Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-00472/USCOURTS-cand-5_05-cv-00472-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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United States District Court

For the Northern District of California

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ORDER, page 1

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

SCOTT R. MOSKO, 

Plaintiff,

v.

THD AT-HOME SERVICES, INC., 

Defendants.

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Case No.: C -05-472 PVT

ORDER DENYING MOTION TO

DISMISS UNDER RULE 12(B)(1)

I. INTRODUCTION AND FACTUAL BACKGROUND

This dispute involves roofing work on the house of Plaintiff Scott Mosko (“Mosko”). Mosko

claims that: 1) his driveway was damaged by the installation equipment; and 2) the roofing work was done

improperly. Defendant, THD At-Home Services (“THD”) has moved to dismiss under Rule12(b)(1),

claiming lack of federal diversity jurisdiction. Defendant argues that the amount in controversy in not met

and that it is not a proper defendant because “Home Depot” signed the contract, as opposed to THD. 

Plaintiff resides in Los Gatos, California. (Complaint ¶ 5.) Defendant THD is a Delaware

corporation with its principal place of business in Atlanta, Georgia. (Complaint ¶ 6.) On August 18,

2004, Mosko entered into a home improvement contract with Defendant. (Complaint ¶ 7.) The contract

provided:

“Job to be completed on or before 9-20-04. Home Depot incurs a 5% per day penalty

each day after 9-20 until the job is completed.” 

Case 5:05-cv-00472-PVT Document 14 Filed 05/19/05 Page 1 of 6
United States District Court

For the Northern District of California

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ORDER, page 2

“Purchaser understands Home Depot offers a 50 year warranty covering the cost of

materials & labor in the event a problem occurs with the roof.” 

(Complaint ¶ 7, Mosko Decl. Exh. B.) 

The contract states it is between the purchasers and “Home Depot U.S.A., Inc. “Home Depot’”

(Contract, Mosko Decl. Exh. B.) However, the contract also states on top of that same page “Sold,

Furnished & Installed by THD At-Home Services, Inc. d/b/a/ The Home Depot At-Home Services.” (Id.) 

Additionally, the Certificate of Completion signed by Mr. Mosko is on stationary that references only “The

Home Depot At-Home Services.” (Certificate, Gomes Decl. Exh. B.) Moreover, multiple pieces of

evidence indicate that Home Depot and THD are the same entity. Mr. Mosko requested that Home Depot

provide a quote on a new roof. (Mosko Decl. ¶ 1.) Mr. Michael Hunt (“Hunt”) contacted Mr. Mosko

saying he was from Home Depot, but provided a business card that said “THD At-Home Services, Inc.” 

(Mosko Decl. Exh. A.) Hunt signed the contract, which has only one signature line stating only “Sales

Consultant”. (Contract, Mosko Decl. Exh. B.) Hunt introduced Mosko to Bob Licon (“Licon”), stating

that he was Home Depot’s project manager for the job. (Mosko Decl. ¶ 5.) Licon’s business card also

stated: “THD At-Home Services, Inc.” (Mosko Decl. Exh. C.) Mosko also declares that Licon stated

that Home Depot and THD At-Home Services were the same entity. (Mosko Decl. ¶ 11.) 

Prior to September 20, 2004, Licon, Gomes and Mosko met at the Mosko residence. At that

meeting, Mosko identified “portions of the work that THD did pursuant to the home improvement contract

that were unsatisfactory.” (Complaint ¶ 8.) Mosko claims that Licon acknowledged that the work was

deficient and represented that the work would be completed on or before October 10, 2004. (Id.) 

Although it is not clear from the complaint, the deficient work refers to damage caused to the driveway of

the Mosko residence. (Opp at 1, Mosko Decl. ¶¶ 6-7). Mosko claims that Licon represented that the

repair work was covered by the home improvement contract. Licon, however, proposed that Mosko

execute a Notice of Completion, stating that as the Notice of Completion would only cover the actual

roofing work. (Mosko Decl. ¶ 8.) Mosko further asserts that THD represented that it would complete the

work by October 10, 2004 in order to induce Mosko to agree to orally amend the contract to allow the

completion date to move from September 20, 2004 to October 10, 2004, but had no intention of

completing the work by the new deadline. (Complaint ¶ 15.) On these facts, Mosko asserts both Fraud

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United States District Court

For the Northern District of California

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ORDER, page 3

and Negligent Misrepresentation on the same facts. (Complaint, First and Second Claims.) Mosko also

claims breach of contract for the damage to the driveway. (Complaint, Third Claim.)

In January 2005, the repair work on the driveway had not been completed. (Complaint ¶ 10.) In

addition, portions of the roofing material installed on the Mosko residence pursuant to the home

improvement contract fell off the roof. (Complaint ¶ 11.) Mosko contacted THD sales consultant, Hunt,

who arranged for an inspection. The inspector stated that the material appeared to have come loose from

the area around the fireplace, but that he could not confirm the extent of the damage without climbing onto

the roof. The inspector promised to return the following day to perform a thorough inspection and to

correct the problems with the roof. (Complaint ¶ 11.) On January 24, 2005, approximately two weeks

after the inspection, Mosko contacted Hunt, who expressed surprise that neither the driveway nor roof

problems had been resolved. (Complaint ¶ 12.) On January 29, 2005, a Susan Shapiro contacted Mosko

and stated that an inspector performed a second inspection and advised that no repairs were necessary. 

Mosko denies that any inspector advised that repairs were unnecessary. (Complaint ¶ 12.) On these facts,

Mosko claims breach of contract (Complaint, Fourth Claim.) 

II. LEGAL STANDARD

 Rule 12(b)(1) allows this Court to dismiss a claim for lack of jurisdiction. “It is a fundamental

principle that federal courts are courts of limited jurisdiction.” Owen Equip. & Erection Co. v. Kroger, 

437 U.S. 365, 374 (1978). Thus, the plaintiff bears the burden of establishing subject matter jurisdiction. 

A court must presume lack of jurisdiction until the plaintiff establishes otherwise. Kokkonen v. Guardian

Life Ins. Co. of America, 511 U.S. 375 (1994); Scott v. Breeland, 792 F.2d 925, 927 (9th Cir.1986)

(The party seeking to invoke federal court jurisdiction has the burden of establishing that jurisdiction is

proper.). 

In order to establish jurisdiction based on diversity, the parties must be of diverse citizenship and

the complaint must place $75,000 in controversy. 28 U.S.C. § 1332(a). When a defendant challenges the

truth of the jurisdictional allegations in the complaint, it is called a “factual attack” or “speaking motion.” In

reviewing a factual attack, the Court may properly consider facts outside of the Complaint, can evaluate

disputed facts to determine jurisdiction, and need not assume the truthfulness of the allegations in the

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United States District Court

For the Northern District of California

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1

In contrast, a “facial attack” is a challenge to the sufficiency of the allegations in the Complaint. In a

facialattack, the Plaintiff enjoys the same standards and safeguards as apply to a motion under Rule 12(b)(6):

the complaint is construed in the lightmost favorable to plaintiff and its allegations are taken as true. Abramson

v. Brownstein, 897 F.2d 389, 391 (9th Cir. 1990). 

ORDER, page 4

 complaint.1 However, where the jurisdictional issue and substantive issues are so intertwined that the

question of jurisdiction is dependent on the resolution of factual issues going to the merits, the jurisdictional

determination should await a determination of the relevant facts on either a motion going to the merits or at

trial. Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983). Therefore, the moving party

should prevail only if the material jurisdictional facts are not in dispute and the moving party is entitled to

prevail as a matter of law. Unless that standard is met, the jurisdictional facts must be determined at trial

by the trier of fact. Thornhill Publishing v. General Tel. & Elec. Corp., 594 F.2d 730, 733-35 (9th Cir.

1979). Additionally, the amount in controversy is generally determined from the face of the pleadings. 

Crum v. Circus Circus Enterprises, 231 F.3d 1129, 1130-31 (9th Cir. 2000). The sum claimed by the

plaintiff controls so long as the claim is made in good faith. St. Paul Mercury Indem. Co. v. Red Cab Co.,

303 U.S. 283, 288-89 (1938). "To justify dismissal, 'it must appear to a legal certainty that the claim is

really for less than the jurisdictional amount.' " Budget Rent-A-Car, Inc. v. Higashiguchi, 109 F.3d 1471,

1473 (9th Cir. 1997) (quoting St. Paul Mercury Indem. Co., 303 U.S. at 289.

Here, THD is making a factual attack because it attacks the truth of the jurisdictional allegations of

the complaint. THD claims that $75,000 is not in controversy and it claims that it did not enter into any

contract with Mosko. Resolution of the jurisdictional attack is dependent on factual issues going to the

merits: 1) is the penalty clause enforceable; 2) does the penalty clause cover damage to property; 3) does

the penalty clause cover work completed timely, but defectively; and 4) is THD bound by the contract at

issue. Accordingly, THD is only entitled to prevail if it can show that the material facts are not in dispute. 

III. DISCUSSION

A. Jurisdictional Amount

1. Validity of Penalty Clause

 THD first argues that the penalty clause is not valid because the contract required that any

 modifications be “in writing in a separate agreement signed by [plaintiff] and Home Depot.” THD claims

 that this provision means that the handwritten penalty clause is not valid. The clause states in full: “Entire

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2Mosko sought leave to add Home Depot as a Defendant if the Court were inclined to grant THD’s

Motion to Dismiss. Even though THD’s motion is denied, Mosko may add Home Depot as a Defendant is

Granted. 

ORDER, page 5

Agreement: This agreement and its attachments contain the complete agreement between the parties and

cannot be amended or modified unless in writing in a separate agreement signed by Purchaser and Home

Depot.” (Mosko Decl. Exh. B.) THD does not, however, explain why the phrase “this agreement and all

its attachments” does not include the handwritten penalty clause. In fact, to the extent that the handwritten

and pre-printed terms conflict, the hand-written terms control. Penthouse Intern., Ltd. v. Barnes, 92 F.2d

943, 949 (9th Cir. 1989). Thus, THD has not shown to a legal certainty that the penalty clause is invalid.

2. Whether the Work Was Completed on Time

THD next argues that the work was completed on time and, therefore no penalty has accrued

under the penalty clause. Mosko, however, argues that the penalty clause applies to the failure to fix the

damage caused to the driveway during the installation work and the failure to fix the defective roof work. 

THD next argues that no penalty could have accrued because Mosko signed the certificate of completion. 

Mosko, however, claims that his signature on the Certificate of Completion was procured by fraud and

THD should be estopped from relying upon it. Mosko claims that Licon expressly represented to him that

the Certification of Completion only referred to the roofing work and not to the driveway. (Mosko Decl. ¶

8.) Thus, THD has not shown that it is entitled to prevail as a matter of law, or “a legal certainty” that the

jurisdictional amount has not been met and resolution of these claims must await resolution on the merits. 

B. Proper Party Defendant

THD asserts that this court is without jurisdiction because Home Depot, not THD, was the

contracting party. As discussed above, there is, at a minimum, a dispute of fact as to whether THD was the

contracting party. Additionally, Mosko asserts that THD is liable for the obligations of the contract signed

by Home Depot because Home Depot was either the agent or the ostensible agent for THD. Thus, THD’s

argument that it is not bound by the contract does not deprive this Court of jurisdiction.2

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ORDER, page 6

IV. CONCLUSION

IT IS HEREBY ORDERED that THD’S Motion to Dismiss is DENIED. 

IT IS SO ORDERED.

Dated: May 18, 2005 

 /s/ Patricia V. Trumbull 

PATRICIA V. TRUMBULL

United States Magistrate Judge

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