United States District Court, D. New Jersey
L. Wolfson, United States District Judge.
matter comes before the Court on five separate motions to
dismiss filed by (1) MCG Cane Bay, LLC ("MCG Cane
Bay"); (2) BMB-MCG, LLC ("BMB-MCG"); (3) BMB
Investments, LLC ("BMB Investments") and BOMA LC
("BOMA"); (4) Kory Reimann ("Mr.
Reimann"); and (5) Mark Brown ("Mr. Brown")
(cumulatively, the "moving
defendants").Specifically, these defendants seek to
dismiss Plaintiff Linus Holding Corp.'s ("Plaintiff
or "Linus") First Amended Complaint pursuant to,
inter alia, Federal Rule of Civil procedure 12(b)(2)
for lack of personal jurisdiction. Plaintiff attempts to
impose liability upon the moving defendants based on an
alleged contractual breach of an agreement entered into with
defendant Mark Line by claiming that the moving defendants
are alter egos of Mark Line. For the reasons set forth below,
the moving defendants' motions to dismiss are
BACKGROUND AND PROCEDURAL HISTORY
is a New York Corporation with a principal place of business
in Asbury Park, New Jersey, that acquires and develops real
property. Amended Complaint ("Am. Compl."), ¶
1. Mark Line, a limited liability company ("LLC"),
is a custom fabricator of modular units and buildings, and
its principal place of business is located in Indiana.
Id. ¶ 2. The other defendant entities are
affiliated with Mark Line and also maintain their principal
places of business outside of New Jersey, in Florida, Utah,
or Minnesota. Id. ¶¶ 2-10. Moreover, the
individual defendants, all of whom served in a corporate
capacity at either Mark Line or an affiliated entity, do not
reside in New Jersey. M ¶¶ 11-15.
alleged in the Amended Complaint, on January 13, 2016, Linus
entered into a Manufacturer's Development Agreement
("MDA") with Mark Line. Id. ¶ 22.
Pursuant to its terms, Linus tendered $37, 125 in exchange
for Mark Line agreeing to produce design documents for
modular units. Id. Linus intended to utilize those
documents in connection with the development of a mixed-use
building, including forty-eight residential units, in Asbury
Park, New Jersey (the "Project"). Id.
October 7, 2016, Linus entered into an additional contract
with Mark Line (the "Agreement"), for the
production and purchase of modular units for the Project.
Id. ¶ 23. According to Plaintiff, Mr. Remke and
Mr. Blockno, as the "Manager, Director, Principal,
and/or President" of Mark Line, negotiated the terms of
the Agreement. Id. ¶¶ H, 13, 24. Pursuant
to Paragraph 35 of the contract, Mark Line was required to
secure Performance and Payment Bonds ("Bonds") in
order to guarantee its obligations under the Agreement and
protect Linus's interests. Id. ¶¶
24-25. The Bonds also served as a prerequisite to Linus's
obligation to tender a 20% deposit in the amount of $790,
000, the payment of which was allegedly necessary for Mark
Line to purchase Project materials. Id. ¶¶
October 12, 2016, notwithstanding the receipt of Linus's
deposit, Plaintiff alleges that Mark Line failed to obtain
the Bonds. Id. ¶ 30. In fact, according to
Plaintiff, Mark Line did not possess such an ability when it
executed the Agreement, because it had a negative cash flow
and insufficient funds. Id. ¶ 32. In that
connection, Mark Line allegedly required Linus's deposit
for the purpose of covering payroll, as opposed to the
purchase of materials for the Project. Id. ¶
33. On March 24, 2017, Linus ultimately terminated the
Agreement, as a result of Mark Line's alleged failure to
obtain the Bonds and, in turn, demanded the immediate
reimbursement of the $790, 000 deposit and initial $37, 125
payment. Id. ¶ 39. However, Mark Line allegedly
refused to comply with these requests. Id. ¶
Plaintiff alleges that from 2016 through 2017, Mark Line
transferred "for little or no consideration"
significant sums of money to its corporate parents and other
related entities, including: (a) $28, 000 to BMB Investments
and BMB-MCG in October of 2016; (b) $770, 000 to Mosaic
Capital in 2016 and 2017; (c) $130, 000 to Dignicare in 2016;
(d) $390, 000 to Earth Trades in March and April of 2016; (e)
$100, 000 to Mosaic Development Corp. in the fall and winter
of 2016; and (f) $304, 000 to MCG Cane Bay in 2016 and 2017.
Id. ¶ 43(a-g). According to Plaintiff, these
transfers violated Mark Line's Operating Agreement,
and, as a consequence, it became undercapitalized and
"unable to satisfy [the] bonding condition" under
the terms of the Agreement. Id. ¶¶ 53-54.
Plaintiff alleges that, at the direction of Mr. Reimann and
Mr. Blockno, Mark Line manipulated its financial statements
in order to appear financially sound and sufficiently liquid.
Id. ¶ 60.
24, 2017, as a result of these events, Plaintiff filed the
instant action. The thirteen-count Amended Complaint asserts
the following claims against the corporate and individual
defendants: (1) breach of contract; (2) conversion; (3)
unjust enrichment; (4) breach of the duty of good faith and
fair dealing; (5) alter ego; (6) piercing the corporate veil;
(7) fraudulent inducement and misrepresentation; (8)
negligent misrepresentation; (9) fraud pursuant to the New
Jersey Consumer Fraud Act; (10) accounting of funds; (11)
fraudulent transfers; (12) breach of fiduciary duties; and
(13) corporate waste.
MCG Cane Bay, BMB-MCG, BMB Investments, BOMA, as well as Mr.
Reimann and Mr. Brown, separately move for dismissal. The
moving defendants, among other things, challenge this
Court's lack of personal jurisdiction over them.
Plaintiff has opposed the motions.
Standard of Review
withstand a motion to dismiss for lack of personal
jurisdiction under Federal Rule of Civil Procedure 12(b)(2),
a plaintiff bears the burden of establishing the court's
personal jurisdiction over the moving defendant by a
preponderance of the evidence. D 'Jamoos ex rel.
Estate of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d
94, 102 (3d Cir. 2009); see Cerciello v. Canale, 563
Fed.Appx. 924, 925 n.l (3d Cir. 2014) (noting that the
plaintiff'"bears the burden to prove, by a
preponderance of the evidence,' that personal
jurisdiction is proper.") (citation omitted).
"However, when the court does not hold an evidentiary
hearing on the motion to dismiss, 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." Miller
Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir.
2004). Still, to meet its burden, the plaintiff must
establish "jurisdictional facts through sworn affidavits
or other competent evidence. . . . [A]t no point may a
plaintiff rely on the bare pleadings alone in order to
withstand a defendant's Rule 12(b)(2) motion to dismiss
for lack of in personam jurisdiction." Id. at
101 (citation and internal quotation marks omitted). If the
plaintiff meets this burden, "the burden shifts to the
defendant to establish the presence of other considerations
that would render the exercise of personal jurisdiction
unreasonable." Display Works, LLC v. Bartley,
182 F.Supp.3d 166, 172 (D.N.J. 2016); Mellon Bank (E.)
PSFS, Nat. Ass'n v. Farino, 960 F.2d 1217, 1226 (3d
district court sitting in diversity may assert personal
jurisdiction over a nonresident defendant to the extent
allowed under the law of the forum state." Metcalfe
v. Renaissance Marine, Inc.,566 F.3d 324, 330 (3d Cir.
2009); see Fed. R. Civ. P. 4(e). In assessing
whether personal jurisdiction exists, the Court's
analysis is twofold: "[t]he court must first determine
whether the relevant state long-arm statute permits the
exercise of jurisdiction; if so, the court must then satisfy
itself that the exercise of jurisdiction comports with due
process." Display Works, 182 F.Supp. at 172.
"Since New Jersey's long-arm statute allows 'the
exercise of personal jurisdiction to the fullest limits of
due process,' [the Court must] 'look to federal law
for the interpretation of the limits on ...