PI, Inc. v. Quality Products, Inc.
Citation | 907 F. Supp. 752 |
Decision Date | 22 December 1995 |
Docket Number | No. 95 Civ. 1723 (JGK).,95 Civ. 1723 (JGK). |
Parties | PI, INC., Plaintiff, v. QUALITY PRODUCTS, INC., James S. Renaldo and Lee Ogle, Defendants. |
Court | U.S. District Court — Southern District of New York |
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
Elliot I. Miller, Kleban & Samor, P.C., Southport, CT, for plaintiff.
Richard W. Cohen, Robinson Borg Leinwand Reich Genovese & Gluck P.C., New York City, for defendant Quality, Inc.
Sam Sexton, Jr., Sexton Law Firm, P.A., Fort Smith, AR, for defendant Lee Ogle.
John B. Glendon, Pepper, Hamiliton & Scheetz, New York City, M. Duncan Grant, Marian C. Miller, Pepper, Hamilton & Scheetz, Philadelphia, PA, for defendant James S. Renaldo.
The plaintiff, PI, Inc. ("PI") has sued the defendants Quality Products, Inc. ("Quality"), James S. Renaldo, and Lee Ogle on various claims arising from a merger agreement. In its Amended Complaint, the plaintiff alleges (1) a breach of contract claim against Quality; (2) a tortious interference claim against defendants Ogle and Renaldo; and (3) fraud against all three defendants. Subject matter jurisdiction over this matter is based on diversity of citizenship, pursuant to 28 U.S.C. § 1332(a)(1).
Several motions are pending. Quality has moved to dismiss the plaintiff's first cause of action, the breach of contract claim, for lack of venue pursuant to Fed.R.Civ.P. 12(b)(3). Renaldo and Ogle have moved to dismiss the tortious interference and fraud claims pursuant to Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction and pursuant to Fed. R.Civ.P. 12(b)(3) for improper venue. All three defendants seek dismissal of the fraud claim pursuant to Fed.R.Civ.P. 9(b) for failure to plead fraud with sufficient particularity and pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. In the alternative, the defendants seek an order transferring the entire action to the United States District Court for the Middle District of Florida, Tampa Division, pursuant to 28 U.S.C. § 1404(a).
After hearing oral argument on the motions, the Court (1) grants Quality's motion to dismiss the breach of contract claim for lack of venue pursuant to 12(b)(3); (2) grants the motions by defendants Ogle and Renaldo to dismiss the tortious interference claim for lack of venue pursuant to Fed.R.Civ.P. 12(b)(3) and for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2); (3) denies Ogle's motions to dismiss the fraud claim for lack of personal jurisdiction pursuant to Fed. R.Civ.P. 12(b)(2), for improper venue pursuant to Fed.R.Civ.P. 12(b)(3), and for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6); (4) grants Ogle's motion to dismiss the fraud claim for failure to plead fraud with sufficient particularity; (5) grants Renaldo's motions to dismiss the fraud claim for lack of personal jurisdiction pursuant to Fed. R.Civ.P. 12(b)(2); (6) grants Quality's motion to dismiss the fraud claim for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6); (7) denies the plaintiff's motion to amend the complaint for the second time; and (8) denies as moot the defendants' motions to transfer this action to the Middle District of Florida.
When considering motions to dismiss, the Court "`must accept the material facts alleged in the complaint as true and construe all reasonable inferences in the plaintiff's favor.'" Gant v. Wallingford Bd. of Education, 69 F.3d 669, 673 (2d Cir.1995) ( )(quoting Hernandez v. Coughlin, 18 F.3d 133, 136 (2d Cir.), cert. denied, ___ U.S. ___, 115 S.Ct. 117, 130 L.Ed.2d 63 (1994)); Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir.1985) ( ).
The current action arises out of a merger agreement between Quality, a Delaware corporation with its principal place of business in Tampa, Florida, (Am.Compl. ¶ 2), and PI, a Massachusetts corporation with its office and principal place of business in Hyannis, Massachusetts. (Am.Compl. ¶ 1.) According to the terms of the merger, a wholly owned subsidiary of Quality known as Q.P.I. Consumer Products Corporation ("QPI"), a Florida corporation with its office and principal place of business in Tampa, Florida, would acquire PI Consumer Products Corporation ("PICPC"), a wholly owned subsidiary of PI incorporated in Massachusetts. (Am.Compl. ¶¶ 1-2.) Defendant James S. Renaldo is a citizen of Florida and was president, chief executive officer, and general counsel of Quality at all times relevant to this litigation. (Am.Compl. ¶ 3.) Lee Ogle is a citizen of Arkansas who allegedly represented to the chairman, president, and director of PI that he controlled Quality through shares ostensibly owned by third parties. (Am.Compl. ¶ 4.)
In January 1993, Scott Smith, an officer and director of PI and a representative of Sentinel, a subsidiary of PI, went to Arkansas to meet with defendants Renaldo and Ogle in order to market Sentinel products to Quality. (Am.Compl. ¶ 7, 9.) At this meeting, Smith informed the defendants that PI had recently placed PICPC on the market. (Am.Compl. ¶ 9.) The defendants indicated that Quality would purchase PICPC; however, no further negotiations occurred at that time because Smith lacked proper authority. (Am.Compl. ¶ 9.) Instead, the parties agreed to conduct negotiations for PICPC in February at the Toy Fair held in New York City. (Am.Compl. ¶ 9.)
In February, John Bambara, the chairman and chief executive officer of PI, and J. Anthony Glydon, the president of PI, attended the Toy Fair. Also present were Renaldo, Ogle, and Smith. (Am.Compl. ¶¶ 10, 11.) In a New York hotel room the evening before the Toy Fair, Smith allegedly told Ogle and Renaldo that Bambara said any merger agreement must include payment of $700,000 to cover PI's current debt. (Am.Compl. ¶ 10.) Ogle agreed to this term. (Am. Compl. ¶ 10.) In addition, Ogle and Renaldo stated that Quality could issue stock to PI in return for the sale, and that such stock "could and would be registered within 180 days of the closing." (Am.Compl. ¶ 10.) Smith suggested that Ogle and Renaldo meet with Bambara at the Toy Fair. (Am.Compl. ¶ 10.)
At the Toy Fair, Ogle met with Bambara alone, at which time Ogle allegedly told Bambara that although he, Ogle, had no official position in PI, he in fact dominated and controlled Quality through the shares he owned registered in the names of nominees. (Am.Compl. ¶ 12.) Ogle also stated that he dominated Renaldo. (Am.Compl. ¶ 12.) In response to Ogle's offer to arrange for Quality to acquire PICPC for consideration that included 800,000 shares of Quality common stock which were restricted securities, Bambara explained that unregistered shares of Quality stock would not be acceptable consideration for the merger because PI needed immediately available funds. (Am.Compl. ¶ 13.) Ogle allegedly agreed to cause Quality to register the 800,000 shares of Quality stock and said that he would personally make sure those shares were registered with the SEC within 180 days of the effective date of the sale of PICPC. (Am.Compl. ¶ 13.) Relying on this representation, Bambara allegedly agreed to the sale of PICPC to Quality. (Am.Compl. ¶ 13.)
(Quality's Notice of Mot., Ex. 2 at 7, § 20 (merger agreement).)
The Court first turns to Quality's motion to dismiss the breach of contract claim for lack of venue pursuant to Fed.R.Civ.P. 12(b)(3).1
The amended complaint alleges diversity jurisdiction under 28 U.S.C. § 1332. (Am.Compl. ¶ 5.) Accordingly, the venue statute applicable to this action is 28 U.S.C. § 1391(a), which provides:
A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) a judicial district in which the defendants are subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.
Once an objection to venue has been raised, the plaintiff has the burden of showing that venue is proper. Reina v. Morgan Drive Away...
To continue reading
Request your trial-
Papa's-June Music, Inc. v. McLean
...Dep't.1975); Miller v. Volk & Huxley, Inc., 44 A.D.2d 810, 810, 355 N.Y.S.2d 605, 606-07 (1st Dep't.1974); PI, Inc. v. Quality Prods., Inc., 907 F.Supp. 752, 761 (S.D.N.Y. 1995); Sudul v. Computer Outsourcing Servs., 868 F.Supp. 59, 62 (S.D.N.Y.1994); Best Western Int'l, Inc. v. CSI Int'l C......
-
U.S. Titan v. Guangzhou Zhen Hua Shipping Co.
...980 F.2d 865, 867 (2d Cir.1992) ("the admonition against recognizing multiple venues has been disapproved"); PI, Inc. v. Quality Prods., Inc., 907 F.Supp. 752, 757 (S.D.N.Y.1995) ("Venue is proper in each district that is the situs of a substantial part of the events or omissions giving ris......
-
Dornberger v. Metropolitan Life Ins. Co.
...that the defendant did not intend to carry out a promise is insufficient to state a fraud claim. See, e.g., PI, Inc. v. Quality Prods., Inc., 907 F.Supp. 752, 761 (S.D.N.Y.1995) (stating that "[n]umerous Appellate Division decisions have held, however, that a cause of action for fraud canno......
-
Telecom Intern. America, Ltd. v. At & T Corp.
...of an "overarching" agreement. Dornberger v. Metropolitan Life Ins. Co., 961 F.Supp. 506, 542 (S.D.N.Y.1997); PI, Inc. v. Quality Prods., Inc., 907 F.Supp. 752, 761 (S.D.N.Y.1995). Nor has TIA identified any facts supporting the notion that AT & T never intended to honor its obligations and......