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Timothy R. Mcgreal v. Frederick B. Semke

November 22, 2011


The opinion of the court was delivered by: Elaine E. Bucklo United States District Judge


Plaintiff Timothy McGreal filed a lawsuit against defendants Frederick Semke, Patricia Semke, and Semke Consulting, Inc. ("Semke Forensic") alleging violation of the Illinois Wage Payment and Collection Act ("IWPCA"), 820 ILCS 115/1, et seq., tortious interference with a contract, and breach of contract. Before me is defendants' motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(2), (3), and (6).*fn1 For the reasons discussed below, the motion is granted in part and denied in part.


McGreal began working for Semke Forensic in early December 2009. At the time, McGreal worked as a Mechanical and Fire Protection Engineer and District Manager in Semke Forensic's Chicago office. In November 2009, McGreal and Semke Forensic entered into an Employment Contract which was drafted, negotiated and signed by Frederick Semke, who is the President and Principal Engineer of Semke Forensic. The contract covered compensation and benefits, including vacation and the payment obligations of Semke Forensic upon termination of McGreal's employment. The contract also stipulated that McGreal was an at-will employee.

On July 8, 2011, Frederick Semke terminated McGreal's employment with Semke Forensic. Afterward, McGreal approached Frederick Semke stating that he was owed vacation and a revenue sharing payment. On July 12, 2011, unbeknownst to McGreal, Semke Forensic filed a petition for declaratory judgment in the Circuit Court of St. Charles County, Missouri. McGreal continued to call Frederick Semke about what he was owed under the contract, but did not hear back from Frederick Semke. McGreal's lawyer contacted Frederick Semke in early August 2011, demanding payment to his client. At that time, McGreal learned about the Missouri lawsuit. On August 18, 2011, McGreal filed his coercive lawsuit in this court.

Defendants now move to dismiss McGreal's claims, arguing that the Missouri action should have priority over this action under the first-to-file doctrine, that the fiduciary shield doctrine protects Frederick and Patricia Semke from personal jurisdiction, and that McGreal has failed to state a claim under the IWPCA or for tortious interference with contract.


Because this is a motion to dismiss, I assume to be true all well-pleaded allegations in the complaint and draw all reasonable inferences in favor of the plaintiff. Marshall-Mosby v. Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir. 2000). The purpose of a motion to dismiss is to test the sufficiency of the complaint, not to decide the merits of its claims or to determine a plaintiff's ability to succeed on his claims. Weiler v. Household Finance Corp., 101 F.3d 519, 524 n. 1 (7th Cir. 1996). A complaint must do more than recite the elements of a cause of action, and a court need not accept mere labels and legal conclusions as factual allegations. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Nor will a court presume facts not alleged. Id.

A. First-to-file rule

The Seventh Circuit has "repeatedly taught that this circuit does not rigidly adhere to a first-to-file rule," particularly where parallel cases involve a declaratory judgment action and a mirror-image action seeking coercive relief. Research Automation, Inc. v. Schrader-Bridgeport Int'l, Inc., 626 F.3d 973, 980 (7th Cir. 2010). In such cases, "we ordinarily give priority to the coercive action, regardless of which case was filed first." Id. In this case, Semke Forensic filed a declaratory judgment action on July 12, 2011 in the Circuit Court of St. Charles County, Missouri. Just over one month later, on August 18, 2011, McGreal filed his coercive action in this court. Therefore, barring other factors favoring transfer, the first-to-file doctrine is not a bar to McGreal's coercive lawsuit.*fn2

Further, Semke Forensic filed its declaratory judgment action only two days after McGreal's employment was terminated and while McGreal was actively seeking to resolve the matter with Frederick Semke directly. McGreal has alleged, and stated in a sworn affidavit, that he attempted to settle his claim repeatedly through July 20, 2011, and that Frederick Semke indicated during that time that he would be in touch with McGreal about what, if anything, was owed to the former employee. Meanwhile, Semke Forensic had already filed its declaratory judgment action. McGreal alleges he did not learn about the lawsuit until after his attorney sent a demand for payment on August 1, 2011. Such anticipatory filing counsels against giving priority to Semke Forensic's declaratory judgment action.

B. Personal jurisdiction over Frederick and Patricia Semke Where jurisdiction is contested in a motion to dismiss, a plaintiff need only make a prima facie showing of jurisdictional facts. Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010). Accepting as true all well-pleaded facts, I conclude that McGreal has made a prima facie showing of personal jurisdiction with regard to Frederick Semke but not Patricia Semke.

A federal court exercising diversity jurisdiction has personal jurisdiction over a defendant if the state in which it sits would have such jurisdiction. See, e.g., RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997). The reach of Illinois' long-arm statute is coterminous with that of the due process clauses of the Illinois and U.S. Constitutions. 735 ILCS 5/2-209(c). "In almost all cases, when federal due process concerns regarding personal jurisdiction are satisfied, so are Illinois due process concerns regarding personal jurisdiction." Keller v. Henderson, 834 N.E.2d 930, 941 (Ill. App. Ct. 2005).

The exercise of personal jurisdiction satisfies the requirements of federal due process when the defendant has "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 ...

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