The opinion of the court was delivered by: Magistrate Judge Bissoon*fn1
For the reasons that follow, Defendants' Motions to Dismiss (Docs. 50 & 53) will be denied, without prejudice to Defendants' renewal of their arguments on summary judgment, as appropriate.
In this diversity action, Plaintiff alleges that BFL, Inc. ("BFL") and Indiana Capital & Leasing, Inc. ("Indiana Capital") breached multiple contracts concerning their purchase of Plaintiffs' trucking business and related assets. See generally 2d Am. Compl. (Doc. 43) at ¶ 30-70.*fn2 The Corporate Defendants made some payments under the contracts, but fell behind and eventually ceased making payments. See generally id. at ¶ 71.
In January, 2008, the parties entered a Master Settlement Agreement (at times, "the Agreement") to resolve all outstanding claims regarding their underlying contracts. See id. Thereafter, the Corporate Defendants failed to make payments under the Master Settlement Agreement, and Plaintiff brings breach of contract claims against the Corporate Defendants, and their sole shareholders, Terry Wallace ("Wallace") and William M. Grojean ("Grojean"; collectively, "the Individual Defendants"). See generally id. at Count I (un-numbered in original); cf. also id. at ¶¶ 7-8 (Wallace is president of BFL and owns 45% of its stock, and Grojean owns remaining 55%) and id. at ¶¶ 9-10 (Wallace is president of Indiana Capital, and he and Grojean co-own company).
Plaintiff also claims that the Corporate and Individual Defendants and Riverside Transport, Inc. ("Riverside") violated the Pennsylvania Uniform Fraudulent Transfers Act, 12 Pa. Cons. Stat. § 5101, et seq. See 2d Am. Compl. at Counts II-III. Plaintiff alleges that, shortly after the Master Settlement Agreement was entered, the Corporate and Individual Defendants transferred BFL's assets to Riverside, a company owned by Grojean, to avoid payments under the Agreement. See generally id. at ¶¶ 100, 138. In connection with their allegations of fraud, Plaintiff also states claims against Wallace and Grojean for civil conspiracy. See id. at Count IV.
A. The Individual Defendants' Motion to Dismiss (Doc. 50)
Wallace and Grojean first argue that they are not subject to personal jurisdiction in this Court. See Individ. Defs.' Br. (Doc. 51) at 6-9.
Plaintiff avers, and the Individual Defendants do not dispute, that Wallace appeared in Pennsylvania to execute the Master Settlement Agreement. Compare 2d Am. Compl. at ¶ 26 (Agreement "w[as] negotiated and signed in the Western District of Pennsylvania") with Aff. of T. Wallace (filed as Ex. 1 to Doc. 51) (admitting to having "contact[s] with Pennsylvania . . . related to this transaction"). Although Wallace attempts to invoke the "fiduciary shield" doctrine, under which individuals acting solely within corporate capacities are excused from personal jurisdiction, Pennsylvania federal courts have raised questions regarding the applicability and scope of that doctrine. See, e.g., Kontonotas v. Hygrosol Pharm. Corp., 2009 WL 3245421, *3 & n.1 (E.D. Pa. Oct. 5, 2009) ("the fiduciary shield doctrine has never been used by Pennsylvania state courts"; "due process does not require" it; and each defendant's "contacts with Pennsylvania [must] be assessed individually," in light of "[the person's] degree of control over [the corporation], and the extent to which he stood to gain personally") (citations and internal quotations omitted); cf. also Bragg v. Linden Research, Inc., 487 F. Supp.2d 593, 602 (E.D. Pa. May 30, 2007) ("[t]he applicability of [the] so called fiduciary shield doctrine is in dispute," and "neither the Pennsylvania Supreme Court nor the Third Circuit has squarely addressed [its] applicability") (citations and internal quotations omitted). At a minimum, Plaintiff is entitled to discovery regarding Wallace's contacts with Pennsylvania before the Court reaches his jurisdictional challenge. See, e.g., Masselli v. Total Luxury Group, Inc., 2008 WL 4126556, *8 (D. N.J. Aug. 29, 2008) (indicating that, despite potential application of fiduciary shield doctrine, "the interest of justice" dictated that plaintiffs should enjoy discovery regarding jurisdiction); compare also Patterson v. Olivet Int'l, Inc., 2009 WL 4722807, *5 (W.D. Pa. Dec. 2, 2009) (exception to fiduciary shield doctrine exists where "a corporate agent [is alleged to be] personally liable for torts committed in a corporate capacity") (citation omitted) with discussions infra (addressing Plaintiff's allegation that Wallace and Grojean participated in fraudulent transfer of BFL's assets to Riverside).
Grojean's direct contacts with the forum appear more attenuated. Cf. Aff. of W. Grojean (attached as Ex. 2 to Doc. 51) at ¶ 6 (Defendant's contacts were limited to three visits to Pennsylvania over past twenty-five years, as agent of Riverside, none of which exceeded forty-eight hours). Nevertheless, Plaintiff alleges that Grojean, like Wallace, participated in a fraudulent transfer, and federal courts have found such conduct sufficient to confer personal jurisdiction under the "effects test." See, e.g., Gambone v. Lite Rock Drywall, 2008 WL 2875949, *4 (3d Cir. Jul. 25, 2008) (affirming finding of personal jurisdiction where defendant participated in fraudulent conveyance, for purpose of avoiding payments owed to Pennsylvania plaintiff, thereby "expressly aim[ing]" conduct at forum) (citation to binding, published authority omitted). For all of these reasons, the Individual Defendants have not demonstrated their entitlement to dismissal at this juncture based on lack of personal jurisdiction.
Defense counsel next argue that Wallace and Grojean are not liable under the Master Settlement Agreement because Wallace signed the document on behalf of the Corporate Defendants, not individually. See Individ. Defs.' Br. at 10-12. Although the Agreement generally appears to limit putative liability to the Corporate Defendants, Paragraph 26 of the Agreement, entitled "Binding Effect," states:
This Agreement shall be binding on, and inure to the benefit of, all of the [p]arties hereto, as well as all of their predecessors, successors, assigns, shareholders, directors, officers, employees, agents, representatives, consultants, attorneys, heirs, executors, and administrators, as well as any corporation, partnership, or other entity into ...