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Galiot v. Midwest Tennis Programs, LLC

United States District Court, N.D. Illinois, Eastern Division

November 20, 2017

MARINA GALIOT, Plaintiff,
v.
MIDWEST TENNIS PROGRAMS, LLC, f/k/a FRANK SACKS TENNIS CAMPS, INC., Defendant.

          MEMORANDUM OPINION AND ORDER [1]

          SIDNEY I. SCHENKIER United States Magistrate Judge

         Plaintiff Marina Galiot brought this suit against defendant Midwest Tennis Programs, LLC ("Midwest"), which Ms. Galiot asserts was formerly known as Frank Sacks Tennis Camps, Inc. ("FSTC") (doc. # 1: CompL). Ms. Galiot contends that Midwest has failed to pay back pay and other amounts Ms. Galiot is owed pursuant to a final order of the Secretary of the United States Department of Labor ("DOL") arising out of her employment with FSTC (Id., at ¶¶ 1, 15-17). Midwest has filed a motion to dismiss Ms. Galiot's complaint under Federal Rule of Civil Procedure 12(b)(7), asserting that plaintiff failed to join a required party under Rule 19 (doc. # 10). The motion is now fully briefed. For the reasons that follow, we deny Midwest's motion.

         I.

         For purposes of a Rule 12(b)(7) motion to dismiss for failure to join a party under Rule 19, the Court must accept plaintiffs allegations as true and draw all reasonable inferences in her favor. Nanko Shipping, USA v. Alcoa, Inc., 850 F.3d 461, 465 (D.C. Cir. 2017). In addition, the Court "may consider matters outside of the pleadings to resolve factual questions pertaining to jurisdiction, process, or indispensable parties." Deb v. SIRVA, Inc., 832 F.3d 800, 809 (7th Cir. 2016). We "resolve[j any conflicts ... in favor of the plaintiff." Davis Cos. v. Emerald Casino, Inc., 268 F.3d 477, 483 (7th Cir. 2001) (internal quotations and citations omitted). According to these rules, we set forth the relevant facts in this case below.

         FSTC was incorporated on November 18, 1998 (Def.'s Mot, Ex. B: 111. Sec. of State Corp. File Detail Report for FSTC). Franklin A. Sacks was FSTC's agent and president, with an address at 6555 Drake Avenue in Lincolnwood, Illinois (Id.). Ms. Galiot began working for FSTC in November 2007 (Compl., at ¶ 6), and her last date of productive employment with FSTC was on December 5, 2008 (Id., at ¶ 11).

         Subsequently, Ms. Galiot filed a complaint with the DOL alleging, in relevant part, that FSTC failed to pay her certain amounts to which she was entitled (Compl., at ¶ 14). On August 25, 2011, after proceedings including an evidentiary hearing, an Administrative Law Judge ("ALJ") issued a decision and order finding in plaintiffs favor and ordering FSTC to pay her back pay for the period from October 1, 2008 to February 5, 2010, plus interest (Id., at ¶ 15).

         Thereafter, on December 17, 2011, Midwest was created as a limited liability company (Def.'s Mot., Ex. A: 111. Sec. of State Corp. File Detail Report for Midwest). Its agent was listed as Mari-Kathleen S. Zaraza, located at 500 Davis Street, Suite 512, in Evanston, Illinois (Id.). Midwest has one manager: Frank Sacks, located at 6555 North Drake in Lincolnwood, Illinois (doc. # 30: PL's Resp., Ex. A: 111. Sec. of State Corp. File Detail Report for Midwest's Managers).

         FSTC appealed the ALJ's decision. On January 9, 2012, the Administrative Review Board ruled on FSTC's appeal, finding in favor of plaintiff and assessing back wages against FSTC in the amount of $49, 006.72, plus interest (Compl., at ¶ 16). On February 21, 2012, the DOL sent a letter to Frank Sacks, as President of FSTC, at 6555 Drake Avenue in Lincolnwood, Illinois, explaining that the Review Board's order became final and unappealable on February 9, 2012(Compl., Ex.B).

         A little less than two months later, on April 13, 2012, FSTC was subject to an "involuntary dissolution" (PL's Resp., Ex. A: 111. Sec. of State Corp. File Detail Report for FSTC). Ms. Galiot alleges that:

During the course of these proceedings, FSTC reorganized as Midwest. Midwest operated the same business with same personnel at the same location as FSTC. FSTC engaged in this reorganization solely to avoid its obligations to pay Galiot. Accordingly, under applicable law, as a matter of law Midwest is a successor in interest to FSTC, and it is legally responsible for FSTC's obligations to Galiot under the final award by the Secretary of Labor.

(Compl., at ¶ 18). FSTC did not pay Ms. Galiot any portion of the amount owed (Id., at ¶ 17). Ms. Galiot has demanded payment from Midwest, but Midwest has refused to pay any portion of the amount due under the DOL's order (Id., at ¶ 19).

         II.

         Midwest alleges that the complaint should be dismissed because plaintiff has failed to join FSTC as a party to the lawsuit (Def.'s Mot. at 1). Rule 19(a)(1) states that:

A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if: (A) in that person's absence, the court cannot accord complete relief among existing parties; or (B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may: (i) as a practical matter impair or impede the person's ability to protect the interest; or (ii) leave an existing ...

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