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Robert Coyle, et al v. Manilal Mathai

November 18, 2011

ROBERT COYLE, ET AL.,
PLAINTIFFS,
v.
MANILAL MATHAI, ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: Honorable Joseph E. Irenas

OPINION

IRENAS, Senior District Judge:

Plaintiffs Robert Coyle, Jr., Apex Property Solutions LLC ("Apex"), and Brownstone Property Group LLC ("Brownstone") initiated this action to recover for an alleged breach of a Non-Disclosure Agreement.*fn1 Defendants move to dismiss the Complaint for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2) and for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6).

I.

Plaintiff Coyle is the President of Apex and Brownstone, which provide real estate brokerage services. (Compl. ¶ 12.) Named as Defendants in this action are Manilal Mathai ("Mathai"), his wife, Daisy Mathai, and several entities of which Mathai is President, including MD Investment Group, Inc. ("MD"), GCG Investments, Inc. ("GCG"), GNE Properties I, Inc. ("GNE I"), and GNE Properties II ("GNE II")(collectively "the Entity Defendants"). (Id. ¶¶ 5-9, 15.)

On September 1, 2010, Coyle and Mathai entered into a Non-Disclosure Agreement (the "Agreement") to ensure the confidentiality of information exchanged "for the purpose of preliminary business discussions relating to: any and all Real Estate Business transactions." (Id. ¶¶ 16-17.) The Agreement prohibits Mathai from disclosing confidential information to third parties and also from "us[ing] or exploit[ing] the Confidential Information for [his] own business or for any other business in which [he is] involved in any capacity." (Id. Ex. A.)

Following execution of the Agreement, Coyle and Mathai entered into negotiations for the purchase of real estate whereby Coyle would act as the agent for the transaction through one of his brokerage agencies. (Id. ¶ 20.) The subject of the negotiations was 65 properties (the "Properties") owned by Coyle's father, Robert N. Coyle, Sr., and several entities through which Coyle, Sr. did business. (Id.) The mortgage for the Properties was held by Nova Bank, d/b/a Pennsylvania Business Bank ("Nova Bank"), which in March 2009 obtained a judgment against Coyle, Sr. and several of his entities, and initiated foreclosure proceedings. (Id. ¶¶ 29, 32.) According to the Complaint, during these negotiations, Coyle revealed confidential information to Mathai, "including the identification of parties who had an interest, financial or otherwise, in the sale of the Properties." (Id. ¶¶ 26-27.)

On September 21, 2010, a letter of intent to purchase the Properties was executed by Mathai on behalf of GCG and by Coyle on behalf of Apex, the agent for the sale. (Id. ¶ 21; Ex. B.)

On October 19, 2010, a contract was executed for the sale of the Properties from Coyle, Sr. and his entities to GCG Investments, Inc. with Brownstone acting as the brokerage company and Coyle as the agent.*fn2 (Id. ¶¶ 23-25; Ex. C.) However, Mathai never purchased the Properties pursuant to this contract.*fn3

Instead, in July 2011, Mathai, through GNE I and GNE II, purchased the Properties from Nova Bank. (Id. ¶ 34.)

On September 9, 2011, Plaintiffs initiated the instant action in this Court. The Agreement contains a forum selection clause that provides: "All claims, controversies and disputes arising out of or relating to this Agreement shall be brought exclusively in the courts, state and Federal, located in Gloucester County, New Jersey."*fn4 (Compl. Ex. A at 2.)

The Complaint alleges that "Mathai used confidential information protected under the Agreement . . . to leapfrog the Plaintiffs and obtain title to the Property through means not previously disclosed to or sanctioned by Coyle." (Id. ¶ 37.) In addition, Plaintiffs believe that "Mathai has used the confidential information he gained from Coyle to enter into negotiations to purchase Republic Bank's interest in other properties owned by Coyle, Sr.--without consulting or seeking the consent of Coyle, as is required under the Agreement." (Id. ¶ 39.)

On October 4, 2011, Defendants filed a Motion to Dismiss the Complaint. Defendant Daisy Mathai and the Entity Defendants move to dismiss for lack of personal jurisdiction and Defendant ...


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