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John Evanko v. Wcdi

February 6, 2012


The opinion of the court was delivered by: Magistrate Judge Cynthia Reed Eddy


This diversity matter was originally filed in the Court of Common Pleas of Allegheny County and was removed to this Court. John Evanko, ("Evanko" or "the Plaintiff), a Pennsylvania resident, alleges in his Amended Complaint [ECF No. 14] liability on the part WCDI, LLC ("WCDI"), a corporation with its principal place of business in Utah; Curtis Brown ("Brown"), an individual residing in Utah; HT Consulting, LLC ("HTC"), a corporation with its principal place of business in New Jersey; 3325 Holdings ('3325"), a corporation with its principal place of business in Florida; Gary Stotz ("Stotz"), an individual residing in Florida; the Estate of Ron Piccolo, a Utah entity; Marston Investments, Inc. ("Marston Investments"); a corporation with its principal place of business in Utah; Emily Marston ("E. Marston"), an individual residing in Utah; Mikelle Marston ("M. Marston"), an individual residing in Florida, and legal representative of the Harold Marston estate being probated in Utah; and the Harold Marston Estate ("H.M. Estate") an entity subject to probate in Utah.

According to Evanko, these Defendants engaged in fraud in the inducement, fraud, conversion, breach of express and implied contract, and violation of unfair trade practice and consumer protection laws when they refused to return to Evanko $75,000 that the parties, who were pursuing a business venture, had agreed would be treated as a loan. Pending is the Defendants' Motion to Dismiss the First Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(2), or, in the alternative, to transfer this matter pursuant to the venue provisions set out in 28 U.S.C. § 1406(a). [ECF No. 20]. The Court will deny the Motion to Dismiss, and grant the Motion to Transfer Venue.


In the First Amended Complaint, Plaintiff alleges that while he was in Pennsylvania in 2009, he received a telephone call from Stotz, who asked whether Evanko was interested in purchasing a twenty percent ($150,000) interest in WCDI, a Company engaged in fabricating and marketing a "TIPIT" waste/commodities handling machine. [ECF No. 14 at ¶ 16]. Evanko was told that he must act quickly, because the Defendants owed money to a third party, Taylor Machine Works ("Taylor"), and if they could not raise the $75,000 immediately, work on the TIPIT prototype would halt. Evanko was assured that his advance would be applied to the price of his ownership interest, provided that a business agreement could be closed. Id. If an agreement could not be reached, the advance would be considered a loan, and refunded.

After meeting with Stotz and Marston, the machine's inventor, in Mississippi, Evanko agreed to advance the $75,000. [Id. at ¶ 17]. Plaintiff wired the funds to Taylor in Mississippi, hired counsel, and began work on the agreement. Approximately two weeks into the process, Marston died. [Id.]. Negotiations continued with Marston's wife and daughter substituting for him. As part of the process, Evanko met with the Defendants in Salt Lake City, Utah where they were able successfully to resolve core matters including the selection of officers and directors and WCDI's retention of the TIPIT patents. [Id. at ¶ 21].

At an unspecified later date, the parties met in Mississippi to discuss finalizing the business plan and to observe the finished TIPIT prototype. [Id. at ¶23]. At that meeting, a dispute arose regarding transfer of ownership of the patents. Due to family disagreements, Marston's wife and daughter no longer wanted to part with their portion. Piccolo committed to contribute his fifty percent holding. [Id.].

"Over the next few weeks the agreement was drafted, but not executed. During this time, a governance issue arose over the voting rights and the small percentage [of the business given to] Brown in exchange for legal work performed on behalf of . . . Marston." [Id. at ¶ 24]. The equable relationship among the parties devolved. Piccollo and Stotz began to argue with E. and M. Marston. Plaintiff began to get cold feet. Piccollo and Stotz tried to smooth matters, reassuring Plaintiff that despite the obstacles, disagreements with the Marston women could be overcome by outvoting them. Plaintiff was unmollified; he worried that this approach would result in litigation against WCDI, and expose him to personal liability. [Id. at ¶ 25]. He thus "refused to execute the agreement." [Id.].

Abandoning the venture, Evanko asked to have his money returned, but was ignored by Defendants who attempted to change the conditions governing the refund of his investment. [Id. at ¶26]. "Defendants have not returned [the] money as they all promised they would, and instead have converted the machine for their own use, sole benefit and unjust enrichment. Plaintiff's repeated requests regarding the current status of the machine, its use, sale and or rental have also been ignored by all Defendants." [Id.]. According to Evanko, instead of honoring their words and their promises, defendants now claim to have had a different agreement than what was "promised to entice and induce Plaintiff to fund the construction of the machine at issue." [Id. at ¶ 29].


Personal Jurisdiction Over the Defendants General Jurisdiction

The Court turns first to Defendants' argument that they are not subject to the personal jurisdiction in Pennsylvania. Under Fed. R. Civ. P. 4(e),*fn1 a federal court may assert personal jurisdiction over a non-resident defendant to the extent allowed by the law of the state in which the action is brought. See Mellon Bank (East) PSFS, N.A. v. Farino, 960 F.2d 1217, 1221 (3d Cir. 1992). Pennsylvania authorizes the exercise of long-arm jurisdiction over non-residents Ato the fullest extent allowed under the Constitution of the United States.@ 42 Pa. Con. Stat. Ann. ' 5322(a)(4); Renner v. Lanard Toys Ltd., 33 F.3d 277, 279 (3d Cir. 1990); Farino, 960 F.2d at 1221. Accordingly, the statute is restricted only by the Due Process Clause of the Fourteenth Amendment of the U.S. Constitution. Kubik v. Letteri, 614 A.2d 1110, 1113-14 (Pa. 1992). A court should not, however, presume that jurisdiction is proper merely because the requirements of a state's long-arm statue have been satisfied. Pennzoil Prod. Co. v. Colelli & Assoc., Inc., 149 F.3d 197, 201 (3d Cir. 1998).

Once a jurisdictional issue has been raised, the plaintiff bears the burden of establishing contacts sufficient to support the court's exercise of personal jurisdiction. See Marten v. Godwin, 499 F.3d 290, 295-96 (3d Cir. 2007); Provident Nat=l Bank v. California Fed. Sav. & Loan Assn, 819 F.2d 434, 437 (3d Cir. 1987). Prior to trial, a plaintiff need only make a prima facie showing of jurisdiction, and the reviewing court must interpret all facts and allegations in a light most favorable to the plaintiff. Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002).

The Plaintiff may meet his burden with respect to jurisdiction by showing that a defendant has had either general or specific contacts with the forum state. AA defendant is subject to general jurisdiction when it has continuous and systematic contacts with the foreign state.@ Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 (1984)). When a state has general jurisdiction over a party, it may exercise jurisdiction based over any claim, even those unrelated to a particular contact with the state. Farino, 960 F.2d at 1221. The threshold showing required to establish general jurisdiction is high. Reliance Steel Prods Co. v. Watson, Ess, Marshall & Engas, 675 F.2d 587, 589 (3d Cir. 1982). Having carefully reviewed ...

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