Aqua Acceptance, LLC v. The Pelican Grp. Consulting
| Decision Date | 23 June 2022 |
| Docket Number | 1:20-cv-02802-JRR |
| Parties | AQUA ACCEPTANCE, LLC, Plaintiff, v. THE PELICAN GROUP CONSULTING, INC., et al., Defendants. |
| Court | U.S. District Court — District of Maryland |
This matter comes before the court on Defendants The Pelican Group Consulting, Inc. (“the Pelican Group”), The Pelican Group Capital Advisors, LLC, The Pelican Group Securities, LLC, The Pelican Group, Mission Advancement Services, LLC (collectively, the “Subsidiary Defendants”), Frank Ferguson, and John Whelan's (collectively the “Pelican Group Defendants”) Renewed Motion to Dismiss Plaintiff's Amended Complaint (ECF No. 61; the “Pelican Group Motion”) and Defendant the University of Mary's Renewed Motion to Dismiss Plaintiff's Amended Complaint. (ECF No. 62; the “University of Mary Motion”).[1]
The parties' submissions have been reviewed and no hearing is necessary. Local Rule 105.6 (D. Md. 2021). For the reasons that follow, by accompanying order, the Pelican Group Motion will be denied as to Counts One and Two and granted as to Counts Three through Six;[2]the University of Mary Motion will be granted. Accordingly, this case shall proceed only as to Plaintiff's claims for breach of contract against the Pelican Group and Mr. Ferguson (Counts One and Two).
BACKGROUND[3]
Plaintiff Aqua Acceptance, LLC is a Delaware LLC with its principal place of business in Maryland. (ECF No. 16, ¶ 1). The Pelican Group is a Delaware Corporation with its principal place of business in Virginia. Id. ¶ 2. The Subsidiary Defendants are all Delaware LLCs with principal places of business in Virginia. Id. ¶¶ 3-5. Mr. Ferguson is a resident of Virginia and at all times relevant to the Complaint was the president and board member of the Pelican Group and the Subsidiary Defendants. Id. ¶ 11. Mr. Whelan is a resident of Florida and at all times relevant to the Complaint served as an officer and board member of the Pelican Group and the Subsidiary Defendants. Id. ¶13. University of Mary is a North Dakota non-profit corporation with its principal place of business in North Dakota. Id. ¶14.
On December 9, 2020, Plaintiff filed its First Amended Complaint (ECF No. 16; “Complaint”) against Defendants[4] alleging breach of contract and fraud claims arising out of a Loan and Security Agreement dated January 2016 (the “Loan Agreement”) and two accompanying promissory notes dated January 2016[5] and June 17, 2016. The Complaint originally contained six counts: (1) Money Judgment against the Pelican Group; (2) Breach of Contract/Breach of Representation and Warranties against the Pelican Group and Mr. Ferguson; (3) Fraud/Civil Conspiracy/Aiding and Abetting against the Pelican Group Defendants and University of Mary; (4) The Alter Ego Defendants; (5) Fraudulent Transfer against Messrs. Ferguson O'Meara, and Whelan; and (6) Fraudulent Transfer against University of Mary, O'Meara, Ferguson, and Whelan. (ECF No. 16.)
The Pelican Group Defendants move to dismiss the Complaint pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6) arguing that the court lacks personal jurisdiction over Mr. Ferguson and Mr. Whelan; and that Plaintiff fails to state a claim upon which relief can be granted. (ECF No. 61-1, p.2.) Similarly, the University of Mary moves to dismiss the case for lack of personal jurisdiction under Rule 12(b)(2) and failure to state a claim under Rule 12(b)(6). (ECF No. 62-1, p.3, 5.)
Given Plaintiff's request that the court dismiss Counts Five and Six (ECF No. 65, p.13; ECF No. 66, p.3), the court will address only Counts One through Four.
Federal Rule of Civil Procedure 12(b)(2)
“When a court's power to exercise personal jurisdiction over a nonresident defendant is challenged by a motion under Federal Rule of Civil Procedure 12(b)(2), ‘the jurisdictional question is to be resolved by the judge, with the burden on the plaintiff ultimately to prove grounds for jurisdiction by a preponderance of the evidence.'” CoStar Realty Info., Inc. v. Meissner, 604 F.Supp.2d 757, 763 (D. Md. 2009) (quoting Carefirst of Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003)) (citations omitted). “If jurisdiction turns on disputed facts, the court may resolve the challenge after a separate evidentiary hearing or may defer ruling pending receipt at trial of evidence relevant to the jurisdictional question.” CoStar Realty Info., Inc., 604 F.Supp.2d at 763 (citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989)). “If the court chooses to rule without conducting an evidentiary hearing, relying solely on the basis of the complaint, affidavits and discovery materials, ‘the plaintiff need only make prima facie showing of personal jurisdiction.'” CoStar Realty Info., Inc., 604 F.Supp.2d at 764 (quoting Carefirst, 334 F.3d at 396) (citations omitted). “In determining whether the plaintiff has proven aprima facie case of personal jurisdiction the court ‘must draw all reasonable inferences arising from the proof, and resolve all factual disputes, in the plaintiff's favor.'” CoStar Realty Info., Inc., 604 F.Supp.2d at 764 (citing Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993)) (citations omitted).
Federal Rule of Civil Procedure 12(b)(6)
A motion asserted under Rule 12(b)(6) “tests the legal sufficiency of a complaint.” It does not “resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)). Accordingly, a “Rule 12(b)(6) motion should only be granted if, after accepting all well-pleaded allegations in the plaintiff's complaint as true and drawing all reasonable factual inferences from those facts in the plaintiff's favor, it appears certain that the plaintiff cannot prove any set of facts in support of his claim entitling him to relief.” Edwards, 178 F.3d at 244 (citing Republican Party v. Martin, 980 F.2d 943, 952 (4th Cir. 1992)). The court, however, is “...not required to accept as true the legal conclusions set forth in a plaintiff's complaint.” Edwards, 178 F.3d at 244 (citing District 26, United Mine Workers of Am., Inc. v. Wellmore Coal Corp., 609 F.2d 1083, 1085 (4th Cir. 1979)).
“The requirement that the court have personal jurisdiction springs not from Article III of the Constitution, but from the Due Process Clause.” Fidrych v. Marriott Int'l, Inc., 952 F.3d 124, 131 (4th Cir. 2019) (citing Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982)). “Because the personal jurisdiction requirement ‘recognizes and protects an individual liberty interest, “the requirement may be waived by a defendant's ‘express or implied consent to the personal jurisdiction of the court.'” Id. (citing Ins. Corp. of Ireland, 456 U.S. at 703.)
“Absent consent, the exercise of personal jurisdiction must comport with the requirements of the Due Process Clause: valid service of process, as well as . . . minimum contacts with the forum so that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice.” Fidrych, 952 F.3d at 131 (quoting Hawkins v. i-TVDigitalis Tavkozlesi zrt., 935 F.3d 211, 228 (4th Cir. 2019)) (citations omitted). The nature and quantity of forum-state contacts required depends on whether the case involves the exercise of “specific” or “general” jurisdiction. Id.
At issue in this case is whether the court may exercise specific personal jurisdiction over the Pelican Group Defendants and the University of Mary. Plaintiff advances several theories upon which it contends this court may exercise jurisdiction. First, Plaintiff asserts that this court may exercise specific jurisdiction over Mr. Ferguson pursuant to Maryland's long-arm statute. (ECF No. 65, p.2.) Second, Plaintiff argues that the forum selection clause contained within the Loan Agreement confers personal jurisdiction on this court over the Pelican Group and Mr. Ferguson.[6] Finally, Plaintiff argues that this court may exercise jurisdiction over Mr. Whelan and the University of Mary pursuant to the jurisdictional conspiracy doctrine. (ECF No. 65, p.4; ECF No. 66, p.1; ECF No. 30, p.7.)[7] A. Specific Jurisdiction - Maryland Long Arm Statute and Due Process[8]
Under Federal Rule of Civil Procedure 4(k)(1)(A), a federal court may exercise personal jurisdiction over a defendant in the manner provided by state law. ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617, 622 (4th Cir. 1997). In order for this court to assert personal jurisdiction over a nonresident defendant, two conditions must be satisfied: (1) the exercise of jurisdiction must be authorized under the state's long-arm statute; and (2) the exercise of jurisdiction must comport with the due process requirements of the Fourteenth Amendment. Christian Sci. Bd. of Dirs. of the First Church of Christ v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001). This court accepts Maryland courts' interpretation with regard to the state's long-arm statute as binding. Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 61 (4th Cir. 1993). It is well settled in Maryland that the state's long-arm statute is coextensive with the limits of personal jurisdiction set by the due process clause of the Constitution. Mohamedv. Michael, 279 Md. 653 (1977). Thus, this court's statutory and constitutional inquiry is merged for purposes of establishing personal jurisdiction. Stover v. O'ConnellAssocs., Inc., 84 F.3d 132, 135 (4th Cir. 1996).
Maryland's Long-Arm Statute provides:
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