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Torske v. Dva Health & Nutrition Gmbh

United States District Court, Third Circuit

April 30, 2013

CHRISTIAN TORSKE, Plaintiff,
v.
DVA HEALTH & NUTRITION GmbH, Defendant.

MEMORANDUM OPINION

MICHAEL A. SHIPP, District Judge.

This matter comes before the Court upon Defendant DVA Health & Nutrition GmbH's ("Defendant" or "DVA Germany") Motion for Summary Judgment filed on September 7, 2012. (Def.'s Br., ECF No. 35.) The motion seeks dismissal of Plaintiff's Second Amended Complaint in full. On September 17, 2012, Plaintiff Christian Torske ("Plaintiff") filed Opposition to the Motion. (Pl.'s Opp'n, ECF No. 36.) Defendant filed a Reply on September 24, 2012. (Def.'s Reply, ECF No. 38.) The Court has carefully considered the Parties' submissions and decided the matter without oral argument pursuant to Federal Rule of Civil Procedure ("Rule") 78. For the reasons stated below, and other good cause shown, Defendant's Motion for Summary Judgment is GRANTED and Plaintiff's Complaint is DISMISSED with prejudice.

I. Background

A. Factual History

Plaintiff, prior to the events which led to this Complaint, was employed by Helm New York, a subsidiary of Helm Germany, as President. (Pl.'s Opp'n 2.) In 2008, the management at Helm Germany advised Plaintiff that mandatory job rotation was to take effect sometime in the future. ( Id. ) As part of the job rotation, Plaintiff would have to either transfer to Helm Germany or accept the position of Vice President for Helm New York. ( Id. )

Subsequently, but before Plaintiff was required to provide Helm with his decision, Plaintiff was contacted by DVA Germany. ( Id. 3.) DVA Germany is a German entity that was looking to expand its interest in the United States. ( Id. ) To further this goal, DVA Germany began preliminary negotiations with Plaintiff. ( Id. ) As the negotiations progressed, it was decided that DVA Germany would form a subsidiary, DVA America, and Plaintiff would serve as its President and Chief Executive Officer. (Def.'s Br. 2.) Although the Parties disagree as to the exact parameters of the negotiations and agreements, Plaintiff maintains that DVA Germany, as part of the offer, promised to provide $1, 000, 000 in funding to DVA America. ("Compl., " ECF No. 27-5, Count 1 § 3.) Plaintiff explains that this funding was to be made in two installments: $500, 000 at the beginning of the venture, plus another $500, 000 in financing of general business expenses in the future. ( Id. )

As a result of these promises, Plaintiff alleges he was induced to leave his previous employment and accept a position with DVA America. ( Id. ) Thus, DVA America was incorporated in New Jersey on June 4, 2009. (Def.'s Br. 2.) Thereafter, on August 1, 2009, Plaintiff signed an employment agreement (the "Agreement") with DVA America. ( Id. ) The Agreement allowed for termination for cause, and other than for cause. (ECF No. 35-4, Ex. 1, Agreement.) Matthias Damm, a principal of DVA Germany, and Peter Zimmerman, Vice President of DVA America, signed the Agreement. (Pl.'s Opp'n 5.)

Plaintiff avers DVA Germany did not provide the second allegedly agreed upon $500, 000 in capital funding, which directly resulted in the poor sales performance of DVA America. ( Id. 7.) Several months later, on January 17, 2011, by a vote at a Special Meeting of the Board of Directors, Plaintiff was terminated prior to the expiration of his employment contract. (Def.'s Br. 2.) DVA America has since filed for bankruptcy. ( Id. )

With this factual backdrop, the following undisputed material facts are necessary for resolution of this motion. The employment Agreement which Plaintiff alleges was breached was signed by DVA America and Plaintiff. (Def.'s SUMF § 2, ECF No. 35-6) (Pl.'s Response to Def.'s SUMF § 2, ECF No. 36-4.) DVA Germany agreed that initial working capital funding for DVA America was to be $1 million financed by DVA Germany, with $500, 000 up front, and $500, 000 as needed. (Pl.'s SUMF § 16, ECF No. 36-5.) DVA Germany gave DVA America $500, 000 in initial funding, and an additional three loans totaling $514, 000. (Def.'s SUMF §§ 4-8) (Pl.'s Response to Def.'s SUMF, §§ 4-8.)

B. Plaintiff's Complaint

Plaintiff's Complaint was filed on March 30, 2011, in the Superior Court of New Jersey Law Division, Camden County. (Def.'s Br. 2.) On June 22, 2011, DVA Germany removed the action to this court. (ECF No. 1.) Thereafter, on April 5, 2012, Plaintiff filed a Motion to Amend the Complaint with a proposed Second Amended Complaint. (Compl.) The Court granted the Motion on May 23, 2012. (ECF No. 28.)

Plaintiff's first count claims breach of contract. (Compl. Count 1 §§ 1-8.) It alleges that DVA Germany was a party to the Agreement and has failed to perform the terms of the contract. ( Id. §§ 2, 4.) In particular, DVA Germany allegedly breached the contract by: (1) failing to fully finance DVA America to the $1, 000, 000 agreed upon as startup capital; and (2) terminating Plaintiff prior to the expiration of the Agreement. ( Id. §§ 4, 7.)[1]

The second count alleges fraud in the inducement. (Compl. Count 2 §§ 1-3.) It claims that Defendant fraudulently induced Plaintiff into leaving his previous employment by representing that it would provide funding to DVA America with $1, 000, 000 and has failed to do so. ( Id. )

Finally, Plaintiff's third count alleges that "DVA Germany, by its complete exercise of dominion and control, is the alter ego of DVA America." (Compl. Count 3 §§ 1-3.) Accordingly, Plaintiff requests that the Court "pie[r]ce the corporate veil" of DVA America ...


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