United States District Court, D. Vermont
ELHANNON WHOLESALE NURSERIES, LLC, D. JAMES SUTTON, and RUTH SUTTON, Plaintiffs,
JEROME CONSTRUCTION, INC., JAMES JEROME, and FELICITY HARRINGTON PURZYCKI, Defendants.
OPINION AND ORDER (DOCS. 7, 8)
Geoffrey W. Crawford, Judge.
Elhannon Wholesale Nurseries, LLC ("Elhannon" or
"EWN"), D. James Sutton, and Ruth Sutton sue
Defendants Jerome Construction, Inc. ("JCI"), James
Jerome, and former Elhannon employee Felicity Harrington
Purzycki, alleging that, in 2010 and 2011, Ms. Purzycki
committed fraud and theft and was unjustly enriched by
orchestrating an unauthorized transaction between Plaintiffs
and Defendants JCI and Mr. Jerome. (See Doc. 6.) JCI
and Mr. Jerome have filed a Rule 12(b)(1) motion to dismiss
the Amended Complaint, asserting that the amount in
controversy does not exceed 28 U.S.C. § 1332's $75,
000 jurisdictional requirement. (Doc. 7.) Ms. Purzycki has
filed a Rule 12(b)(6) motion to dismiss, asserting that
Plaintiffs' claim is foreclosed by a June 20, 2011
Stipulation of Dismissal in Apex Nursery, Inc. v. Donald
James Sutton, Jr., No. 204-6-11 Bncv (Vt. Super. Ct).
(Doc. 8.) This court heard argument on both motions on July
6, 2016, at which time the motions were taken under
factual allegations in the Amended Complaint are as follows.
Plaintiff Elhannon is a wholesale landscaping supply business
that provides plants, trees, and shrubs to its wholesale
customers. Elhannon also supplies consultants to its
customers to provide expertise and knowledge regarding
landscaping and Elhannon's wholesale products. At all
times relevant, Plaintiffs James and Ruth Sutton owned the
plants, trees, and shrubs that Elhannon would sell to its
customers, and Plaintiff James Sutton was Elhannon's
JCI is a construction company that purchases landscaping
products and supplies as part of its ordinary course of
business. Defendant James Jerome is the President and
majority owner of JCI. Mr. Jerome also owns property known as
the Hubbell Homestead in Bennington, Vermont.
and 2011, Ms. Purzycki was working for Elhannon. She was
responsible for maintaining Elhannon's financial books
and records. She owns property on Chapel Road in Bennington,
Vermont. She also owned Apex Nursery, Inc.
("Apex"), a company that provided landscaping
workers and laborers to install landscaping products sold by
Elhannon and other companies.
and 2011, Ms. Purzycki facilitated an arrangement in which
Mr. Jerome, through his company JCI, entered into purchase
agreements with Elhannon for the purchase of over $80, 000 in
trees and other plants, as well as the provision of
consultants to aid with planting. The goods and services
required of Elhannon in the contract were to be used at the
Hubbell Homestead. Defendants JCI and Mr. Jerome took
possession of the Elhannon/Sutton goods in New York and
transported them to the Hubbell Homestead. Plaintiffs assert
that, at Ms. Purzycki's direction, Apex or Elhannon
provided workers to install the plants and trees at the
JCI nor Mr. Jerome paid for the goods and services provided
by Elhannon and the Suttons. Instead, JCI and Mr. Jerome
provided Ms. Purzycki with construction work at her Chapel
Road property. Ms. Purzycki did not inform Plaintiffs that
the purchase agreements with JCI and Mr. Jerome were any
different than typical purchase agreements, in which Elhannon
would provide goods and services in exchange for monetary
payments. Plaintiffs assert that JCI and Mr. Jerome knew that
the construction work was being provided at Ms.
Purzycki's personally-owned property and that the
arrangement was not approved by Elhannon.
2011, Apex, Elhannon, and Ms. Purzycki sued Mr. Sutton in
Apex Nursery, Inc. v. Donald James Sutton, Jr., No.
204-6-11 Bncv (Vt. Super. Ct), alleging that he had
"frozen" her out of Elhannon's bank account,
and engaged in other actions to put her out of business,
irreparably damage Apex, and usurp full ownership and control
of Elhannon. (See Doc. 7-13.) Also in 2011, Mr.
Sutton terminated Ms. Purzycki's relationship with
Elhannon due to unrelated fraudulent transactions. At that
time, Plaintiffs were not aware of the "barter"
arrangement that Ms. Purzycki had facilitated.
2014, under a Stipulation of Dismissal in the Apex
litigation, Apex was placed into receivership and the books
and accounts of both Apex and Elhannon were examined by an
independent auditor. Ms. Purzycki provided the auditor with
the books, accounts, and other financial information for both
Apex and Elhannon. Despite inquiries and requests by the
court-appointed auditor, Ms. Purzycki did not provide
financial information related to the "barter"
arrangement. During the audit process, Elhannon and Mr.
Sutton discovered the "barter" transaction for the
and James Jerome's Rule 12(b)(1) Motion
district court properly dismisses an action under
Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction
if the court 'lacks the statutory or constitutional power
to adjudicate it'" Cortlandt St. Recovery Corp.
v. Hellas Telecomms., S.A.R.L., 790 F.3d 411, 417 (2d
Cir. 2015) (quoting Makarova v. United States, 201
F.3d 110, 113 (2d Cir. 2000)). On a Rule 12(b)(1) motion, the
court accepts as true '"all material allegations of
the complaint and . . . construe[s] the complaint in favor
the complaining party.'" Id. (first
brackets in original) (quoting W.R. Huff Asset Mgmt. Co.
v. Deloitte & louche LLP, 549 F.3d 100, 106 (2d Cir.
assert that the court has jurisdiction under 28 U.S.C. §
1332, which confers upon the district courts original
jurisdiction of "all civil actions where the matter in
controversy exceeds the sum or value of $75, 000, exclusive
of interest and costs, and is between . . . citizens of
different States." 28 U.S.C. § 1332(a). JCI and
James Jerome maintain that the ...