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Machinery Solutions Inc. v. Doosan Machine Tool America Corporation

United States District Court, D. South Carolina, Columbia Division

March 21, 2017

Machinery Solutions, Inc., Frank Carl Amick, and James B. Dubose, Plaintiffs,
v.
Doosan Machine Tool America Corporation f/k/a Doosan Infracore America Corporation, Defendant.

          ORDER AND OPINION

         Plaintiffs Machinery Solutions, Inc. (“MSI”), Frank Carl Amick and James B. Dubose (collectively “Plaintiffs”) filed this action seeking a declaration that they do not owe $657, 678.00 to Defendant Doosan Machine Tool America Corporation (“DMTAC” or “Defendant”) f/k/a Doosan Infracore America Corporation. (ECF No. 1-1.)

         This matter is before the court by way of DMTAC's Motion to Dismiss the Complaint with Prejudice pursuant to Rules 8(a), 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 5.) For the reasons set forth below, the court GRANTS IN PART and DENIES IN PART DMTAC's Motion to Dismiss.

         I. RELEVANT BACKGROUND TO PENDING MOTION

         On June 27, 2016, Plaintiffs allege that Frank Carl Amick and James B. Dubose received a demand letter (the “June Letter”) from DMTAC's attorney requesting that Plaintiffs pay $657, 678.00 to DMTAC by July 5, 2016.[1] (ECF No. 1-1 at 5 ¶ 2.) Plaintiffs further allege that they do not owe DMTAC money because “[t]here is presently a suit pending . . . in which MSI has asserted that Defendant owes it a sum far exceeding all that is claimed in the June 27, 2016 demand” and “MSI is entitled to offset any amounts it might possibly owe to Defendant.” (Id. at 5 ¶ 3-6 ¶ 4.)

         On July 1, 2016, Plaintiffs filed a declaratory judgment action in the Lexington County (South Carolina) Court of Common Pleas captioned Machinery Solutions, Inc. v. Doosan Infracore America Corporation, Case No.: 2016-CP-32-02317 (Lexington Cnty. C.P. July 1, 2016). After removing the matter to this court on August 3, 2016 (ECF No. 1), DMTAC filed the instant Motion to Dismiss “on the grounds that the Complaint fails to state a plausible claim for relief and that this Court lacks subject matter jurisdiction over the Declaratory Judgment (ECF No. 5 at 2-3.) Plaintiffs filed opposition to the Motion to Dismiss on August 29, 2016, asserting that the court should exercise its discretion and not dismiss this declaratory judgment action for the following reasons:

First, we suggest that any refusal to exercise jurisdiction and accept this case at this very preliminary stage of the litigation would be inappropriate. Second, judicial efficiency would certainly dictate that all issues regarding the relationship between MSI and Doosan should be resolved in the same court so that some other court does not or is not required to determine and defer all those issues which are already being addressed in the suit in federal court (C/A No. 3:15-cv-03447-JMC). Unlike the argument made by Doosan in its Memorandum, we suggest that a determination of liability and damages in the pending suit will afford a primary answer to all the litigation and might render any other issues moot.

(ECF No. 7 at 10.) On September 9, 2016, DMTAC filed a Reply in support of dismissal. (ECF No. 10.)

         II. JURISDICTION

         The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a)(1) based on DMTAC's allegations that there is complete diversity of citizenship between Plaintiffs and Defendant, and the amount in controversy herein exceeds the sum of Seventy-Five Thousand ($75, 000.00) Dollars, exclusive of interest and costs. (See ECF No. 1 at 2 ¶ 3.) MSI is a corporation organized under the laws of South Carolina with its principal place of business in Lexington County, South Carolina. (ECF No. 1-1 at 5 ¶ 1.) Frank Carl Amick, and James B. Dubose live and work in Lexington County, South Carolina (Id.) DMTAC is incorporated in the State of New York and has its principal place of business in Suwanee, Georgia. (ECF No. 1 at 2 ¶ 3a.) Moreover, the court is satisfied that the amount in controversy exceeds $75, 000.00 in accordance with DMTAC's representation. (Id. at ¶ 3b.)

         III. LEGAL STANDARD

         A. Declaratory Judgment Actions

         Under the Declaratory Judgment Act, a district court, in a case or controversy otherwise within its jurisdiction, “may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). “Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941) (citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-42 (1937)). “[T]he dispute [must] be ‘definite and concrete, touching the legal relations of parties having adverse legal interests'; and that it be ‘real and substantial' and ‘admi[t] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.'” Medimmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126 (2007) (quoting Haworth, 300 U.S. at 240-41).

         The Supreme Court has “repeatedly characterized the Declaratory Judgment Act as ‘an enabling Act, which confers a discretion on the courts rather than an absolute right upon the litigant.'” Wilton v. Seven Falls Co., 515 U.S. 277, 287 (1995) (quoting Pub. Serv. Comm'n of Utah v. Wycoff Co., 344 U.S. 237, 241 (1952)). Courts have long interpreted the Act's permissive language “to provide discretionary authority to district courts to hear declaratory judgment cases.” United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488, 493 (4th Cir. 1998). “[A] declaratory judgment action is appropriate ‘when the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and . . . when it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.'” Centennial Life Ins. Co. v. Poston, 88 F.3d 255, 256 (4th Cir. 1996) (quoting Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 325 (4th Cir. 1937)).

         The Declaratory Judgment Act . . . is not an independent source of federal jurisdiction. Carolina Water Serv., Inc. v. McCarthy, C/A No. 3:15-cv-04919-MBS, 2016 WL 5661699, at *10 (D.S.C. Sept. 29, 2016) (citing Schilling v. Rogers, 363 U.S. 666, 677, (1960)). “It also does not create substantive rights; it is merely ‘a procedural device that enhances the remedies available' ...


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