Harte-Hanks Direct Market v. Varilease Technology
| Decision Date | 28 January 2004 |
| Docket Number | No. CIV. CCB-03-2775.,CIV. CCB-03-2775. |
| Citation | 299 F.Supp.2d 505 |
| Parties | HARTE-HANKS DIRECT MARKETING/BALTIMORE, INC. v. VARILEASE TECHNOLOGY FINANCE GROUP, INC., et al. |
| Court | U.S. District Court — District of Maryland |
John Allen McCahill and Steven Lieberman, Rothwell Figg Ernst and Manbeck PC, Washington, DC; Charles Platto, Law Offices of Charles Platto PLC, Norwich, VT, for Plaintiff.
Price O. Gielen, Neuberger Quinn Gielen Rubin and Gibber PA, Edward Hutchinson Robbins, Jr., and John Robert Fischel, Miles and Stockbridge PC, Baltimore, MD, for Defendants.
Now pending before the court are motions filed by the defendants to dismiss all of the plaintiff's claims on various grounds, and a motion filed by the plaintiff for a preliminary injunction. For the reasons stated below, the court will (1) dismiss all claims against defendant Robert VanHellemont for lack of personal jurisdiction, (2) dismiss all claims against MVSS International, LLC for failure to state a claim, (3) dismiss all claims against CitiCapital Commercial Leasing Corporation for failure to state a claim, with leave to amend count seven, (4) deny the motion to dismiss count one as to defendants Varilease Technology Group, Inc., Worldwide Maintenance Company, and Varilease Technology Finance Group, Inc., (5) dismiss all other claims against Varilease Technology Group, Inc. and Worldwide Maintenance Company for failure to state a claim, with leave to amend count six, and (6) dismiss all other claims against Varilease Technology Finance Group, Inc. for failure to state a claim.
Plaintiff Harte-Hanks Direct/Marketing Baltimore, Inc. ("Harte-Hanks Baltimore") is a direct marketing company with its principal place of business in Baltimore, Maryland, and is a Maryland corporation. Harte-Hanks Baltimore is a subsidiary of Harte-Hanks, Inc. ("Harte-Hanks National"), a corporation with its principal place of business in San Antonio, Texas, and with affiliated offices in a dozen other states and around the world. Harte-Hanks Baltimore's claims arise from a Master Lease Agreement ("MLA") entered into on June 22, 2001 by Harte-Hanks National and Varilease Technology Group, Inc., an Arizona corporation ("Varilease Arizona").1 Under the MLA, Harte-Hanks National agreed to lease sophisticated laser printers from Varilease Arizona for a period of 48 months, at a base monthly rental rate of over $59,000. (Compl. at Ex. 1, MLA, at Sched. 01 and 02, at ¶ 2.) The MLA specifies that the equipment is to be located at 4545 Annapolis Road, Baltimore, Maryland, which is the location of Harte-Hanks Baltimore. (Id. at ¶ 3.) Other than the listing of this address, the MLA contains no references to Harte-Hanks Baltimore.
On October 19, 2001, Varilease Arizona sent a Notice and Acknowledgment directed to Harte-Hanks National at the Baltimore address, providing notice that Varilease Arizona had granted a security interest for financing purposes in a portion of the MLA to Associates Leasing, Inc., a corporation now known as CitiCapital Commercial Leasing Corporation ("CitiCapital").2 (Id. at ¶ 19, Ex. 2.) On December 17, 2001, Varilease Arizona sent an identical Notice and Acknowledgment directed to Harte-Hanks National at the Baltimore address, providing notice that it had granted a security interest in the remainder of the MLA to CitiCapital. (Id. at Ex. 3.) On November 15, 2002, Varilease Arizona sent a Notice and Acknowledgment directed to Harte-Hanks National at the Baltimore address, providing notice that Varilease Arizona had sold and assigned all of its rights and obligations under the MLA to Varilease Technology Finance Group, Inc., a Michigan corporation ("Varilease Michigan"). (Id. at Ex. 4.) According to the plaintiff's complaint, Varilease Michigan now claims that this assignment was in error, and that Varilease Michigan has not assumed any responsibilities under the MLA. (Id. at ¶ 29.)
Harte-Hanks Baltimore alleges that the printing equipment leased from Varilease Arizona requires daily, on-site maintenance. (Id. at ¶ 13.) The schedules to the MLA state that "[b]ase maintenance is included in the Base Monthly Rental for all of the leased equipment," and that the lessee is entitled to a certain number of "usage clicks" per month at no additional charge. (Id. at Ex. 1, MLA, at Sched. 01 and 02, at ¶ 7(1) and (2).) Harte-Hanks Baltimore alleges that a separate maintenance agreement was to be arranged by the lessor, and that the basic costs for this maintenance are included in the base monthly rent paid to the lessor. (Id. at ¶ 14.) Harte-Hanks Baltimore estimates that the value of the base maintenance included in the MLA is approximately $34,000 per month, or more than half of the monthly rental fee.3 (Id. at ¶ 13.) Harte-Hanks Baltimore also states that it has made timely monthly payments of over $59,000 to either Varilease Arizona or CitiCapital throughout the term of the MLA. (Id. at ¶ 31, 39.)
According to the complaint, Varilease Arizona provided daily, on-site maintenance for the leased equipment through January 2003, even after the MLA apparently had been assigned to Varilease Michigan. (Id. at ¶ 32-33.) In January 2003, a company named MVSS International, LLC ("MVSS") informed Harte-Hanks Baltimore that it would be taking over the maintenance obligation from Varilease Arizona from that point forward. (Id. at ¶ 33.) However, the same maintenance personnel continued to perform the work. (Id.) In May 2003, MVSS informed Harte-Hanks Baltimore that it would continue to perform the maintenance work only if Harte-Hanks Baltimore made additional payments to MVSS, which Harte-Hanks Baltimore refused to do. (Id. at ¶ 35.) Around July 1, 2003, MVSS and Varilease Michigan informed Harte-Hanks Baltimore that they were losing money on the maintenance services, and no longer would perform the work. (Id. at ¶ 37.) Harte- Hanks Baltimore alleges that, as a result, it has been required to arrange for a new maintenance agreement with another company at an additional cost of over $40,000 per month. (Id. at ¶ 38.)
The laser printers leased by Varilease Arizona each display a meter that is designed to count the number of copies printed during the life of the machine. (Id. at ¶ 16.) Harte-Hanks Baltimore also alleges that although the meters on the laser printers indicate that the machines had limited prior service, the meters have been altered and the machines actually have substantially more prior service than indicated. (Id. at ¶ 17-18.)
Harte-Hanks Baltimore filed this suit on September 29, 2003 against Varilease Michigan, MVSS, Varilease Arizona, Citi-Capital, and Robert VanHellemont.4 The complaint includes counts for breach of contract, breach of the implied covenant of good faith and fair dealing, quantum meruit / unjust enrichment, estoppel, and fraud. (Id. at ¶ 40-68.) The plaintiff also seeks a declaratory judgment regarding the parties' rights and legal obligations, and injunctive relief enjoining CitiCapital and the other defendants from repossessing the leased equipment and from requiring further lease payments from Harte-Hanks Baltimore. (Id. at ¶ 69-74.) The plaintiff requests rescission of the MLA, damages, and punitive damages against all of the defendants except CitiCapital.
"The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint; importantly, a Rule 12(b)(6) motion does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir.1999) (internal quotation marks and alterations omitted). When ruling on such a motion, the court must "accept the well-pled allegations of the complaint as true," and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff." Ibarra v. United States, 120 F.3d 472, 474 (4th Cir.1997). Consequently, a motion to dismiss under Rule 12(b)(6) may be granted only when "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); see also Edwards, 178 F.3d at 244. In addition, because the court is testing the legal sufficiency of the claims, the court is not bound by the plaintiff's legal conclusions. See, e.g., Young v. City of Mount Ranier, 238 F.3d 567, 577 (4th Cir.2001) (); Labram v. Havel, 43 F.3d 918, 921 (4th Cir.1995) ().
Defendant Robert VanHellemont has filed a motion to dismiss pursuant to Fed. R.Civ.P. 12(b)(2), arguing that the court cannot assert personal jurisdiction over him. When a defendant challenges a court's personal jurisdiction under Rule 12(b)(2) of the Federal Rules of Civil Procedure the burden rests ultimately with the plaintiff to prove, by a preponderance of the evidence, grounds for jurisdiction. See Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396-97 (4th Cir.2003). If the district court does not hold an evidentiary hearing, however, as in this case, then the plaintiff is required only to make a prima facie showing of personal jurisdiction. See id. at 396; Estate of Bank v. Swiss Valley Farms Co., 286 F.Supp.2d 514, 516 (D.Md.2003). The court must resolve all factual disputes and make all reasonable inferences in favor of the plaintiff. See Carefirst, 334 F.3d at 396.
A federal court may exercise personal jurisdiction over a...
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