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Agri-Marketing, Inc. v. Proterra Solutions, LLC

United States District Court, E.D. Pennsylvania

March 23, 2018

AGRI-MARKETING, INC., doing business as USA GYPSUM, Plaintiff,



         I. Introduction

         Defendants ProTerra Solutions, LLC, Stanley Gibson, Deborah Gibson, and Mark Lafon move to dismiss Plaintiff Agri-Marketing's Second Amended Complaint in its entirety for improper venue and, in the alternative, move to dismiss Counts III, IV, and V of the Second Amended Complaint for failure to state a claim. For the reasons set forth below, the Court denies Defendants' motion to dismiss for improper venue, but grants its motion to dismiss Counts III, IV, and V.

         II. Background

         A. Factual Background

         The Second Amended Complaint alleges the following facts.

         Plaintiff Agri-Marketing is a Pennsylvania corporation dedicated to converting drywall to beneficial uses. Second Am. Compl. ¶¶ 5, 13, ECF No. 13. Defendant ProTerra Solutions is a Florida limited liability company that advertised and promoted itself as having the requisite resources to design, furnish, and install integrated processing solutions for recyclers. Id. ¶¶ 6, 16. Defendants Stanley Gibson, Deborah Gibson, and Mark Lafon are members/managers of Proterra. Id. ¶¶ 7-9.[1]

         In December 2013, Agri-Marketing began discussions with ProTerra to engage the latter in designing, manufacturing, delivering, and installing an integrated processing solution to recycle drywall materials (i.e., a “recycling system”). Id. ¶ 17. ProTerra, by its agents and employees Mr. Gibson and Mr. Lafon, represented to Agri-Marketing that it had expertise in designing and fabricating equipment for solutions in the environmental processing industries, and specifically that it possessed the skill, staff, and expertise necessary to design, manufacture, deliver, and install a recycling system. Id. ¶ 19. In May 2014, Agri-Marketing signed an Agreement with ProTerra, memorializing its acceptance of the latter's offer to design, furnish, and install an integrated processing solution (“the Recycling System”) for recovered wallboard material at Agri-Marketing's facility in Denver, Pennsylvania, in consideration of $886, 000. See Id. ¶¶ 22-25.[2] The Agreement includes a project overview, an extensive list of items to be provided by ProTerra, and payment terms, among other items. See Id. ¶¶ 28-36.

         From January to April 2015, ProTerra performed work related to the Recycling System, during which time Mr. Gibson frequently visited the jobsite and Mr. Lafon directed numerous emails and phone calls to Agri-Marketing in Pennsylvania and visited the jobsite on one occasion. Id. ¶¶ 43-52. In April 2015, ProTerra demanded a $100, 000 payment from Agri-Marketing, purportedly in order to pay vendors for work on the Recycling System. Id. ¶¶ 54-57. Agri-Marketing provided the payment but alleges, upon information and belief, that ProTerra did not use these funds to pay vendors or for any purpose related to the Recycling System. Id. ¶¶ 57-58.

         On or about April 3, 2015, ProTerra assured Agri-Marketing that the project would be complete on April 20, 2015, and that ProTerra's crew would stay until its completion. Id. ¶ 59. After ProTerra failed to complete the project by that date, Mr. Gibson visited the jobsite on May 20, 2015, and promised to return around May 26, 2015. Id. ¶¶ 65-67. Mr. Gibson never returned and the project remains incomplete. Id. ¶ 68.

         To date, Agri-Marketing has paid to ProTerra $817, 000 for the incomplete Recycling System. Id. ¶ 70. Agri-Marketing has experienced a number of failures with the Recycling System due to deficiencies in ProTerra's work and has communicated these failures to ProTerra, but has not received any response. Id. ¶¶ 71-102.

         Following the filing of the Agri-Marketing's initial Complaint in this matter, Ms. Gibson signed Articles of Dissolution for ProTerra, which were filed with the Florida Secretary of State in March 2017, stating that that the “occurrence that resulted in the limited liability company's dissolution” is “THIS COMPANY HAS BEEN INACTIVE FOR OVER A YEAR AND A HALF.” Id. ¶ 109. Agri-Marketing alleges that “[b]ased upon Defendant's communications and interactions with [Agri-Marketing] . . . it is believed that Defendants are intentionally seeking to dissolve business entities, shift assets, and otherwise evade their obligations to, and judgments entered in favor of, [Agri-Marketing] as against [ProTerra].” Id. ¶ 110. Further, “[a]s a result of the dissolution of [ProTerra], Defendants have extended their fraudulent conduct to the improper dissolution, winding up, and shifting of assets from [ProTerra] . . . and are continuing to perpetuate a fraud against [Agri-Marketing] in persisting in this course of conduct.” Id. ¶ 112.

         Based on these allegations, in Counts I and II of the Second Amended Complaint, Agri-Marketing asserts claims of breach of contract and breach of warranty against ProTerra only. In Counts III and IV, it asserts claims of fraud and fraudulent transfer against all Defendants, namely, ProTerra, Mr. Gibson, Ms. Gibson, and Mr. Lafon. Finally, in Count V, Agri-Marketing asserts an unjust enrichment claim against the individual Defendants only.

         B. Procedural Background

         Agri-Marketing filed its initial Complaint in this matter in February 2017. ECF No. 1. After Defendants filed a motion to dismiss, Agri-Marketing filed an Amended Complaint. ECF No. 7. Defendants again filed a motion to dismiss and Agri-Marketing moved to file a Second Amended Complaint. See ECF Nos. 9, 11. The Court granted the motion, permitting Agri-Marketing to file its Second Amended Complaint, but ordered that no further amendments would be permitted, absent good cause. ECF No. 12. Defendants now move to dismiss the Second Amended Complaint in its entirety due to improper venue. In the alternative, they move to dismiss the claims asserted in Counts III through V for failure to state a claim and (with respect to certain claims and Defendants) lack of personal jurisdiction.

         III. Standards of Review

         A. Rule 12(b)(1) Motion to Dismiss - Lack of Personal Jurisdiction

         “To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff bears the burden of establishing the court's jurisdiction over the moving defendants.” Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004) (citation omitted). If the court does not hold an evidentiary hearing, “the plaintiff need only establish a prima facie case of personal jurisdiction and the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its favor.” Id. (citation omitted).

         B. Rule 12(b)(6) Motion to Dismiss - Failure to State a Claim

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In rendering a decision on a motion to dismiss, this Court must “accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” See Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)) (internal quotation marks omitted).

         III. Analysis

         A. Venue is not improper in this Court.

         Defendants initially move to dismiss the Second Amended Complaint in its entirety for improper venue, pursuant to paragraph 13 of the Terms and Conditions of Sale provided on the final page of the Agreement between Agri-Marketing and ProTerra. That paragraph is titled “General” and provides in pertinent part as follows:

In the event Company places this agreement in the hands of an attorney for collection of the purchase price or other sums owing to Company from Purchaser, Purchaser agrees to pay Company's reasonable costs and expenses of collection, including attorney's fees, whether or not any suit or action is filed and any additional costs, expenses and attorneys' fees incurred at trial or on appeal. Purchaser consents to personal jurisdiction in Florida and venue in Hillsborough County Circuit Court. Statements about the product(s) may have been made to Purchaser by representatives of Company. Such statements do not constitute warranties and shall not be relied on by Purchaser and are not part of this agreement. The entire agreement is embodied in this writing. THIS WRITING CONSTITUTES THE FINAL EXPRESSION OF THE PARTIES AGREEMENT AND IS A COMPLETE AND EXCLUSIVE STATEMENT OF THE TERMS OF THE AGREEMENT.

Am. Compl. Ex. B, ECF Nos. 7-2 and 7-3.

         In particular, Defendants rely on the second sentence quoted above, which provides that “Purchaser [Agri-Marketing] consents to personal jurisdiction in Florida and venue in Hillsborough County Circuit Court.” Defendants contend that this is a “forum selection clause” that renders venue improper anywhere other than the Hillsborough County Circuit Court. Agri-Marketing responds that this clause is limited by the preceding sentence, such that the clause applies only to collection actions filed by the Company (ProTerra) against the Purchaser (Agri-Marketing). Defendants reply that the paragraph (which, they point out, is titled “GENERAL”) does not merely contain terms for ...

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