Ptg Logistics, LLC v. Bickel's Snack Foods, Inc.
| Decision Date | 12 January 2002 |
| Docket Number | No. C-1:00-0333.,C-1:00-0333. |
| Parties | PTG LOGISTICS, LLC, Plaintiff, v. BICKEL'S SNACK FOODS, INC., et al., Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
Donald Jeffrey Ireland, Martin A. Foos, Faruki Gilliam & Ireland, Dayton, OH, for PTG Logistics LLC
Kimberly J Wile, McNees Wallace & Nurick, Columbus, OH, James P DeAngelo, Debra P Fourlas, Barbara A Darkes, McNees Wallace & Nurick, Harrisburg, PA, for Bickels Snack Food Inc.
This matter is before the court on Defendants' motion to dismiss. Defendants move to dismiss this case for lack of personal jurisdiction under Rule 12(b)(2), improper venue under Rule 12(b)(3), failure to join a necessary party under Rule 12(b)(7), and failure to state a claim under Rule 12(b)(6). Doc. 3. Defendants have also requested an evidentiary hearing in the event that the Court decides that it has jurisdiction over either or both defendants. Doc. No. 10.
This is a diversity action brought by PTG Logistics, LLC (PTG), an Ohio carrier, against Bickel's Snack Foods ("BSF") and its parent company, Hanover Foods, both of York, Pennsylvania. Plaintiff has brought four claims for relief: for breach of contract, fraudulent misrepresentation, unjust enrichment and declaratory judgment.
This dispute arises over Defendants' alleged performance of and subsequent repudiation of a contract between PTG and BSF's predecessor in interest, York Foods. The parties dispute whether there was a contract between PTG and BSF. However, PTG asserts the existence of a contract between itself and BSF and alleges that Defendants repudiated the contract and misrepresented their intention to enter into a new contract with PTG in order to induce PTG to return a security deposit it held under the terms of its contract with York Foods.
On November 18, 1996, PTG entered into a Transportation Services Agreement with York Foods to transport York's snack food products from its manufacturing plant and warehouse to various retailers. Complaint ¶¶ 9, 10. PTG agreed to purchase or lease the trucks and trailers necessary to perform its obligations, and York agreed to pay PTG a weekly fee for PTG's services, labor, and equipment. Complaint ¶ 10. Under the terms of the Agreement, York Foods made a deposit of $300,000 with PTG as security for performance of its obligations. Complaint ¶ 14. The Agreement was for a term of five years, ending in November, 2001. Complaint ¶ 10. The Agreement contained a forum selection and choice of law clause under which the parties to the Agreement submitted to the jurisdiction of the state and federal courts of Ohio. Complaint, Exhibit A.
On January 1, 2000, BSF, a subsidiary of Hanover Foods, purchased York Foods' snack food facility. Complaint ¶ 11. Although the York Foods/PTG agreement is not listed among the liabilities BSF assumed when it acquired York Foods, when BSF purchased the assets of York Foods, it purchased the rights to the remainder of the security deposit held by PTG under the York Foods/PTG agreement, which at the time of the purchase was $182,433. Defendants' Motion to Dismiss, Boeckel Affidavit ¶ 5. PTG records indicate that the two parties continued to perform under the terms of the PTG/York Foods contract until April, 2000 and that between January 1, 2000 and June 30, 2000, BSF made sixteen payments totaling $566,085.58 to PTG. Plaintiff's Memorandum in Opposition, Siekemeyer Affidavit, Exhibit B.
Discussions between PTG's Chief Operating Officer, Richard Siekemeyer, and Edward Boeckel, Jr., General Manager of BSF regarding modification of the York Foods/PTG agreement began five days after BSF purchase of York Foods when Mr. Siekemeyer telephoned Mr. Boeckel to congratulate him on the acquisition of York. In that conversation, Mr. Boeckel mentioned that Hanover was interested in renegotiating the agreement. Plaintiff's Memorandum in Opposition, Siekemeyer Affidavit ¶ 10.
On January 26, Woody Stoddard of BSF left a telephone message for Mr. Siekemeyer indicating that BSF was interested in reducing the size of PTG's fleet and asking PTG to modify its rates. Siekemeyer Affidavit ¶ 12. A series of telephone calls between the parties resulted in a meeting on February 1, 2000 in York, Pennsylvania between representatives of BSF and Hanover and representatives of PTG. At that meeting, the parties discussed modifications to the agreement, including fleet reduction and rate changes. The parties also discussed operational support issues regarding Hanover. Siekemeyer Affidavit ¶ 13.
At the February 1 meeting, Mr. Siekemeyer agreed that PTG would return the balance of the security deposit to BSF as a good-faith gesture, with the understanding that PTG and BSF were entering into a new contract. Complaint ¶ 19. PTG notified Mr. Boeckel on or about February 13, 2000, that PTG had credited BSF account in the amount of $182,422.01. Plaintiff's Memorandum in Opposition, Siekemeyer Affidavit ¶ 14.
On March 15, 2000, Mr. Boeckel telephoned PTG and indicated that BSF and Hanover were considering canceling the Agreement. Siekemeyer Affidavit ¶ 16. Nevertheless, both parties continued to perform their obligations under the Agreement. On April 14, Gary T. Knisely, Executive Vice President of Hanover, sent a letter to PTG disavowing the York Foods/PTG Agreement and asserting that it had never applied to BSF because the Agreement between York Foods and PTG was not among the liabilities BSF had assumed when it acquired York Foods. Siekemeyer Affidavit, Exhibit E.
PTG Logistics brought this action for breach of contract, fraudulent misrepresentation, unjust enrichment and declaratory judgment based on BSF's and Hanover Foods' actions in regard to the York Foods/PTG contract and their alleged misrepresentation of an intent to continue a contractual relationship with PTG that induced PTG to return the security deposit it held under the York Foods agreement.
The party seeking assertion of in personam jurisdiction bears the burden of showing that jurisdiction exists. CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir.1996). On a motion to dismiss for lack of personal jurisdiction, if the court relies only on affidavits without holding an evidentiary hearing, the court must consider all of the pleadings and affidavits in the light most favorable to the plaintiff and cannot consider evidence that controverts the plaintiff's evidence. Id. The plaintiff need only establish a prima facie showing of jurisdiction. Id.
Presented with a properly supported 12(b)(2) motion and opposition, the court has three alternatives: to decide the motion upon the affidavits alone; to permit limited discovery; or to hold an evidentiary hearing to resolve any apparent factual questions. Serras v. First Tennessee Bank Nat. Ass'n, 875 F.2d 1212, 1214 (6th Cir.1989). The court has discretion to decide which procedure to follow, and it will only be reversed for abuse of that discretion. Id.
To determine whether personal jurisdiction over a non-resident defendant exists, federal courts apply the law of the forum state, subject to the constitutional limits of due process. Id. In Goldstein v. Christiansen, 70 Ohio St.3d 232, 638 N.E.2d 541, 545 (1994), the Ohio Supreme Court held that Ohio's long-arm statute does not extend to the constitutional limits of due process in all cases. Id. 638 N.E.2d at 545 n. 1 The Court must therefore examine the requirements of both the Due Process Clause and Ohio's long-arm statute to determine whether it can exercise jurisdiction over the Defendant. LSI Industries v. Hubbell Lighting, Inc., 64 F.Supp.2d 705, 706 (S.D.Ohio 1999), rev'd on other grounds, 232 F.3d 1369 (Fed.Cir. 2000).
Personal jurisdiction over an out-of-state defendant can be either general or specific depending on the type of contacts the defendant had with the forum state. Reynolds v. International Amateur Athletic Federation, 23 F.3d 1110, 1115 (6th Cir. 1994). In this case, because neither Defendant had contacts within's the state of Ohio apart from those that gave rise to the cause of action, the Court must decide if plaintiff has established a prima facie case for the assertion of specific personal jurisdiction over the defendants.
Under § 2307.382(A)(1) of the Ohio Revised Code, "A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person's ... transacting business in this state." Although BSF disputes the existence of a contract with PTG, PTG asserts that it did have a contract with BSF and that BSF's acceptance of PTG's services and payment for those services under the terms of the York Foods/PTG contract established a contract between BSF and PTG. The facts in this case are very similar to those in Advanced Polymer Sciences, Inc. v. Phillips Industrial Services, 34 F.Supp.2d 597 (N.D.Ohio 1999), in which Phillips disputed the existence of a written contract with Advanced Polymer Systems (APS). The U.S. District Court for the Northern District of Ohio noted in that case that "APS has asserted the existence of a contract, and at this stage of the litigation, APS's assertions must be taken to be true." Id. at 599 n. 3. Having accepted the existence of a contract, the court found that the contacts arising from it were sufficient to bring the defendant within Ohio's long-arm statute. Id. at 598.
The Sixth Circuit's analysis of whether a defendant transacted business in order to bring it under the state's long-arm statute treats transacting business and availing one's self of the laws of the forum state as a two-step inquiry. Under Southern Machine Co. v. Mohasco Industries, 401 F.2d 374 (6th Cir.1968), business is transacted in a state when obligations created or operations set in motion by the defendant have a...
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