Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_07-cv-00063/USCOURTS-azd-3_07-cv-00063-3/pdf.json

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

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 For a complete factual history of Plaintiff’s claims, see the Court’s Memorandum

of Decision and Order entered June 23, 2007 (Dkt. 18).

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Conrad Larson,

Plaintiff,

v.

Rodger Johnson, et al.,

Defendants.

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No. CIV 07-0063-PCT-SMM

MEMORANDUM OF DECISION AND

ORDER

Pending before the Court is Plaintiff Conrad Larson’s (“Plaintiff”) Motion to Dismiss

Defendant Kittleson’s (“Kittleson”) Counterclaim (Dkt. 22). Having considered the parties’

arguments, the Court issues this Memorandum of Decision and Order granting Plaintiff’s

motion.

BACKGROUND

A. Factual History1

Plaintiff alleges that on March 16, 2004, he entered into an employment agreement

(“Agreement”) with Kittelson for the project management and sale of property in Bullhead

City, Mohave County, Arizona. (Compl. ¶¶ 19, 20.) Plaintiff further alleges that he was not

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fully compensated according to the terms of the Agreement and now asserts a claim for

breach of contract.

B. Procedural History

Originally filed in the Superior Court of Arizona, Mohave County, on November 27,

2006, this action was removed to this Court on January 8, 2007 pursuant to 28 U.S.C. §§

1332, 1441, and 1446. Kittleson filed a motion to dismiss on January 26, 2007, which was

denied. (Dkt. 18.) Kittleson then filed an Answer that included a counterclaim for breach

of contract and unjust enrichment. (Dkt. 20.) Plaintiff then moved to dismiss Kittleson’s

counterclaim for lack of subject matter jurisdiction. (Dkt. 22.) The motion has been fully

briefed.

STANDARD OF REVIEW

A party may file a motion asserting a lack of jurisdiction over the subject matter under

Rule 12(b)(1) of the Federal Rules of Civil Procedure. Fed. R. Civ. P. 12(b)(1). A court may

raise the question of subject matter jurisdiction sua sponte at any time during the pendency

of the action, even on appeal. United States v. Moreno-Morillo, 334 F.3d 819, 830 (9th Cir.

2003); see also Fed. R. Civ. P. 12(h)(3).

Rule 12(b)(1) jurisdictional attacks may be facial or factual. A facial attack inquires

whether the relevant pleading contains sufficient allegations to invoke the jurisdiction of a

federal court. A factual attack relies on extrinsic evidence beyond the pleadings to assert

lack of jurisdiction. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004).

DISCUSSION

A counter-claim may be compulsory or permissive. A counterclaim is compulsory if

it “arises out of the same transaction or occurrence that is the subject matter of the

opposing party’s claim.” Fed. R. Civ. P. 13(a). A permissive counterclaim does not arise

out of the same transaction or occurrence. Fed. R. Civ. P. 13(b). District courts have

supplemental jurisdiction over other claims that are so related to the claims in the action

that they form “part of the same case or controversy.” 28 U.S.C. § 1367(a).

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The Complaint in this matter states claims for breach of contract arising out of the

Agreement. Kittleson’s counterclaim seeks to recover from Plaintiff on a Promissory

Note allegedly executed in favor of Kittleson for $15,000, plus interest, and due “upon

request.” (Def. Kittleson’s Answer pg. 4, ¶ 2.) Plaintiff argues that the counterclaim

should be dismissed for lack of jurisdiction because Kittleson fails to present any facts

demonstrating a connection between the counterclaim and Plaintiff’s claims. (Pl.’s Mot.

to Dismiss 3.) Kittleson responds that the Court has supplemental jurisdiction under 28

U.S.C. § 1367(a) because the Promissory Note, like the employment agreement, arose out

of the parties’ involvement in the Bullhead City project. (Def.’s Resp. to Mot. to Dismiss

3.) 

Kittleson supports his contention via an unsworn declaration attached to his Response

and stating the connection between the Promissory Note and the Agreement. (Id. at Ex.

1.) Plaintiff replies that the unsworn declaration cannot be used to dispute a facial

jurisdictional attack because it is extrinsic evidence neither attached to nor incorporated

by reference in the counterclaim. (Pl.’s Reply to Mot. to Dismiss 3.) Besides the fact that

it involves the same parties, the only facial connection between the Promissory Note and

the Agreement is that they were executed approximately 16 days apart. 

As the movant and not the respondent chooses whether a jurisdictional attack is facial

or factual, the Court will not consider Kittleson’s unsworn declaration in determining the

sufficiency of the counterclaim. See Safe Air, 373 F.3d at 1039 (“In a facial attack, the

challenger asserts that the allegations contained in a complaint are insufficient on their

face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes

the truth of the allegations that, by themselves, would otherwise invoke federal

jurisdiction.”) (emphasis added). The counterclaim alleges nothing to connect the

Promissory Note to the Agreement, other than the identity of parties and the dates of

execution. The Promissory Note itself only states that it is executed “for value received.” 

(Def. Kittleson’s Answer, Ex. 1, Promissory Note dated February 28, 2004.) The

counterclaim is therefore facially insufficient to support a finding that it and the

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Complaint form “part of the same case or controversy.” 28 U.S.C. § 1367(a). As this

deficiency can be overcome by amendment, the Court will dismiss the Counterclaim

without prejudice. Id. at § 1653; Fed. R. Civ. P. 15(a).

CONCLUSION

Defendant’s Kittleson’s Answer and Counterclaim fails to allege a connection to the

subject matter of Plaintiff’s claim for breach of contract against Defendant Kittleson. 

Accordingly,

IT IS HEREBY ORDERED granting Plaintiff’s 12(b)(1) Motion to Dismiss

Defendant Kittleson’s Counterclaim (Dkt. 22), without prejudice.

DATED this 16th day of November, 2007.

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