Torsiello v. Strobeck

955 F. Supp. 2d 300, 2013 WL 3286157, 2013 U.S. Dist. LEXIS 91405
CourtDistrict Court, D. New Jersey
DecidedJune 27, 2013
DocketCiv. No. 2:12-3302 (KM)
StatusPublished
Cited by22 cases

This text of 955 F. Supp. 2d 300 (Torsiello v. Strobeck) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Torsiello v. Strobeck, 955 F. Supp. 2d 300, 2013 WL 3286157, 2013 U.S. Dist. LEXIS 91405 (D.N.J. 2013).

Opinion

OPINION

KEVIN McNULTY, District Judge.

This dispute arises from a medical practice merger. The plaintiff, Michael M. Torsiello, M.D., folded his practice into that of Defendant Walk In Wound Medical Associates, P.C. (“WIW”), allegedly in exchange for a minority ownership stake and certain compensation and benefits. Torsiello alleges that he did not receive his end of the bargain. Instead, the Defendants allegedly breached their fiduciary duties, breached contracts, misused corporate assets, engaged in corporate waste, and committed other oppressive acts. They allegedly did this by, inter alia, stripping WIW of accounts receivable, cash, and money, transferring assets to entities or individuals controlled by certain [304]*304Defendants, taking Torsiello’s personal property, misrepresenting WIW’s financial condition, refusing to sign an employment agreement, improperly billing Torsiello’s work, not compensating Torsiello as required by the contract, and failing to fund a 401(k) plan.

The Defendants, having removed the complaint from state court, now move to dismiss it on two grounds. First, any state-law claims relating to Torsiello’s alleged 401(k) plan are governed by the Employee Retirement Income Security Act, 29 U.S.C. § 1002 et seq. (“ERISA”), and therefore are preempted. Second, the claims are not sufficiently pleaded under Federal Rules of Civil Procedure 8(a) and 9(b). See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

I agree, and will dismiss the Complaint, subject to amendment. To the extent Torsiello’s claims relate to a 401(k) plan, they are preempted by ERISA. His claims must also be dismissed because they are too destitute of detail to detail to meet federal pleading standards. Such dismissal will be without prejudice to the filing of an amended complaint, which may include claims that invoke, or are pleaded to make it clear that they are not preempted by, ERISA. Leave to amend is generally freely granted in any case; it is even more appropriate here, because Torsiello filed his complaint in state court, not knowing that it would be removed and subjected to federal pleading standards.

I. BACKGROUND1

Torsiello had his own medical practice for 27 years. (Complaint ¶ 15, Ex. A to Notice of Removal [Docket No. 1-1]). He decided to merge his practice with WIW in exchange for a 10% ownership interest in WIW, a salary of $360,000 plus benefits, contributions to a 401(k) plan, a bonus structure of 60% of net revenue after expenses and retained earnings, management company ownership, and an offer to purchase shares in the Hawthorne Surgery Center. {Id.). WIW is operated and controlled by Defendant Strobeck, its Managing Member, who is also a physician. {Id. ¶ 7).

The merger did not go as planned. The Defendants,2 among other things, “stripp[ed] WIW [] of significant account receivables, cash and monetary assets, [took] control of plaintiffs personal property, improperly us[ed] and transferred] those assets to other entities or individuals, which entities were either owned and/or controlled by defendants, mismanage[ed] the books and records of WIW [ ], misrepresented] its assets and accounts receivables to plaintiff, misrepresented] WIW[’s] liabilities, expenses and profits, lur[ed] plaintiff into a fraudulent business scheme, [stole] confidential and proprietary information, [invaded Torsiello’s] privacy, [refused] to sign an employment [305]*305agreement, fail[ed] to conduct proper billing for work generated by plaintiff, fail[ed] to bill at all for some of plaintiffs work, depriv[ed] plaintiff of his distributive share of bonuses, profits and ownership interests in WIW [ ] and otherwise fail[ed] to honor plaintiffs employment agreement.” (Id. ¶ 2).

Strobeck, Heart-Lung, and Juliano fired Torsiello once the business started generating significant profits, refused to return Torsiello’s equipment and private proprietary information, did not pay Torsiello at various times, never established his 401 (k) account, and refused to give Torsiello access to WIW’s books and records. (Id. ¶ 23). In addition, on March 12, 2012, WIW office manager Jane Levine directed an individual to break into one of Torsiello’s lockers at WIW and photocopied private and confidential information, including marble notebooks and charts. (Id. ¶¶ 64-66). Later the same day, at Levine’s direction, an individual named Willie used bolt cutters to open Torsiello’s other locker at WIW. (Id. ¶ 67). Levine then copied the contents of this locker, included patient charts and envelopes. (Id. ¶ 68).

On April 23, 2012, Torsiello filed the Complaint in the Superior Court of New Jersey, Law Division, Passaic County. The Complaint alleges that the conduct described above gives rise to causes of action for fraudulent inducement, a violation of the New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8-1 et seq. (the “CFA”), breach of oral contract, for relief pursuant to N.J. Stat. Ann. § 14A:12-7,3 breach of fiduciary duty, waste and diversion of corporate opportunities, conversion, unjust enrichment, intentional infliction of emotional distress, negligent infliction of emotional distress, theft of proprietary information and invasion of privacy, fraud, and misrepresentation. Torsiello is seeking to recover his bonuses, unpaid salary, 401 (k) retirement plan, severance pay, unreimbursed expenses, and his share of profits, plus attorney’s fees and costs. (Id. ¶ 12,14).

On June 1, 2012, the Defendants timely removed the case to this Court. Defendants allege that this Court has federal question jurisdiction over the claims relating to Torsiello’s 401(k) plan4 because any such claims are preempted by Sections 502(a)(1)(B) and 514 of ERISA. See 28 U.S.C. § 1331. To the extent that ERISA does not govern the remaining claims, the Court may, under the proper circumstances, exercise supplemental jurisdiction. See 28 U.S.C. § 1367. Venue is proper because this District is where the original state action was filed. See 28 U.S.C. § 1446(a).

On June 22, 2012, the Defendants filed this Motion to Dismiss the complaint [Docket No. 4].

II. LEGAL STANDARD

A. Rule 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if it fails to state a claim upon which relief can be granted. The moving party, ordinarily the deten[306]*306dant, bears the burden of showing that no claim has been stated. Hedges v. United States,

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955 F. Supp. 2d 300, 2013 WL 3286157, 2013 U.S. Dist. LEXIS 91405, Counsel Stack Legal Research, https://law.counselstack.com/opinion/torsiello-v-strobeck-njd-2013.