Gus's Franchisor, LLC v. Terrapin Rest. Partners, LLC, Case No. 2:20-cv-2372-JPM-cgc

CourtUnited States District Courts. 6th Circuit. Western District of Tennessee
Docket NumberCase No. 2:20-cv-2372-JPM-cgc
Decision Date23 November 2020

LLC, and MARK DAWEJKO, Defendants.

Case No. 2:20-cv-2372-JPM-cgc


November 23, 2020


This cause is before the Court on Defendants Terrapin Restaurant Partners, LLC ("Terrapin") and Mark Dawejko's Motion to Dismiss, filed on July 27, 2020. (ECF No. 39.) Defendants move the Court pursuant to Federal Rule of Civil Procedure 12(b)(2) to dismiss Plaintiff Gus's Franchisor, LLC's ("Gus's) Amended Complaint for lack of personal jurisdiction. (See generally id.) Defendants assert that they do not have the requisite minimum contacts with Tennessee for this Court to exercise jurisdiction over them. (Id. at PageID 1470-71.)

Gus's filed its Response on August 10, 2020. (ECF No. 45.) Gus's opposes the Defendant's Motion, raising three arguments in support of its position: (1) Defendants consented to this Court's jurisdiction over them by signing agreements containing forum selection clauses; (2) Defendants have waived their argument regarding lack of personal jurisdiction by consenting to a permanent injunction and generally by appearing in this case and

Page 2

making arguments on the merits; and (3) Defendants are subject to jurisdiction in Tennessee because this Court's exercise of personal jurisdiction over them would not deny Defendants their due process and because the Defendants are amenable to service of process under Tennessee's long-arm statute. (See generally id.)

For the reasons set forth below, Defendants' Motion to Dismiss is DENIED.


Gus's filed its Complaint on May 22, 2020. (Compl., ECF No. 1.) Gus's alleges that Defendants unlawfully used Gus's trademarks, trade dress, trade secrets and proprietary business information in operating their Greenbelt, Maryland Gus's franchise after Gus's terminated its franchise relationship with Defendants on or about May 8, 2020. (See id. ¶¶ 1-4.) Plaintiff filed a Motion for a Temporary Restraining Order ("TRO") and Preliminary Injunction on May 26, 2020. (ECF No. 8.)

The Court held a hearing on May 29, 2020 on Plaintiff's application for a TRO ("TRO Hearing"). (ECF No. 17.) After hearing testimony from Defendant Mark Dawejko, the Court granted the TRO. (TRO, ECF No. 20.) In finding that the Court had jurisdiction to issue the TRO, this Court found that "Dawejko signed a number of documents related to the draft Franchise Agreement, and several included forum selection clauses designating this Court as the proper venue for litigation arising out of the relationship between Plaintiff and Defendants." (Id. at PageID 656.)

On June 15, 2020, the Court entered a Consent Permanent Injunction as submitted by the Parties. (ECF No. 26.) The Consent Permanent Injunction states that "Defendants have agreed to withdraw the jurisdictional arguments raised at the TRO hearing and consent to this

Page 3

Court's jurisdiction for the purposes of entry and enforcement of this Consent Injunction." (Id. at PageID 672.)

On June 23, 2020, Gus's filed its Amended Complaint, alleging that Defendants continued to operate their restaurant as a Gus's Fried Chicken franchise despite the TRO and Permanent Injunction. (Am. Compl., ECF No. 28 ¶¶ 6-11.) Gus's also filed a Motion for Contempt, claiming that Defendants have violated the Court's TRO and Permanent Injunction. (ECF No. 29.) A hearing was held on Gus's Motion for Contempt on July 28, 2020 (ECF No. 40), after which the Court entered an Order Granting Plaintiff's Motion for Contempt on August 31, 2020. (ECF No. 49.)

On July 27, 2020, the Defendants filed the instant Motion to Dismiss for Lack of Jurisdiction. (ECF No. 39.) Exhibit A to Defendants' Motion to Dismiss is the Affidavit of Mark Dawejko ("Dawejko Aff."), in which he states that "[n]either Terrapin nor [he] are parties to a contract or other written agreement with Gus's concerning the sale of food, beverages or any other marketable item." (Dawejko Aff., ECF No. 39-1 ¶ 10.)

Gus's filed its Response on August 10, 2020. (ECF No. 45.) Exhibit B to Gus's Response is the Declaration of Wendy McCrory ("McCrory Decl."), in which she states, in part, that "Terrapin and Dawejko each signed multiple franchise documents reflecting their consent to jurisdiction in Tennessee." (ECF No. 45-1 ¶ 5.) The franchise documents identified by McCrory include the Personal Guaranty (ECF No. 28-6), the Acknowledgment of Receipt of Gus's Operations Manual (ECF No. 28-7), the Notice of Proprietary and Confidential Information (ECF No. 8-2) and the Telephone Number and Directory Advertising Assignment Agreement (McCrory Decl., Exh. A, ECF No. 45-1.)

Page 4


A defendant may challenge personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). "The plaintiff bears the burden of making a prima facie showing of the court's personal jurisdiction over the defendant." Intera Corp. v. Henderson, 428 F.3d 605, 615 (6th Cir. 2005). A plaintiff "can meet this burden by 'establishing with reasonable particularity sufficient contacts between [defendants] and the forum state to support jurisdiction.'" Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002) (quoting Provident Nat'l Bank v. Cal. Fed. Sav. Loans Ass'n, 819 F.2d 434, 437 (3d Cir. 1987)) (internal quotation marks omitted). The plaintiff cannot rest on the pleadings alone; by affidavit or otherwise, the plaintiff must provide specific evidence supporting the court's personal jurisdiction over the defendant. Carrier Corp. v. Outokumpu Oyj, 673 F.3d 430, 449 (6th Cir. 2012). If the plaintiff meets his prima facie burden, the Court must deny the motion to dismiss, "notwithstanding any controverting presentation by the moving party." Serras v. First Tenn. Bank Nat'l Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989) (quoting Marine Midland Bank, N.A. v. Miller, 664 F.2d 889, 904 (2d Cir. 1981)).

If the court does not conduct an evidentiary hearing on the issue of personal jurisdiction, it will "not consider the facts proffered by the defendant that conflict with those offered by the plaintiff and will construe the facts in the light most favorable to the nonmoving party." Neogen Corp., 282 F.3d at 887 (6th Cir. 2002) (quoting Provident Nat'l Bank, 819 F.2d at 437) (citation omitted). The plaintiff's burden to establish a prima facie case of personal jurisdiction is "relatively slight" when the court relies solely on the pleadings and the parties' affidavits without holding an evidentiary hearing or directing the parties to conduct jurisdictional

Page 5

discovery. Air Prods. & Controls, Inc. v. Safetech Int'l, Inc., 503 F.3d 544, 549 (6th Cir. 2007) (quoting Am. Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988)).

"Where a federal court's subject matter jurisdiction over a case stems from the existence of a federal question, personal jurisdiction over a defendant exists 'if the defendant is amenable to service of process under the [forum] state's long-arm statute and if the exercise of personal jurisdiction would not deny the defendant[] due process.'" Bird v. Parsons, 289 F.3d 865, 871 (6th Cir. 2002); Aristech Chem. Int'l Ltd. v. Acrylic Fabricators, Ltd., 138 F.3d 624, 627 (6th Cir. 1998); CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996). A finding that the exercise of personal jurisdiction over the defendant does not comport with the Due Process Clause of the Fourteenth Amendment "foreclose[s] the exercise of personal jurisdiction even where a properly construed provision of the long-arm statute would otherwise permit it." Theunissen v. Matthews, 935 F.2d 1454, 1459 (6th Cir. 1991). The jurisdictional limits of Tennessee's long-arm statute are coterminous with the limits of federal due process. Parker v. Winwood, 938 F.3d 833, 839 (6th Cir. 2019); see also First Cmty. Bank, N.A. v. First Tennessee Bank, N.A., 489 S.W.3d 369, 384 (Tenn. 2015), cert. denied sub nom. Fitch Ratings, Inc. v. First Cmty. Bank, N.A., 136 S. Ct. 2511, 195 L. Ed. 2d 841 (2016); Tenn. Code Ann. § 20-2-223(a). The Court need only determine whether exercising personal jurisdiction over the defendant is consistent with federal due process requirements. Bridgeport Music, Inc. v. Still N The Water Pub., 327 F.3d 472, 477 (6th Cir. 2003). The Due Process Clause of the Fifth Amendment requires that a non-resident defendant have at least "certain minimum contacts with the [forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Youn v. Track, Inc., 324 F.3d 409, 417 (6th Cir. 2003) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

Page 6

"There are two kinds of personal jurisdiction within the Federal Due Process inquiry: (1) general personal jurisdiction, where the suit does not arise from defendant's contacts with the forum state; and (2) specific jurisdiction, where the suit does arise from the defendant's contacts with the forum state." Conn v. Zakharov, 667 F.3d 705, 712-13 (6th Cir. 2012). General jurisdiction allows a plaintiff to sue a defendant "on any and all claims," regardless of the connection (or lack thereof) between the claim and the forum. Maxitrate Tratamento Termico E Controles v. Super Sys., Inc., 617 F. App'x 406, 408 (6th Cir. 2015), cert. denied sub nom. Maxitrate Tratamento Termico E Controles v. Allianz Seguros S.A., 136 S. Ct. 336 (2015) (citing Daimler AG v. Bauman, 134 S. Ct. 746, 769 (2014)). Under the Due Process Clause, general jurisdiction over a corporation requires that the corporation's "affiliations with the State [be] so 'continuous and systematic' as to render them essentially at home in the forum State." Diamler AG v. Bauman, 134 S.Ct. 746, 761 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)).

Specific jurisdiction, on the other hand, "exposes the defendant to suit...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT