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RH Sealcoating v. Machinery Tradeoff, LLC

United States District Court, D. Minnesota

January 7, 2019

RH Sealcoating & Asphalt Maintenance, Inc., Plaintiff,
v.
Machinery Tradeoff, LLC., Defendant.

          William J. Toulouse, Esq. and Quarnstrom & Doering, counsel for plaintiff.

          Barry R. Gronke, Jr., Esq. and Stoneberg, counsel for defendant.

          ORDER

          David S. Doty, Judge

         This matter is before the court upon the motion to dismiss by defendant Machinery Tradeoff, LLC (MTO) for lack of jurisdiction and improper venue or, alternatively, for transfer to the Southern District of Texas. Based on a review of the file, record, and proceedings herein, and for the following reasons, the court grants the motion to dismiss.

         BACKGROUND

         This contract and warranty dispute arises out of plaintiff RH Sealcoating & Asphalt Maintenance, Inc.'s purchase of a chip spreader[1] from MTO. RH Sealcoating, located in Lyon County, Minnesota, repairs, constructs, and maintains roads, streets, roofs, and other surfaces. Compl. ¶¶ 2-3. MTO, located in Southern Texas, sells used construction machinery and heavy equipment. Lerma Decl. ¶ 3. Magdiel Lerner, a Texas resident, is the sole member of MTO. Id. ¶¶ 1, 6, 8. MTO is not registered to do business in Minnesota, has no offices or employees in Minnesota, does not pay Minnesota taxes, and does not own or lease real property in Minnesota. Id. ¶¶ 5-8. MTO advertises in local newspapers and periodicals, local radio stations, and its website. Id. ¶ 4. MTO also lists inventory on machinerytrader.com, which advertises equipment and machinery for dealers across the country. Hook Aff. ¶ 10.

         On April 4, 2018, Roger Hook, CEO of RH Sealcoating, called MTO in Texas to inquire about the chip spreader advertised on machinerytrader.com. Id. ¶¶ 10, 12. Lerner sent Hook an estimate by email for the chip spreader the same day. Id. ¶ 13; id. Ex. 2. Lerner then called Hook “at least twenty (20) times” to encourage him to purchase the chip spreader. Id. ¶ 14. On May 7, Lerner emailed Hook an invoice for the chip spreader with instructions for wiring payment. Id. ¶ 15; id. Ex. 3. Lerner contacted Hook several more times thereafter to see if Hook was going to purchase the chip spreader. Id. ¶ 16. On July 12, Hook agreed to purchase the chip spreader and wired $65, 000 to MTO in Texas from RH Sealcoating's bank in Minnesota.[2] Id. ¶ 17; id. Ex. 4. After the sale, Lerner sent Hook several MTO business cards to give to others who may be interested in his services. Id. ¶ 18. RH Sealcoating received the chip spreader in late July and soon discovered that the equipment did not work as promised. Id. ¶¶ 21, 22. MTO declined to fix the problem and this suit followed. Id. ¶ 22.

         On August 28, 2018, RH Sealcoating filed suit against MTO in Lyon County, Minnesota, alleging breach of contract and breach of warranty. MTO timely removed and now moves to dismiss for lack of personal jurisdiction or to transfer to the Southern District of Texas based on improper venue.

         DISCUSSION

         I. Standard of Review

         To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must establish a prima facie case that the forum state has personal jurisdiction over the defendant. Stevens v. Redwing, 146 F.3d 538, 543 (8th Cir. 1998). In the absence of an evidentiary hearing, a court “must look at the facts in the light most favorable to the nonmoving party and resolve all factual conflicts in favor of that party.” Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991). A federal court may assume jurisdiction over a nonresident defendant “only to the extent permitted by the long-arm statute of the forum state and by the Due Process Clause.” Romak USA, Inc. v. Rich, 384 F.3d 979, 984 (8th Cir. 2004) (citation and internal quotation marks omitted). Because the Minnesota long-arm statute “confers jurisdiction to the fullest extent permitted by the Due Process Clause, ” the court need only consider due process requirements. See Coen v. Coen, 509 F.3d 900, 905 (8th Cir. 2007).

         To satisfy due process, a defendant must have “sufficient minimum contacts” with the forum state such that maintaining the suit “does not offend traditional notions of fair play and substantial justice.” Romak, 384 F.3d at 984 (citation omitted). “Sufficient contacts exist when [a] defendant's conduct and connection with the forum state are such that [it] should reasonably anticipate being haled into court there....” Coen, 509 F.3d at 905 (citation and internal quotation marks omitted).

         A forum state has specific jurisdiction when the cause of action “arise[s] out of” or “relate[s] to” a defendant's activities within that state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (citation and internal quotation marks omitted). “In order for a court to exercise specific jurisdiction over a claim, there must be an ‘affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State.'” Bristol-Myers Squibb Co. v. Superior Court of Cal., 137 S.Ct. 1773, 1781 (2017) (alteration in original) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)).

         II. ...


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