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Rockland Industrial Holdings, LLC v. Container Navigation Corp.

United States District Court, District of Minnesota

February 27, 2015

Rockland Industrial Holdings, LLC, d/b/a Rockland Flooring, Plaintiff,
v.
Container Navigation Corporation, and Kyung Kang, Defendants.

Seth J. S. Leventhal, Esq., LEVENTHAL pllc, Minneapolis, MN, on behalf of Plaintiff.

E. Casey Beckett, Esq., Maslon Edelman Borman & Brand, LLP, Minneapolis, MN, on behalf of Defendants.

MEMORANDUM OPINION AND ORDER

ANN D. MONTGOMERY U.S. DISTRICT JUDGE

I. INTRODUCTION

On January 14, 2015, the undersigned United States District Judge heard oral argument on Container Navigation Corporation (“CNC”) and Kyung Kang’s (collectively, the “Defendants”) Motion to Dismiss [Docket No. 3]. Plaintiff Rockland Industrial Holdings, LLC d/b/a Rockland Flooring (“Rockland”) opposes the motion. For the reasons set forth below, Defendants’ motion is denied.

II. BACKGROUND

Rockland is a limited liability company with its principal place of business in Red Wing, Minnesota.[1] Notice of Removal [Docket No. 1] Attach. 3 (“Am. Compl.”) ¶ 3. Since 2002, Rockland has been manufacturing flooring products for domestic containers transported by trains, large trucks, and cargo ships. Wolford Decl. [Docket No. 12] ¶ 5. Both Rockland’s corporate headquarters and its original manufacturing facility is located in Red Wing, Minnesota. Id. ¶ 7. Rockland has additional manufacturing facilities located in Wisconsin, Indiana, and Ontario, Canada. Id.

Beginning in or around 2001, Rockland began conducting business with Shine Pyung, a Korean container manufacturing company owned and operated by Mr. Jae Man Hur. Kang Decl. [Docket No. 7] ¶¶ 3, 4, 6; Wolford Decl. ¶ 9. Shine Pyung’s relationship with Rockland was governed by an agreement that included a Minnesota choice of law provision. Chorney Decl. [Docket No. 13] ¶ 7. Ms. Kyung Kang was Shine Pyung’s corporate secretary at this time.

According to Kang, CNC was founded by Hur in 2001. Kang Decl. ¶ 3. At its inception, CNC was an international subsidiary of Shine Pyung, with Hur acting as president of both Shine Pyung and CNC. Sometime thereafter, CNC began conducting business directly with Rockland. Wolford Decl. ¶ 16. Kang became CNC’s principal contact with Rockland. Kang Decl. ¶ 7. Throughout the parties’ business relationship, Kang and CNC had regular telephonic and electronic communication with Rockland employees in Red Wing, Minnesota. Wolford Decl. ¶¶ 19-20. Sometime in 2006 or 2007, Kang traveled to Red Wing, Minnesota to meet with Rockland executives. Kang Decl. ¶ 9; Wolford Decl. ¶ 17 Chorney Decl. ¶ 6. Rockland recalls discussing business with Kang, including future container demand and other market projections. Wolford Decl. ¶ 17; Chorney Decl. ¶ 6. Rockland also recalls providing Kang with a tour of Rockland’s Red Wing, Minnesota facility, which had produced flooring for Shine Pyung in the past. Id. Kang remembers very little about her trip to Minnesota. Kang. Decl. ¶ 9.

Hur died in 2011. Id. ¶ 10. After his death, CNC became an independent company and Kang became president. Id. CNC and Rockland’s business relationship continued after Hur’s passing. Id. ¶ 11. CNC requested assurances from Rockland that the parties would execute an agreement similar in nature to Shine Pyung’s agreement with Rockland. Id. Although Rockland agreed to make such an agreement, no contract between Rockland and CNC was ever executed. Id.; Pl.’s Mem. Opp’n. Defs.’ Mot. Dismiss [Docket No. 11] 4.

Over the course of their relationship, Rockland and Defendants transacted for over $40 million worth of business. Wolford Decl. ¶ 8. CNC stopped payment on Rockland invoices in 2014. Kang Decl. ¶ 12. According to Rockland, these invoices total over $750, 000. Am. Compl. ¶1. CNC does not dispute the outstanding invoices. CNC claims it stopped payment after learning Rockland was selling product directly to CNC’s largest customer. Kang Decl. ¶ 12.

Rockland initiated this action in Goodhue County, Minnesota, after settlement discussions failed to resolve the parties’ dispute. See Notice of Removal. CNC removed the action to federal court and this Motion followed.

III. DISCUSSION

A. Personal Jurisdiction


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