Blue Ball Properties v. McClain

• Citation: 658 F. Supp. 1310
• Decision Date: 13 April 1987
• Docket Number: Civ. A. No. 86-464-JLL.
• Parties: BLUE BALL PROPERTIES, INC., Cherry Island Farm, Ltd., and Chillison's Island, Ltd., all Delaware corporations, Plaintiffs, v. Gee McCLAIN, Defendant.
• Court: U.S. District Court — District of Delaware

658 F. Supp. 1310

BLUE BALL PROPERTIES, INC., Cherry Island Farm, Ltd., and Chillison's Island, Ltd., all Delaware corporations, Plaintiffs, v. Gee McCLAIN, Defendant.

Civ. A. No. 86-464-JLL.

United States District Court, D. Delaware.

April 13, 1987.

COPYRIGHT MATERIAL OMITTED

Richard P. Beck of Morris, James, Hitchens & Williams, Wilmington, Del., for Blue Ball Properties, Inc., Cherry Island Farm, Ltd., and Chillison's Island, Ltd.

Nicholas H. Rodriguez and William W. Pepper of Schmittinger & Rodriguez, P.A., Dover, Del., for Gee McClain.

LATCHUM, Senior District Judge.

Presently before the Court is a motion by the defendant, Gee McClain ("McClain"), to dismiss the action against him due to a lack of personal jurisdiction and improper venue. See Fed.R.Civ.P. 12(b)(2) and (3). The plaintiffs, Blue Ball Properties, Inc., Cherry Island Farm, Ltd., and Chillison's Island, Ltd. (collectively "the plaintiffs"), brought suit against McClain for failure to perform a contract to construct a deep water pier in Maryland. The plaintiff's complaint sets forth three counts which pray for relief on grounds that McClain (1) breached the contract, (2) defrauded the plaintiffs, and (3) was negligent, reckless, and willfully tortious in his actions.

Naturally, the plaintiffs oppose the motion to dismiss. The plaintiffs contend that the Delaware long arm statute, 10 Del.C. § 3104, gives this Court personal jurisdiction over McClain and that exercising this jurisdiction will not infringe on McClain's rights under the Due Process Clause of the Fourteenth Amendment.¹ In order to make a well reasoned decision, the Court held an evidentiary hearing on March 17, 1987, at which McClain and W.A. Bundesen II ("Bundesen"), president of the plaintiff corporations, testified. After reviewing the testimony and evidence presented at the hearing, the parties' briefs with supporting affidavits, and the applicable law, the Court holds for the reasons discussed in this opinion that the long arm statute does not give this Court personal jurisdiction over McClain and that due process considerations would preclude this Court from exercising personal jurisdiction over McClain even if the Court did have personal jurisdiction. Therefore, McClain's motion to dismiss for lack of personal jurisdiction will be granted.

BACKGROUND

The parties agree on the facts up to a point at which their factual contentions sharply diverge. The undisputed facts shall be discussed first, then each party's view of the remaining facts shall be set forth.

The plaintiffs are all Delaware corporations with offices in Montchanin, Delaware. (Docket Item "D.I." 1 at ¶ 1.) Plaintiff Cherry Island Farms, Ltd., holds title to approximately 280 acres of land (the "Farm") on Beckwith Creek and Little Choptank River at the point of Morris Neck in Dorchester County, Maryland. (D.I. 1 at ¶ 6.) Plaintiff Chillison's Island, Ltd., holds title to an island in Beckwith Creek (the "Island"). The Farm provides access to and utilities for the Island. (Id. at ¶ 8.) Plaintiff Blue Ball Properties, Inc., has chartered a yacht on a long term basis for use between the Farm and Island and for the entertainment of business guests. (Id. at ¶ 11.) Bundesen is the president of all three corporations. (Id. at ¶ 13.)

The defendant, McClain, is a general contractor and pile driver who resides and works in Maryland. McClain is not licensed to do business in Delaware nor has he ever done work in Delaware. (D.I. 8A Affidavit of Gee McClain at ¶¶ 2, 3.) Additionally, at the evidentiary hearing McClain testified that he has never advertised for business, had an agent, or maintained a bank account in Delaware.

The plaintiffs decided to reconstruct a deep water pier along the Beckwith Creek shore of the Farm at the site of the remains of a former pier. Some time in February 1986, Stokes Keyes, the Farm's caretaker, contacted McClain in Maryland and asked him for an estimate of the cost to remove the old pilings and construct a new pier. (D.I. 8A at ¶ 4.) McClain made a preliminary check of the site approximately the second week of March. About a week later, Bundesen and McClain met at the Farm for the first time. McClain gave Bundesen a written estimate at this meeting. (Id.) Bundesen sought other estimates in the following weeks prior to meeting with McClain at the Farm for a second time. At the second meeting, which occurred sometime around the middle of April, Bundesen asked McClain to lower his price. McClain agreed to reduce the price by $1,500 and gave Bundesen a handwritten contract reflecting the new price. (Id. at ¶ 5.) Bundesen told McClain that he would call him if Bundesen's principals agreed to the new price. Bundesen called McClain several days later to tell him the new price had been accepted. He asked McClain to type up a contract reflecting their agreement and mail it to him. McClain mailed the contract to Montchanin, Delaware. (Id.)

The parties disagree considerably about the events following Bundesen's receipt of the contract. Plaintiffs contend that after receiving what they characterize as McClain's "offer" (D.I. 1 at ¶ 14), Bundesen called McClain in Maryland and claims they agreed to modify the so-called offer to reflect correctly the terms of their first agreement by specifying that work on the pier would commence by June 15, 1986, and that the pier would include a "50' T Head." (Id. at ¶ 16 and D.I. 8A at ¶ 5.) According to the plaintiffs, once these changes were made, Bundesen signed the contract and mailed it back to McClain in Maryland. (D.I. 1 at ¶ 17.) McClain does not dispute that this call took place, but contends that he met with Bundesen at the Farm for a third time after the call and that at this meeting McClain authorized the change of date for commencing work and Bundesen signed the contract. (D.I. 8A at ¶ 9.)

The contract was dated April 20, 1986, and expressly provided that McClain would be paid half the contract price within seven days of the date the contract was accepted. This payment was not made as scheduled. The plaintiffs claim that McClain called Bundesen sometime after the middle of May to request that payment be made. (D.I. 1 at ¶ 18.) At the evidentiary hearing, Bundesen testified that he had decided not to send the check until McClain started work, because he did not know McClain. McClain testified that he could not order the materials for the job until the money had been received. He made his request for the money through Stokes Keyes and he never called Bundesen in Delaware to ask for the money.

The parties agree that a check for $13,750, dated May 22, 1986, was drawn by Cherry Island Farm, Ltd., on an account at the Wilmington Trust Company. (D.I. 1 at 18.) Although the plaintiffs' complaint alleges the check was mailed to McClain (id.), Bundesen testified at the evidentiary hearing that he hand delivered the check to McClain at the Farm. McClain agreed that the check was hand delivered.² Once McClain had received the check, he placed an order for the pilings and lumber needed to build the pier. (D.I. 8A at ¶ 7.) McClain testified that the pilings were delivered on June 19, 1986.

McClain contends he was unable to proceed immediately with the construction of the pier, because his barge which was needed to drive piles had sunk at another job site. He testified that the barge was in several feet of water, so it could be pumped out for use at the other site, but that it was not in a condition to allow for the approximately forty-five mile move to the Farm. After determining that his barge could not be moved, McClain contacted several other contractors in the middle of May to see whether they could drive the piles. None were available to do this. McClain then sought to find a barge to rent. He contacted a number of potential sources before agreeing to rent a barge from Black Dog Marine. The barge was in Norfolk, Virginia, at the time McClain allegedly entered into a minimum three month rental, but was to be made available to McClain on June 30, 1986. The barge was not actually made available until the end of July 1986. McClain testified that he did not proceed with the job, because he received a letter dated August 6, 1986 (Plaintiffs' Exhibit 1), from the plaintiffs' attorney stating that McClain was in default on the contract and that he should not do any more work on the project. McClain claims to have been surprised by this letter, because he contends Bundesen was aware of the problems with the barge. (Id.)

Bundesen claims that he was not kept apprised of McClain's alleged efforts to obtain a barge and commence work. (D.I. 9A at ¶ 3.) Bundesen testified that McClain did not tell him about the problems with the barge until late June 1986 and that McClain never informed him that a barge had been rented. Bundesen contends that his numerous calls to McClain to check the status of the project were seldom returned and that when they were returned, McClain gave false assurances that work would commence immediately. (Id.) McClain acknowledged that he made approximately ten calls to Delaware, but only in response to Mr. Bundesen's messages.

After the August 6, 1986 letter from the plaintiffs' attorney to McClain, all progress or potential for progress ceased. Eventually, the plaintiffs contracted with someone else to build the pier. According to McClain, the pilings he ordered and had delivered to the Farm were used. Plaintiffs did not refute or question this contention. McClain testified that he paid over $7,000 to William E. Burton Lumber for the pilings and that the remainder of the money he received from the plaintiffs is in a safe deposit box in the National Bank of Cambridge.

ANALYSIS

The preceding statement of facts details the chronology of events surrounding the contract so as to provide a clear understanding of how this dispute arose. Many of these facts do not affect the resolution of the motion before the Court. At the evidentiary...