Romans v. Orange Pelican, LLC
| Decision Date | 10 November 2022 |
| Docket Number | 22-cv-4169 |
| Parties | FRANK ROMANS, Plaintiff, v. ORANGE PELICAN, LLC, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
After filing this lawsuit against Defendant Orange Pelican, LLC (“Orange Pelican”), Plaintiff Frank Romans now moves for prejudgment attachment of Orange Pelican's assets. (Motion for Pre-Judgment Attachment Under Federal Rule of Civil Procedure 64 (“Attachment Motion”) (Dkt. No. 6).)[1]Orange Pelican, in turn, moves to dismiss Romans's Complaint for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). (Defendant Orange Pelican, LLC's Motion to Dismiss for Lack of Personal Jurisdiction (“Jurisdiction Motion”) (Dkt. No. 13).) For the reasons set forth below, we deny the Jurisdiction Motion and grant the Attachment Motion.
In January 2021, Romans, an Illinois resident, learned that Dr Arvind Ahuja, a Wisconsin resident, organized events to administer COVID-19 vaccines at a medical office in Wisconsin. (Declaration of Arvind Ahuja, M.D. (“Ahuja Dec.”) (Dkt. No. 15) ¶¶ 1, 5; Declaration of Frank Romans (“Romans Dec.”) (Dkt. No. 19-1) ¶¶ 1, 3-4.) Romans thereafter traveled to Dr. Ahuja's practice in Wisconsin to receive his first dose of the vaccine. (Romans Dec. ¶ 5.)
After the visit, Dr. Ahuja sent Romans an e-mail asking him to invest “$2-3 million” in a venture to purchase medical-grade gloves from abroad and sell them domestically for a profit. (Exhibit 1 to Romans Dec. (Dkt. No. 19-1) at 7.) Dr. Ahuja “personally guarantee[d] 15% per year” on Romans's investment. (Id.) A few weeks later, Dr. Ahuja e-mailed Romans a marketing brochure for the gloves he planned to purchase from Vietnam. (Romans Dec. ¶ 6; Exhibit 2 to Romans Dec. (Dkt. No. 19-1) at 10-39.) Romans responded by requesting to see the gloves, and Dr. Ahuja offered to send him samples and reiterated that he “can guarantee 15% return for you.” (Exhibit 3 to Romans Dec. (Dkt. No. 19-1) at 41.) Dr. Ahuja did not send Romans samples. (Romans Dec. ¶ 7.)
Romans and Dr. Ahuja eventually finalized a loan agreement memorialized in a Promissory Note dated April 7, 2021 (the “April Note”), under which Romans would lend Dr Ahuja's Wisconsin business entity, Orange Pelican, $2,000,000 at 15% annual interest. (Romans Dec. ¶ 8; Exhibit 4 to Romans Dec. (“April Note”) (Dkt. No. 19-1) at 43; Ahuja Dec. ¶ 2.) The April Note provided that Wisconsin law would govern. (April Note at 44.) Dr. Ahuja signed the April Note in Wisconsin in his capacity as Orange Pelican's sole member. (Ahuja Dec. ¶ 6.) Dr. Ahuja e-mailed Romans “instructions for wiring to Orange Pelican” via CIBC Bank USA at an address in Chicago. (Exhibit 5 to Romans Dec. (Dkt. No. 19-1) at 47-48.) Romans wired $2,000,000 to that account. (Romans Dec. ¶ 10.) Romans's bank account also had a wiring address in Illinois. (Romans Dec. ¶ 13; Exhibit 8 to Romans Dec. (Dkt. No. 19-1) at 55.)
Dr. Ahuja then solicited another $1,500,000 loan from Romans by e-mail. This loan was memorialized as a Promissory Note dated May 25, 2021 (the “May Note”), which called for 20% annual interest. (Romans Dec. ¶¶ 11-12; Exhibit 6 to Romans Dec. (Dkt. No. 19-1) at 50; Exhibit 9 to Romans Dec. (“May Note”) (Dkt. No. 19-1) at 57-59.) Dr. Ahuja signed the May Note in Wisconsin on behalf of Orange Pelican. (Ahuja Dec. ¶ 6.) Romans wired money to Orange Pelican's bank account at CIBC USA with an Illinois address. (Romans Dec. ¶ 15.)
Both the April Note and May Note provided for quarterly interest payments. (April Note at 43; May Note at 57.) Romans e-mailed Dr. Ahuja instructions to wire those payments to Romans's bank account in Illinois. (Romans Dec. ¶ 13; Exhibit 8 to Romans Dec. (Dkt. No. 191) at 55.) Orange Pelican made seven payments to Romans's account in Illinois. (Romans Dec. ¶ 16.) At least once, payment was made after Dr. Ahuja directed CIBC to wire funds to Romans's account in Illinois. (Exhibit 10 to Romans Dec. (Dkt. No. 19-1) at 61.)
Romans now alleges that although he performed all his obligations under the April and May Notes, Orange Pelican failed to make all payments under the April and May Notes by their maturity dates. (Verified Complaint (“Compl.”) (Dkt. No. 1) ¶¶ 9-28.) In an affidavit, he asserts that Orange Pelican owed Romans $3,770,000 as of August 9, 2022, with $833.33 in interest accruing daily. (Affidavit of Frank Romans (“Romans Aff.”) (Dkt. No. 6-1) ¶ 6.)
Under Rule 12(b)(2), a party can move to dismiss a case against it based on lack of personal jurisdiction. Fed.R.Civ.P. 12(b)(2). A complaint need not include facts alleging personal jurisdiction, but when a defendant moves to dismiss under Rule 12(b)(2), the plaintiff bears the burden of demonstrating personal jurisdiction over the defendant. N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014); Purdue Rsch. Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). In determining whether personal jurisdiction exists, we accept all well-pleaded allegations in the complaint as true. Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012). We may also consider affidavits or other evidence in opposition to or in support of our exercise of personal jurisdiction. Purdue Rsch., 338 F.3d at 783. “[O]nce the defendant has submitted affidavits or other evidence in opposition to the exercise of jurisdiction, the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction.” Id. We resolve factual disputes in the plaintiff's favor, but accept unrefuted assertions by the defendant as true. GCIU-Emp'r Ret. Fundv. Goldfarb Corp., 565 F.3d 1018, 1020 n.1 (7th Cir. 2009).
Under Federal Rule of Civil Procedure 64, “[a]t the commencement of and throughout an action, every remedy is available that, under the law of the state where the court is located, provides for seizing a person or property to secure satisfaction of the potential judgment,” unless a federal statute applies. Fed.R.Civ.P. 64(a). The Illinois prejudgment attachment remedy under 735 Ill. Comp. Stat. 5/4-101 permits “a creditor having a money claim,” including those “sounding in contract,” to “have an attachment against the property of his or her debtor . . . either at the time of commencement of the action or thereafter, when the claim exceeds $20” if any of eleven circumstances apply, including “[w]here the debtor is not a resident of [Illinois].” 735 Ill. Comp. Stat. 5/4-101(1). The plaintiff must also demonstrate a “probability” of success on the merits. 735 Ill. Comp. Stat. 5/4-137; U.S. Bank Nat'l Ass'n v. Rose, 2014 IL App (3d) 130356, ¶ 13. “If the factual findings establish both cause and a probability of success, the court retains no discretion to deny attachment-the court ‘shall' enter the order.” Rose, 2014 IL App (3d) 130356, ¶ 16.
In response to Romans's motion for prejudgment attachment, Orange Pelican observes that we cannot award any relief if we lack jurisdiction. (Defendant's Brief Opposing Plaintiff's Motion for Pre-Judgment Attachment (“Attachment Opp.”) (Dkt. No. 17) at 1.) We agree. See Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999) (). We therefore begin our analysis with Orange Pelican's motion to dismiss.
Orange Pelican argues that as a Wisconsin entity whose agent never left Wisconsin throughout his dealings with Romans, it did not establish sufficient minimum contacts with Illinois to support either general or specific jurisdiction. (Brief of Defendant Orange Pelican, LLC in Support of Its Motion to Dismiss for Lack of Personal Jurisdiction (“Jurisdiction Memo”) (Dkt. No. 14) at 1-6.) In response, Romans does not claim that we have general jurisdiction over Orange Pelican, but he argues that Dr. Ahuja's e-mails to Illinois, the terms of the April and May Notes, and Orange Pelican's Illinois bank account are sufficient contacts to establish specific jurisdiction. (Plaintiff's Opposition to Defendant's Rule 12(b)(2) Motion to Dismiss (“Jurisdiction Opp.”) (Dkt. No. 19) at 5 n.1, 5-11.) Orange Pelican replies that neither e-mails to Illinois nor holding an account with a bank with regional headquarters in Illinois suffice. (Defendant Orange Pelican, LLC's Reply Brief in Support of Its Motion to Dismiss for Lack of Personal Jurisdiction (“Jurisdiction Reply”) (Dkt. No. 20) at 1-9.)
“A district court sitting in diversity has personal jurisdiction over a nonresident defendant only if a court of the state in which it sits would have jurisdiction.” Purdue Rsch., 338 F.3d at 779; see Fed.R.Civ.P. 4(k)(1)(A). Illinois's long-arm statute extends the personal jurisdiction of its courts to out-of-state defendants on any basis “permitted by the Illinois Constitution and the Constitution of the United States.” 725 Ill. Comp. Stat. 5/2-209(c). Therefore, if personal jurisdiction is constitutional, an Illinois court may exercise jurisdiction under its long-arm statute. N. Grain Mktg., 743 F.3d at 492 ().
The Due Process Clause of the Fourteenth Amendment sets the federal bounds of personal jurisdiction in a diversity suit. U.S Const., amend. XIV, § 1; Burger King Corp. v. Rudzewicz, 471 U.S. 462, 464 (1985); N. GrainMktg., 743 F.3d at 492. Under the federal constitution, “[a] forum state's courts may not exercise personal jurisdiction over a nonconsenting, out-of-state defendant unless the defendant has ‘certain minimum contacts with it such that the maintenance of the...
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