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TELESIS MERGERS & ACQUISITIONS, INC. v. ATLIS FED.

February 20, 1996

TELESIS MERGERS & ACQUISITIONS, INC., Plaintiff,
v.
ATLIS FEDERAL SVCS, INC., NATIONAL NURSES SERVICE, INC., Defendants.



The opinion of the court was delivered by: LECHNER

 LECHNER, District Judge

 This is a breach of contract action by plaintiff Telesis Mergers and Acquisitions, Inc. ("Telesis"), seeking $ 192,681.00 plus interest, attorneys' fees and costs from defendants Atlis Federal Services, Inc. ("Atlis") and National Nurses Service, Inc. ("NNS") (collectively, the "Defendants"). Removal jurisdiction is alleged pursuant to 28 U.S.C. § 1441(a) ("Section 1441(a)").

 Currently before the court is the question whether this matter should be remanded to the Superior Court of New Jersey, Law Division, Bergen County (the "Superior Court") pursuant to 28 U.S.C. § 1447(c) ("Section 1447(c)"). Also before the court is the question whether this matter should be transferred to the United States District Court for the District of Maryland (the "U.S. District Court, Maryland"). *fn1" For the reasons set forth below, this matter is transferred to the U.S. District Court, Maryland. *fn2"

 Facts

 A. Background

 Telesis represents buyers and sellers of home health care and medical staffing businesses. Wittman Declaration, P 2. Telesis is a corporation organized and existing under the laws of the State of New Jersey with its principal place of business in Franklin Lakes, New Jersey. Id., P 8. Atlis is a corporation organized and existing under the laws of the State of Delaware with its principal place of business in Rockville, Maryland. Messenheimer Affidavit, P 5. NNS is a corporation organized and existing under the laws of the State of Delaware with its principal place of business in Silver Spring, Maryland. Id. P 4. Messenheimer is the president of NNS and the chairman and chief executive officer of Atlis. Id., PP 1-2. Until 30 June 1995, NNS was a wholly-owned subsidiary of Atlis. Id., P 2; Wittman Declaration, P 2.

 On 23 January 1995, Atlis entered into a retention agreement with Telesis (the "Retention Agreement") to locate a buyer for NNS. Wittman Declaration, P 2 (stating both Atlis and NNS retained Telesis); id., Exhibit A (Retention Agreement); Messenheimer Affidavit, P 3 (stating the Retention Agreement was between Telesis and NNS). The Retention Agreement provided that Telesis would have "the sole and exclusive right to offer [NNS] for sale for a period of six months," from 1 February 1995 to 31 July 1995. Wittman Declaration, Exhibit A (Retention Agreement). At the end of that six-month period, Telesis would continue to have the sole and exclusive right to offer NNS for sale until NNS provided written notice to Telesis to cease such representation. Id. The Retention Agreement does not contain a forum selection or choice-of-law clause.

 Atlis entered into a stock purchase agreement (the "Purchase Agreement") with Mid-Atlantic Home Health Network ("Mid-Atlantic") on 30 June 1995. Wittman Declaration, P 4 & Exhibit B (Purchase Agreement); Messenheimer Affidavit, PP 3, 9. Mid-Atlantic is a corporation organized and existing under the laws of the State of Nevada, with its principal place of business in Manassas, Virginia. Messenheimer Affidavit, P 9. Telesis was not involved with negotiating the Purchase Agreement, nor did Telesis participate in the closing of the Purchase Agreement, which occurred in Montgomery County, Maryland. Messenheimer Affidavit, P 11. Telesis states that pursuant to the Retention Agreement, NNS and Atlis owe it a commission of $ 197,681.00, less a $ 5,000.00 credit, for the Purchase Agreement with Mid-Atlantic. Wittman Declaration, P 5; id., P 3 ("The Retention Agreement granted Telesis the sole and exclusive right to offer NNS for sale ... and further provided that Telesis would be paid a commission if (among other things) '[NNS] is sold or exchanged through or as a result of [Telesis's] efforts or [NNS's] efforts, or the efforts of any other person during the period of this Agreement'") (quoting Retention Agreement).

 Messenheimer states the terms of the Retention Agreement were negotiated at the offices of NNS in Silver Spring, Maryland, with the exception of "a few brief telephone calls [Messenheimer] made to [Telesis] in New Jersey from [Messenheimer's] office in Maryland to finalize minor details...." Messenheimer Affidavit, P 7. Messenheimer states Roa, the president of Telesis, travelled to the offices of NNS in Maryland to negotiate the terms of the Retention Agreement and that "no meetings of the parties were held in New Jersey." Id. Messenheimer also states that NNS signed the Retention Agreement at its office in Maryland. *fn3" Id., P 8.

 Roa states Messenheimer initially solicited the assistance of Telesis in locating a purchaser for NNS. Roa Declaration, PP 2-4. In its submissions regarding transfer, Telesis also argues it performed the Retention Agreement in New Jersey. Wittman states: "Telesis performed its obligations under the Retention Agreement primarily and substantially in New Jersey, through the mails and by telephone." Wittman Declaration, P 11. Roa states the Defendants intended the Retention Agreement to be performed in New Jersey. Roa Declaration, PP 5-6. In support of that proposition, Roa cites a clause in the Retention Agreement, which states NNS "will reimburse Telesis for pre-authorized, reasonable travel expenses incurred in carrying out the terms of [the Retention Agreement]." Id.. P 6 (quoting Retention Agreement) (emphasis added in Roa Declaration). Roa states Messenheimer "made it clear that he did not want Telesis personnel traveling from New Jersey to Maryland, or anywhere else, as Telesis sought a purchaser for NNS." Id. Roa states Messenheimer insisted on including the above-quoted language in the Retention Agreement because that clause "assured him that if Telesis was to travel on [Defendants] behalf, [Messenheimer] would know about it ahead of time. Otherwise, at [Messenheimer's] insistence, Telesis was to conduct its business of (sic) [Defendants'] behalf in New Jersey." Id. (emphasis added in Roa Declaration).

 The Retention Agreement opens with the following language:

 
This will confirm the understanding between Telesis, [NNS] and its shareholders (the "Company") . . . .

 Wittman Declaration, Exhibit A (Retention Agreement). Roa states both Atlis and NNS are parties to the Retention Agreement because the passage quoted above includes shareholders of NNS and Atlis is the sole shareholder of NNS. Roa Declaration, P 7. Roa also states that, at the time the Retention Agreement was signed, Messenheimer was president of NNS and chairman and chief executive officer of Atlis. Id., P 8. "[Atlis], as NNS's parent, would be the direct beneficiary of the sale [of NNS] .... It was understood that Telesis was rendering service to both NNS and [Atlis] and that both NNS and [Atlis] would owe Telesis a commission if a sale [of NNS] occurred." Id.; see id., PP 9-10.

 The submissions of the parties address the location of witnesses and documents relevant to this breach of contract action. Wittman states that, at trial, Telesis intends to introduce testimony of Wittman, who resides in New York City, and Roa, who resides in Franklin Lakes, New Jersey. Wittman Declaration, P 8. Wittman states Roa expects to testify about the circumstances surrounding the consummation of the Retention Agreement. Wittman also states Roa expects to testify about the services Telesis expected to render to NNS and the calculation of Telesis' compensation under the Retention Agreement. Id., P 9. Wittman expects to offer testimony concerning "the activities Telesis undertook pursuant to the Retention Agreement to carry out its obligations," including its efforts to locate a purchaser for NNS. Id., P 10. "All of the documents upon which Telesis would rely at trial are located at Telesis's offices in Franklin Lakes." Id., P 11.

 Messenheimer states he was responsible for negotiating the Retention Agreement on behalf of NNS, subject to the approval of Cunningham. Messenheimer Affidavit, P 12. Messenheimer states he and Cunningham "are principal witnesses" in the instant matter and that they both reside and work in Montgomery County, Maryland. Id. Messenheimer also states that, as president of NNS, he is unable to spend a substantial amount of time away from his office in Maryland. Id., P 13. Messenheimer represents that all the business records relevant to the instant matter are located in Maryland, or at the offices of Mid-Atlantic or the parent company of Atlis, located in Virginia and Maryland, respectively. Id., P 14.

 Messenheimer states neither NNS nor Atlis has any offices, employees or customers in New Jersey, nor have NNS or Atlis ever transacted business in New Jersey. Messenheimer Affidavit, PP 4-5. Neither NNS nor Atlis has a telephone listing in New Jersey, nor do either of them advertise in New Jersey. Id., P 6.

 B. Procedural History

 On 25 August 1995, Telesis filed a complaint (the "Complaint") against Defendants in the Superior Court. Atlis and NNS both joined in the Notice of Removal (the "Notice of Removal"), which was filed on 21 September 1995. Defendants allege that the court has diversity jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a)(1) because the amount in controversy exceeds $ 50,000.00, exclusive of interest and costs, and the plaintiff and defendants are citizens of different states. Notice of Removal, PP 3-7. Defendants further allege that "NNS first received a copy of the Complaint without summons by mail at its principal office in Maryland" on 28 August 1995. Id., P 1. Defendants also allege "NNS was purportedly served in the action by certified mail delivery of a summons and Complaint" on 1 September 1995. Id., P 2. The Notice of Removal provides that "Atlis has not been served in this action." Id. The final paragraph of the Notice of Removal provides: "This Notice of Removal is being filed with the [Superior Court], by filing same ... within thirty (30) days after first receipt by any defendant of the Complaint in the action." Id., P 8.

 Discussion

 A. Removal Pursuant to 28 U.S.C. § 1446

 Under the general Federal removal statutes, an action brought in state court can be removed by a defendant to a Federal district court if that Federal court would have had original jurisdiction over the action. Section 1441(a). *fn4" A defendant seeking to remove a case must file "a notice of removal containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served." 28 U.S.C. § 1446(a) ("Section 1446(a)").

 The removing party must show Federal subject matter jurisdiction exists and removal is proper. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990), cert. denied, 498 U.S. 1085, 112 L. Ed. 2d 1046, 111 S. Ct. 959 (1991); Steel Valley Auth. v. Union Switch & Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987), cert. dism'd, 484 U.S. 1021, 108 S. Ct. 739, 98 L. Ed. 2d 756 (1988); Moore v. DeBiase, 766 F. Supp. 1311, 1315 n.5 ...


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