Johnson v. Diamond Shine, Inc.

890 F. Supp. 2d 763, 2012 WL 3598275, 2012 U.S. Dist. LEXIS 117017
CourtDistrict Court, W.D. Kentucky
DecidedAugust 17, 2012
DocketCase No. 1:11-CV-192-R
StatusPublished
Cited by6 cases

This text of 890 F. Supp. 2d 763 (Johnson v. Diamond Shine, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Johnson v. Diamond Shine, Inc., 890 F. Supp. 2d 763, 2012 WL 3598275, 2012 U.S. Dist. LEXIS 117017 (W.D. Ky. 2012).

Opinion

MEMORANDUM OPINION & ORDER

THOMAS B. RUSSELL, Senior District Judge.

This matter is before the Court upon Defendants’ motion to dismiss Plaintiffs amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) and 12(b)(6). Plaintiff has additionally filed a motion for a hearing on Defendants’ motion to dismiss (DN 20). These matters are fully briefed and are ripe for adjudication. For the following reasons, Plaintiffs motion for a hearing (DN 20) is DENIED and Defendants’ motion to dismiss (DN 14) is GRANTED in PART and DENIED in PART.

BACKGROUND

In the early 1990s, Defendant Scott Soble was employed by his family-owned company, Ohio Soap Products Company (“Ohio Soap”). At that time, Ohio Soap was primarily a regional soap supplier to commercial laundries and institutional dishwashing facilities in northern Ohio and western Pennsylvania. Secondary to those lines of business, Ohio Soap maintained a car wash product line, “Diamond Shine,” which it distributed to the car wash industry. Eventually, Ohio Soap became a distributor for Blue Coral Systems, a company which produced commercial car wash products, distributing its products to car wash operations around Cleveland, Ohio.

Plaintiff Norman Johnson (“Plaintiff’) was the regional vice president for Blue Coral Systems and was responsible for the distribution relationships east of the Mississippi River. Thus, Plaintiff worked closely with Ohio Soap and Scott Soble. After Plaintiff left his employment with Blue Coral Systems, Blue Coral System’s relationship with Ohio Soap and Scott Soble deteriorated.

While Ohio Soap was in the process of terminating its distribution relationship with Blue Coral System, Scott Soble approached Plaintiff for advice on protecting its business in the region from the anticipated competition from Blue Coral Systems. In August of 1997, Scott Soble traveled to Bowling Green, Kentucky to recruit Plaintiffs support and assistance in developing a strategy to compete with Blue Coral Systems. During one of Scott Soble’s visits to Bowling Green, he and Plaintiff allegedly reached an agreement at Plaintiffs home. According to the terms of the verbal agreement, in return for Plaintiffs assistance in the creation of a [767]*767distributor business segment of Diamond Shine, Inc. (“Diamond Shine”) to distribute its car wash soap products, Plaintiff would receive 6% of gross distributor sales for his lifetime.

After the agreement was made, Plaintiff used “his relationships, marketing expertise, and industry knowledge” to assist Defendants in developing a new segment of distributor sales. In accordance to the terms of the verbal agreement, Plaintiff received his first check from Diamond Shine on December 12, 1997 in the amount of $181.70. Thereafter, Defendants honored the agreement for thirteen years and nine months. In October of 2011, Defendants refused to make further monthly payments to Plaintiff.

Plaintiff then filed this action in Warren Circuit Court, asserting claims for breach of contract, quantum meruit, and promissory estoppel. Plaintiff further seeks a declaration that he is entitled to receive 6% of monthly gross distributor sales. Finally, Plaintiff seeks to pierce the corporate veil of Diamond Shine, Inc. and DSM Industries, Inc. in order to hold their shareholders, Scott and David Soble, personally liable. Defendants removed the action to this Court on the basis of diversity jurisdiction. Thereafter, Defendants filed a motion to dismiss the complaint on the basis of lack of personal jurisdiction and on the basis of failure to state a claim upon which relief may be granted. Plaintiff then filed his first amended complaint as a matter of right, and Defendant filed a motion to dismiss the amended complaint on the same grounds as previously asserted in their prior motion to dismiss.

DISCUSSION

I. Motion for Hearing

Plaintiff, pursuant to Local Rule 7.1(f), requests this Court to conduct a hearing on Defendants’ motion to dismiss the amended complaint. In support of this request, Plaintiff contends that it may be helpful to hear oral arguments in order for the appropriate facts and case law to be considered in connection with the parties’ respective positions. Defendants, in response, contend that the legal issues have been extensively briefed by the parties and that oral argument would be of little or no assistance to the Court. The Court agrees that oral arguments would not be helpful to a determination of Defendants’ motion to dismiss, as the issues have been thoroughly briefed by the parties and the facts are not in dispute for purposes of this motion to dismiss. Accordingly, the Court will DENT Plaintiffs motion for a hearing.

II. Motion to Dismiss Pursuant to Rule 12(b)(2)

Defendants contend that Plaintiffs Amended Complaint should be dismissed because Defendants’ contacts with Kentucky are insufficient to allow this Court to exercise personal jurisdiction over them.

a. Standard for Personal Jurisdiction

Rule 12(b)(2) of the Federal Rules of Civil Procedure permits a defendant to dismiss for want of personal jurisdiction. The plaintiff bears the burden of establishing jurisdiction. Third Nat’l Bank v. WEDGE Group, Inc., 882 F.2d 1087, 1089 (6th Cir.1989). Where, as here, there is no evidentiary hearing on the motion, the plaintiff need only make a prima facie showing of jurisdiction to avoid the motion to dismiss. Id. The court must consider the pleading and affidavits in a light most favorable to the non-moving party, and “cannot weigh the controverting assertions of the party seeking dismissal.” Tharo Sys. v. cab Produkttechnik GmbH & Co. KG, 196 Fed.Appx. 366, 369 (6th [768]*768Cir.2006) (citing Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991); CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir.1996)), cert. denied, 549 U.S. 1117, 127 S.Ct. 1006, 166 L.Ed.2d 713 (2007).

In a diversity action, the Court must look to the law of the forum state to determine whether personal jurisdiction exists. Intera Corp. v. Henderson, 428 F.3d 605, 615 (6th Cir.2005); CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir.1996). “A Court’s exercise of personal jurisdiction over a nonresident defendant is appropriate only if it meets the state’s long-arm statute and constitutional due process requirements.” Henderson, 428 F.3d at 615. Kentucky’s long-arm statute has been understood to reach the limit permitted by the Constitution; thus, the single issue is whether the jurisdiction sought is within the requirements of due process.1 Tobin v. Astra Pharm. Prods., Inc.,

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Cite This Page — Counsel Stack

Bluebook (online)
890 F. Supp. 2d 763, 2012 WL 3598275, 2012 U.S. Dist. LEXIS 117017, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johnson-v-diamond-shine-inc-kywd-2012.