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Coloplast A/S v. Spell Pless Saura, PC

Court of Appeals of Minnesota

June 3, 2013

Coloplast A/S, et al., Respondents,
v.
Spell Pless Saura, PC (f/k/a Welch Spell, PC), et al., Appellants, Lindquist & Vennum, PLLP, et al., Respondents.

UNPUBLISHED OPINION

Hennepin County District Court File No. 27-CV-12-12601.

Daniel Q. Poretti, Benjamin C. Johnson, Nilan Johnson Lewis PA, Minneapolis, Minnesota (for respondents Coloplast A/S, et al.).

Stephen J. Foley, Benjamin R. Skjold, Joanna M. Salmen, Foley & Mansfield, PLLP, Minneapolis, Minnesota; and Robert G. Gilbreath (pro hac vice), Hawkins Parnell Thackston & Young LLP, Dallas, Texas (for appellants).

Considered and decided by Cleary, Presiding Judge; Kalitowski, Judge; and Hooten, Judge.

CLEARY, Judge

Appellants challenge the district court order denying their motion to dismiss for lack of personal jurisdiction. Appellants argue that they did not engage in continuous and systematic contacts with Minnesota sufficient to justify general jurisdiction; that the cause of action does not arise out of their contacts with Minnesota; and that Minnesota does not have an interest in supplying a forum for respondents' dispute with them. Appellants also argue that the district court erred by determining sua sponte that a Minnesota statute of limitations should apply to the dispute. We affirm.

FACTS

Appellant Spell Pless Saura, PC (Spell Pless), formerly known as Welch Spell, PC, is a law firm located in Georgia. Spell Pless provided legal services for respondents from the 1990s until 2008.[1] Respondent Coloplast A/S is a company that is incorporated under the laws of Denmark, and its headquarters are located there. Respondent Coloplast Corporation (Coloplast) is a wholly-owned subsidiary of Coloplast A/S. Coloplast is incorporated under the laws of Delaware, and its headquarters are located in Minneapolis. Until 2006, Coloplast's headquarters were located in Georgia. Appellant James Tramonte is an attorney who used to work for Spell Pless and provided legal services for respondents. Appellant Lawrence Pless is an attorney who currently works for Spell Pless and also provided legal services for respondents. Both Tramonte and Pless reside in Georgia. Lindquist & Vennum, PLLP, and April Hamlin are named defendants in this cause of action, but did not challenge jurisdiction and are not involved in this appeal.

Respondents develop and sell medical devices and products. In 2005, Coloplast A/S informed Spell Pless that it intended to acquire certain assets of Mentor Corporation (Mentor), a Minnesota corporation, including the stock of various Mentor entities, Mentor's corporate headquarters in California, Mentor's sales locations in Europe and Asia, and research, development, and production facilities in Europe, Oklahoma, and Minnesota. Spell Pless represented Coloplast A/S during the acquisition process by completing due diligence, reporting to Coloplast A/S's executives in Denmark, negotiating the terms of the acquisition, and drafting relevant documents. Spell Pless represented Coloplast A/S from its offices in Georgia, and attorneys of Spell Pless traveled to California, New York, and London during the negotiations. The acquisition was successfully completed in 2006.

One specific asset that Coloplast A/S acquired from Mentor was a penile-implant product line. Beginning in the 1980s, the research and development for this product line was financed by a group of investors with whom Mentor had formed a limited partnership. The partnership was called the Mentor Development Limited Partnership (MDLP), and Mentor served as the general partner. The limited partners received periodic royalty payments, and Mentor had the right to terminate the partnership subject to specific termination payments.

After Coloplast A/S successfully acquired Mentor's assets, Spell Pless advised Coloplast A/S regarding the MDLP. Coloplast was substituted as the general partner of the MDLP. Spell Pless drafted the document that substituted Coloplast as the general partner, the General Partner Transfer and Substitution Agreement (GPTSA), which was executed in August 2006. Spell Pless also drafted administrative guidelines for the MDLP. At different times, Tramonte and Pless each served as the Director of Partner Relations for the MDLP, overseeing the administration of the partnership on behalf of Coloplast. In that role, Tramonte and Pless regularly communicated with limited partners regarding partnership business. In 2006, the name of the MDLP was changed to Coloplast Development Limited Partnership ("CDLP"). The MDLP and the CDLP were both formed under the laws of Minnesota. Appellants filed the partnership paperwork with the Minnesota Secretary of State to change the partnership name to CDLP and to change the general partner from Mentor to Coloplast.

From 2006 until the fall of 2008, Spell Pless continued to represent respondents, advising them regarding the administration of the CDLP and the role of Coloplast as the general partner of the CDLP. During this time, Spell Pless also counseled respondents in their capacities as operating companies. In October 2006, Coloplast began to move its headquarters from Georgia to Minnesota. As part of the move, Coloplast also transitioned its legal representation from Spell Pless to an in-house Minnesota legal team. During the transition, appellants frequently worked with the Minnesota legal team, communicating with the Minnesota office by telephone, mail, and email.[2]

In August 2008, Coloplast retained Lindquist & Vennum to represent it regarding the CDLP. In October 2009, Coloplast informed the limited partners of the CDLP that the partnership would be terminated at the end of 2009. Coloplast told the limited partners that the termination sum, as determined by the partnership agreement, would be a cash payout equal to the amount that each limited partner had originally invested, totaling slightly more than $1 million. The cash payout was significantly less than the alternate termination sum, a payout of stock shares, also offered under the partnership agreement. Many of the limited partners objected to the offered cash payout and instituted an arbitration proceeding in 2010. In December 2011, the arbitrators awarded the limited partners more than $12 million.

The present action arises from the legal representation provided by Spell Pless, Tramonte, and Pless regarding the acquisition of Mentor's assets and management of the CDLP. Respondents allege breach of contract and negligence by ...


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