E. Coast Storage Equip. Co. v. ZF Transmissions Gray Court, LLC
| Decision Date | 26 May 2021 |
| Docket Number | Civil Action No. 20-12414 (FLW) |
| Parties | EAST COAST STORAGE EQUIPMENT CO., INC., Plaintiff, v. ZF TRANSMISSIONS GRAY COURT, LLC; ZF NORTH AMERICA, INC.; THS CONSTRUCTORS, INC., Defendants. |
| Court | U.S. District Court — District of New Jersey |
*NOT FOR PUBLICATION*
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Plaintiff East Coast Storage Equipment Co., Inc. ("Plaintiff" or "East Coast") brings this suit against Defendants ZF Transmissions Gray Court, LLC ("ZF Transmissions"), ZF North America, Inc. ("ZF North America") (collectively, with ZF Transmissions, the "ZF Defendants"), and THS Constructors, Inc. ("THS") (collectively, "Defendants"), asserting claims for breach of contract, violation of New Jersey's Consumer Fraud Act ("NJCFA"), N.J.S.A. 56:8-1, et seq., violation of New Jersey's Prompt Payment Act ("Prompt Payment Act"), N.J.S.A. 2A:30A-1, et seq., and various other state law claims. Specifically, this case arises out of the expansion of the ZF Defendants' automated storage and retrieval system ("ASRS" or "racking system") at its facility in Gray Court, South Carolina. Defendants removed the case from state court pursuant to 28 U.S.C. § 1332 and 28 U.S.C. § 1441 on the basis of diversity jurisdiction.
Presently before the Court are three separate motions. First, THS moves to dismiss the Complaint for lack of personal and subject matter jurisdiction. Next, the ZF Defendants move to dismiss the Complaint for failure to state a claim pursuant to Fed. R. Civ. P.12(b)(6) and to transfer venue pursuant to 28 U.S.C. § 1404(a). And third, Plaintiff cross-moves for summary judgment against Defendants. For the reasons set forth below, this Court lacks personal jurisdiction over THS, and in lieu of dismissal, this matter is transferred to the United States District Court for the District of South Carolina, pursuant to 28 U.S.C. § 1631 and § 1404(a). The ZF Defendants' Motion to Dismiss and Plaintiff's Motion for Summary Judgment are DENIED without prejudice, with the right to refile such motions in the transferee court.
The following factual allegations are taken from the Complaint and are accepted as true for the purpose of Defendants' Motions to Dismiss.
Plaintiff is a manufacturer, custom fabricator, erector, installer, and distributor of ASRS. Plaintiff alleges that in March 2017, it was contacted by a representative of the ZF Defendants regarding Plaintiff's ability to produce specialized engineering drawings in connection with the expansion of the ZF Defendants' existing ASRS at its facility in South Carolina (the "Project"). (Id. at ¶¶ 12-13.) According to Plaintiff, the ZF Defendants asked Plaintiff to collaborate with their architect on the design of the ASRS, and invited Plaintiff to a "kick off meeting" at the ZF Defendants' facility in South Carolina. (Id. at ¶¶ 13-15.) Following the meeting, Plaintiff alleges that, among other things, it was asked to provide "detailed drawings for racking, including all loads, dimensions and interfaces with the building to be included into final civil drawings" for the ASRS expansion. (Id. at ¶¶ 16-17.) Plaintiff further alleges that the parties agreed that any contractors bidding on the prime contract "need to include East Coast . . . as one of the subsuppliers to quote the racking system." (Id. at ¶ 17.)
Plaintiff alleges that on May 5, 2017, it "delivered the plans that the ZF Defendants used to publish" their request for quotation ("RFQ") to potential prime contractors. (Id. at ¶¶ 18-27.) Plaintiff also avers that the ZF Defendants informed all bidders in the RFQ that "East Coast waspre-selected to design, fabricate, construct, and install the ASRS system, and required all prime contract bidders to include East Coast as its subcontractor for the design, manufacturing, and installation of the ASRS system," but that the RFQ allowed bidders to propose alternative subcontractors. (Id. at ¶ 28.)
In response to the RFQ, THS allegedly submitted a bid to serve as the prime contractor on the Project. (Id. at ¶ 29.) Prior to submitting its final bid, however, THS sought permission from the ZF Defendants to substitute another subcontractor in place of Plaintiff. (Id.) Plaintiff alleges that the ZF Defendants denied this request, and Plaintiff submitted a proposal to THS to serve as its subcontractor. (Id. at ¶¶ 29-30.)
Thereafter, the ZF Defendants awarded THS the prime contract, which was executed on June 18, 2017. (Id. at ¶ 32.) According to Plaintiff, however, after execution, THS falsely represented to the ZF Defendants that Plaintiff was not properly licensed to design, fabricate, and/or construct an ASRS in South Carolina. Specifically, Plaintiff alleges that no such license requirement exists. (Id.) Relying on this allegedly false information, Plaintiff claims that the ZF Defendants permitted amendment of the prime contract so THS could select a new subcontractor, Engineered Products, LLC, in place of Plaintiff. (Id. at ¶ 33.) Regardless of the amendment, however, Plaintiff alleges that it executed a subcontract with THS ("THS Subcontract") on August 4, 2017. (Id. at ¶¶ 33, 42.) Under the Subcontract, upon execution, THS was to pay Plaintiff $340,000. (Id. at ¶¶ 36, 42.) Plaintiff alleges that payment was not timely received, and shortly thereafter, THS advised Plaintiff that the ZF Defendants were "reevaluating how [they] wish[] to proceed with this project" and that Plaintiff was to refrain from any work on the Project. (Id. at ¶ 49.) Plaintiff then allegedly contacted the ZF Defendants, who advised Plaintiff that they wouldrefrain from being involved in the contractual dispute. (Id. at ¶¶ 50-51.) Thereafter, on September 11, 2017, THS informed Plaintiff that it had terminated the THS Subcontract. (Id. at ¶ 54.)
On August 3, 2020, Plaintiff filed its Complaint in the Superior Court of New Jersey, Ocean County, asserting twelve causes of action: breach of contract against the ZF Defendants (Count I); promissory estoppel against the ZF Defendants (Count II); unjust enrichment against Defendants (Count III); quantum meruit against the ZF Defendants (Count IV); account stated against Defendants (Count V); violation of the NJCFA against Defendants (Count VI); conversion against Defendants (Count VII); fraud against THS (Count VIII); violation of the Prompt Payment Act against Defendants (Count IX); breach of the implied covenant of good faith and fair dealing against Defendants (Count X); tortious interference with a prospective economic benefit against THS (Count XI); and trade libel against THS (Count XII). (See, e.g., Compl.)
On September 8, 2020, Defendants filed a Notice of Removal with this Court on the basis of diversity jurisdiction. (See ECF No. 1, Notice of Removal.)
Several weeks thereafter, on September 29, 2020, THS moved to dismiss the Complaint for lack of personal and subject matter jurisdiction, and the ZF Defendants moved to dismiss Counts I, III, V-VIII, and IX-X of the Complaint and transfer the remaining claims to the District of South Carolina. (ECF Nos. 9 and 14.) In response, Plaintiff filed its cross-motion for summary judgment in opposition to Defendants' motions to dismiss and transfer on October 17, 2020. (ECF No. 18.)
"A federal court sitting in New Jersey has jurisdiction over parties to the extent provided under New Jersey state law." Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 96 (3d Cir. 2004)(citing Fed. R. Civ. P. 4(e)). "[T]he New Jersey long-arm statute permits the exercise of personal jurisdiction to the fullest limits of due process." IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 259 (3d Cir. 1998) (citations omitted). Thus, the central inquiry is whether the defendant has Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotations and citations omitted). In analyzing personal jurisdiction, the Court must determine whether it has general or specific jurisdiction over the defendant.
On a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), "when the court does not hold an evidentiary hearing on the motion to dismiss, the plaintiff need only establish a prima facie case of personal jurisdiction and the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its favor." Miller Yacht Sales, Inc., 384 F.3d at 97; see also Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 457 (3d Cir. 2003). Still, plaintiff "'bears the burden to prove, by a preponderance of the evidence,' that personal jurisdiction is proper." Cerciello v. Canale, 563 F. App'x 924, 925 n.1 (3d Cir. 2014) (quoting Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992)). In the context of assessing personal jurisdiction, "[w]hile disputed issues are construed in favor of the plaintiff, allegations may be contradicted by the defendant through opposing affidavits or other evidence, at which point the plaintiff must respond with 'actual proofs, not mere allegations.'" Am. Bd. of Internal Med. v. Rushford, No. 14-6428, 2015 WL 5164791, at *2 (D.N.J. Sept. 2, 2015) (quoting Patterson v. FBI, 893 F.2d 595, 603 (3d Cir. 1990)).
In reviewing a motion to dismiss for failure to state a claim upon which relief can be granted, pursuant to Fed. R. Civ. P. 12(b)(6), "courts accept all factual allegations as true, construethe complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (internal quotation marks and citation omitted). While Fed. R. Civ. P. 8(a) does not require that a complaint contain detailed...
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