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De Lage Landen Financial Services, Inc. v. Donner Medical Marketing

December 15, 2010

DE LAGE LANDEN FINANCIAL SERVICES, INC.
v.
DONNER MEDICAL MARKETING, INC., ET AL.



The opinion of the court was delivered by: Baylson, J.

MEMORANDUM RE: MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

I. Introduction

Presently before this Court is the Motion to Dismiss for Lack of Personal Jurisdiction of Defendants Donner Medical Marketing, Inc. ("DMM") and Bruce Donner ("Donner"). This action for fraud, breach of contract, and unjust enrichment arises from a series of contracts for the purchase and leasing of medical equipment entered into by Plaintiff De Lage Landen Financial Services ("DLL"), DMM, and Defendant Allied Health Care Services, Inc. ("Allied"). For the following reasons, this Court will deny the Motion to Dismiss.

II. Factual & Procedural Background

DLL is a Michigan corporation with headquarters located in Wayne, Pennsylvania. Compl. ¶ 1; Affidavit of Edward Gresh, Nov. 4, 2010 ("Gresh Aff.") ¶ 2. DMM is a New Jersey corporation with its principal place of business in New Jersey. Compl. ¶ 2. Donner, a New Jersey resident, is a director and officer of DMM, and the sole full-time employee of DMM at its New Jersey address. Compl. ¶ 3-4. Allied is a New Jersey corporation with its principal place of business in New Jersey. Compl. ¶ 5.

In the Complaint (ECF No. 1), DLL asserts that beginning in 2007, DLL and Allied entered into a series of "Master Lease Schedules" and corresponding "Master Lease Agreements" (collectively, "the Agreements"), pursuant to which DLL purchased Life Care Products PLV 102 Home Care Ventilators ("Ventilators") from DMM and then leased the Ventilators to Allied. Compl. ¶¶ 9-11. DMM sent invoices to DLL ("the Invoices") that identified the Ventilators for purchase in each transaction by their manufacturing model and serial numbers. Compl. ¶¶ 12-13. DLL paid the Invoices by sending checks that totaled $1,425,000 to DMM, which DMM deposited. Compl. ¶ 14. DLL alleges that Donner was personally involved in preparing the Invoices that were sent to and paid by DLL. Compl. ¶¶ 29, 43, 57, 71. Allied acknowledged receipt of the Ventilators in Delivery and Acceptance Certificates ("the Certificates") that corresponded to each transaction. Compl. ¶¶ 18, 32, 46, 60.

The crux of DLL's claims is that, despite its expenditure of over $1.4 million dollars and the legion of documents delineating the sales and leasing arrangements, the purported serial numbers in the Invoices did not correspond to any Ventilators produced by the manufacturer. Compl. ¶¶ 15, 24, 38, 52, 66. Indeed, DLL now believes that no Ventilators ever exchanged hands in connection with these contracts. Id.

DLL alleges 16 counts in this action: Count I, Fraud, against Donner, for preparing Invoices that falsely represented that DMM was selling certain Ventilators to DLL and delivering them to Allied; Count II, Conversion, against Donner, for unlawfully obtaining the purchase price monies from DLL; Counts III and IV, Unjust Enrichment, against Donner and DMM, for retaining the purchase price monies from DLL without delivering any Ventilators to Allied;

Counts V, VIII, IX, and XIV, Breach of Contract, against DMM, in connection with each of the Invoices; Counts VI, IX, XII, and XV, Breach of Contract, against Allied, in connection with each of the rental and leasing Agreements; and Counts VII, X, XIII, and XVI, Breach of Contract, against Allied, in connection with each of the Certificates. DLL's prayer for relief includes compensatory damages, punitive damages, prejudgment interest thereon, attorney's fees and costs of suit, and other equitable and just relief.

DMM and Donner (hereinafter, "Defendants")*fn1 filed the instant Motion to Dismiss for Lack of Personal Jurisdiction on October 7, 2010. ECF No. 10. Plaintiff filed a response brief in opposition to the motion on November 5, 2010. ECF No. 12. Plaintiff also filed an Affidavit of Edward Gresh, the Vice President of Risk for the Office Technology Global Business Unit of DLL, dated November 4, 2010, in support of its motion. ECF No. 12-1. Defendants did not reply to Plaintiff's response brief or file a counter affidavit.

The Court held oral argument on this motion on December 9, 2010. The Court expressed its surprise that Defendants neither filed a reply and/or counter affidavit nor requested discovery. The Court asked Counsel for Defendants if they wanted the opportunity to take either course of action. Counsel declined, stating that Defendants were resting on the record. Therefore, the legal issue of whether this Court can exercise personal jurisdiction over Defendants is ripe for determination.

III. Basis of Federal Jurisdiction

The Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because the matter in controversy exceeds $75,000, exclusive of interests and costs, and the parties are citizens of different states. For purposes of diversity jurisdiction, a corporation is a citizen of its state of incorporation and of the state where it has its principal place of business. 28 U.S.C.A. § 1332(c)(1). Plaintiff DLL ...


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