Joseph v. Edeskuty & Associates v. Jacksonville Kraft Paper Co.

702 F. Supp. 741, 1988 U.S. Dist. LEXIS 15153
CourtDistrict Court, D. Minnesota
DecidedDecember 30, 1988
DocketCIVIL 4-87-613
StatusPublished
Cited by14 cases

This text of 702 F. Supp. 741 (Joseph v. Edeskuty & Associates v. Jacksonville Kraft Paper Co.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Joseph v. Edeskuty & Associates v. Jacksonville Kraft Paper Co., 702 F. Supp. 741, 1988 U.S. Dist. LEXIS 15153 (mnd 1988).

Opinion

MEMORANDUM AND ORDER

MacLAUGHLIN, District Judge.

This matter is before the Court on plaintiff’s motion for partial summary judgment *742 and defendant’s motion to dismiss for lack of personal jurisdiction or, in the alternative, for improper venue. The Court finds that defendant waived its personal jurisdiction defense, determines that venue is proper and will grant plaintiffs motion for partial summary judgment.

FACTS

Plaintiff Joseph Y. Edeskuty & Associates (Edeskuty) is a Minnesota sole proprietorship which provides engineering and design consulting services. Edeskuty filed this action on July 9, 1987 against three defendants seeking compensation for consulting work performed at a paper mill and power plant in Jacksonville, Florida. Two of the defendants, Abraham Zion and Seminole Kraft Paper Co., were dismissed from this suit for lack of personal jurisdiction. Defendant Jacksonville Kraft Paper Co., Inc. (Kraft), a Florida corporation, which operated the paper mill and power plant until October 31, 1986, is the only remaining defendant.

This suit had its genesis in October 1983 when Kraft contacted Edeskuty and orally requested engineering services at the Jacksonville paper mill and power plant. Plaintiffs Memorandum of Law in Support of Motion for Partial Summary Judgment, Exhibit A, 1 Affidavit of Robert V. Edeskuty at par. 3 and attachment. After performing initial consulting services, Edeskuty submitted an invoice in the amount of $9,280.71 to Kraft’s pulp and power manager, Evan M. Wise. Plaintiff’s Exhibit B, December 6, 1983 Letter from Robert V. Edeskuty to Evan M. Wise. Along with the invoice, Edeskuty submitted a proposal for further services in the amount of $13,-219. Plaintiff’s Exhibit C, Proposal for Study of Alternative for Short Term Reduction of Dependence on Fuel Oil at 4. In response, Kraft stated that it would issue a purchase order for Edeskuty’s completed work and take Edeskuty’s proposal under advisement. Plaintiff’s Exhibit D, December 8, 1983 Letter from Evan M. Wise to Robert Y. Edeskuty.

In January 1984 Kraft authorized payment for Edeskuty’s earlier proposal. Plaintiff’s Exhibit E, January 25, 1984 Kraft Change Order. Soon afterward, Edeskuty began performing work for Kraft based solely on oral authorizations because Kraft’s business “was such that great flexibility was required from engineers to quickly solve or analyze problems that cannot be anticipated.” Plaintiff’s Exhibit G, Affidavit of Evan M. Wise at par. 6.

From February 1984 through March 1985 Edeskuty billed Kraft in excess of $150,000 for professional services. Plaintiff’s Exhibit H, Account with Jacksonville Kraft Paper Co., Inc. 12/05/83 — 4/08/85. Examples of Edeskuty’s work for Jacksonville include:

1) On-site studies and recommendations for reducing Kraft’s dependence on oil;
2) Feasibility study and preliminary engineering work on converting oil-fired boilers to burn pulverized dried bark;
3) Feasibility study of replacing high pressure drop emission control scrubbers with low pressure drop scrubbers;
4) Consulting and design improvements to paper machine lump crusher roll shaft;
5) Repeated meetings with Jacksonville executives and Florida State environmental officials to discuss Jacksonville’s on-going efforts to comply with pollution emission standards; and
6) Consulting and evaluation on freeze up problems at plant due to plant shutdown.

See Outline of services attached to Plaintiff's Exhibit A, Edeskuty Affidavit as well as Plaintiff’s Exhibit G, Wise Affidavit.

Edeskuty claims that its work during this time was authorized by a number of Kraft officers, including Kraft’s president, Ben Westby, its executive vice president and general manager, Ronald G. Caravano, and its pulp and power manager, Evan M. Wise. Edeskuty also claims that Kraft paid Edeskuty without ever requiring written approval or authorization. Kraft’s account was paid in full for services invoiced *743 through March 14, 1985. See Plaintiff’s Exhibit H, Account with Jacksonville Kraft Paper Co., Inc., 12/5/83 — 4/8/85.

In early March 1985 Kraft was acquired by Abraham Zion. Edward Sadowsky replaced Ben Westby as president within a few weeks of the company’s sale. Deposition of Abraham Zion at 86. Financial problems forced a shutdown of half the mill and power plant three months after it was purchased and the facility closed completely two months later. Zion Dep. at 85-88.

Edeskuty continued to perform work for Kraft until December 4, 1985. See, Plaintiff’s Exhibit N, Invoice for services from November 1, 1985 through December 4, 1985. 2 Kraft made partial payments for this work with the last payment received by Edeskuty on September 6, 1985. 3

In October 1985 Zion assumed the duties of president in order to dissolve the company. Zion Dep. at 93. At some point thereafter a creditor committee was elected in order to permit Kraft the time needed to either sell or liquidate. Zion Dep. at 92. When Edeskuty failed to receive any further payments by January 1986, it secured a mechanic’s lien against Kraft in the amount of $83,110.64. Complaint, Exhibit E. On October 31, 1986 Kraft sold the Jacksonville paper mill and related assets to Seminole Kraft Paper Co. Zion Dep. at 103. As part of the sale agreement, Kraft placed $12 million into an escrow account to satisfy the various default judgments and liens which had been obtained by Kraft’s creditors for nonpayment of bills. All creditors except for Edeskuty satisfied their claims from the escrow account. 4 Zion Dep. at 121-22. After unsuccessfully attempting to collect its debt from Seminole and its parent corporation plaintiff instituted this action.

Advancing contract and quantum meru-it theories, Edeskuty claims $83,065.64 for work performed for Kraft. Edeskuty’s complaint also asserts claims for conversion, fraud, fraudulent inducement to contract, and punitive damages against Kraft.

DISCUSSION

Two motions are before the Court. Kraft moves for dismissal on the basis of a lack of personal jurisdiction or, in the alternative, for improper venue. Edeskuty responds to Kraft’s motion with a request for sanctions under 28 U.S.C. § 1927. Edeskuty also moves for summary judgment on its contract and quantum meruit claims.

I. Personal Jurisdiction

A. Factual Background

Some of the history of this litigation is relevant to the question of whether the Court has personal jurisdiction over Kraft.

Three months after this case was filed, in October 1987, the two defendants other than Kraft moved to dismiss for lack of personal jurisdiction.

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702 F. Supp. 741, 1988 U.S. Dist. LEXIS 15153, Counsel Stack Legal Research, https://law.counselstack.com/opinion/joseph-v-edeskuty-associates-v-jacksonville-kraft-paper-co-mnd-1988.