DGVAULT, LLC v. DUNNE

CourtDistrict Court, D. New Jersey
DecidedJanuary 6, 2020
Docket2:18-cv-14152
StatusUnknown

This text of DGVAULT, LLC v. DUNNE (DGVAULT, LLC v. DUNNE) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DGVAULT, LLC v. DUNNE, (D.N.J. 2020).

Opinion

Not for Publication

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

DG VAULT, LLC.,

Plaintiff, Civil Action No. 18-14152 (ES) (MAH)

v. OPINION

WILLIAM DUNNE, et al.,

Defendants.

SALAS, DISTRICT JUDGE

Before the Court is defendants William Dunne (“William”), Kyle Dunne (“Kyle”), and ArcoInfo, Inc.’s (“Arco”) (collectively, “Defendants”) motion to partially dismiss DGVault, LLC’s (“Plaintiff”) Complaint for lack of personal jurisdiction, improper venue, and for failure to meet the particularity requirements of Federal Rule of Civil Procedure 9(b). (D.E. No. 23). In the alternative, Defendants ask the Court to transfer this matter to the United States District Court for the Middle District of Florida pursuant to 28 U.S.C. § 1404. (Id.). Plaintiff opposed the motion (D.E. No. 24), and Defendants replied (D.E. No. 26). The Court has reviewed the parties’ submissions and decides this motion without oral argument. Fed. R. Civ. P. 78(b); L. Civ. R. 78.1(b). For the reasons that follow, the Court will transfer this matter to the Middle District of Florida pursuant to 28 U.S.C. § 1404(a). I. Background On May 8, 2017, Plaintiff and DGV Acquisition LLC (“DGVA”) executed an Asset Purchase Agreement (“APA”). (D.E. No. 13 (“Am. Compl.”) ¶ 2). Plaintiff is a Delaware limited liability company and its principal place of business is in Edison, New Jersey. (Id. ¶ 4). DGVA is a Texas limited liability company, and as of May 2017 its principal place of business is in Poinciana, Florida. (D.E. No. 23-2 ¶ 9). William, as one of the owners of DGVA, was an individual signatory to the APA. (Id. ¶ 16). The APA memorialized the sale of certain assets of DGVA to Plaintiff, including customer lists and customer accounts. (Am. Compl. ¶ 17). One of these accounts was a contract with a customer named MCCi, a Florida company. (See id. ¶¶ 28 &

30; D.E. No. 2-2 at 28 (CM/ECF Pagination)). Moreover, the APA contains a New York choice of law provision. (D.E. No. 2-2 at 22 (CM/ECF Pagination)). It appears that some of the negotiations leading up to the APA occurred in New Jersey (see D.E. No. 24-1 ¶ 3), although it is unclear where the APA was executed or whether any performance occurred in New Jersey. Moreover, at the time the APA was being negotiated, William lived in Lombard, Illinois, while when the APA was signed he lived in Poinciana, Florida, where he still resides today. (D.E. No. 23-2 ¶ 8). In any event, William personally agreed that as of May 8, 2017, and for five years thereafter, he would not engage in a competing business, as defined by the APA. (See Am. Compl. ¶¶ 2 & 20). William also agreed not to solicit or do competing business with Plaintiff’s customers,

particularly the customers sold through the APA. (Id. ¶¶ 2 & 26). After singing the APA, William became an outside salesperson for Plaintiff and Plaintiff’s parent company. (See id. ¶¶ 34–36 & 84). As part of his employment, he was tasked with traveling to customer sites, introducing customers to the acquiring company, transitioning and facilitating those relationships, and making sales for Plaintiff until his retirement. (Id. ¶ 34). William held this position until his termination on June 28, 2018. (Id. ¶ 36). Concurrently, William’s son, Kyle, also became an employee of Plaintiff. (Id. ¶ 40; D.E. No. 23-4 ¶ 2). From May 2017 through September 2017, Kyle worked at Plaintiff’s office in Carol, Illinois. (D.E. No. 23-4 ¶ 3). In September 2017, Kyle began to work at Plaintiff’s office

in Tampa, Florida, where he remained until his termination on August 15, 2018. (Id.). Kyle has lived in Wesley Chapel, Florida, since September 2017. (Id. ¶ 4). Notably, Kyle has been in New Jersey only once; in May 2017 when he traveled to Plaintiff’s office in Carlstadt, New Jersey, for five days as part of his work duties. (Id. ¶ 5). Moreover, from December 20, 2017, through his termination, Kyle’s responsibilities were limited to Plaintiff’s business in Florida. (Id. ¶¶ 7 & 8).

Plaintiff alleges that during his employment, William operated certain entities (including Sri IIST, Inc; Digital Concepts Org. LLC1; and DGVA) to conduct imaging work for Plaintiff’s customers, in violation of the APA. For instance, Plaintiff alleges that William was listed on Sri IIST’s website as its president and CEO, and that between July 2017 and the Spring of 2018, William used a Sri IIST email address to email certain customers, including MCCi. (Am. Compl. ¶¶ 46–47). Plaintiff also asserts that William steered imaging jobs away from Plaintiff to Digital Concepts and DGVA. (Id. ¶¶ 49 & 51–52). Specifically, Plaintiff asserts that William used these entities to provide services to MCCi. (Id. ¶¶ 46–52). The undisputed record reflects that this work was performed in Texas; the invoices to MCCi were prepared by William in his home-office in Poinciana, Florida, and sent to MCCi’s office in Tallahassee, Florida; and William received all

payments at his home-office in Poinciana, Florida. (D.E. No. 23-2 ¶ 14). Thus, none of this activity occurred in New Jersey. Plaintiff also contends that on January 17, 2018, William incorporated Defendant Arco. (Am. Compl. ¶ 57). Arco is a Delaware limited liability company with a principal place of business in New York. (D.E. No. 23-2 ¶ 3). William is Arco’s president, and he works for Arco out of his home-office in Poinciana, Florida. (Id. ¶ 2). Kyle also works for Arco out of his home in Wesley Chapel, Florida. (D.E. No. 23-4 ¶ 11). Additionally, in the form registering Arco to do business in New York, William instructed the New York Department of State to mail service of process to

1 Digital Concepts is a Florida limited liability company with a principal place of business in Poinciana, Florida. (D.E. No. 23-2 ¶ 13). his home address in Poinciana, Florida. (Am. Compl. ¶ 58). Plaintiff alleges that in August and September 2018, William and Kyle exchanged emails with certain individuals about soliciting business for Arco from customers covered by the APA, including Tech Pro Solutions. (Am. Compl. ¶¶ 60–61). The undisputed record reflects that these

emails originated in Florida, and none of the participants and customers identified in those emails are located in New Jersey. (See D.E. No. 23-2 ¶ 7). Moreover, the undisputed record shows that Arco has no clients or office in New Jersey, and that since its inception it has had only two clients: one in Wilmington, North Carolina, and another in Tampa, Florida. (Id. ¶ 6). Based on these allegations, Plaintiff’s Amended Complaint asserts five counts: Count I – breach of contract against William; Count II – breach of loyalty against William and Kyle; Count III – fraud against William; Count IV – tortious interference with contractual relationship against William; and Count V – tortious interference with contractual relationship against Kyle and Arco. (Am. Compl. ¶¶ 77–111). II. Legal Standard

While “[t]he question of personal jurisdiction, which goes to the court’s power to exercise control over the parties, is typically decided in advance of venue . . . a court may reverse the normal order of considering personal jurisdiction and venue.” Leroy v. Great W. United Corp., 443 U.S. 173, 180 (1979).

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