "if the contacts between the defendant and Illinois are sufficient to satisfy the requirements of due process, then the requirements of both the Illinois long-arm statute and the United States Constitution have been met, and no other inquiry is necessary"); see also Rollins v. Ellwood, 565 N.E.2d 1302, 1315 (Ill. 1990) (indicating "Illinois' long-arm statute . . . may well restrict the power that the courts of this State have to bring nonresidents before them to a greater extent than do the Federal due process clause and the `minimum contacts' standard developed over the years by the [United States] ...


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