Tiverton Advisors, LLC v. AgriFruit, LLC et al
ORDER granting 17 Motion to Dismiss. Plaintiff's action is DISMISSED WITHOUT PREJUDICE for lack of personal jurisdiction, pursuant to Rule 12(b)(2). The clerk is DIRECTED to close this case. Signed by District Judge Louise Wood Flanagan on 7/29/2022. (Waddell, K.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
TIVERTON ADVISORS, LLC,
AGRIFRUIT, LLC; BOB JONES RANCH,
INC.; BOBALU, LLC; ROBERT B.
JONES FAMILY LIMITED
PARTNERSHIP; WEST COAST BERRY
FARMS, LLC; AGRIFROST, LLC;
ROBERT B. JONES; and RICHARD C.
This matter is before the court on defendants’ motion to dismiss for lack of personal
jurisdiction and for improper venue, pursuant to Federal Rule of Civil Procedure 12(b)(2) and (3).
(DE 17). The issues raised are ripe for ruling. For the following reasons, the motion is granted.
STATEMENT OF THE CASE
Plaintiff commenced this action February 1, 2022, asserting that defendants breached a
confidentiality agreement and binding terms governing negotiations for a proposed financing
transaction. Plaintiff seeks damages and costs.
Defendants filed the instant motion, relying upon declarations of defendants Robert B.
Jones and Richard C. Jones, as well as correspondence between the parties. Plaintiff responded in
opposition, relying on a declaration of Andrew Scontsas (“Scontsas”), a director of plaintiff.
STATEMENT OF FACTS
The facts alleged in the complaint may be summarized as follows. Plaintiff is a North
Carolina limited liability company with its principal office in Raleigh, North Carolina, which
“focuses on investing in agribusiness to provide long-term, value-oriented capital through loans
and growth equity capital to agribusinesses across the country.” (Compl. ¶ 14). Defendants are
affiliated California entities, along with their owners and managers (collectively, “AgriFruit”), that
grow, package and ship strawberries.
“Prior to 2019, AgriFruit borrowed money from Pacific Premier Bank (“Pacific”) for
working capital and other business-related needs.” (Id. ¶ 16). “In 2020, AgriFruit sought to
refinance the Pacific loans with [plaintiff] because its principals indicated it was having issues in
its current lending relationship with Pacific.” (Id. ¶ 17). “In connection with this effort, [plaintiff]
and AgriFruit . . . executed a Confidentiality Agreement regarding the exchange and disclosure of
confidential information” (the “Confidentiality Agreement”). (Id.). Plaintiff and AgriFruit “did
not consummate a financing transaction deal in 2020.” (Id.).
AgriFruit “indicated to [plaintiff] that the relationship between AgriFruit and Pacific had
been souring since 2019.” (Id. ¶ 18). “AgriFruit repeatedly expressed that it was unsatisfied with
its relationship with Pacific.” (Id.). AgriFruit “indicated to [plaintiff] that AgriFruit was required
to sign a forbearance agreement in November 2020 on the Pacific loan, which increased
AgriFruit’s interest expense payment and extended the maturity date.” (Id. ¶ 19). AgriFruit also
“indicated to [plaintiff] that AgriFruit’s note with Pacific was set to mature on or about September
15, 2021, thereby requiring AgriFruit to either refinance or payoff the note by that date.” (Id. ¶
20). AgriFruit further “indicated to [plaintiff] that since 2020 AgriFruit had been seeking credit
facilities from other lenders and banks to refinance the Pacific debt but their efforts were
unsuccessful.” (Id. ¶ 21).
According to the complaint, “AgriFruit had been negotiating with Pacific to refinance the
debt or enter into a new credit facility in 2020 prior to agreeing to the Binding Terms, as defined
below, with [plaintiff].” (Id. ¶ 22). “AgriFruit was unable to reach agreeable terms with Pacific
to refinance the debt or enter into a new credit facility.” (Id. ¶ 23).
“In July 2021, AgriFruit sought to reengage [plaintiff] to refinance AgriFruit’s Pacific
loans and provide working capital through a $29 million credit facility.” (Id. ¶ 24). “Specifically,
[plaintiff] sought to provide a loan to refinance AgriFruit’s existing creditors and provide working
capital for AgriFruit’s business needs.” (Id.). On “August 5, 2021, [plaintiff] delivered to
AgriFruit a commitment letter which contained the high-level terms of the proposed financing
transaction.” (Id. ¶ 25). That same date, plaintiff “delivered to AgriFruit a set of binding terms
governing the parties’ rights and obligations during the transaction process” (the “Binding
Terms”). (Id. ¶ 26). Plaintiff and AgriFruit “discussed the Binding Terms on August 5, 2021.”
“On August 9, 2021, [plaintiff] delivered a revised commitment letter [the “commitment
letter”] to AgriFruit reflecting AgriFruit’s requested changes to the financing transaction terms”
(the “Transaction”). (Id. ¶ 27). “The Binding Terms did not change between the August 5, 2021
and August 9, 2021 agreements.” (Id.). “On August 10, 2021, each named defendant executed
the commitment letter and Binding Terms.” (Id. ¶ 28).
The commitment letter sets forth a “financing proposal” including the following terms: 1)
a loan amount of $29.0 million, 2) structured to comprise a $16.0 million “[r]eal estate note” and
$13.0 million “[o]perating line,” 3) with proceeds used to pay off outstanding debt to Pacific and
to fund operations, 4) secured by collateral including real estate, crops, inventory, and equipment,
5) at an interest rate of 5.75%, 6) with a closing date on or about August 31, 2021, and 7) maturing
seven years after closing date for the real estate loan and two years after closing for the operating
note. (Compl. Ex. B (DE 1-2) at 1).
The Binding Terms include the following provisions:
1. ACCESS TO INFORMATION. Company [AgriFruit] agrees to provide
[plaintiff] or its representatives reasonable access to Company and broader
enterprise management, books & records, financial statements, properties, and any
other information reasonably requested within a time frame appropriate to enable
[plaintiff] to complete its due diligence, underwriting, and close the Transaction by
the date provided above [August 31, 2021]. Such further diligence will include, but
not be limited to:
a. Operational / business due diligence
b. Surveys and or appraisals
c. Financial / accounting / tax diligence
d. Legal due diligence
e. Management discussion / site visit
(Id. at 2).
The Binding Terms also include a confidentiality provision that incorporates the
Confidentiality Agreement previously executed August 25, 2020. (Id.). Further, the Binding
Terms provide for an “Exclusivity Period” until AgriFruit terminates by written notice or the
Transaction has been consummated. (Id.). The Binding Terms also include a provision for
AgriFruit to pay plaintiff’s “transaction costs,” such as “travel, appraisal, environmental, legal,
agricultural, mapping, accounting, diligence and other general expenses,” not to exceed
$50,000.00. (Id. at 3). Finally, the Binding Terms provide for a “Breakup Fee” in the event
AgriFruit “decide[s] to evaluate or pursue a transaction with another party . . . to provide financing
. . . similar to the Transaction proposed” in the commitment letter, in a twelve month period after
the Exclusivity Period. (Id.).
“Between August 10, 2021 and September 20, 2021, [plaintiff] and AgriFruit engaged
in the due diligence process to close the Transaction.” (Compl. ¶ 29). “During the due diligence
process, [plaintiff] expended significant resources and expenses to close the Transaction.” (Id. ¶
30). “In August 2021 alone, [plaintiff] expended over 500 hours of work to close the Transaction.”
(Id.). Plaintiff “also incurred expenses for legal services, title work, travel, and other expenses
related to evaluating and closing the Transaction.” (Id. ¶ 31).
Plaintiff “was prepared to close and fund the Transaction upon finalizing the necessary due
diligence and paperwork.” (Id. ¶ 32). “However,” according to the complaint, “AgriFruit used
the terms and existence of the Transaction as leverage to obtain more desirable financing terms
from Pacific in violation of the Binding Terms.” (Id. ¶ 33). “[P]rior to August 2021, AgriFruit had
not been able to reach an agreement with Pacific regarding refinancing the Pacific debt or entering
into a new credit facility.” (Id. ¶ 34). “Between August 10, 2021 and August 16, 2021, AgriFruit
disclosed to Pacific that it was negotiating and working to close the Transaction with [plaintiff]
and that AgriFruit had executed a term sheet with [plaintiff].” (Id. ¶ 35).
“Between August 10, 2021 and September 2, 2021, AgriFruit engaged in discussions with
Pacific about a financing transaction similar to and for the same purposes as the Transaction.” (Id.
¶ 36). “On September 2, 2021, AgriFruit received a term sheet from Pacific for a financing
transaction similar to and for the same purposes as the Transaction.” (Id. ¶ 37). “[B]etween
September 2, 2021 and September 16, 2021, AgriFruit continued to negotiate the term sheet with
Pacific.” (Id. ¶ 38).
On September 20, 2021, AgriFruit provided notice to plaintiff of its
“termination of the transaction.” (Compl. Ex. C (DE 1-3) at 1).
According to the complaint, “[b]etween August 10, 2021 and September 20, 2021,
AgriFruit disclosed Confidential Information to Pacific by discussing the existence and terms of
the Transaction,” in alleged breach of the Confidentiality Agreement and Binding Terms. (Compl.
¶ 43). During that same time period, extending to October 20, 2021, AgriFruit allegedly breached
the “Exclusivity Period” provision in the Binding Terms by “discussing and negotiating with
Pacific a financing transaction similar to and for the same purpose as the Transaction.” (Id. ¶ 51).
AgriFruit allegedly also breached the reimbursement provision in the Binding Terms by failing to
reimburse plaintiff for “transaction expenses,” and by failing to pay plaintiff the Breakup Fee upon
securing alternative financing with Pacific in 2021. (Id. ¶¶ 58, 72).
Additional facts bearing on personal jurisdiction will be set forth in the analysis herein.
Standard of Review
Federal Rule of Civil Procedure 12(b)(2) allows for dismissal of a claim for lack of personal
jurisdiction.1 “[W]hen the court addresses the personal jurisdiction question by reviewing only the
parties’ motion papers, affidavits attached to the motion, supporting legal memoranda, and the
allegations in the complaint, a plaintiff need only make a prima facie showing of personal
jurisdiction to survive the jurisdictional challenge.” Grayson v. Anderson, 816 F.3d 262, 268 (4th
Cir. 2016).2 At this stage, the court “must construe all relevant pleading allegations in the light
most favorable to plaintiff, assume credibility, and draw the most favorable inferences for the
existence of jurisdiction.” Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989); see Mylan Labs.,
Where the court grants defendants’ motion on the basis of lack of personal jurisdiction under Rule 12(b)(2),
the court does not address herein the standard of review for a motion to dismiss for improper venue.
Throughout this order, internal citations and quotation marks are omitted from all citations unless otherwise
Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993) (“[T]he district court must draw all reasonable
inferences arising from the proof, and resolve all factual disputes, in the plaintiff’s favor.”).
“A lawful assertion of personal jurisdiction over a defendant requires satisfying the
standards of the forum state’s long-arm statute and respecting the safeguards enshrined in the
Fourteenth Amendment’s Due Process Clause.” Tire Eng’g & Distribution, LLC v. Shandong
Linglong Rubber Co., 682 F.3d 292, 301 (4th Cir. 2012). Where “North Carolina’s long-arm
statute is construed to extend jurisdiction over nonresident defendants to the full extent permitted
by the Due Process Clause, . . . the dual jurisdictional requirements collapse into a single inquiry”
of whether personal jurisdiction comports with due process. Christian Sci. Bd. of Directors of
First Church of Christ, Scientist v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001).
“For a [s]tate to exercise jurisdiction consistent with due process, the defendant’s suitrelated conduct must create a substantial connection with the forum State.” Walden v. Fiore, 571
U.S. 277, 284 (2014). “To decide whether specific jurisdiction exists, [the court must] examine
(1) the extent to which the defendant purposefully availed itself of the privilege of conducting
activities in the State; (2) whether the plaintiff[’s] claims arise out of those activities directed at
the [s]tate; and (3) whether the exercise of personal jurisdiction would be constitutionally
reasonable.” Mitrano v. Hawes, 377 F.3d 402, 407 (4th Cir. 2004); see Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 474-76 (1985).3 With regard to the first prong, the touchstone of the
purposeful availment inquiry is whether “the defendant's conduct and connection with the forum
State are such that he should reasonably anticipate being haled into court there.” World-Wide
In the alternative, a plaintiff may meet the due process standard by demonstrating “general jurisdiction.”
ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 711 (4th Cir. 2002). In this case, where plaintiff does
not assert general jurisdiction exists, the court analyzes only specific jurisdiction.
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). “If, and only if, we find that the
plaintiff has satisfied this first prong of the test for specific jurisdiction need we move on to a
consideration of prongs two and three.” Consulting Engineers Corp. v. Geometric Ltd., 561 F.3d
273, 278 (4th Cir. 2009).
“In determining whether a defendant has purposely availed itself of the privilege of
conducting business in a State, [courts] have identified numerous nonexclusive factors to be
considered, such as” –
(1) whether the defendant maintained offices or agents in the State; (2) whether the
defendant maintained property in the State; (3) whether the defendant reached into
the State to solicit or initiate business; (4) whether the defendant deliberately
engaged in significant or long-term business activities in the State; (5) whether a
choice of law clause selects the law of the State; (6) whether the defendant made
in-person contact with a resident of the State regarding the business relationship;
(7) whether the relevant contracts required performance of duties in the State; and
(8) the nature, quality, and extent of the parties’ communications about the business
Sneha Media & Ent., LLC v. Associated Broad. Co. P Ltd., 911 F.3d 192, 198–99 (4th Cir. 2018);
see Consulting Engineers Corp., 561 F.3d at 278. “This analysis is not mechanical,” and “a court
must weigh the totality of the facts before it.” Perdue Foods LLC v. BRF S.A., 814 F.3d 185, 189
(4th Cir. 2016).
Plaintiff has not demonstrated a prima facie case of personal jurisdiction. As an initial
matter, several enumerated factors that are not in dispute weigh against exercise of jurisdiction.
Defendants do not maintain property, offices, or agents in North Carolina. (Richard C. Jones Decl.
(DE 20) ¶¶ 6-11; Robert B. Jones Decl. (DE 19) ¶¶ 7-25). No choice of law clause selects the law
of North Carolina; in fact, the Confidentiality Agreement specifies that New York law governs,
and the Binding Terms incorporate the Confidentiality Agreement by reference. (Compl. Ex. B
(DE 1-2) at 2). Defendants made no “in-person contact with [a] resident of the forum in the forum
state regarding the business relationship,” Consulting Engineers, 561 F.3d at 278, and instead the
only in-person contact came upon a visit by plaintiff’s representatives to California. (Richard C.
Jones Decl. (DE 20) ¶ 14; Robert B. Jones Decl. (DE 19) ¶¶ 26-27, 32).
Additional undisputed factors in addition to those enumerated above also weigh against
exercise of jurisdiction. Defendants Richard C. Jones and Robert B. Jones have not ever travelled
to North Carolina, except for one golf trip by defendant Richard C. Jones when he was 14 years
old. (Richard C. Jones Decl. (DE 20) ¶ 7; Robert B. Jones Decl. (DE 19) ¶ 21). Defendants are
engaged in farming operations in California, and defendants Richard C. Jones and Robert B. Jones
do not have any North Carolina-issued licenses, North Carolina bank accounts, or leases in North
Carolina. (Richard C. Jones Decl. (DE 20) ¶¶ 8-10; Robert B. Jones Decl. (DE 19) ¶¶ 16, 22-24).
“The fact that [plaintiff] was based in North Carolina had nothing to do with [defendants’] potential
interest in pursuing a financing transaction with [plaintiff].” (Richard C. Jones Decl. (DE 20) ¶
19; Robert B. Jones Decl. (DE 19) ¶ 34). Indeed, that proposed transaction contemplated the use
of defendants’ real estate, improvements, and crops, as collateral, all of which are located in
California. (Richard C. Jones Decl. (DE 20) ¶ ; Robert B. Jones Decl. (DE 19) ¶ 35).
“[a]ll of the capital contemplated in the Parties’ negotiations was intended to be loaned in
California and deployed for use in California.” (Robert B. Jones Decl. (DE 19) ¶ 34). In sum, these
factors further highlight the lack of connection and contacts with North Carolina.
Although plaintiff suggests that remaining four enumerated factors favor jurisdiction,
examination of each such factor demonstrates to the contrary. First, defendants did not “reach
into” North Carolina to “solicit or initiate business.” Sneha, 911 F.3d at 198. Rather, defendants
were introduced to plaintiff through a third party, Scott Porter, senior vice president of Cascadia
Capital LLC, in Seattle, Washington. That introduction is in the form of an email stating as
Joe [Joseph Rumley, AgriFruit] –
I want to introduce you to Andrew Scontsas and Griff Jenkins at Tiverton Ag.
Tiverton is a great investor and lender to the ag sector and I think they can be a nice
resource to your situation.
Andrew/Griff – please meet Joe Rumley at Bobalu Berries. Joe is working on a refi
and I think it’s worth a discussion.
(Robert B. Jones Decl. Ex. A (DE 19-1) at 4). As such, defendants did not “reach into” North
Carolina to make initial contact with plaintiff, which is reinforced by the undisputed fact that they
were not interested in plaintiff because of its location in North Carolina. (Richard C. Jones Decl.
(DE 20) ¶ 19; Robert B. Jones Decl. (DE 19) ¶ 34).
Plaintiff points to a subsequent email exchange, the next morning, in which Joe Rumley
states: “Thank you for the introduction, Scott. It is good to meet you via email, Andrew and Griff.
Let me know a convenient time for a discussion about our business and our refinancing
objectives”; and, then, plaintiff’s representative responds: “Joe – great to make the connection as
well, and pleased to introduce Tiverton as a lender to the ag space,” suggesting a time for a call.
(Robert B. Jones Decl. Ex. A (DE 19-1) at 2-3). Plaintiff also highlights the fact that, after the
parties did not pursue a financing transaction in 2020, “[i]n July 2021, the [d]efendants and
[plaintiff] re-engaged their discussions about a potential financing transaction.” (Scontsas Decl.
(DE 25) ¶ 9). These subsequent communications, however, are not on a par with reaching into
North Carolina to solicit or initiate business. They are more properly considered with the course
of communications between the parties after they were “first introduced.” Consulting Engineers,
561 F.3d at 282.
Regarding the next disputed factor, defendants did not “engage in significant or longterm business activities in the State.” Sneha, 911 F.3d at 198. Instead, defendants’ business
activities are alleged to comprise negotiations with plaintiff regarding potential terms of a
financing agreement, which negotiations culminated only in execution of the Confidentiality
Agreement and the commitment letter and Binding Terms. (See, e.g., Compl. ¶¶ 17-21, 24-28).
These executed agreements provided for plaintiff’s due diligence activities lasting less than one
month, and an exclusivity and “breakup fee” period extending no more than 14 months, with no
guarantee of a long-term financing relationship. (See, e.g., Compl. Ex. B. (DE 1-2) at 2-3). Indeed,
the commitment letter expressly states that it “does not bind [plaintiff] to consummate a
Transaction with” defendants.4 In sum, none of these activities constitute a significant or longterm business relationship between the parties, much less significant or long-term business
activities in North Carolina.
Plaintiff argues that defendants engaged in significant and long-term business activities in
North Carolina because the “anticipated transaction involved the exchange of $29 million dollars
– a significant sum of money,” the “transaction anticipated a long-term, structured business
relationship” with an operating line of credit, and the transaction “contemplated at least a sevenyear relationship.” (Pl’s Resp. (DE 24) at 12-13). However, the relevant inquiry is “whether the
defendant deliberately engaged in significant or long-term business activities in the State,” Sneha,
911 F.3d at 198 (emphasis added), not whether the parties were anticipating or contemplating
doing so. Here, defendants did not “engage in significant or long-term business activities in the
State,” because they only contracted to keep information confidential and provide information,
reimburse expenses, and maintain exclusivity during a limited time period. (Compl. Ex. B (DE 12) at 2-3).
In fact, contrary to the label used in complaint, the commitment letter states that it “is not a ‘commitment
letter.’” (Compl. Ex. B (DE 1-2) at 2) (emphasis added). The court nonetheless maintains the label used in the
complaint for ease of reference.
Plaintiff argues that this case involves “a structured, long-term business relationship more
akin to the multi-year franchise agreement discussed in Burger King [Corp. v. Rudzewicz, 471
U.S. 462, 464 (1985)].” (Pl’s Resp. (DE 24) at 13). This argument ignores, however, a critical
difference between the two cases, namely that the defendant in Burger King had already entered
into a contract containing such terms and obligations, whereas the parties here only anticipated or
contemplated one. “By signing . . . final agreements, [the defendant in Burger King] obligated
himself personally to payments exceeding $1 million over the 20-year franchise relationship,” and
“he entered into a carefully structured 20-year relationship that envisioned continuing and widereaching contacts with Burger King” in the forum state. 471 U.S. at 467, 480. In this manner, the
defendant in Burger King had “engaged in” significant business activities in the forum state by
binding himself to such activities through “continuing obligations,” which engagement is not
present here. Id. at 476.
With respect to the next disputed factor, none of “the relevant contracts required
performance of duties in the State” of North Carolina. Sneha, 911 F.3d at 198-99. Indeed, the
contracts do not even mention North Carolina as a place of performance, much less a required one.
(Compl. Exs. A & B (DE 1-1 and 1-2)). Plaintiff points to the fact that it “performed due diligence
related to the business transaction from its offices in North Carolina,” and that plaintiff actually
incurred over $50,000.00 in due diligence expenses. (Pl’s Resp. (DE 24) at 10; see Scontsas Decl.
(DE 25) ¶¶ 11, 19, 22, 24). Whether plaintiff actually completed work in North Carolina, or even
expected to complete work in North Carolina, however, is not the inquiry covered by this factor.
See Sneha, 911 F.3d at 198-99. Moreover, in those limited instances where the Binding Terms
specifically describe site-specific work to be performed, the implied location is California, not
North Carolina. (See, e.g., Compl. Ex. B (DE 1-2) at 2-3 (stating that defendants agree to provide
plaintiff “reasonable access to Company . . . properties”; that due diligence will include “Surveys
and or appraisals” and “site visit”; and that invoices for reimbursement will be sent to defendants
at their California address)).
Concerning the last factor, “the nature, quality, and extent of the parties’ communications
about the business being transacted,” Sneha, 911 F.3d at 199, the evidence is mixed. On the one
hand, the communications between the parties were numerous, comprising 90 emails, 45 virtual
meetings, 47 phone calls, 60 text messages, and one in person meeting, during their 16-month
relationship. (Scontsas Decl. (DE 25) ¶ 26). Of these, defendants “sent approximately 27 emails,
participated in all 45 virtual meetings, initiated 12 of the 47 phone calls, and sent approximately
half of the text messages” to plaintiff’s representatives in North Carolina. (Id.). On the other hand,
the nature of these communications highlights the California-centric focus of the parties’
relationship, where these communications “related to [d]efendants’ underlying business needs,
finances, and projections; [plaintiff’s] proposed credit facility terms and the Binding terms; due
diligence and underwriting needs related to the transaction; the parties’ business relationship; and
Pacific’s offered financial terms.” (Id. ¶ 27). Furthermore, concerning the quality of the
communications, plaintiff describes the sole in-person meeting between the parties as follows:
From August 4, 2021 to August 6, 2021, a number of Tiverton representatives
traveled to California to meet with several business contacts and prospective
business partners. On the second day of that trip the Tiverton representatives met
with Defendants for three hours to discuss the potential lending agreement, tour the
site, and have lunch. Following that meeting, we went to another meeting with a
different business partner.
At the meeting with Defendants, we provided a copy of and discussed Tiverton’s
binding terms that generally accompany Tiverton’s indicative term sheet and the
proposed credit facility terms. The meeting consisted of spending a few hours of
discussing the transaction with Defendants, taking a site tour, and having lunch. We
flew home the following day, August 6, 2021.
(Id.). From defendants’ perspective, plaintiff “gave us their sales pitch.” (Robert B. Jones Decl.
(DE 19) ¶ 32). As such, plaintiff’s communications with defendants in California were critical to
their relationship. While other communications between the parties are numerous, they are not
sufficient to tip the scale in favor of jurisdiction, particularly where their nature is considered in
conjunction with other pertinent factors and the totality of the circumstances.
Plaintiff cites to four cases where personal jurisdiction was found to exist, which plaintiff
contends are analogous to the instant case. These cases, however, are inapposite by virtue of key
distinguishing facts. In Vishay Intertechnology, Inc. v. Delta Int’l Corp., 696 F.2d 1062 (4th Cir.
1982), the defendant “initiated the contacts with [the plaintiff] in North Carolina,” and “intended
. . . to inflict foreseeable injury upon [the plaintiff] . . . arising out of those contacts.” 696 F.3d at
1068. Specifically, in its “initial solicitation of price information,” the defendant “deceptively
identified itself,” forming the basis of a tort claim for unfair and deceptive business practices. Id.
at 1065. In addition, the defendant “caus[ed] service of process on [the plaintiff] in North
Carolina,” forming the basis of the plaintiff’s abuse of process claim. Id. In the instant case, by
contrast, there is no such self-initiated, direct, tortious, conduct into North Carolina allegedly
inflicted on plaintiff.
In Eng. & Smith v. Metzger, 901 F.2d 36 (4th Cir. 1990), the defendant attorney “initiated
the relationship with [the plaintiff attorney], knowing that [the plaintiff] was a Virginia lawyer
who likely would do the requested work in Virginia.” 901 F.2d at 39. The defendant attorney
asked the plaintiff by telephone if he “would become his co-counsel in [a] forfeiture case on a
contingent fee basis,” and the court in that case noted that the plaintiff was “a recognized authority
on forfeiture law and is the author of the only book on the subject.” Id. at 37. The court further
noted that “[f]ew examples of transacting business are more classic than [the defendant’s] decision
to associate a Virginia law firm on a case and his subsequent dealings with that firm.” Id. at 39.
Here, defendants did not initiate such targeted contact to plaintiff, through an initial telephone call
offer, directly seeking to associate on a joint work endeavor.
In Manley v. Air Canada, 753 F. Supp. 2d 551, 555 (E.D.N.C. 2010), the “defendant’s
Chief Executive Officer (‘CEO’) personally traveled to North Carolina to meet with plaintiff,” in
2005, to negotiate an initial contract “to assist in preparing a strategic labor plan” for the defendant.
Id. at 555. Then, “[i]n early 2006, defendant proposed that plaintiff devote the majority of his
work time to defendant over the next four to five years, and after months of negotiations, the parties
entered into a separate agreement on or about August 7, 2006.” Id. “The 2006 agreement, the
alleged breach of which form[ed] the basis for th[e] lawsuit, provide[d] plaintiff with a minimum
annual retainer of $240,000.00, plus additional fees and expenses.”
Manley, thus is
distinguishable because of the initial contact by the defendant’s CEO personally traveling to meet
with plaintiff in North Carolina, and because of the extent and nature of the agreement governing
plaintiff’s work for defendant.
Finally, in Bundy v. CitySwitch II, LLC, No. 320CV00618FDWDSC, 2021 WL 4142677,
(W.D.N.C. Sept. 10, 2021), the defendant’s president and CEO “called his college acquaintance
and friend [the plaintiff], who was at his office in Charlotte, North Carolina, in order to seek [the
plaintiff’s] professional advice and services.” Id. at *1. “During that call, [he] requested [the
plaintiff’s] assistance to locate a capital partner to provide the necessary funding for [the
defendant].” Id. A year later, he “again initiated contact with [the plaintiff], informed [the plaintiff]
that [the defendant] had failed to secure a capital partner, and indicated [the defendant] wanted
[the plaintiff to] provide services to help raise the necessary capital.” Id. at *2. Bundy is
distinguishable because of the initial contact by the defendant’s CEO targeting plaintiff in North
Carolina to request services, and the CEO’s additional initiation of contact and request for services
by the plaintiff in North Carolina.
In sum considering the factors bearing on personal jurisdiction and the totality of the
circumstances in this case, plaintiff has not established a prima facie case that defendants
purposefully availed themselves of the privilege of conducting business in North Carolina.
Accordingly, defendants’ motion to dismiss is granted, and the court does not reach defendants’
additional arguments in favor of dismissal.
Based on the foregoing, defendants’ motion to dismiss (DE 17) is GRANTED. Plaintiff’s
action is DISMISSED WITHOUT PREJUDICE for lack of personal jurisdiction, pursuant to Rule
12(b)(2). The clerk is DIRECTED to close this case.
SO ORDERED, this the 29th day of July, 2022.
LOUISE W. FLANAGAN
United States District Judge
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