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Lanard & Axilbund, LLC v. Wolf

United States District Court, E.D. Pennsylvania

September 23, 2014

LANARD & AXILBUND, LLC, d/b/a COLLIERS INTERNATIONAL, Plaintiff,
v.
JASON M. WOLF and WOLF COMMERCIAL REAL ESTATE, Defendants.

MEMORANDUM

GERALD AUSTIN McHUGH, District Judge.

This is a breach of contract dispute between a commercial real estate broker and the firm he represented. The dispute arises out of an Independent Contractor Agreement executed in 1998 (the "1998 Agreement"). Defendants seek dismissal of the action under a later ownership agreement containing an arbitration clause, and have further moved to dismiss for improper venue. Because I find this District appropriate and the 1998 Agreement controlling, Defendants' motion to dismiss is denied on both counts.

I. Background

Plaintiff Lanard & Axilbund, LLC, d/b/a Colliers International ("Colliers"), is a commercial real estate firm headquartered in Philadelphia, Pennsylvania. Defendant Jason Wolf is domiciled in Southern New Jersey, and acts as President and principal owner of Wolf Commercial Real Estate ("WCRE"), a New Jersey licensed commercial real estate brokerage serving Southern New Jersey and the Philadelphia region.

In 1998, Wolf entered into an Agreement with Lanard & Axilbund, Inc. ("L&A"), Colliers' predecessor, which dictated the terms of his commercial real estate work as an independent contractor and salesperson.[1] In 2010, Wolf entered into an Operating Agreement (the "2010 Agreement") with Plaintiff granting him 2% ownership interest in the company. The 2010 Agreement controlled all terms relating to Wolf's ownership interest in Colliers. The 1998 Agreement still remained in full force and effect, and continued to govern Wolf's activities as a salesperson and broker.

Wolf terminated his association with Colliers effective January 27, 2012. Sections 14 and 15 of the 1998 Agreement contain provisions that take effect upon termination. Section 15, "Restrictive Covenants, " addresses the disclosure of confidential information. See § 15(b). Section 15(c) prevents Wolf from soliciting any of Plaintiff's clients or influencing any existing employees or sales representatives to terminate their relationship with Plaintiff for two years. Section 14(b) entitles Wolf to certain post termination commissions, which Plaintiff allegedly paid (totaling in excess of $100, 000). Finally, Wolf's violation of any of the terms and conditions of the 1998 Agreement would constitute a waiver of all of his rights to post termination commissions. See § 14(d).

Plaintiff alleges that Wolf began to conduct commercial real estate business in February, 2012 on behalf of his own brokerage, WCRE. Upon Wolf's resignation and formation of WCRE, Plaintiff demanded the return of all of its confidential information. According to Plaintiff, despite repeated requests, Wolf failed to return Plaintiff's information and used those materials to solicit Plaintiff's clients in Philadelphia and Southern New Jersey. Plaintiff further alleges that Wolf encouraged Evan Zweben, an employee of Plaintiff, to join WCRE. Colliers claims to be aware of at least twenty instances over the past two years where Wolf has solicited business from its clients, thereby violating the restrictive covenants in the 1998 Agreement. Moreover, Plaintiff claims that WCRE intentionally interfered with Wolf's existing contractual relationship with Plaintiff because the company knew and understood the express terms of the restrictive covenants.

Plaintiff's complaint consists of three counts: (1) breach of contract against Wolf; (2) intentional interference in existing contractual relations directed solely at Defendant WCRE; and (3) injunctive relief against both Defendants preventing the solicitation of Colliers' clients for two years. Plaintiff also seeks counsel fees under Section 14(d) of the 1998 Agreement.

Defendant has moved to dismiss the complaint for improper venue, or, alternatively, to refer to arbitration under the 2010 Agreement.

II. Legal Analysis

a. Venue

Defendants move pursuant to Fed.R.Civ.P. 12(b)(3)(B) to dismiss Plaintiff's amended complaint for improper venue. In the case of a challenge to venue, the burden of persuasion rests with the defense. Myers v. Am. Dental Ass'n , 695 F.2d 716, 724 (3d Cir. 1982). Defendants here have exercised their option to submit an affidavit in support of their motion, and Plaintiff has responded in kind. In resolving the issue, I am bound to accept uncontradicted allegations in the complaint as true, and to resolve and construe disputed facts in favor of the Plaintiff. Carteret Savings Bank v. Shushan , 954 F.2d 141, 142, n.1 (3d Cir 1992); Heft v. AA1 Corp. , 355 F.Supp.2d 757, 762 (M.D. Pa. 2005); see also Hancock v. Am. Tel. & Tel. Co. , 701 F.3d 1248, 1260-61 (10th Cir. 2012), cert. denied, 133 S.Ct. 2009 (2013).

Under 28 U.S.C. § 1391(b)(2), a civil action may be brought "in a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred." Based on the parties' submissions, I have no hesitancy in finding venue proper here. Neither Defendant challenges the Court's personal jurisdiction, which is telling. Wolf's Declaration does not address many fundamental points, including Colliers' allegation that the agreement which is the subject of this case was negotiated and signed in Pennsylvania. Wolf states that his sales "market" and "territory" were Southern New Jersey, but has not contested Colliers' allegation that he conducted business in Pennsylvania. Moreover, one of the pillars of Plaintiff's case is the solicitation of clients here in Pennsylvania in violation of the parties' agreement, and Wolf's Declaration is silent in that respect. Finally, WCRE's internet "home page" and its LinkedIn "Profile" page describe it as serving the Philadelphia region.

The requirement of substantiality in section 1391 is "intended to preserve the element of fairness so that a Defendant is not haled into a remote district having no real relationship to the dispute." Cottman Transmission Sys., Inc. v. Martino , 36 F.3d 291, 294 (3d Cir. 1994). As Defendant Wolf resides and works nearby in southern New Jersey, and purports to offer his services to the Philadelphia region, the Eastern District is hardly remote. This point is underscored by the fact that Defendants suggest the District of New Jersey could more appropriately hear the case. The federal Courthouse in Camden, New Jersey, is a mere ten minute drive from this District's Courthouse.[2] In fact, two federal Courthouses located in the District of New Jersey are substantially farther from where Wolf ...


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