Haarslev, Inc. v. Christensen Machine, Inc. <b><font color="red"> Case Consolidated for Discovery All Non-Dispositive filings to be made in Lead Case 23-cv-2569</font></b>

CourtDistrict Court, D. Kansas
DecidedMarch 18, 2024
Docket2:23-cv-02575
StatusUnknown

This text of Haarslev, Inc. v. Christensen Machine, Inc. <b><font color="red"> Case Consolidated for Discovery All Non-Dispositive filings to be made in Lead Case 23-cv-2569</font></b> (Haarslev, Inc. v. Christensen Machine, Inc. <b><font color="red"> Case Consolidated for Discovery All Non-Dispositive filings to be made in Lead Case 23-cv-2569</font></b>) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Haarslev, Inc. v. Christensen Machine, Inc. <b><font color="red"> Case Consolidated for Discovery All Non-Dispositive filings to be made in Lead Case 23-cv-2569</font></b>, (D. Kan. 2024).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

HAARSLEV, INC., ) ) Plaintiff, ) CIVIL ACTION ) v. ) No. 23-2575-KHV ) CHRISTENSEN MACHINE, INC. ) ) Defendant. ) ____________________________________________)

MEMORANDUM AND ORDER

On November 30, 2023, in the District Court of Johnson County, Kansas, plaintiff filed suit against Christensen Machine, Inc. (“CMI”), alleging breach of contract (Count I), unjust enrichment (Count II), negligent misrepresentation (Count III) and fraudulent misrepresentation (Count IV). See Petition (Doc. #1-1) filed December 28, 2023. On December 28, 2023, defendant removed the case to federal court based on diversity jurisdiction. See Notice Of Removal (Doc. #1). This matter comes before the Court on Defendant Christensen Machine, Inc.’s Motion To Dismiss And Memorandum In Support (Doc. #10) filed January 18, 2024. For reasons stated below, the Court overrules defendant’s motion. Legal Standard

When defendant files a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2), Fed. R. Civ. P., plaintiff bears the burden to establish personal jurisdiction over defendant. Rockwood Select Asset Fund XI (6)-1, LLC v. Devine, Millimet & Branch, 750 F.3d 1178, 1179–80 (10th Cir. 2014). At these preliminary stages of litigation, plaintiff’s burden to prove personal jurisdiction is light. AST Sports Sci., Inc. v. CLF Distrib. Ltd., 514 F.3d 1054, 1056 (10th Cir. 2008). To defeat the motion, plaintiff need only make a prima facie showing of personal jurisdiction. Id. Plaintiff can do so by showing facts, through affidavit or other written materials, that if true would support jurisdiction over defendant. Id.; see also Wenz v. Memery Crystal, 55 F.3d 1503, 1508 (10th Cir. 1995) (plaintiff can support jurisdictional allegations “by competent proof”). When evaluating the prima facie case, the Court must resolve all factual disputes in favor of plaintiff. AST Sports, 514 F.3d at 1056.

Factual Background

Plaintiff’s petition in Johnson County alleges as follows: Plaintiff is a North Carolina corporation that designs, manufactures, sells and installs equipment for the food, food byproducts and pet food industries. Plaintiff has its principal place of business in Lenexa, Kansas and is registered to do business in Kansas. Plaintiff employed Michael Chapple as Sales & Project Engineer. Chapple acted as project manager on the DemKota Project, a manufacturing and installation project in Aberdeen, South Dakota. Defendant, an Idaho corporation with its principal place of business in Heyburn, Idaho, is in the business of manufacturing and installing commercial food and food byproducts equipment. Before plaintiff hired him, Chapple worked in Idaho where he formed a connection with defendant and its then employee, Jeff Muir. While working for plaintiff, Chapple sought out defendant to produce certain pieces of food processing equipment for the DemKota Project. On September 20, 2021, defendant prepared and sent an initial quote for the project. The next day, Chapple approved Purchase Order #15795 for $1,200,000 to cover the manufacturing of equipment listed in defendant’s quote.1

1 In its motion to dismiss, defendant asks the Court to take judicial notice of plaintiff’s petition in a related suit, see generally Haarslev, Inc. v. Michael Chapple, No. 2:24-cv- 02003-KHV-RES (D. Kan.). Motion To Dismiss (Doc. #10) at 2 n.2. According to defendant, (continued . . .) On March 17, 2022, defendant asked Chapple about the scope of work to which the parties agreed in Purchase Order #15795. On March 18, 2022, defendant sent plaintiff a Bill of Lading which listed parts that defendant had shipped for the project. Defendant’s work under Purchase Order #15795 ended in April of 2022 after it produced a defective raw bin which required on-site repairs. Shortly thereafter, plaintiff’s customer requested that plaintiff remove defendant from the

project. In its final invoice, defendant stated that it had left the project facility “as is, incomplete, per request by customer.” Petition (Doc. #1-1), ¶ 36. From September 21, 2021 until April 1, 2022, defendant issued four invoices to plaintiff related to Purchase Order #15795. Chapple approved them and plaintiff paid them in full.2 On these invoices, defendant (1) intentionally kept its descriptions vague to prevent plaintiff from knowing what defendant was charging it for, (2) charged plaintiff an unreasonable profit margin, (3) included $235,382.51 in undisclosed mark-ups and (4) asked plaintiff to pay for items that are typically not compensable under a time and materials contract, including Muir’s sales commission and salary.

On November 30, 2023, in the District Court of Johnson County, Kansas, plaintiff filed

1 (. . . continued) plaintiff alleged that its employment contract with Chapple specifies that he works out of plaintiff’s Missouri office. See Petition, Haarslev, Inc. v. Michael Chapple, No. 2:24-cv-02003-KHV-RES (D. Kan.), ECF Doc. 1-1.

While a court may take judicial notice of its own records as well as those of other courts, especially in closely-related cases, the Court declines to do so in this instance because plaintiff has alleged that it issued Purchase Order #15795 from its office in Kansas and made its payments to defendant under that contract from its office in Kansas. Svendsen Affidavit (Doc. #16-1), ¶¶ 15, 17; see Hutchinson v. Hahn, 402 F. App’x 391, 394 (10th Cir. 2010) (citing St. Louis Baptist Temple, Inc. v. FDIC, 605 F.2d 1169, 1172 (10th Cir. 1979)); AST Sports, 514 F.3d at 1056 (court must resolve factual disputes in plaintiff’s favor).

2 These invoices include Invoices #93308 ($600,000), #93672 ($125,000), #93705 ($350,000) and #93713 ($57,281.61). Petition (Doc. #1-1), ¶¶ 19–24, 30–32, 35–37. suit against defendant, alleging breach of contract (Count I), unjust enrichment (Count II), negligent misrepresentation (Count III) and fraudulent misrepresentation (Count IV). See Petition (Doc. #1-1). On December 28, 2023, defendant removed the case to federal court. On January 18, 2024, defendant filed a motion to dismiss for lack of personal jurisdiction. See Defendant’s Motion To Dismiss (Doc. #10). To its response to defendant’s motion, plaintiff

attached the affidavit of Troels Svendsen, president of Haarslev, Inc. See Affidavit Of Troels Svendsen (Doc. #16-1). The affidavit asserts that on June 14, 2021, defendant submitted its Vendor Information Sheet to plaintiff which indicated defendant’s intent to conduct business with plaintiff. Id., ¶ 8. On or about September 1, 2021, plaintiff relocated its corporate headquarters from Kansas City, Missouri to Lenexa, Kansas and has since maintained its headquarters in Kansas. Id., ¶ 5. On September 21, 2021, a few weeks after its relocation, plaintiff issued Purchase Order #15795. Id., ¶ 14. Although plaintiff issued Purchase Order #15795 out of its office in Kansas, the document lists plaintiff’s previous address in Missouri. Id., ¶ 15. The affidavit also states that (1) defendant addressed and submitted its invoices for Purchase Order #15795 to

plaintiff’s headquarters in Kansas, (2) between November 1, 2021 and June 7, 2022, plaintiff made four payments to defendant out of its office in Kansas and (3) between June of 2021 and June of 2022, defendant regularly communicated with plaintiff’s employees in Kansas. Id., ¶¶ 12, 13, 16– 18.

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Haarslev, Inc. v. Christensen Machine, Inc. <b><font color="red"> Case Consolidated for Discovery All Non-Dispositive filings to be made in Lead Case 23-cv-2569</font></b>, Counsel Stack Legal Research, https://law.counselstack.com/opinion/haarslev-inc-v-christensen-machine-inc-bfont-colorred-case-ksd-2024.