Berkeley Research Group, LLC v. Southern Advanced Materials, LLC

CourtCourt of Appeals of Tennessee
DecidedAugust 9, 2024
DocketW2023-00720-COA-R3-CV
StatusPublished

This text of Berkeley Research Group, LLC v. Southern Advanced Materials, LLC (Berkeley Research Group, LLC v. Southern Advanced Materials, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Berkeley Research Group, LLC v. Southern Advanced Materials, LLC, (Tenn. Ct. App. 2024).

Opinion

08/09/2024 IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON April 10, 2024 Session

BERKELEY RESEARCH GROUP, LLC v. SOUTHERN ADVANCED MATERIALS, LLC

Appeal from the Chancery Court for Shelby County No. CH-22-1433-II Jim Kyle, Chancellor ___________________________________

No. W2023-00720-COA-R3-CV ___________________________________

Defendant appeals the trial court’s decision to deny its motion to dismiss for lack of personal jurisdiction and grant the plaintiff’s motion to confirm an arbitration award. Because we conclude that the plaintiff failed to establish that the trial court had either specific or general jurisdiction over this matter, we reverse.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Reversed and Remanded

J. STEVEN STAFFORD, P.J., W.S., delivered the opinion of the court, in which ARNOLD B. GOLDIN, and CARMA DENNIS MCGEE, JJ., joined.

Philip B. Seaton, Memphis, Tennessee, for the appellant, Southern Advanced Materials, LLC.

David Mendelson and Adam M. Nahmias, Memphis, Tennessee, for the appellee, Berkeley Research Group, LLC.

OPINION

I. FACTUAL AND PROCEDURAL BACKGROUND

On or about April 4, 2019, Plaintiff/Appellee Berkeley Research Group, LLC (“Plaintiff”) and Defendant/Appellant Southern Advanced Materials, LLC (“Defendant”) entered into an Engagement Agreement for Expert Consulting Services (“the Agreement”). The purpose of the Agreement was to engage Plaintiff and an expert employed thereby for expert consulting and support services in a New York litigation between Defendant and a third-party. In addition to detailed terms governing the work to be performed and the parties’ contractual obligations, the Agreement contained the following provision:

This Agreement shall be interpreted and controlled by the laws of the state of Delaware. Any controversy, dispute, or claim between [Defendant] on the one hand and [Plaintiff] on the other hand of whatever nature arising out of, in connection with, or in relation to the interpretation, performance or breach of this agreement, including any claims based on contract, tort, or statute, (“Claims”) shall be resolved at the request of any party to this agreement, by final and binding arbitration, administered by Judicial Arbitration & Mediation Services, Inc. (JAMS), . . . , and judgment upon any award rendered by the arbitrator may be entered by any State or Federal Court having jurisdiction thereof. Any such arbitration shall take place exclusively in Philadelphia, PA. . . .

In September and November 2019, Defendant paid at least three invoices arising from work performed under the Agreement out of an office and bank account located in Memphis, Tennessee. In July 2020, a dispute arose between the parties related to Defendant’s alleged non-payment of additional invoices submitted under the Agreement.

Pursuant to the Agreement, the parties entered into binding arbitration as to the dispute. The arbitration occurred virtually on October 26–27, 2021. On August 2, 2022, the arbitrator issued a final ruling in favor of Plaintiff for a total award of $433,815.34.

On October 17, 2022, Plaintiff filed a petition in the Shelby County Chancery Court (“the trial court”) to confirm the arbitration award and enroll the award as a judgment. The petition alleged that the trial court had personal and subject matter jurisdiction to confirm the arbitration award and render judgment in favor of Plaintiff pursuant to the award. The petition finally sought an award of attorney’s fees.

On November 17, 2022, Defendant filed a motion to dismiss the petition to confirm the arbitration award, arguing that the trial court lacked both personal and subject matter jurisdiction, that venue was improper, and that the Agreement “reserves all rights to adjudicate jurisdiction and venue to the State of Delaware.”

In support of its motion, Defendant filed a memorandum of law, a statement of undisputed facts,1 the affidavit of William P. Wells, Defendant’s Manager, and various exhibits. The argument in Defendant’s memorandum was essentially two-fold. First, Defendant asserted that the Agreement mandated that the arbitration be confirmed and enrolled only in Delaware. Second, Defendant asserted that Tennessee lacked sufficient

1 Plaintiff later objected to the statement of undisputed facts, as improperly filed in connection with a motion to dismiss. -2- contacts with Defendant so as to confer personal jurisdiction over Defendant in this matter.

As to the issue of minimum contacts, Mr. Wells stated in his affidavit that Defendant was a Delaware limited liability company (“LLC”); that Defendant’s sole purpose was to invest in another company, CV Holdings, LLC (“CV Holdings”), a Delaware LLC with its principal place of business in Alabama; that neither Defendant nor CV Holdings conduct any business Tennessee; that Defendant “maintains an office in Memphis, Tennessee for administrative purposes only”; that the subject of the Agreement was a New York litigation that had no connection with Tennessee whatsoever, including the subject matter, the parties, or the attorneys; and that Plaintiff also had no contact with Tennessee, including during the performance of the Agreement or the arbitration. Defendant supported its filings with a print-out from the Delaware Division of Corporations indicating that Defendant was incorporated as an LLC in Delaware on July 24, 2001; the document stated, however, that it was “not a statement of good standing.”

Plaintiff filed a response in opposition to the motion to dismiss on December 9, 2022. Therein, Plaintiff first asserted that the Agreement did not mandate that the arbitration be confirmed in Delaware alone, but any state with jurisdiction. Plaintiff further argued that personal jurisdiction was proper in Tennessee, as Mr. Wells admitted in his affidavit that Defendant maintains an office in Memphis, Tennessee. Plaintiff attached three checks that it had received pursuant to the Agreement from Defendant’s Memphis office, dated September 23, 2019, November 1, 2019, and November 15, 2019.

Plaintiff further asserted that records from the Tennessee Secretary of State demonstrate that Defendant was formed as a Tennessee LLC in 2001 with a registered agent for service of process located in Memphis and a “Principal Address” at the same location. According to Plaintiff, however, Defendant suffered from “administrative revocation for failure to make necessary payments to the Tennessee Department of Revenue in 2003 (and presumably thereafter).” In the attached print-out from Tennessee’s Secretary of State website, the following was noted:

I, Tre Hargett, Secretary of State of the State of Tennessee, do hereby certify that that [Defendant], Control # 411033 was formed or qualified to do business in the State of Tennessee on 7/11/2001. [Defendant] has a home jurisdiction of TENNESSEE and is currently on an Inactive – Revoked (Revenue) status.

The print-out indicated that the last time annual reports had been filed for Defendant in Tennessee was on or about March 7, 2003. However, the records also showed that on February 4, 2003, a “Dissolution/Revocation – Revenue” occurred.

Eventually, the trial court held oral argument on the competing motions on April 11, 2023. On April 21, 2023, the trial court entered an order denying Defendant’s motion -3- to dismiss, confirming the arbitration award, and enrolling the arbitration award as a judgment. Defendant thereafter filed a notice of appeal to this Court. Following an order from this Court questioning the finality of the trial court’s judgment, on September 8, 2023, the trial court entered an agreed order awarding Plaintiff $12,500.00 in attorney’s fees.

II. ISSUE PRESENTED

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Bluebook (online)
Berkeley Research Group, LLC v. Southern Advanced Materials, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/berkeley-research-group-llc-v-southern-advanced-materials-llc-tennctapp-2024.