The opinion of the court was delivered by: Honorable Tonianne J. Bongiovanni United States Magistrate Judge
Currently pending before the Court Plaintiff Russell A. Casella's ("Plaintiff") Motion for leave to Amend the Complaint in order to include a cause of action for shareholder oppression in violation of N.J.S.A. 14A:12-7(1)(c) ("the shareholder oppression statute") [DocketEntry No. 18]. Defendant Home Depot, Inc. ("Home Depot" or "Defendant") has filed an opposition to Plaintiff's Motion [Docket Entry No. 19]. After considering the submissions and arguments of the parties, and for good cause shown, Plaintiff's Motion for leave to Amend the Complaint is DENIED WITHOUT PREJUDICE.
On June 25, 1999, Home Depot Plumbing Service, L.L.C. ("HDPS") was formed as a New Jersey Limited Liability Company in order to conduct plumbing services in compliance with New Jersey statutes and regulations. (Def. Br. at 1). Under New Jersey law, HDPS was required to have a licenced master plumber to serve as its bona fide representative whose information was to be included on every signing and advertisement of the company. (Am. Compl. at ¶ 9). In October 1999, Plaintiff and HDPS entered into an Employment Agreement in which HDPS retained Plaintiff as a New Jersey licensed master plumber to serve as vice president of HDPS and to act as its bona fide representative. (Def. Br. at 2). The Employment Agreement expressly provided that if Plaintiff's employment is terminated, Plaintiff automatically and immediately relinquishes all interests in HDPS. (Def. Br. at 2). Plaintiff and Defendant also entered into an Operating Agreement which made Plaintiff a limited member of HDPS and a ten percent owner of the corporation as required by the New Jersey State Plumbing License Law of 1968, N.J.S.A. § 45:14C-2. (Def. Br. at 2; Am. Compl. at ¶¶ 9-10). Home Depot owned the remaining ninety percent of HDPS.
Plaintiff was employed by HDPS until February of 2005. (Def. Br. at 2). From April of 2004 until April of 2005, Plaintiff was absent from employment while on a one year medical leave. (Am. Compl. at ¶ 17). While Plaintiff's last day of work with Home Depot was on February 13, 2004, he was not terminated until February 14, 2005. (Def. Br. at 2). It is with this termination that Defendant alleges that Plaintiff relinquished his interest in HDPS in accordance with the Employment Agreement. (Id.).
In May of 2005, approximately three months after Plaintiff's termination, HDPS was dissolved by Home Depot, the lone remaining interest holder of HDPS. (Def. Br. at 2). Plaintiff was never consulted about the cancellation of HDPS and never approved in writing the cancellation of either HDPS or his own ownership rights. (Am. Comp. at ¶ 21). Subsequent to the cancellation of Plaintiff's employment agreement, Home Depot continued to list Plaintiff's contractor license number on its website and also used Plaintiff's master plumber's licence number in its newspaper advertising supplements. (Id. at ¶¶ 21-22).
Plaintiff alleges that he was never given proper compensation of the net profits of HDPS in accordance with his ten percent membership. (Id. at ¶ 19). Defendant alleges that the total value of the plumbing and heating, ventilation, and air-conditioning installation during the period of 1999 to 2006 is $1,800,000.00, while Plaintiff asserts that the proper number is at least $50,000,000.00. (Id. at ¶ 24). Plaintiff asserts that despite repeated requests, Defendant has failed and refused to provide an accounting to support its statement. (Id.).
Plaintiff filed a Complaint against Defendant on January 29, 2009, seeking an accounting and alleging breach of fiduciary duty [Docket Entry No. 1]. Plaintiff now seeks to amend the Complaint in order to include a cause of action for shareholder oppression in violation of N.J.S.A. 14A:12-7(1)(c). Plaintiff alleges that Home Depot used its majority controlling interest to act fraudulently or illegally, mismanage the affairs of the corporation, abuse its authority, and/or act oppressively or unfairly toward Plaintiff, depriving Plaintiff of his reasonable expectations as a member of HDPS. (Am. Compl. at ¶¶ 43-44).
A. Motion to Amend Standard
Leave to amend the pleadings is generally given freely. Foman v. Davis, 371 U.S. 178, 182 (1962). Notwithstanding this liberal standard, courts will deny a motion to amend on grounds of dilatoriness or undue delay, prejudice, bad faith or futility. See Alvin v. Suzuki, 227 F.3d 107, 121 (3d Cir. 2000); Hill v. City of Scranton, 411 F.3d 118, 134 (3d Cir. 2005). If there is an absence of undue delay, bad faith, prejudice or futility, a motion for leave to amend a pleading should be liberally granted. Long v. Wilson, 393 F.3d 390, 400 (3d Cir. 2004). In reviewing a motion to amend, the court looks only at the pleadings. Pharm. Sales & Consulting Corp. v. J.W.S. Delavau, Co., Inc., 106 F. Supp.2d 761, 765 (D.N.J. 2000). In this case, the main argument before the Court is whether Plaintiff's proposed amended complaint is futile.
An amendment is futile if it "is frivolous or advances a claim or defense that is legally insufficient on its face." Harrison Beverage Co. v. Dribeck Imp., Inc.,, 133 F.R.D. 463, 468 (D.N.J. 1990) (internal quotation marks and citations omitted). In determining whether an amendment is "insufficient on its face," the Court employs the Rule 12(b)(6) motion to dismiss standard (see Alvin, 227 F.3d at 121) and considers only the pleading, exhibits attached to the pleading, matters of public record and undisputedly authentic documents if the party's claims are based upon same. See Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). When considering whether a pleading would survive a Rule 12(b)(6) motion, the Court must accept all facts alleged in the pleading as true and draw all reasonable inferences in favor of the party asserting them. Lum v. Bank of Am., 361 F.3d 217, 223 (3d Cir. 2004). "[D]ismissal is appropriate only if, accepting all of the facts alleged in the [pleading] as true, the p[arty] has failed to plead 'enough facts to state a claim to relief that is plausible on its face[.]'" Duran v. Equifirst Corp., Civil Action No. 2:09-cv-03856, 2010 WL 918444, *2 (D.N.J. March 12, 2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). In other words, the facts alleged must be sufficient to "allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009).
While a pleading does not need to contain "detailed factual allegations," a party's "obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do[.]" Twombly, 550 U.S. at 555 (citation omitted). Thus, the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Id. In addition, although the Court must, in assessing a motion to dismiss, view the factual allegations contained in the pleading at issue as true, the Court is "not compelled to accept ...