Goffe v. Blake
| Decision Date | 27 March 1985 |
| Docket Number | Civ. A. No. 83-762-WKS. |
| Parties | Robert R. GOFFE, a citizen of the District of Columbia, Plaintiff, v. Stephen BLAKE, a citizen of Indiana, individually and as an officer and director of AMW, Inc., and as an officer, director, and owner of Avanti Motor Corporation, AMW, Inc., a corporation of the State of Delaware, and Avanti Motor Corporation, an Indiana corporation, Defendants. |
| Court | U.S. District Court — District of Delaware |
Richard R. Wier, Jr., Vernon R. Proctor, Prickett, Jones, Elliott, Kristol & Schnee, Wilmington, Del., J. Michael Cavanaugh, Gary W. Christian, Graham & James, Washington, D.C., for plaintiff.
Michael D. Goldman, Potter, Anderson & Corroon, Wilmington, Del., Charles R. Donnenfeld, Lucinda J. Bach, Schwalb, Donnenfeld, Bray & Silbert, Washington, D.C., for defendants.
This is a diversity action brought by plaintiff Robert R. Goffe ("Goffe") against defendants Stephen H. Blake ("Blake"), AMW, Inc. ("AMW-Delaware"), and Avanti Motor Corporation ("Avanti") asserting claims based on breach of contract, common law fraud, and breach of fiduciary duty. Following the filing of an amended complaint, defendants moved to dismiss. I denied the motion to dismiss with respect to AMW-Delaware and Avanti but held that venue was improper as to Blake. Thereafter, Goffe moved to transfer the case to the District of Columbia and defendants moved to transfer the case to the Northern District of Indiana. For the reasons set forth herein, I find that this case should be transferred to the District of Columbia.
Plaintiff Goffe is a citizen and resident of the District of Columbia where he practices law, specializing in tax and securities matters. Defendant Blake is a resident of the Northern District of Indiana, although he was a resident of the District of Columbia prior to October, 1982. Blake is an officer, director, and owner of Avanti.
The background with respect to AMW-Delaware and Avanti is somewhat more complicated. AMW-Delaware was formed in 1981 allegedly as part of a plan to acquire Avanti Motor Corporation (a going concern manufacturing automobiles). Blake held stock in AMW-Delaware. On September 27, 1982, another corporation called AMW, Inc. was incorporated in Indiana ("AMW-Indiana"), and, on October 1, 1982, AMW-Delaware was merged into AMW-Indiana. In accordance with the merger agreement all outstanding shares of AMW-Delaware were then converted into shares of AMW-Indiana. At approximately the same time, AMW-Indiana purchased Avanti Motor Corporation. Thereafter, on November 1, 1982, AMW-Indiana formally was renamed Avanti Motor Corporation. As a result of these transactions, Blake became a stockholder of Avanti. Apparently, the merger agreement was not filed in Delaware after its approval, and consequently, AMW-Delaware continued to exist as a Delaware entity. However, counsel has indicated that the certificate of merger has now been filed in Delaware, and as a result, AMW-Delaware no longer exists.
In general terms, Goffe alleges that Blake approached him in Washington, D.C. in January, 1981, to retain Goffe's services in connection with Blake's quest to acquire Avanti Motor Corporation. Following this meeting, Goffe claims that he entered into an oral agreement with Blake that he would help raise capital and perform other preacquisition services for Blake in return for an interest equal to Blake's in Avanti or any entity acquiring an interest in Avanti. Blake and Goffe also allegedly agreed that Goffe would be paid for his legal services out of investment capital, once the acquisition took place.
In September, 1981, Goffe claims that he and Blake decided to incorporate AMW-Delaware as a vehicle for acquiring Avanti Motor Corporation. As part of this plan, it was allegedly agreed upon that both Goffe and Blake would purchase 250 shares of the initial 1,000 share offering of AMW-Delaware. Goffe asserts that this agreement was memorialized in a Pre-Incorporation Agreement which was allegedly signed in October, 1981.
On December 17, 1981, AMW-Delaware was incorporated and on December 21, 1981, an organizational meeting was allegedly held in Washington, D.C. Goffe claims that at this meeting he and Blake were elected officers of AMW-Delaware and were issued stock in accordance with the Pre-Incorporation Agreement. However, on December 29, 1981, Blake allegedly informed Goffe that there had been a "foul-up" with the incorporation of AMW-Delaware and by March, 1982, all communications between Blake and Goffe had ended. Indeed, Goffe claims he was unable to locate or contact Blake thereafter. Only then did Goffe terminate the services that he had allegedly been performing on a full time basis since January, 1981.
On October 28, 1983, Goffe initiated this action seeking, inter alia, specific performance of the Pre-Incorporation Agreement, damages caused by the defendants' breach of this agreement, damages resulting from being fraudulently induced to provide services in connection with Blake's efforts to acquire Avanti, and reimbursement in quantum meruit for those services thus provided. The defendants have denied virtually all of the material allegations contained in the complaint and the affidavits submitted by Goffe.
Goffe has moved to transfer this action to the District of Columbia pursuant to 28 U.S.C. § 1406(a) which provides, as follows:
The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.
(emphasis added).
By contrast, defendants have moved to transfer the case to the Northern District of Indiana pursuant to 28 U.S.C. § 1404(a) which provides, as follows:
For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.
(emphasis added).
The parties agree that under either statute, it is necessary to show that all defendants are subject to the in personam jurisdiction of the transferee court before transfer to that court can be properly effectuated. The defendants maintain, however, that this action cannot be transferred to the District of Columbia because Avanti is not subject to personal jurisdiction in that forum.1 Goffe, on the other hand, argues that Avanti's contacts with the District of Columbia are sufficient to render Avanti amenable to suit under the District of Columbia long-arm statute thereby allowing transfer to that forum.2
In Shutte v. Armco Steel Corp., 431 F.2d 22 (3d Cir.1970), cert. denied, 401 U.S. 910, 91 S.Ct. 871, 27 L.Ed.2d 808 (1971), the Third Circuit Court of Appeals discussed the statutory requirement that a case be transferred only to a forum in which it could have been originally brought, commenting as follows:
A transfer is authorized by the statute only if the plaintiff had an "unqualified right" to bring the action in the transferee forum at the time of the commencement of the action; i.e. venue must have been proper in the transferee district and the transferee court must have had power to command jurisdiction over all the defendants.... If there is a "real question" whether a plaintiff could have commenced the action originally in the transferee forum, ... it is evident that he would not have an unqualified right to bring his cause in the transferee forum.
Id. at 24. The court found that there was substantial doubt as to the validity of the then new long-arm statute of the state of the transferee forum, and hence, that plaintiff did not have an "unqualified right" to bring her suit in the transferee forum because personal jurisdiction over one of the defendants was questionable. Id. at 24-25. Therefore, if I find that there is a "real question" over whether Avanti is amenable to service of process in the District of Columbia, I must deny Goffe's motion to transfer the case to that forum.
Plaintiff argues that Avanti is subject to personal jurisdiction in the District of Columbia under either the general "doing business" jurisdictional statute, D.C.Code Ann. § 13-334, or the District of Columbia "long-arm" statute, D.C.Code Ann. § 13-423. Plaintiff grounds this argument on both Avanti's contacts and actions with respect to the District of Columbia, and the contacts and actions of AMW-Delaware and Blake with respect to the District of Columbia which plaintiff asserts may be attributed to Avanti for purposes of personal jurisdiction.
As a general proposition, actions and conduct of a constituent corporation may be attributed to the surviving corporation following a merger for purposes of determining the surviving corporation's amenability to personal jurisdiction for liabilities incurred by the constituent corporation. For example, in Duris v. Erato Shipping, Inc., 684 F.2d 352 (6th Cir.1982), the lower court dismissed plaintiff's complaint on grounds, inter alia, that plaintiff had failed to establish in personam jurisdiction over the surviving corporation to a merger because the surviving corporation, as opposed to the constituent corporation, did not have sufficient business contacts in Ohio to bring it within the reach of that state's long-arm jurisdictional statute. On appeal, the Sixth Circuit reversed, finding that although the surviving corporation never had done any business in Ohio, its constituent corporation clearly had. Moreover, under Ohio law, the surviving corporation was liable "for all claims against the constituent corporation." Id. at 356. The court thus held that the plaintiff could gain personal jurisdiction over the...
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