Vinyl Kraft Acquisition, LLC v. RHI, Inc.

• Decision Date: 03 October 2022
• Docket Number: 1:22-cv-271
• Parties: VINYL KRAFT ACQUISITION, LLC, Plaintiff, v. RHI, INC., Defendant.
• Court: U.S. District Court — Southern District of Ohio

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VINYL KRAFT ACQUISITION, LLC, Plaintiff, v. RHI, INC., Defendant.

No. 1:22-cv-271

United States District Court, S.D. Ohio, Western Division

October 3, 2022

ORDER

KAREN L. LITKOVITZ, UNITED STATES MAGISTRATE JUDGE.

Plaintiff originally filed this action in the Court of Common Pleas for Scioto County, Ohio, and defendants removed it to this Court. (See Docs. 1, 2). This matter is before the Court on defendant RHI, Inc.'s motion to dismiss (Doc. 8) plaintiff Vinyl Kraft Acquisition, LLC's response (Doc 11), and defendant's reply (Doc. 14).^[1]

I. Background^[2]

Plaintiff is an Ohio limited liability company with its principal place of business in Scioto County, Ohio. According to defendant's owner's affidavit, defendant is a Michigan corporation doing business as “Rapid Roofing.” (Beaty Aff., Doc. 8 at PAGEID 57). In mid-June of 2020, plaintiff and defendant entered into an agreement for plaintiff to provide certain construction products to defendant. As of April 27, 2022, the date of plaintiff's state court complaint, defendant owed plaintiff $304,093.88 for construction products shipped to and accepted by defendant.

Plaintiff asserts claims for breach of contract, account, and unjust enrichment based on the account statement attached to its complaint. Defendant's motion to dismiss is styled as if based on “forum non conveniens” but also references Rules 12(b)(2), (3), (6), and (7) of the Federal Rules of Civil Procedure.^[3] (See Doc. 8 at PAGEID 52).

II. Analysis

A. Personal jurisdiction

Defendant argues that is inconsistent with the due process clause of the Fourteenth Amendment to be subjected to this Court's jurisdiction for merely buying construction products from an Ohio company. Defendant notes that all of its projects that incorporate plaintiff's construction products are located outside of Ohio and that it has not entered Ohio. Defendant also argues in reply that it did not use an agent to transact business in Ohio for purposes of Ohio's long-arm statute.

Plaintiff argues in response that defendant purposefully availed itself of the privileges of acting or causing a consequence in Ohio by working with an Ohio company, ANC Home, LLC (ANC) (see Doc. 8 at PAGEID 61 (Ohio Secretary of State registration)), which facilitated defendant's connection and subsequent business transactions with plaintiff-another Ohio company. Plaintiff points to emails and documents from ANC, which defendant attached to its motion, to demonstrate that defendant transacted business in Ohio and/or entered into an agreement with a sales representative for the solicitation of orders in Ohio. (See id. at PAGEID 58-60). Plaintiff also argues that defendant's failure to pay on its account, which it had been paying directly and not through an intermediary, caused tortious injury to plaintiff in Ohio.

Where a defendant has moved to dismiss a case under Rule 12(b)(2) for lack of personal jurisdiction, and the district court rules on the motion without an evidentiary hearing, the plaintiff need only make a “prima facie” showing that the court has personal jurisdiction. Conn v. Zakharov, 667 F.3d 705, 711 (6th Cir. 2012) (citing Kroger Co. v. Malease Foods Corp., 437 F.3d 506, 510 (6th Cir. 2006)). The Court considers the pleadings in the light most favorable to the plaintiff and does not weigh the disputed facts, although the court may consider the defendant's undisputed factual assertions. Id. (citing Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d 147, 153 (6th Cir. 1997); CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1261-62 (6th Cir. 1996)).

Where, as here, a federal court's jurisdiction is premised on diversity of citizenship, the plaintiff must satisfy state law requirements for personal jurisdiction. Schneider v. Hardesty, 669 F.3d 693, 699 (6th Cir. 2012) (citing Estate of Thomson ex rel. Estate of Rakestraw v. Toyota Motor Corp. Worldwide, 545 F.3d 357, 361 (6th Cir. 2008)). Under Ohio law, personal jurisdiction over a non-resident defendant exists only if: (1) Ohio's long-arm statute confers jurisdiction, and (2) the requirements of the federal due process clause of the Fourteenth Amendment are met. Conn, 667 F.3d at 712 (citing Kauffman Racing Equip., L.L.C. v. Roberts, 930 N.E.2d 784, 790 (Ohio 2010); Goldstein v. Christiansen, 638 N.E.2d 541, 543 (Ohio 1994)).

Ohio's long-arm statute confers personal jurisdiction over a non-resident if the nonresident's conduct falls within one of the nine bases for jurisdiction listed under the statute. Plaintiff raises the following potentially relevant bases:

(A) A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person's:

(1) Transacting any business in this state;

....

(4) Causing tortious injury in this state by an act or omission outside this state if the person regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state; ....

(6) Causing tortious injury in this state to any person by an act outside this state committed with the purpose of injuring persons, when the person might reasonably have expected that some person would be injured thereby in this state; ....

(B) For purposes of this section, a person who enters into an agreement, as a principal, with a sales representative for the solicitation of orders in this state is transacting business in this state.

Ohio Rev. Code § 2307.382.

Federal due process requires that a non-resident defendant have sufficient “minimum contact[s]” with the forum state such that a finding of personal jurisdiction does not “offend traditional notions of fair play and substantial justice.” Conn, 667 F.3d at 712 (quoting Third Nat'l Bank in Nashville v. WEDGE Group, Inc., 882 F.2d 1087, 1089 (6th Cir. 1989)). Federal due process encompasses two types of personal jursidiction: “general jurisdiction, when the suit does not arise from [the] defendant's contacts with the forum state; and specific jurisdiction, where the suit does arise from the defendant's contacts with the forum state.” Id. at 712-13 (citing Third Nat'l Bank, 882 F.2d at 1089). A non-resident defendant may be subject to the general jurisdiction of the forum state only where his contacts with that state are “continuous and systematic.” Id. at 713 (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 & n.9 (1984)). A finding of specific jurisdiction, relevant here, requires that three elements be satisfied:

First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.

Id. (quoting Bird v. Parsons, 289 F.3d 865, 874 (6th Cir. 2002)).

Considering the facts in a light most favorable to plaintiff, the Court finds that plaintiff has made out a prima facie case for the Court's exercise of personal jurisdiction over defendant. The Court concludes that defendant transacted business in Ohio for purposes of Ohio's long-arm statute, see Ohio Rev. Code § 2307.382(A)(1),^[4] which “is coextensive with the purposeful availment prong of the constitutional analysis.” Ironhead Marine, Inc. v. Donald C. Hanna Corp., No. 3:10-cv-82, 2011 WL 6817764, at *4 (N.D. Ohio Dec. 28, 2011) (quoting Burnshire Dev., LLC v. Cliffs Reduced Iron Corp., 198 Fed.Appx. 425, 432 (6th Cir. 2006)). “The phrase ‘transacting any business' is broad and encompasses more than ‘contract.'” Clark v. Connor, 695 N.E.2d 751, 755 (Ohio 1998) (quoting Kentucky Oaks Mall Co. v. Mitchell's Formal Wear, Inc., 559 N.E.2d 477, 480 (Ohio 1990)). The Court identifies the following allegations, as well as statements by defendant, related to defendant's transaction of business in/purposeful availment of Ohio:

• Defendant entered into an agreement with plaintiff, an Ohio company. (Pl.'s Compl., Doc. 2, PAGEID 12-13 at ¶¶ 5, 8).

• Plaintiff shipped construction products to defendant, and defendant accepted these shipments. (Id., PAGEID 13 at ¶¶ 9, 14).

• Plaintiff invoiced defendant for these shipments. (Id. at ¶ 15).

• Defendant paid plaintiff directly on the invoices. (Beaty Aff., Doc. 8, PAGEID 57 at ¶ 5).

• The parties were doing business in this way for nearly two years. (Doc. 2, PAGEID 12-13 at ¶¶ 5, 8).

• Defendant failed to pay the invoices in full. (Id., PAGEID 12-14 at ¶¶ 6, 10-12, 14, 1617, and 19).

• Defendant entered into an agreement with ANC (an Ohio company (see Doc. 8 at

PAGEID 61)) to order construction products from companies, including plaintiff. (Def.'s reply, Doc. 14 at PAGEID 105).

The above does not describe a one-off transaction between plaintiff and defendant but instead a business relationship of nearly two years. See Air Prod. & Controls, Inc v. Safetech Int'l, Inc., 503 F.3d 544, 551 (6th Cir. 2007) (finding that the plaintiff had demonstrated “purposeful availment” where “the parties did not engage in a one-time transaction, but in a continuing business relationship that lasted a period of many years”); Long v. Grill, 799 N.E.2d 642, 648 (Ohio Ct. App. 2003) (three-month business relationship, inter alia, sufficient to demonstrate minimum contacts with Ohio). See also Speedeon Data, LLC v. Integrated Direct Mktg., LLC, 718 Fed.Appx. 333, 336 (6th Cir. 2017) (holding that Ohio Revised Code § 2307.382(A)(1) was satisfied where the defendant “reached out to [the plaintiff] in Ohio for a business relationship,”...