March-Westin Company, Inc. v. Swinerton Builders, Inc.
Filing
18
MEMORANDUM OPINION AND ORDE GRANTING DEFENDANT'S MOTION TO DISMISS: It is ORDERED that Plaintiff's 6 Motion to Dismiss for Lack of Jurisdiction is hereby GRANTED and this case is DISMISSED WITHOUT PREJUDICE. The Clerk is DIRECTED to enter a separate judgment order. Signed by Senior Judge Irene M. Keeley on 6/1/18. (cnd)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
MARCH-WESTIN COMPANY, INC.,
Plaintiff,
v.
//
CIVIL ACTION NO. 1:17CV199
(Judge Keeley)
SWINERTON BUILDERS, INC.,
Defendant.
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
Pending is the defendant’s motion to dismiss this case for
lack of personal and subject matter jurisdiction. For the reasons
that follow, the Court GRANTS the motion (Dkt. No. 6).
I. BACKGROUND
The facts alleged in the complaint are as follows.1 The
plaintiff, March-Westin Company, Inc. (“March-Westin”), “is a fullservice
engineering,
general
contracting
and
design-building
enterprise headquartered in Morgantown, West Virginia” (Dkt. No. 1
at 2). The defendant, Swinerton Builders, Inc. (“Swinerton”), is a
California corporation that offers “general contracting services,
including, without limitation, project management and supervision
services and subcontractor administration.” Id. at 1-2.
1
As discussed below, because the motion to dismiss implicates
personal and subject matter jurisdiction, the facts need not be
construed in the light most favorable to the plaintiff. Cf.
De’Lonta v. Johnson, 708 F.3d 520, 524 (4th Cir. 2013)
MARCH-WESTIN v. SWINERTON
1:17CV199
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
In June 2016, Viega LLC retained Swinerton to manage the
construction
Project”).
of
When
January 2017,
two
buildings
Swinerton
in
sought
Broomfield,
bids
from
Colorado
(“the
subcontractors
in
LignaTerra Global, LLC (“LignaTerra”), submitted a
preliminary bid to provide “cross-laminated” and “glue-laminated”
timber, which are uncommon building materials in the United States.
Id. at 2-3. March-Westin “originally corresponded with LignaTerra
. . . to assist it in its methodology in developing its bid,” but
LignaTerra
subsequently determined that it would not be able “to
meet prequalification requirements to be a subcontractor on the
project.” Id. at 3. In April 2017, Swinerton asked March-Westin to
provide its own bid for the timber products, with LignaTerra acting
as March-Westin’s vendor. Id.
As early as April 24, 2017, Swinerton began communicating with
March-Westin
and
its
principal,
Phillip
Weser
(“Weser”),
and
continued to do so over the course of the following two months. In
reliance
on
Swinerton’s
requests
for
a
bid,
requests
for
performance and payment bonds, and transmission of draft contracts,
March-Westin prepared a bid, which it eventually submitted to
Swinerton on June 26, 2017. Id. at 3-4.
After March-Westin submitted its bid, Swinerton transmitted
drafts of a Master Service Agreement (“MSA”), which Weser executed
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MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
on behalf of March-Westin on July 7, 2017.2 After Weser executed
the MSA, Swinerton transmitted draft work orders, including one on
July 21, 2017. In reliance on Swinerton’s correspondence, MarchWestin “paid $137,000 to LignaTerra to cover certain project costs
including a payment to Hess Timber Limitless (a German timber
supplier)
in
order
to
guarantee
[Swinerton’s]
construction
schedule.” Id. at 4. Thereafter, March-Westin incurred internal
costs related to the Project. Id. at 4-5.
Despite having March-Westin’s bid in its possession, Swinerton
transmitted draft work orders containing incorrect prices. Upon
inquiry,
Swinerton
repeatedly
stated
that
these
errors
were
clerical and would be corrected. Nevertheless, because revised
drafts consistently contained the inaccurate price, March-Westin
never
executed
them.
Id.
at
5.
March-Westin
alleges
that
Swinerton’s communications were designed to induce it to believe
that a contract existed and to continue to devote time and effort
to the Project. On August 14, 2017, Swinerton sent March-Westin a
“Notice of Intent to Not Award,” which advised that the work order
and MSA “should be considered rescinded.” Id. Since that time,
2
March-Westin affirmatively alleges that Swinerton never
executed the MSA, and thus that any alternative dispute or venue
provisions are inapplicable (Dkt. No. 1 at 4).
3
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MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
Swinerton has worked “directly with the timber supplier procured by
LignaTerra and [March-Westin],” and “has made use of and benefitted
from the cost estimates, designs and techniques introduced to the
project by [March-Westin].” Id. at 5-6.
In its complaint filed on November 21, 2017, March-Westin
claims relief for 1) Fraudulent or Negligent Inducement, 2) Breach
of Contract, 3) Unjust Enrichment, 4) Promissory Estoppel, and 5)
Conversion. Id. at 6-9. Swinerton was served through the Secretary
of State on December 6, 2017 (Dkt. No. 3). After the parties
stipulated to an extension of time for it to do so, Swinerton moved
to dismiss the complaint on January 15, 2018
(Dkt. Nos. 5; 6). The
Court heard argument on the motion at a scheduling conference on
February 22, 2018.
II. DISCUSSION
A.
Personal Jurisdiction
Swinerton argues that March-Westin’s complaint should be
dismissed for lack of personal jurisdiction (Dkt. No. 7 at 14-17).
“Under Rule 12(b)(2), a defendant must affirmatively raise a
personal jurisdiction challenge, but the plaintiff bears the burden
of demonstrating personal jurisdiction at every stage following
such a challenge.” Grayson v. Anderson, 816 F.3d 262, 267 (4th Cir.
4
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MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
2016). “[W]hen . . . the court addresses the question on the basis
only of motion papers, supporting legal memoranda and the relevant
allegations of a complaint, the burden on the plaintiff is simply
to make a prima facie showing of a sufficient jurisdictional basis
to survive the jurisdictional challenge.” Combs v. Bakker, 886 F.2d
673, 676 (4th Cir. 1989).
“Ultimately,
however,
a
plaintiff
must
establish
facts
supporting jurisdiction over the defendant by a preponderance of
the evidence,” and the Court should “follow a procedure that allows
it to dispose of the [issue] as a preliminary matter.” Grayson, 816
F.3d at 268. “[I]f a court requires the plaintiff to establish
facts supporting personal jurisdiction by a preponderance of the
evidence prior to trial,” it must “afford the parties a fair
opportunity to present both the relevant jurisdictional evidence
and their legal arguments.” Id.
In this case, both Swinerton and March-Westin have presented
evidence outside the pleadings in the course of briefing the motion
to dismiss. As well, the Court has heard oral argument on the
motion, and, after fair consideration of the arguments of the
parties, concludes that the parties have had “a fair opportunity to
present both the relevant jurisdictional evidence and their legal
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MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
arguments.” Grayson, 816 F.3d at 268. In light of the evidence, the
Court further concludes that March-Westin has failed to establish
the existence of this Court’s personal jurisdiction over Swinerton
under either a prima facie or preponderance of the evidence
standard.
1.
“A
Standard of Review
federal
district
court
may
only
exercise
personal
jurisdiction over a foreign corporation if such jurisdiction is
authorized by the long-arm statute of the state in which it sits
and application of the long-arm statute is consistent with the due
process clause of the Fourteenth Amendment.” Consulting Eng’rs
Corp. v. Geometric Ltd., 561 F.3d 273, 277 (4th Cir. 2009).
“[B]ecause the West Virginia long-arm statute is coextensive with
the Due Process Clause, it is unnecessary . . . to go through the
normal two-step formula for determining the existence of personal
jurisdiction. Rather, the statutory inquiry necessarily merges with
the Constitutional inquiry.” Shelton v. Crookshank, No. 3:17-CV108, 2018 WL 527423, at *3 (N.D.W.Va. Jan. 24, 2018) (quoting In re
Celotex Corp., 124 F.3d 619, 627-28 (4th Cir. 1997)).
To satisfy the constitutional due process requirement, a
defendant must have sufficient “minimum contacts” with
the forum state such that “the maintenance of the suit
does not offend traditional notions of fair play and
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MEMORANDUM OPINION AND ORDER GRANTING
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substantial justice.” The minimum contacts test requires
the plaintiff to show that the defendant “purposefully
directed his activities at the residents of the forum”
and that the plaintiff's cause of action “arise[s] out
of” those activities. This test is designed to ensure
that the defendant is not “haled into a jurisdiction
solely as a result of random, fortuitous, or attenuated
contacts.” It protects a defendant from having to defend
himself in a forum where he should not have anticipated
being sued. Because a sovereign's jurisdiction remains
territorial, to justify the exercise of personal
jurisdiction
over
a
non-resident
defendant,
the
defendant's contacts with the forum state must have been
so substantial that “they amount to a surrogate for
presence . . . .”
Geometric, 561 F.3d at 277-78 (internal citation omitted).
The
Fourth
Circuit
“has
synthesized
the
due
process
requirements for asserting specific personal jurisdiction in a
three part test in which ‘we consider (1) the extent to which the
defendant
purposefully
availed
itself
of
the
privilege
of
conducting activities in the State; (2) whether the plaintiffs'
claims arise out of those activities directed at the State; and (3)
whether
the
exercise
of
personal
jurisdiction
would
be
constitutionally reasonable.’” Id. at 278 (quoting ALS Scan, Inc.
v. Digital Serv. Consultants, Inc., 293 F.3d 707, 712 (4th Cir.
2002)).3 Under the first prong, in the business context, courts
3
March-Westin does not contest that Swinerton lacks the
“continuous and systemic” contacts that would subject it to general
jurisdiction in West Virginia (Dkt. No. 9 at 5 n.1). CFA Inst. v.
Inst. of Chartered Fin. Analysts of India, 551 F.3d 285, 292 n.15
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consider various nonexclusive factors, including “whether the
defendant maintains offices or agents in the forum state,” “whether
the defendant owns property in the forum state,” “whether the
defendant reached into the forum state to solicit or initiate
business,”
“whether
the
defendant
deliberately
engaged
in
significant or long-term business activities in the forum state,”
“whether the parties contractually agreed that the law of the forum
state would govern disputes,” “whether the defendant made in-person
contact with the resident of the forum state in the forum state
regarding the business relationship,” “the nature, quality and
extent of the parties’ communications about the business being
transacted,” and “whether performance of the contractual duties was
to occur within the forum.” Id. (internal citations omitted). Only
if the first prong is satisfied does the Court analyze the second
and third prongs. Id.
2.
Discussion
The threshold inquiry in this case is whether Swinerton meets
“the minimum contacts requirement of constitutional due process
(4th Cir. 2009). Although Swinerton is registered to do business in
West Virginia, it is not a licensed contractor and does not perform
any work there. Moreover, Swinerton does not maintain an office in
West Virginia and does not direct business activities toward the
state (Dkt. No. 6-1 at 1-2).
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that
[it]
purposefully
availed
[itself]
of
the
privilege
of
conducting business under the law of the forum state.” Geometric,
561 F.3d at 278. Swinerton contends that it lacks sufficient
contacts with West Virginia (Dkt. Nos. 7 at 17; 10 at 8-10), while
March-Westin contends that Swinerton’s contacts were much more than
“random, fortuitous, or attenuated” (Dkt. No. 9 at 6). Because the
Court’s analysis is fact-intensive, it is instructive to survey how
other courts have considered similar matters.
In Burger King Corp. v. Rudzewicz, the Supreme Court found
that Florida could exercise personal jurisdiction over a Michigan
franchisee whose dispute with the franchiser “grew directly out of
‘a contract which had a substantial connection with [Florida],’”
despite the fact that he had no physical ties with the state. 471
U.S. 462, 479 (1985) (quoting McGee v. Int’l Life Ins., Co., 355
U.S.
220,
223
(1957)
(emphasis
added)).
The
defendant
had
deliberately reached out to a “Florida corporation for the purchase
of a long-term franchise.” Id. at 480. In doing so, he “entered
into a carefully structured 20-year relationship that envisioned
continuing and wide-reaching contacts with Burger King in Florida,”
including contractual provisions that selected the law of Florida
to
govern
any
disputes.
Id.
at
480-81.
In
other
words,
he
voluntarily accepted “long-term and exacting regulation of his
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MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
business from Burger King’s Miami headquarters.” Id. at 480.
Moreover, by breaching the franchise agreement, the defendant had
caused foreseeable injury in Florida. The “quality and nature” of
his relationship with Florida was thus much more than random,
fortuitous, or attenuated. Id.
In Consulting Engineers Corp. v. Geometric Ltd., Consulting
Engineers Corp. (“CEC”), a Virginia corporation, had a business
relationship with Structure Works, LLC (“Structure Works”) and
Geometric Software Solutions (“Geometric”), Colorado and Indian
corporations respectively. 561 F.3d 273, 275 (4th Cir. 2009).
Structure Works retained Geometric to work on a design project, and
introduced Geometric to CEC, which it believed might be able to
assist with an aspect of the project. Thereafter, following several
emails and phone calls, CEC entered into non-disclosure agreements
with both Geometric and Structure Works. Id. at 275-76. During the
four subsequent months of negotiation regarding CEC’s potential
assistance, the three companies met once in India. Geometric then
hired a CEC employee to work for it in India. Structure Works
ultimately elected not to pursue the project with CEC. Id. at 276.
When CEC filed suit in Virginia, Structure Works and Geometric
contested personal jurisdiction. In concluding that Structure Works
could not be sued in Virginia, the Fourth Circuit expressly
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discounted the fact that the company had reached out to CEC and
directed eight emails into Virginia:
Structure Works did not have offices or employees in
Virginia, nor did it own property there. It had no
on-going business activity in Virginia. The record does
not reflect any in-person contact with CEC in Virginia.
Structure Works negotiated NDA II from, and signed it in,
Colorado, and the agreement includes a Colorado
choice-of-law and choice-of-forum clause. Any work
contemplated by the discussions would have been performed
in India; no formal agreement was ever reached to perform
the work; and, indeed, the very activity of which CEC
complains—the hiring of Kumar—took place in India.
Further, because the alleged conspiracy (between two
non-Virginia
corporations)
and
alleged
tortious
interference with an at-will contract occurred in India,
Indian law would govern under Virginia's choice of law
provisions.
Id. at 279-80.
Likewise,
despite
the
fact
that
Geometric
had
exchanged
communications with CEC and agreed that Virginia law would govern
their non-disclosure agreement, the Fourth Circuit concluded it
could not be haled into a court in Virginia:
Geometric is based in, and negotiated solely from, India.
Geometric owns no property in Virginia. None of
Geometric's employees work in Virginia; none have ever
even traveled to Virginia. Although CEC contended that
Geometric “initiated” contact with it in Virginia, the
record does not support this assertion. The record
reflects, and indeed CEC does not dispute, that the two
parties were first introduced on a joint conference call
with Structure Works.
Geometric engaged in no on-going business activities in
Virginia, and the only in-person meeting among the
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parties occurred in India. If the parties had consummated
their agreement to work together, the work would have
been performed in India. Again, the activity of which CEC
complains—the hiring of Kumar in alleged violation of NDA
I—took place in India. The alleged conspiracy and
interference with an at-will contract occurred outside of
Virginia, involving an alleged plan between two
non-Virginia corporations to hire an employee working in
India.
Id. at 281-82.
In Perdue Foods LLC v. BRF S.A., Perdue Holdings, Inc.
(“Perdue”) and BRF S.A. (“BRF”), a Brazilian company, executed an
agreement in 2002 to avoid confusion between Perdue’s PERDUE mark
and BRF’s PERDIX mark. 814 F.3d 185, 187-88 (4th Cir. 2016). Perdue
agreed not to register its mark in Brazil, while BRF agreed to
abandon a version of its mark worldwide. The agreement contained a
Maryland choice-of-law provision. Id. at 188. Thereafter, “[f]rom
2012 to 2014, Perdue bought an aggregate 715,000 pounds of chicken
. . . from BRF. Perdue sent purchase orders from Maryland and BRF
sent invoices to Maryland . . . but at Perdue’s direction BRF
shipped the chicken from Brazil to Tanzania.” Id.
When BRF subsequently sought to register its mark in several
foreign countries, Perdue sued it in Maryland. Id. The Fourth
Circuit, however, concluded that BRF had not purposefully availed
itself of the privilege of doing business in Maryland.
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The company employs no Maryland officers or agents and
owns no property in the state. BRF did not initiate the
negotiations that led to the Agreement, and no BRF
employee traveled to Maryland in connection with the
Agreement. BRF conducts no business in Maryland: it does
not import any products into or sell or ship products to
any clients in Maryland, and it has no contract with any
entity in Maryland other than Perdue. BRF's alleged
breach of the Agreement occurred not in Maryland, but in
the Foreign Countries.
Id. at 189. Moreover, the agreement itself did not require BRF or
Perdue to perform any duties in Maryland or create continuing
obligations or contacts in the state. Id. at 190. In light of these
factors,
the
court
concluded
that
Maryland
lacked
personal
jurisdiction over BRF. Id. at 192.
Here, Swinerton’s contacts with West Virginia are akin to
those of the defendants in Geometric and Perdue. Although Swinerton
maintains a registered agent in West Virginia, it “is not a
license[d] contractor in West Virginia and does not perform any
work there,” “has no offices or other facilities in West Virginia,”
and “does not direct business activities toward West Virginians or
otherwise advertise in West Virginia” (Dkt. No. 6-1 at 1-2).
Indeed, Swinerton did not initiate contact with March-Westin, but
was placed in contact with the company through LignaTerra, another
potential subcontractor (Dkt. Nos. 6-3; 6-4). There also is no
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indication that Swinerton owns any property in West Virginia.
Geometric, 561 F.3d at 278.
Swinerton did not engage in “significant or long-term business
activities” in West Virginia. Id. The four-month relationship
between Swinerton and March-Westin resulted only in the execution
of an MSA that did not obligate either party to conduct work or
enter into future agreements, much less conduct any work in West
Virginia (Dkt. No. 6-2). The subject of the parties’ specific
negotiations was a project situated in Colorado for which MarchWestin would facilitate the provision of specialized building
materials from outside the United States. Although March-Westin
undoubtedly is located in West Virginia, even a project-specific
agreement would not have required it to conduct any work there.
March-Westin does not dispute that Swinerton never made “in-person
contact with [it] in the forum state.” Geometric, 561 F.3d at 278.
Indeed, Weser traveled to Colorado to discuss the Project (Dkt. No.
9-2 at 7, 74). And in the MSA, the parties agreed that the law of
Colorado would govern any disputes, and that Colorado would be the
appropriate venue (Dkt. No. 6-2 at 15).
March-Weston rests its argument primarily on the contention
that the nature, quality, and extent of the parties’ communications
establish that Swinerton purposefully availed itself of conducting
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business in West Virginia (Dkt. No. 9 at 5-6). Although the
parties’ communications between April and August 2017 are at times
quite
detailed,
“even
very
extensive
communications
are
not
dispositive of the defendant’s purposeful availment, unless the
parties had an extensive, substantive, or continuing relationship
that tied their behavior to the forum state.” Alacrity Renovation
Servs., LLC v. Long, No. 3:16-cv-00206-FDW-DSC, 2016 WL 4150011, at
*7 (W.D.N.C. Aug. 3, 2016). Here, the emails provided by MarchWestin are insufficient to establish such a tie to West Virginia.
Put simply, the parties’ communications are exactly what one might
expect between sophisticated parties negotiating a relatively
significant construction contract.
As early as September 2016, LignaTerra communicated with
Swinerton about supplying and erecting wood aspects of the Project,
indicating that it would use March-Westin as “a strategic partner”
if selected (Dkt. No. 6-4). On April 25, 2017, Weser and LignaTerra
representatives visited Colorado to attend a meeting regarding the
Project (Dkt. No. 9-2 at 73-73). Throughout April and May 2017,
representatives
from
Swinerton,
LignaTerra,
and
March-Westin
exchanged emails concerning drawings, wood treatments, and pricing.
Id. at 64, 70, 72. At the same time, Swinerton and March-Westin
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exchanged communications regarding March-Westin’s forthcoming bid
to provide “the bulk of the structure.” Id. at 55, 60.
Thereafter,
the
parties’
communications
became
more
significant. In early June, Swinerton indicated that it “was hoping
to obtain a bond commitment [l]etter” and execute a general
contract, the MSA, so that March-Westin could execute a projectspecific contract once Swinerton executed its contract with Viega.
Id. at 49, 51. From June 1 through 16, 2017, March-Westin continued
to provide pricing estimates, as well as a bonding letter, for
Swinerton to utilize in its negotiations with Viega. Id. at 42-50.
Once Swinerton was “officially under contract with Viega” on June
27, 2017, it again expressed a desire to execute a contract with
March-Westin. Id. at 40-41. Swinerton also asked March-Westin to
provide “updated pricing” and explain “why [they] did not realize
[certain] design efficiency savings.” Id. at 34-38.
While March-Weston was working toward a “100% bid” in early
July 2017, the parties executed the MSA, and Swinerton began
“working on the project specific work orders.” Id. at 28. During
late July and early August, concerns began to arise regarding
suppliers’ ability to meet Swinerton’s schedule, and the parties
disagreed about the overall price of March-Westin’s services. Id.
at 8-22. Ultimately, on August 14, 2017, Swinerton forwarded Weser
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a Notice of Intent to Not Award March-Westin a subcontract for the
Project. Id. at 1.
While these communications certainly amount to more than
random and fortuitous contacts, they are not substantial enough to
outweigh the other relevant factors. Indeed, they reinforce the
attenuated nature of Swinerton’s contacts with West Virginia, which
as discussed, related to a construction project in Colorado and the
possibility that March-Westin would execute a subcontract to supply
and install specialized timber products from Europe. The parties’
in-person contact took place in Colorado. Swinerton sent all its
communications to March-Westin from Colorado. In addition, it
executed the MSA in Colorado, and the MSA itself selected the law
of Colorado to govern any disputes.
Far from purposefully availing itself of the privilege of
conducting
business
in
West
Virginia,
Swinerton
attempted
to
negotiate the provision of materials and services in Colorado, but
fell short of a final agreement with a West Virginia company. “Put
simply, however significant the plaintiff’s contacts with the forum
may be, those contacts cannot be decisive in determining whether
the defendant’s due process rights are violated.” Fastpath, Inc. v.
Arbela Technologies Corp., 760 F.3d 816, 823 (8th Cir. 2014)
(quoting Walden v. Fiore, 571 U.S. 277 (2014)) (holding that a
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company could not be sued in Iowa despite “‘aggressively pursuing’
a business relationship with an Iowa company”).4
This
case
is
distinguishable
from
Tire
Engineering
&
Distribution, LLC v. Shandong Linglong Rubber Co., Ltd., cited by
March-Westin in support of its contrary argument. 682 F.3d 292 (4th
Cir. 2012). There, plaintiff Alpha developed and sold specialized
tires for underground mining vehicles, the blueprints for which it
closely guarded in order to prevent competitors from copying its
design. Id. at 298. Defendant Al Dobowi was found subject to
personal jurisdiction in the plaintiff’s home state of Virginia
because it hatched a “conspiracy to unlawfully copy Alpha’s tires
while in Virginia and substantially correspond[ed] with an employee
based in Virginia.” Id. at 303. Defendant Linglong was a foreign
tire manufacturer that produced the copies despite knowing “that
the blueprints had been stolen.” It even communicated with Al
Dobowi’s employee in Virginia to discuss “taking steps to slightly
4
This conclusion also is consistent with a number of district
court decisions. See, e.g., Dehner Co., Inc. v. Appromed Corp., No.
8:16CV7, 2016 WL 9408573, at *4-*5 (D. Neb. Sept. 14, 2016)
(finding that a defendant was not subject to personal jurisdiction
despite emails, telephone calls, and the submission of documents);
Decusati v. Reiss Eng’g, Inc., No. 3:15-cv-204-JAG, 2015 WL
4622494, at *3-*4 (E.D. Va. July 30, 2015) (reasoning that a
Florida company’s negotiations with a prospective employee in
Virginia did not establish personal jurisdiction).
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modify their tires to make it less obvious they had copied Alpha’s
design.” Id. at 299. The Fourth Circuit found these communications
to be “qualitatively significant,” and reasoned that Linglong too
could
expect
“extensive
to
be
haled
into
collaboration”
a
and
Virginia
court
due
“substantively
to
its
weighty
communications” regarding unlawful conduct in the forum state. Id.
at 305.5
Although March-Westin contends that Swinerton engaged in
“extensive collaboration” with it, there are no “substantively
weighty communications” that warrant haling Swinerton into court in
West Virginia. Rather, like Geometric, “the locus of the parties’
interaction
was
overwhelmingly”
outside
the
forum
state
in
Colorado. Tire Engineering, 682 F.3d at 302. Therefore, MarchWestin has not met its burden to establish personal jurisdiction
over Swinerton in West Virginia.
5
Several other cases cited by March-Westin involve far more
significant contacts than are at issue in this case. CFA Institute,
551 F.3d at 294 (finding personal jurisdiction where the defendant
visited the plaintiff in Virginia, attended the plaintiff’s board
meeting in Virginia, and “corresponded and collaborated” with the
plaintiff for years); Patriot Coal Sales LLC v. Bridgehouse
Commodities Trading Ltd., No. 2:12-cv-03653, 2013 WL 504890, at *4*6 (S.D.W.Va. Feb. 8, 2013) (finding personal jurisdiction over
affiliated companies that, among other things, sent a comfort
letter to West Virginia guaranteeing their performance of
significant contractual duties in West Virginia).
19
MARCH-WESTIN v. SWINERTON
1:17CV199
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
B.
Subject-Matter Jurisdiction
Alternatively,
Swinerton
argues
that
the
case
should
be
dismissed for lack of subject-matter jurisdiction due to provisions
of the MSA (Dkt. No. 7 at 7-12). March-Westin contends that the MSA
does not apply because Swinerton repudiated it (Dkt. No. 9 at 2-3).
Should the Court need to reach this issue, it is clear that MarchWestin’s argument is without merit, and the Court would lack
subject matter jurisdiction.
1.
Standard of Review
Pursuant to Fed. R. Civ. P. 12(b)(1), a party may move to
dismiss an action for lack of subject matter jurisdiction. “A
defendant may contest subject matter jurisdiction in one of two
ways: by attacking the veracity of the allegations contained in the
complaint or by contending that, even assuming the allegations are
true,
the
complaint
fails
to
set
forth
facts
upon
which
jurisdiction is proper.” Durden v. United States, 736 F.3d 296, 300
(4th Cir. 2013) (citing Kerns v. United States, 585 F.3d 187, 192
(4th
Cir.
2009)).
“If
the
defendant
challenges
the
factual
predicate of subject matter jurisdiction, ‘[a] trial court may then
go beyond the allegations of the complaint and in an evidentiary
hearing determine if there are facts to support the jurisdictional
20
MARCH-WESTIN v. SWINERTON
1:17CV199
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
allegations’ . . . .” Kerns, 585 F.3d at 192 (alteration and
emphasis in original). In this case, Swinerton challenged the
factual predicate of subject matter jurisdiction in its motion to
dismiss,
briefing.
and
both
When
the
parties
Court
presented
took
up
relevant
the
evidence
motion,
neither
during
party
presented additional evidence.
2.
Discussion
In its complaint, March-Westin alleged that the MSA “was never
executed by Defendant” and that its provisions thus do not apply
(Dkt. No. 1 at 4). Swinerton, however, submitted the executed MSA
with its motion to dismiss (Dkt. No. 6-2). The MSA bears the
electronic signature of both Phillip Weser of March-Westin and
Chris Staker of Swinerton. Id. at 15. According to the declaration
of John Spight, project executive at Swinerton, these signatures
were affixed to the MSA on July 7, 2017 (Dkt. No. 6-1 at 2). MarchWestin did not present any evidence to rebut Swinerton’s contention
that it executed the MSA on the same day as Weser.
The MSA requires the parties to mediate and participate in
binding arbitration:
15. DISPUTES AND DISPUTE RESOLUTION. A Dispute shall
arise when Contractor denies or otherwise challenges a
timely Claim brought by Subcontractor or the Parties have
21
MARCH-WESTIN v. SWINERTON
1:17CV199
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
another form of disagreement arising from the Subcontract
Documents (collectively “Dispute”).
. . .
(d) Disputes between Contractor and Subcontractor. If a
dispute is only between Contractor and Subcontractor,
then the dispute resolution procedure set forth in
Paragraphs 15(e) through 15(f) below shall apply. . . .
(e) Mediation. Neither Party shall proceed with
arbitration or litigation until the parties have mediated
the Dispute. Mediation will be conducted under the
American Arbitration Association’s Construction Industry
Mediation Rules unless the Parties agree otherwise. The
costs of the mediator shall be shared equally by the
Parties. The Parties agree to stay any legal or equitable
proceedings pending completion of mediation. The
mediation shall be held in the city or county where the
Project is located, unless otherwise agreed. Prior to the
mediation, Subcontractor shall provide sufficient
supporting information as determined by Contractor to
enable Contractor to reasonably evaluate Subcontractor’s
claims. Agreements reached in mediation shall be
enforceable as settlement agreements in any court having
jurisdiction thereof.
(f) Binding Arbitration. For Disputes not resolved by
mediation as set forth above, the Parties agree to
resolve such Disputes by binding arbitration . . . .
(Dkt. No. 6-2 at 11-12).
March-Westin does not contest that the dispute resolution
provisions
of
the
MSA
require
binding
arbitration,
that
the
provisions are enforceable, and that the dispute arises out of the
contract such that application of the provisions warrants dismissal
of this case. See Ohio Power Co. v. Dearborn Mid-West Conveyor Co.,
22
MARCH-WESTIN v. SWINERTON
1:17CV199
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
Inc., No. 5:11CV164, 2012 WL 2522960, at *2 (N.D.W.Va. June 29,
2012) (analyzing these factors and dismissing a lawsuit). Rather,
March-Westin contends that Swinerton repudiated the MSA in its
Notice of Intent to Not Award (Dkt. No. 9-1), where Swinerton
stated:
As March-Westin Company, Inc. (“March Westin”) has failed
to maintain the budgetary number provided by LignaTerra
Global, LLC; Swinerton Builders hereby terminates any
current work being done by March Westin on the Viega
Headquarters’ Work Order issued July 21, 2017, and the
Subcontract previously forwarded but not yet executed
should be considered rescinded.
. . . Swinerton is terminating any and all agreements
with March Westin as it relates to this Project.
In West Virginia, the doctrine of anticipatory breach, i.e.
repudiation, is defined as follows:
[T]he renunciation of an executory contract by one party
thereto, which would excuse performance by the other,
must be unequivocal and deal with the entire performance
to which the contract binds the party which it is claimed
has renounced the same.
Mollohan v. Black Rock Contracting, Inc., 235 S.E.2d 813, 815-16
(W. Va. 1977).6
Here, the plain language of Swinerton’s letter does not
support
March-Westin’s
argument
6
that
Swinerton
unequivocally
At the scheduling conference, the parties agreed that the
Court should apply the contract law of West Virginia, rather than
Colorado.
23
MARCH-WESTIN v. SWINERTON
1:17CV199
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
repudiated the MSA. Throughout the parties’ negotiations, the terms
“work
order”
and
“subcontract”
were
used
interchangeably
and
separate from the MSA to discuss the parties’ prospective, projectspecific agreement (Dkt. No. 10-1 at 2). In its notice, Swinerton
expressly terminated only work being done on a “work order” and
“subcontract” (Dkt. No. 9-1). In contrast, the MSA covered the
parties’ general relationship, and was not project-specific (Dkt.
Nos. 6-2; 10-1 at 1). Swinerton’s intent to terminate “any and all
agreements with March Westin as it relates to this Project” thus
does not implicate the MSA (Dkt. No. 9-1).
Moreover,
even
if
Swinerton
did
repudiate
the
MSA,
the
arbitration clause in the agreement likely would survive, and
March-Westin’s claims would be subject to binding arbitration. See
Syl. Pt. 3, State ex rel. Ranger Fuel Corp. v. Lilly, 267 S.E.2d
435,
437
(W.
Va.
1980)
(“[T]he
duty
to
arbitrate
under
an
arbitration clause in a contract survives the termination of the
contract.”).7
7
Given its conclusions regarding personal and subject matter
jurisdiction, the Court need not reach Swinerton’s additional
argument that venue is improper in the Northern District of West
Virginia (Dkt. No. 7 at 17-20).
24
MARCH-WESTIN v. SWINERTON
1:17CV199
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO DISMISS [DKT. NO. 6]
III. CONCLUSION
For the reasons discussed, the Court GRANTS Swinerton’s motion
(Dkt. No. 6), and DISMISSES this case WITHOUT PREJUDICE.
It is so ORDERED.
The Court directs the Clerk to transmit copies of this Order
to counsel of record, to enter a separate judgment order, and to
strike this case from the Court’s active docket.
DATED: June 1, 2018.
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE
25
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