Viracon, Inc. v. J&L Curtain Wall LLC

• Court: U.S. District Court — District of Minnesota
• Writing for the Court: RICHARD H. KYLE
• Citation: Viracon, Inc. v. J&L Curtain Wall LLC, 929 F.Supp.2d 878 (D. Minn. 2013)
• Decision Date: 08 March 2013
• Docket Number: Civ. No. 12–2566 (RHK/JJK).
• Parties: VIRACON, INC., Plaintiff, v. J & L CURTAIN WALL LLC d/b/a J & L Curtainwall, LLC, et al., Defendants.

929 F.Supp.2d 878

VIRACON, INC., Plaintiff,

v.J & L CURTAIN WALL LLC d/b/a J & L Curtainwall, LLC, et al., Defendants.

Civ. No. 12–2566 (RHK/JJK).

United States District Court, D. Minnesota.

March 8, 2013.

C.J. Schoenwetter, Dustin D. Fossey, Richard G. Morgan, Michael R. Carey, Bowman & Brooke LLP, Minneapolis, MN, for Plaintiff.

Curtis D. Ripley, Steven R. Lindemann, Leonard Street and Deinard, PA, Minneapolis, MN, for Defendant.

MEMORANDUM OPINION AND ORDER

RICHARD H. KYLE, District Judge.

INTRODUCTION

Plaintiff Viracon, Inc. (“Viracon”) is a Minnesota-based fabricator of architectural glass. In early 2009, a New York-based company, Defendant J & L Curtain Wall LLC (“J & L”), agreed to purchase over $1 million worth of Insulated Glass Units (“IGUs”) ¹ from Viracon for use in the construction of a hotel in upstate New York.² When J & L failed to pay for the IGUs, Viracon commenced the instant action; J & L now moves to dismiss for lack of personal jurisdiction and improper venue. For the reasons that follow, the Court concludes that it lacks personal jurisdiction over J & L and, accordingly, it will dismiss this action without prejudice.

BACKGROUND

The relevant facts are straightforward. J & L is a New York limited liability company that “specializes in building exterior curtain walls ³ to be used in construction projects.” (Cappelli Decl. ¶ 12.) ⁴ It is headquartered in Valhalla, New York, and its primary business operations are in and around New York state. ( Id. ¶¶ 12, 14.) It is not registered to do business in Minnesota; has no offices in this state; owns no Minnesota property; has no registered agents here; and has never paid Minnesota taxes. ( Id. ¶ 14.)

In 2008, J & L was retained to build the curtain wall at the “Concord Project,” a hotel and casino development project in upstate New York. (Compl. ¶ 8; Cappelli Decl. ¶ 4.) In response to a solicitation it had received from Viracon, on December 11, 2008, J & L faxed from its New York headquarters a “letter of intent” to purchase IGUs from Viracon for use at the Concord Project. (Simon Decl. ¶ 4 & Ex. A.) The letter specified that the IGUs, which were to be manufactured at Viracon's Minnesota factory in accordance with J & L's specifications, were to be shipped to a J & L warehouse in Pennsylvania. ( Id. Ex. A.)

Because the IGUs were to be shipped before Viracon received payment, it required J & L to submit a credit application. On December 17, 2008, J & L faxed that application to Viracon, providing information about its assets, equity, debts, and liabilities. ( Id.) The application listed several “trade references,” one of which was a company located in Minnesota from which J & L previously had purchased products. ( Id.; Second Cappelli Decl. ¶¶ 4–5.)

Viracon approved J & L's application, and on December 23, 2008, J & L faxed Viracon a purchase order for several thousand IGUs, at a total cost of approximately $1.5 million, to be delivered to J & L's Pennsylvania warehouse over the course of several weeks in early 2009. (Simon Decl. ¶ 8 & Ex. D.) The following day, Viracon faxed back an “order confirmation,” confirming the purchase and incorporating its standard “terms of sale” into the transaction. ( Id. ¶ 9 & Ex. E.) Among other things, those terms provided that (1) completed but unshipped orders were “subject to storage charges” by Viracon, (2) J & L could “arrange to inspect” the IGUs at Viracon's factory before shipment, and (3) Minnesota law would govern the transaction. ( Id. Ex. G.) ⁵

Viracon then began manufacturing the IGUs and shipping them to J & L's Pennsylvania warehouse. Between February and May 2009, it shipped 16 separate lots of IGUs for which it billed J & L approximately $960,000. ( Id. ¶ 14 & Ex. J.) J & L accepted all of the IGUs and never informed Viracon they were unacceptable or failed to meet its specifications; however, it did not pay for them. ( Id. ¶ 15.) Viracon later manufactured the remaining IGUs in J & L's order, but because it had not been paid, it stored them in a Minnesota warehouse rather than shipping them to Pennsylvania. ( Id. ¶¶ 21, 23.)

In September 2009, Viracon sent J & L an e-mail about its outstanding balance, and J & L responded that the Concord Project had “experienced a delay in obtaining construction financing,” but the financing was due to be completed shortly and it hoped to clear its outstanding debt to Viracon “within the next 3 weeks.” ( Id. Ex. K.) When a month passed without payment, Viracon again e-mailed J & L and asked that at least some portion of the outstanding balance be paid. ( Id. Ex. L.) J & L responded that it was “not in a position to make a payment at [the] time,” and it requested that Viracon continue to carry the outstanding balance until the expected financing was completed, which was supposedly “close” to occurring. ( Id.) But “close” turned out to be an inaccurate description—more than a year passed without payment by J & L. During that time, Viracon e-mailed or telephoned J & L from time to time, reminding it of its outstanding balance. ( Id. Ex. M.) Ultimately, financing for the Concord Project was never completed, and J & L failed to pay Viracon for the IGUs. (Cappelli Decl. ¶ 8.)

In 2011, “[s]everal parties, including Viracon, filed claims in New York state court” against the contractors involved in the Concord Project, including J & L, to recover damages “for materials that they [had] provided” on the project. ( Id. ¶ 10.) Of particular relevance here, Viracon asserted claims against J & L due to its non-payment for the IGUs. But in April 2012, rather than continuing to litigate in New York, Viracon voluntarily dismissed its claims. (Compl. ¶ 6; Carey Decl. ¶ 2.) It then filed the instant action in the Steele County, Minnesota District Court, asserting a host of contract and tort claims against J & L. J & L removed the action to this Court on diversity grounds and now moves to dismiss, inter alia, under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction.⁶ The Motion has been fully briefed and is now ripe for disposition.

STANDARD OF REVIEW

To survive a motion to dismiss under Rule 12(b)(2), a plaintiff must make a prima facie showing that personal jurisdiction exists. E.g., Johnson v. Woodcock, 444 F.3d 953, 955 (8th Cir.2006); Lakin v. Prudential Sec., Inc., 348 F.3d 704, 706 n. 3 (8th Cir.2003). It can do so by proffering sufficient evidence “to support a reasonable inference that the defendant[ ] can be subjected to jurisdiction within the [forum] state.” K–V Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d 588, 591–92 (8th Cir.2011) (internal quotation marks and citation omitted). The plaintiff's “showing must be tested, not by the pleadings alone, but by the affidavits and exhibits supporting or opposing the motion.” Id. at 592 (internal quotation marks and citations omitted). And where the Court has not held an evidentiary hearing (which no party has requested here), the evidence must be viewed in the light most favorable to the plaintiff. E.g., Pangaea, Inc. v. Flying Burrito LLC, 647 F.3d 741, 745 (8th Cir.2011); Digi–Tel Holdings, Inc. v. Proteq Telecomms. (PTE), Ltd., 89 F.3d 519, 522 (8th Cir.1996).

To determine whether Viracon has discharged its burden, the Court must ask two questions. First, has Minnesota's long-arm statute been satisfied? Second, would exercising jurisdiction comport with the Due Process Clause of the Fourteenth Amendment? E.g., Guinness Import Co. v. Mark VII Distribs., Inc., 153 F.3d 607, 613 (8th Cir.1998); Minn. Mining & Mfg. Co. v. Nippon Carbide Indus. Co., 63 F.3d 694, 696–97 (8th Cir.1995). These two inquiries collapse into one, however, because Minnesota's long-arm statute extends jurisdiction to the outer limits of the Due Process Clause. E.g., Guinness, 153 F.3d at 614;Marquette Nat'l Bank of Minneapolis v. Norris, 270 N.W.2d 290, 294 (Minn.1978).⁷

Due process requires that a defendant have sufficient “minimum contacts with [Minnesota] such that maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (citation omitted); accord, e.g., World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291–92, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). “The central question” is whether the defendant “has purposefully availed itself of the privilege of conducting activities in [Minnesota] and should, therefore, reasonably anticipate being haled into court [here].” Pecoraro v. Sky Ranch for Boys, Inc., 340 F.3d 558, 562 (8th Cir.2003) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)).

There are no “talismanic formulas to personal jurisdiction.” Clune v. Alimak AB, 233 F.3d 538, 542 (8th Cir.2000). Nevertheless, the Eighth Circuit has instructed district courts to consider five factors when determining whether jurisdiction exists: (1) the nature and quality of the defendant's contacts with the forum; (2) the quantity of those contacts; (3) the relation of the cause of action to the contacts; (4) the forum state's interest in providing a forum for the plaintiff; and (5) the convenience of the parties. Pecoraro, 340 F.3d at 562 (citation omitted). The Minnesota Supreme Court has adopted the same five-factor test. E.g., Dent–Air, Inc. v. Beech Mountain Air Serv., Inc., 332 N.W.2d 904, 907 (Minn.1983). The first three factors are of primary importance, while the last two factors are considered secondary. Pecoraro, 340 F.3d at 562;Dent–Air, 332 N.W.2d at 907.⁸

ANALYSIS

I. Viracon has not established personal jurisdiction under the five-factor test.

Having carefully considered the factors set forth above, the Court has little trouble concluding that personal jurisdiction over J & L is absent here. The nature, quality, and quantity of its contacts with Minnesota are paltry; Viracon has done little more than establish that J & L entered into a...