United States District Court, D. New Jersey
MEMORANDUM AND ORDER
G. SHERIDAN, U.S.D.J.
before the Court is Defendants Cell-U-More, Inc. and Roy
Davoult's Motion to Dismiss Plaintiff Alex
Shnayderman's Complaint pursuant Federal Rules of Civil
Procedure 12(b)(1), 12(b)(2) and 12(b)(6). (ECF No. 6). For
the reasons discussed herein, Defendants' Motion to
Dismiss is granted in part and denied in part.
case arises from a dispute between former business partners
and friends. Plaintiff Alex Shnayderman, a New Jersey
resident, brings this matter against Defendants Roy Davoult
and Cell-U-More, based on a purported breach of contract.
According to the Complaint, Davoult, a Texas resident and
owner of Cells-U-More, approached Plaintiff about obtaining a
$200, 000 loan. (Complaint at ¶ 6). Apparently,
Cells-U-More, a Texas mobile phone business with its
principal place of business in Texas, had fallen on hard
times and Davoult needed additional funding to help keep his
business afloat. (Id. at ¶¶ 7-8). In June
2013, Davoult flew to New Jersey to meet with Plaintiff to
"further solicit" a loan from him. (Id. at
¶ 10). Once at Plaintiffs home, the two reached an oral
agreement, whereby Plaintiff would extend a $200, 000 loan to
Davoult, "with a terms of repayment of the loan in a
short period of time and Defendant Davoult personally
guaranteeing repayment of the loan." (Id. at
¶ 11). After orally agreeing to the terms of the loan,
Plaintiff wired $200, 000 from his account to
Cells-U-More's on July 10, 2013. (Id. at ¶
12). Thereafter, Defendants purportedly failed to timely
repay Plaintiff; as such, Plaintiff now brings this
four-count complaint, alleging: (1) breach of contract; (2)
legal fraud; (3) equitable fraud; (4) unjust enrichment; and
seeking to demonstrate a lack of personal jurisdiction,
Defendants attach Davoult's declaration to their Brief in
Support of their Motion to Dismiss. (ECF No. 6-2). As
background, Davoult explained that he and Plaintiff were
co-owners of a junior hockey team, the Wichita Falls
Wildcats, which was worth approximately $400, 000.
(Id. at ¶ 7, 41). According to Davoult,
Cells-U-More's business is limited to its retail
locations in Texas, Oklahoma, Kansas and Nebraska.
(Id. at ¶¶ 12, 15). In addition, Davoult
avers that Cells-U-More has never done business in, or
solicited customers from, New Jersey; nor has Cells-U-More
"had any meaningful, systematic, or continuous contacts
with New Jersey or New Jersey's residents."
(Id. at ¶ 15). Regarding the party's loan
agreement, Davoult disclaims having ever solicited a loan
from Plaintiff; instead, he claims:
In June 2013, [Plaintiff] and I had a telephone
conversation to discuss our team. I was in Texas for that
phone call. On a personal note, during the call I informed
him that [Cells-U-More] was not doing well, which was putting
a financial strain on me and the business, and therefore, I
was considering selling my ownership interest in the
Wildcats, which was then valued at about $200, 000.
Without my requesting or prompting, [Plaintiff] offered to
help after citing the growing success of his medical billing
business and asked me how much money we needed.
(Id. at ¶¶ 21-22). According to Davoult,
the terms of the agreement were that Plaintiff would wire
$200, 000 to him and, in exchange, Plaintiff would receive
Davoult's share of the team, if they were to sell it.
(Id. at ¶¶ 23-24). In any event, Davoult
claims that in late June 2013, Plaintiff invited him to New
Jersey to see an ice hockey rink that he recently purchased
and a New Jersey junior hockey team that he was interested in
acquiring. (Id. at ¶ 29). Davoult averred that
the trip was purely personal and no discussions regarding the
loan were ever made. (Id. at ¶¶ 28,
response to Defendants' motion, Plaintiff attached a
declaration seeking to establish personal jurisdiction. (ECF
No. 8-1). Contrary to Davoult's declaration, Plaintiff
claims that Davoult's New Jersey trip was not strictly
personal. (Id. at ¶ 4). According to Plaintiff,
during Davoult's visit, he mentioned the financial
difficulties he was experiencing with Cells-U-More and that
he needed $200, 000 to keep the business in operation.
(Id.). Plaintiff expressed concern for Davoult's
financial situation, and mentioned that he may be able to
help him, although no agreement was made. (Id. at
¶ 5). Apparently, after returning to Texas, Davoult
continued to contact Plaintiff about providing the $200, 000
and, eventually, Plaintiff agreed. (Id. at ¶
6). According to Plaintiff, as conditions for the loan,
Davoult agreed to provide a personal financial statement and
assurances. (Id. at ¶ 7). Satisfied with
Davoult's financial statements, Plaintiff wired him the
money through one of his business accounts, ACB Receivables
Management, Inc. (Id. at ¶15).
Federal Rule of Civil Procedure 12(b)(1)
Federal Rules of Civil Procedure 12(b)(1) a claim can be
dismissed for "lack of jurisdiction over the subject
matter." "A motion to dismiss for lack of standing
is also properly brought pursuant to Rule 12(b)(1), because
standing is a jurisdictional matter." Federman v.
Bank of Am., N.A., No. 14-0441, 2014 U.S. Dist.
LEXIS 175565, at *10 (D.N.J. Dec. 16, 2014) (quoting
Ballentine v. United States, 486 F.3d 806, 810 (3d
Cir. 2007). "When subject matter jurisdiction is
challenged under Rule 12(b)(1), the plaintiff must bear the
burden of persuasion." Hedges v. United States,
404 F.3d 744, 750 (3d Cir. 2005) (quoting Kehr Packages,
Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir.
Defendants contend that because ACB Receivables was the party
that provided the loan to Davoult, not Plaintiff, he lacks
standing to assert any claims. The Court disagrees.
III of the United States Constitution 'limits the
jurisdiction of federal courts to "Cases" and
"Controversies." Edmonson v. Lincoln Nat'l
Life Ins. Co., 725 F.3d 406, 414 (3d Cir. 2013) (quoting
Lujan v. Defenders of Wildlife, 504 U.S. 555, 559
(1992)). To establish Article III standing, a plaintiff must
allege: "(1) an injury in fact'; (2) 'a causal
connection between the injury and the conduct complained of-
the injury has to be fairly traceable to the challenged
action of the defendant, and not the result of the
independent action of some third party not before the
court'; and (3) a showing that it 'be likely, as
opposed to merely speculative, that the injury will be
redressed by a favorable decision.'" N.J.
Physicians, Inc. v. President of the U.S., 653 F.3d 234,
238 (3d Cir. 2011).
Plaintiff, not ACB Receivables Management, entered an
agreement with Davoult to wire money to him. In doing so,
Plaintiff authorized ABC Receivables to forward the funds to
Davoult. Since forwarding the loan proceeds, Davoult has
failed to make Plaintiff whole. As such, Plaintiff
established Article III standing, since he suffered injury in
fact by providing money through ABC Receivables to Davoult,
and Davoult failing to perform his end of the agreement. As
such, the Court will not dismiss Plaintiffs Complaint for
lack of standing. However, the parties may re-open the
standing issue after discovery if a fact question arises
about Plaintiffs ownership and control of the funds.
Federal Rule of Civil ...