Reynoso v. Mueller

CourtDistrict Court, E.D. Michigan
DecidedJuly 29, 2022
Docket4:21-cv-12556
StatusUnknown

This text of Reynoso v. Mueller (Reynoso v. Mueller) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reynoso v. Mueller, (E.D. Mich. 2022).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION GUILLERMO JOSE GRÜNBERGER REYNOSO,

Plaintiff, Case No. 21-cv-12556 Hon. Matthew F. Leitman v. RAND MUELLER and GPSI, LLC,

Defendants. __________________________________________________________________/ ORDER DENYING PLAINTIFF’S MOTION TO REMAND WITHOUT PREJUDICE (ECF No. 6)

This action involves a dispute over the ownership and operation of Defendant GPSI, LLC (“GPSI”). In the ownership portion of the dispute, Plaintiff Guillermo Jose Grünberger Reynoso (“Grünberger”) claims that he and Defendant Rand Mueller are members of GPSI and that Mueller (the alleged controlling member of GPSI) wrongfully purported to sell his (Grünberger’s) membership interest in GPSI. Grünberger seeks a declaration that the purported sale of his interest in GPSI was ineffective and that he remains a member of GPSI. In the operation portion of this dispute, Grünberger alleges that Mueller, in his capacity as the controlling member of GPSI, engaged in oppressive conduct toward him (Grünberger). As relief for that misconduct, Grünberger seeks, among other things, an order “dissolving and liquidating the assets of GPSI.”

Grünberger initially filed this action in the Oakland County Circuit Court. Mueller and GPSI, who are represented by separate counsel, then jointly removed the action to this Court. In their Notice of Removal, Defendants contended that the

Court has diversity jurisdiction over this action under 28 U.S.C. § 1332. Grünberger has now moved to remand the action back to state court. (See Mot. to Remand, ECF No. 6.) Grünberger insists that complete diversity – essential to diversity jurisdiction – is lacking here because (1) he remains a member of

Defendant GPSI and (2) that Defendant thus shares his citizenship. (See id.) The Court cannot resolve Grünberger’s jurisdictional challenge at this point. His argument as to why complete diversity is lacking is inextricably intertwined with

the merits of his claim – which is vigorously disputed by Defendants – that he remains a member of GPSI. If, as Grünberger alleges in one of his declaratory judgment claims, he remains a member of GPSI, then complete diversity is lacking, and the Court lacks subject-matter jurisdiction. But if, as Defendants contend,

Grünberger is no longer a member of GPSI, then there is complete diversity, and the Court has jurisdiction over this action. Under settled Sixth Circuit law, where, as here, a challenge to subject-matter jurisdiction is inextricably bound up with the

merits of the plaintiff’s claims, then a district court must assume that it has jurisdiction and proceed to adjudicate the claims on the merits. The Court concludes that it cannot resolve the merits of Grünberger’s claim that he remains a member of

GPSI on the current record. Therefore, the Court will DENY Grünberger’s motion to remand (ECF No. 6) WITHOUT PREJUDICE and will decide whether it has subject-matter jurisdiction over this action when it decides the merits of

Grünberger’s claim to be a member of GPSI – which may be following Defendants’ filing of a dispositive motion or after a trial. I A

GPSI is a limited liability company that is headquartered in Madison Heights, Michigan. (See Compl. at ¶9, ECF No. 8-3, PageID.243.) It “is a supplier of vehicle telematics solutions to automotive original equipment manufacturers, dealerships,

commercial fleet managers, rental car companies, and individual vehicle owners.” (Id.) Prior to September 30, 2020, there was no dispute over the ownership of GPSI. It had two members: Grünberger, who held a 29.4807% interest in the company, and

Mueller, who held a 70.5193% interest. (See id. at ¶¶ 7–8, PageID.243.) Mueller “controlled GPSI,” but “Grünberger was [also] involved in [its] business operations.” (See id. at ¶¶ 1, 3, PageID.242.) Mueller is a citizen of Florida. (See id.

at ¶3, PageID.242.) Grünberger is a citizen of Mexico. (See id. at ¶1, PageID.242.) “On October 2, 2020, [] Mueller telephoned Grünberger and informed him that he had sold GPSI.” (Id. at ¶15, PageID.244.) Then, on October 5, 2020,

“Grünberger was presented with paperwork stating that Mueller had purportedly sold all membership interests in GPSI” – including Grünberger’s 29.4807% interest – on September 30, 2020. (Id. at ¶17, PageID.244.) The “paperwork” provided to

Grünberger included a sales agreement between Mueller and GPSI’s new purported owners, MFSS Holdings LLC and MFSS Acquisition LLC (the “Purported Sales Agreement”). (See Purported Sales Agmt., ECF No. 8-3, PageID.296–372.) The Purported Sales Agreement contains a non-compete provision that, “if enforceable,

would prohibit Grünberger from engaging in” the same line of business as GPSI “for a period of five years commencing on September 30, 2020 and covering a territory of ‘the entire world.’” (Compl. at ¶75, ECF No. 8-3, PageID.253, quoting Purported

Sales Agmt. at § 5.05, ECF No. 8-3, PageID.331.) Grünberger insists that Mueller’s purported sale of his (Grünberger’s) interest in GPSI through the Purported Sales Agreement was ineffective because Mueller did not obtain Grünberger’s consent to the sale. Grünberger also claims that Mueller, in

his capacity as the controlling member of GPSI, engaged in oppressive conduct towards him (Grünberger). B On September 30, 2021, Grünberger filed suit against Mueller and GPSI in

the Oakland County Circuit Court. In his Complaint, Grünberger challenged the effectiveness of the Purported Sales Agreement and complained about Mueller’s conduct as the controlling member of GPSI. Grünberger summarized his claims as

follows: Grünberger’s 29.4807% membership interest in GPSI, LLC was purportedly sold absent his consent in October 2020. Grünberger did not receive notice of the sale before the purported sale closing and never consented to the sale. Despite the purported sale purchase price of $7 million, Grünberger was offered a check for only $70,879. Additionally, Defendant Rand Mueller controlled GPSI as a majority member before the unauthorized purported sales transaction and engaged in actions that substantially interfered with Grünberger’s interests as a limited liability company member of GPSI. This Complaint seeks to address all of the wrongful conduct suffered by Grünberger.

Id., PageID.242.)

Grünberger’s Complaint contains the following ten claims:  Count I – Breach of Contract as to Defendant Mueller;  Count II – Common Law and Statutory Conversion as to Defendant Mueller;  Count III – Declaratory Judgment as to Grünberger’s Membership Interests as to Defendants Mueller and GPSI;  Count IV – Declaratory Judgment Regarding 2018 Promissory Note as to Defendant Mueller;  Count V – Accounting as to Defendants Mueller and GPSI;  Count VI – Constructive Trust as to Defendant Mueller;  Count VII – Unjust Enrichment as to Defendant Mueller;

 Count VIII – Declaratory Judgment as to Covenant Not to Compete as to Defendants Mueller and GPSI;  Count IX – Membership Oppression MCL § 450.4515 as to Defendants Mueller and GPSI; and  Count X – Breach of Fiduciary Duty as to Defendant Mueller. Grünberger seeks several different types of relief. As relevant here, in his claim for “Declaratory Judgment as to Grünberger’s Membership Interests as to Defendants Mueller and GPSI” (Count III), Grünberger seeks, among other things, a declaration that “Defendant Mueller’s purported conveyance of [his

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Reynoso v. Mueller, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reynoso-v-mueller-mied-2022.