AMA Sys. v. Vonnic, Inc.
| Decision Date | 15 June 2022 |
| Docket Number | CIVIL 1:22-cv-00652-JRR |
| Parties | AMA SYSTEMS, LLC, ET AL., Plaintiffs, v. VONNIC, INC., ET AL., Defendants. |
| Court | U.S. District Court — District of Maryland |
This matter comes before the court on Defendants Vonnic, Inc. (hereafter “Vonnic”) and Kim Por Lin's Motion to Dismiss, or, in the Alternative, Request for Transfer of Venue. (ECF 16; the “Motion”.) The court has reviewed all motions papers. No hearing is necessary. Local Rule 105.6 (D. Md. 2021).
According to the complaint and pending motions papers, this case arises out of a business dispute in which Defendant Vonnic agreed to sell certified KN95 face masks to Plaintiff Bluemar Promotions, LLC (hereafter “Bluemar”), who, in turn, contracted to sell them to Plaintiff AMA Systems, LLC (hereafter “AMA Systems”). According to Plaintiffs, Vonnic and Vonnic's CEO, Defendant Lin represented to Bluemar that Vonnic could provide “FDA and CE certified” “KN95” face masks. Defendants also provided Bluemar a catalogue that displayed face masks with those specifications. (ECF 1.)
Plaintiffs allege that, relying on those representations, Bluemar entered into a purchase agreement with Defendants for one million certified face masks priced at $2 per mask. The Bluemar/Vonnic purchase order includes the following specifications: (ECF 1 p. 5.) Bluemar also entered into a purchase agreement with AMA Systems to sell the Vonnic face masks to AMA Systems.
Plaintiffs allege that Defendants shipped the face masks directly to the AMA Systems warehouse in Elkridge, Maryland.[1] They further claim that the face masks they received did not have the agreed-upon certifications and were not NK95 masks, in breach of their agreement. After discovering the product was non-conforming, Lin, on behalf of Vonnic, agreed to refund Plaintiffs one half of the purchase price, but later revised its proposed remedy and proposed a credit of $250, 000.
Plaintiffs filed this action including claims for breach of contract (Counts I and V) and breach of representations and warranties (Counts II, III, and IV). (ECF 1.) Defendants Vonnic and Lin responded by filing the Motion seeking dismissal of the complaint on the basis of lack of personal jurisdiction improper venue, and failure to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(2), 12(b)(3) 12(b)(6).
Federal Rule of Civil Procedure 12(b)(2) allows for dismissal for lack of personal jurisdiction. FED. R. CIV. P. 12(b)(2). On a Rule 12(b)(2) motion, “the jurisdictional question thus raised is one for the judge, with the burden on the plaintiff ultimately to prove the existence of a ground for jurisdiction by a preponderance of the evidence.” Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). A plaintiff is simply required to make a prima facie showing of personal jurisdiction to survive a motion to dismiss on these grounds. Id. In making this determination, the court “must draw all reasonable inferences arising from the proof, and resolve all factual disputes, in the plaintiff's favor.” Mylan Labs., Inc. v. Akzo, N. V., 2 F.3d 56, 60 (4th Cir. 1993).
A motion to dismiss may also be filed for failure to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” FED. R. CIV. P. 8(a)(2). To survive a motion for dismiss for failure to state a claim, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. Twombly, 550 U.S. 544, 556 (2007)). This requirement is met when the plaintiff “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. At the motion to dismiss stage, all reasonable inferences are drawn in favor of the Plaintiff. Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 253 (4th Cir. 2009). The court assumes all well-pled facts to be true on a motion to dismiss. Id.
Plaintiffs begin their opposition to the Motion by asserting that Defendants waived their challenges to personal jurisdiction and venue pursuant to Rule 12(h). In view of the impact such a finding could have on the balance of the court's review of the Motion, the court addresses first Plaintiffs' waiver argument.
Rule 12(h) provides in relevant part that a party can waive its motions under Rule 12(b)(2) through (5) by 1) bringing one such motion and failing to bring all that are then available (i.e., Rule 12(b)(2) through (5) defenses may not be filed ad seriatim); 2) failing to file such a motion prior to or in a responsive pleading; 3) or by simple failure to file as a general matter.
Plaintiffs rest their waiver argument on two grounds: Defendants' “litigation conduct to date” and “making a general appearance before this Court.” (ECF 17 at p. 2.) Specifically, Plaintiffs argue that by filing a motion for an extension of time to respond to the complaint with a “responsive pleading or motion” (ECF 14), Defendants waived their right to object to personal jurisdiction and venue because the motion for extension did not raise an objection to personal jurisdiction or venue, and because the motion for extension gave Plaintiffs the reasonable expectation that Defendants intended to defend the merits of the action in Maryland.
Plaintiffs rely on several cases in arguing that Defendants' motion for extension of time to file a responsive pleading or motion waived 12(b)(2) and (3) objections.
Savas v. Maria Trading Corp., 285 F.2d 336 (4th Cir. 1960):
In Savas, an admiralty case, the Fourth Circuit affirmed the district court's determination that the defendant trading corporation waived its right to object to personal jurisdiction. Having been impleaded into the action (or on notice that it was about to be), defendant Maria Trading Corporation filed exceptions to a ruling that raised the potential for it to bear liability in connection with a lien on a vessel. Importantly, the defendant at the time of its exceptions had no cognizable interest in the vessel because it had been sold to another entity. Therefore, the defendant could not avail itself of the rule in admiralty proceedings that a vessel owner can appear before the court in answer to a libel in rem proceeding (to preserve its right in the thing) without generally submitting to the court's jurisdiction in personam.
As a result, when Maria Trading Corporation filed its exceptions seeking a ruling that it was not liable and neglected to object to the court's personal jurisdiction over it, the court ruled that the defendant waived any such objection. Savas, 285 F.2d at 341.
This case is inapposite. By seeking an extension to respond to the complaint by pleading or motion, Defendants did not seek action by the court as to the merits of any matter or otherwise to protect itself from liability as in Savas. Further, Defendants' request put Plaintiffs (and the court) on express notice that Defendants may object to the jurisdiction or venue of the court, and therefore did not by action (or inaction) create a reasonable expectation that they would elect to defend the merits of the action in this court; nor did Defendants' extension request violate Rule 12(h)'s prohibition on Rule 12 motions filed ad seriatim.
Trust Co. Bank v. Tillgen-Millford Drapery Co., 119 F.R.D. 21 (E.D. N.C. 1987):
In Tillgen-Millford, the court ruled that a telephone conversation between opposing counsel during which defense counsel asked plaintiff's counsel what the deadline was to answer the complaint put plaintiff's counsel on notice by implication that the defendant intended to defend the action such that entry of Rule 55 judgment was improper. Notably, this case does not pertain to activities sufficient to waive Rule 12 objections. Instead, the case is about whether a defendant's activities will suffice to notify a plaintiff of an intention to defend the action rendering judgment by default inappropriate. The court found that, although the defendant had not filed a response to the complaint, defense counsel's inquiry about the deadline to respond to the complaint implied an intent to do so; and, therefore, the plaintiff was not entitled to judgment by default.
This court is unwilling to equate what suffices for notice of an intention to defend for Rule 55 purposes with what rises to the level of waiver of an objection to the court's personal jurisdiction. The jurisprudence on default judgments is plain that default judgments are disfavored, which has lent to a rather permissive view of what constitutes an “appearance” in order to “support the policy against unnecessary defaults.” 119...
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