Hall v. Rag-O-Rama, LLC

359 F. Supp. 3d 499
CourtDistrict Court, E.D. Kentucky
DecidedJanuary 8, 2019
DocketCIVIL ACTION NO. 18-12-DLB-CJS
StatusPublished
Cited by31 cases

This text of 359 F. Supp. 3d 499 (Hall v. Rag-O-Rama, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hall v. Rag-O-Rama, LLC, 359 F. Supp. 3d 499 (E.D. Ky. 2019).

Opinion

David L. Bunning, United States District Judge

Plaintiff Sally Hall brings a number of common-law claims against her former employer, Rag-O-Rama, LLC, including wrongful termination, breach of her employment contract, tortious interference with a business relationship, intentional and/or negligent infliction of emotional distress, and fraudulent inducement. (Doc. # 6). Hall seeks, among other things, reinstatement, lost wages, and compensatory and punitive damages. Id. Defendant has moved to dismiss for lack of personal jurisdiction, arguing that none of its contacts with Kentucky fall within one of the enumerated categories in Kentucky's long-arm statute and that the exercise of personal *503jurisdiction would violate federal due process. (Doc. # 13). In the alternative, Defendant argues that the case should be dismissed for improper venue. Id. The matter is fully briefed and ripe for review. (Docs. # 23 and 30). For the reasons set forth herein, Defendant's Motion to Dismiss is denied .

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Sally Hall is a citizen of Kentucky and resides in Falmouth, Kentucky. (Doc. # 6 ¶ 2). Defendant Rag-O-Rama is an Ohio limited liability company with its principal place of business in Columbus, Ohio. Id. ¶ 3. At least one of its corporate officers resides in Georgia. Id. Rag-O-Rama operates resale clothing stores in Ohio and Georgia. (Docs. # 13 at 2 and 23-1 ¶ 6). Rag-O-Rama does not have a physical presence in Kentucky and does not sell merchandise in Kentucky. (Docs. # 13 at 2 and 23-1 ¶ 6).

Plaintiff was a salaried employee of Rag-O-Rama on a part-time basis as a Trainer from August 21, 2015 to June 13, 2016 and thereafter on a full-time basis as Area Manager until her effective termination date of January 10, 2017. (Doc. # 6 ¶ 5). During this entire time period, Hall worked predominantly from her home in Falmouth, Kentucky. (Docs. # 6 ¶ 6 and 23-1 ¶¶ 2, 10). Hall had also previously worked at Rag-O-Rama from 1999-2003, where she "helped to develop its original business model, designed its artwork and logos, helped to develop its original training and employee materials, and operated its store in St. Louis, Missouri." (Doc. # 6 ¶ 8).

Hall claims that Rag-O-Rama's CEO Vance Whitener actively recruited her to work at Rag-O-Rama. (Doc. # 6 ¶¶ 9, 11, 16). Specifically, Plaintiff alleges that Whitener initiated phone calls to her in Kentucky requesting that she rejoin Rag-O-Rama, first on a part-time basis in 2015 and then again on a full-time basis in 2016. (Doc. # 23-1 ¶ 4). Defendant disputes this, claiming instead that Hall asked Whitener to hire her. (Doc. # 13-1 ¶ 8). Plaintiff further claims that she accepted Whitener's offers of employment on the phone. (Doc. # 23-1 ¶ 4). Plaintiff's Trainer and Area Manager positions were memorialized in two employment contracts, which were executed on September 18, 2015 and June 14, 2016, respectively. See (Docs. # 13-3 at 3 and 13-5).

The facts and circumstances surrounding Hall's 2016 Area Manager contract are as follows. Whitener sent a signed copy of the contract to Hall at her home in Kentucky, which Hall then signed, scanned, and emailed back to Whitener at his home in Georgia. (Doc. # 23-1 ¶ 5). The contract stated that Defendant would pay Plaintiff an annual salary of $ 51,000 plus quarterly bonuses of $ 3,600 as well as other benefits. (Docs. # 6 ¶ 13 and # 13-5). Plaintiff claims that the contract, which went into effect on June 13, 2016, required Hall to stay employed at Rag-O-Rama for at least one year, after which the employment relationship was "at will." (Docs. # 6 ¶¶ 12, 15 and # 23-1 ¶ 5). By contrast, Defendant asserts that the employment contract was "at will" from the beginning. (Doc. # 13-1 ¶ 9). As an Area Manager, Hall became one of three executives at Rag-O-Rama, the other two being Whitener and Vice President Jorge Maymo. (Doc. # 23-2).

Rag-O-Rama hired Hall "with the express understanding and agreement that her work would primarily be performed remotely from her residence in Falmouth, Kentucky." (Doc. # 6 ¶ 17); see (Doc. # 13-7 at 5). In addition, Defendant signed the contract with Hall knowing that she "was a single mother who had custodial responsibilities for a minor child and grandchild *504that required her to physically reside and be present in Falmouth, Kentucky." (Doc. # 6 ¶ 21). Nevertheless, Defendant at certain times communicated to Hall its desire that she spend as much time as possible in Columbus. See (Doc. # 23-5).

As Area Manager for Rag-O-Rama, Hall's primary responsibility was to manage Defendant's Columbus, Ohio store remotely by video feeds and through email and telephone communications from her residence in Falmouth, Kentucky. (Docs. # 6 ¶ 19 and 23-1 ¶ 8). Defendant shipped a computer, monitor, and cellular telephone to Hall's home in Falmouth, Kentucky to enable her to manage the Columbus, Ohio store remotely. (Doc. # 6 ¶ 8). Hall performed the "vast majority" of her work for Rag-O-Rama from her home in Kentucky via the cameras and phone that Defendant provided. (Doc. # 23-1 ¶ 10). Plaintiff would also make occasional visits to the Columbus store and sometimes stayed in Columbus overnight in an apartment provided by Rag-O-Rama. (Doc. # 23-1 ¶ 11). Hall was reimbursed for any travel expenses when visiting the store. Id. ¶ 8.

Not long after Hall started working full-time in June 2016, the employment relationship began to sour. Hall's three-month review listed a number of deficiencies in her job performance. See (Doc. # 13-7). On January 10, 2017, Rag-O-Rama gave Hall a "performance improvement plan" and "final warning," listing a number of areas in which Hall was not meeting expectations. See (Doc. # 13-8). Hall disputed Rag-O-Rama's account of her work performance and refused to sign the personal improvement plan. See (Docs. # 6 ¶ 23 and 13-8 at 5). By letter dated January 12, 2017 and addressed to Plaintiff's home address in Kentucky, Rag-O-Rama informed Hall that she was terminated effective January 10, 2017. See (Docs. # 6 ¶¶ 26-27 and 23-7).

Plaintiff filed a Complaint on January 10, 2018 (Doc. # 1) and an Amended Complaint on January 24, 2018. (Doc. # 6). In her Amended Complaint, Plaintiff brings claims for wrongful discharge, breach of contract, breach of fiduciary duty, breach of warranty, fraudulent inducement, tortious interference with a contractual relationship, and negligent and/or intentional infliction of emotional distress. Id. On March 21, 2018, Defendant filed a motion to dismiss for lack of personal jurisdiction and improper venue. (Doc. # 13). On May 17, 2018, Plaintiff filed a Response accompanied by an affidavit. (Docs. # 23 and 23-1). Defendant filed a Reply on June 11, 2018. (Doc. # 30).

II. ANALYSIS

A. Standard of Review

When a defendant brings a Rule 12(b)(2) motion to dismiss, the burden is on the plaintiff to establish personal jurisdiction. Theunissen v. Matthews , 935 F.2d 1454, 1458 (6th Cir. 1991).

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359 F. Supp. 3d 499, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hall-v-rag-o-rama-llc-kyed-2019.