Burns & Russell Co. of Baltimore v. Oldcastle, No. AMD00-3019.

• Decision Date: 15 October 2001
• Docket Number: No. AMD00-3019.
• Citation: 166 F.Supp.2d 432
• Parties: BURNS & RUSSELL CO. OF BALTIMORE, et al., Plaintiffs v. OLDCASTLE, INC., et al., Defendants
• Court: U.S. District Court — District of Maryland

166 F.Supp.2d 432

BURNS & RUSSELL CO. OF BALTIMORE, et al., Plaintiffs v. OLDCASTLE, INC., et al., Defendants

No. AMD00-3019.

United States District Court, D. Maryland.

October 15, 2001.

Nicholas David Cowie, Thomas Allen Mott, Cowie and Mott PA, Baltimore, MD, for Southeast Capital Corporation.

Daniel F Goldstein, Brown Goldstein and Levy LLP, Baltimore, MD, Stephen E Hudson, Joel D Bush, II, Kilpatrick Stockton LLP, Atlanta, GA, for Oldcastle, Inc.

Daniel F Goldstein, Brown Goldstein and Levy LLP, Baltimore, MD, for CRH

PLC, Amcor, Inc., Oldcastle Architectural West, Inc., Oldcastle APG West, Inc., Oldcastle APG National, Inc., Trenwyth Industries, Inc., Superlite Block, Inc.

MEMORANDUM

DAVIS, District Judge.

Plaintiffs, the Burns & Russell Company of Baltimore and Southeast Capital Corporation (together "the plaintiffs" or "B & R"), have instituted this damages action alleging state common law breach of contract claims and federal and state statutory claims against the following 11 defendants: (1) Oldcastle, Inc.; (2) CRH, plc; (3) Amcor, Inc.; (4) Oldcastle Architectural West, Inc.; (5) Oldcastle APG West, Inc.; (6) Oldcastle APG National, Inc.; (7) Trenwyth Industries, Inc.; (8) Superlite Block, Inc.; (9) Oldcastle Precast, Inc.; (10) Oldcastle Architectural, Inc.; and (11) Oldcastle Acquisition Corporation (collectively "the defendants").¹ Now pending are some defendants' motions to dismiss for lack of personal jurisdiction, insufficient process, and failure to state a claim. See Fed.R.Civ.P. 12(b)(2), 12(b)(4), 12(b)(6). Also pending are motions to dismiss the first amended complaint with respect to Oldcastle Precast, Inc. (under Fed.R.Civ.P. 12(b)(6)); and Oldcastle Architectural, Inc., and Oldcastle Acquisition Corp (both under Fed.R.Civ.P. 12(b)(2)). The issues have been fully briefed and no hearing is necessary. I shall grant defendants' motion to dismiss for insufficient service of process regarding B & R's claims against six of the defendants. Also, I shall grant the motions to dismiss filed by defendants Superlite Block, Inc. and Oldcastle Architectural, Inc. because they lack the capacity to be sued. And, defendants' motion to dismiss the first amended complaint with respect to Oldcastle Architectural, Inc. shall be granted.

For the reasons set forth below, however, I will reserve judgment on defendants' motions to dismiss for lack of personal jurisdiction with respect to defendant Oldcastle, Inc., pending the completion of jurisdictional discovery. I will also reserve judgment on defendants' motions to dismiss for failure to state a claim pending resolution of the outstanding jurisdictional issues.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

The Parties

A brief description of the corporate hierarchy involved in this litigation helps provide a better understanding of the current dispute.

Plaintiff Burns & Russell Company ("B & R") is a Pennsylvania corporation with its principal place of business in Baltimore. B & R provides services to the masonry industry through manufacturing bricks and a variety of masonry products. B & R has also developed its own products, which it allows other companies to utilize through license agreements. One such product is SPECTRA-GLAZE®, a glazed concrete block developed, patented and trademarked by B & R.

The other plaintiff, Southeast Capital Corporation ("Southeast"), is a Maryland corporation that is also involved in the masonry industry. In 1998, Southeast purchased the SPECTRA-GLAZE® trademark, as well as certain technical know-how, from B & R. Sometime thereafter, Southeast licensed rights in the trademark back to B & R. Consequently, both B & R and Southeast (hereinafter collectively referred to as B & R) own and control all of the rights associated with the trademark.

Defendant CRH, plc ("CRH") rests atop the corporate hierarchy that encompasses all 11 defendants in the current litigation. CRH is an Irish corporation, a holding company, that apparently owns a broad range of companies in the concrete building materials industry. Its principal office is in Dublin, Ireland. Complaint at ¶ 3.

Defendant Oldcastle, Inc. ("Oldcastle"), a Delaware corporation with its principal place of business in Atlanta, is a seventh-tier subsidiary of CRH. Oldcastle acts as a holding company for entities doing business in the United States. Id. at ¶ 4. B & R alleges that Oldcastle, d/b/a Amcor, obtained a license in order to manufacture B & R's glazed block product. As discussed infra, Oldcastle denies this allegation.

Defendant Amcor, Inc. ("Amcor") was a supplier of concrete blocks. In 1960, Amcor acquired rights to the SPECTRA-GLAZE® product through a Trademark Agreement and Patent License Agreement with B & R. B & R alleges that Amcor eventually transferred this license agreement to Oldcastle; thereupon, Oldcastle simultaneously changed its trade name to Amcor. Defendants, however, dispute any involvement by Oldcastle; instead, defendants maintain that Amcor transferred the licensing agreement to Oldcastle APG West, Inc. Defendants also assert that Amcor no longer exists as a separate corporate entity, having merged into Oldcastle Precast on December 31, 1994.

Defendant Oldcastle APG West, Inc. ("APG West"), a Colorado corporation in the business of manufacturing concrete block products, is a third-tier subsidiary of Oldcastle.² Its principal place of business is in Littleton, Colorado. According to defendants, APG West, originally under the name of Amcor, manufactured the SPECTRA-GLAZE® product under a license from B & R and sold the glazed blocks throughout Colorado, Arizona, Utah, Oregon, Washington, and California.

Defendant Oldcastle Architectural West, Inc. ("Oldcastle Architectural West"), before being renamed, was a second-tier subsidiary of Oldcastle. It was incorporated in Colorado with its principal place of business in Littleton. According to defendants, Oldcastle Architectural West no longer exists as a corporate entity since being renamed as Oldcastle APG West.

Defendant Oldcastle Architectural, Inc. ("Oldcastle Architectural"), a Delaware corporation with its principal place of business in Atlanta, claims to be a holding company for operating entities in the United States. Oldcastle Architectural allegedly acquired Trenwyth Industries, Inc. ("Trenwyth") on December 31, 1998.

Defendant Oldcastle Acquisition Corporation ("Oldcastle Acquisition"), according to B & R, was a subsidiary of Oldcastle, which was merged into defendant Trenwyth, with Trenwyth remaining as the surviving entity. According to defendants, however, defendant Trenwyth is currently an operating division of Oldcastle APG National, Inc. ("APG National"). Originally, Trenwyth existed as a separate legal entity with offices in Arizona, Pennsylvania and Illinois. As a separate corporate entity, Trenwyth was B & R's largest competitor, manufacturing ASTRA-GLAZE®, a glazed concrete block.³ On or before October 3, 1997, Oldcastle Acquisition acquired Trenwyth. Then, on December 31, 1998, Oldcastle Architectural acquired Trenwyth. Finally, on December 31, 1999, Trenwyth was merged into APG National. Defendants maintain that Trenwyth most accurately references an operating division of APG National.

Defendant APG National is a third-tier subsidiary of Oldcastle with its principal place of business in Bethesda, Maryland.

Defendant Oldcastle Precast is a Washington corporation with its principal place of business in Auburn, Washington. Presently, Oldcastle Precast is a third-tier subsidiary of Oldcastle.

Defendant Superlite Block, Inc. ("Superlite") appears to be a defunct corporation with no current legal existence. Effective December 31, 1999, Superlite merged into Oldcastle Architectural West, Inc., which is now known as APG West.

The Agreements

On April 17, 1980, B & R and Amcor executed a license agreement ("License Agreement") that, inter alia, provided Amcor with the rights to "trade secrets and technical know-how to use all methods of counting masonry units covered by [licensed] patents." License Agreement at ¶ 1(a). The License Agreement permitted Amcor to use the patents in Nevada, Utah and particular counties of Idaho. This agreement replaced a patent agreement which had been transferred, allegedly, to Oldcastle (trading as Amcor) on October 4, 1978.⁴ The agreement was to be in effect "until the last to occur of the following: (1) the last expiration date of the United States Letters Patents licensed under this Agreement; (2) the termination of the use by the Licensee of the Licensor's aforesaid trade secrets, technical know-how and other information and skills." License Agreement at ¶ 8(a). The agreement also allowed the licensee to terminate the agreement upon 18 months prior written notice. Id. ¶ 8(b).

B & R and Oldcastle Architectural West (d/b/a Amcor) (now APG West, according to defendants) executed the SPECTRA-GLAZE® Trademark Agreement ("Trademark Agreement") on January 18, 1994. This agreement licensed the use of the trademark to Amcor. The agreement was to "remain in full force and effect for ten (10) years" "[u]nless sooner canceled." Trademark Agreement at ¶ 8.

On February 21, 1995, B & R and Oldcastle Architectural West (doing business as Amcor)(now APG West, according to defendants) executed an amendment to the 1980 License Agreement. This amendment incorporated additional patents and potential patents and detailed the respective royalty for each unit sold.

In addition to the above licensing agreements, the current litigation also involves an alleged breach of a settlement agreement that B & R entered into with Trenwyth. B & R executed this agreement on May 16, 1991, resolving all claims which had arisen with regard to their prior licensing relationship. This agreement required Trenwyth to maintain the confidentiality of B & R's "know-how" and technology. It also prohibited Trenwyth from interfering with any of B & R's other licensing relationships....