Potomac Auto Mall Holdings, LLC v. Blue Clover Financial, LLC

CourtDistrict Court, E.D. Virginia
DecidedNovember 24, 2020
Docket1:20-cv-00865
StatusUnknown

This text of Potomac Auto Mall Holdings, LLC v. Blue Clover Financial, LLC (Potomac Auto Mall Holdings, LLC v. Blue Clover Financial, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Potomac Auto Mall Holdings, LLC v. Blue Clover Financial, LLC, (E.D. Va. 2020).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Alexandria Division

POTOMAC AUTO MALL HOLDINGS, INC., Plaintiff, ) Case No. 1:20-cv-865 ) Hon. Liam O’Grady BLUE CLOVER FINANCIAL, LLC, et ai., ) Defendants. MEMORANDUM OPINION & ORDER Before the Court is Defendants’ Rule 12(b)(2) motion to dismiss Plaintiff's complaint (Dkt. 1) for lack of personal jurisdiction. See Dkt. 22. For the reasons set forth below, Defendants’ motion is DENIED. I. BACKGROUND a. The parties Plaintiff Potomac Auto Mall Holdings, Inc. (“Plaintiff”) is a limited liability company based in Virginia and wholly owned by Jason Brown, a citizen of Virginia. Dkt. 1, at 2, 445. Defendant Blue Clover Financial LLC (“Blue Clover”) is a limited liability company with its principal place of business in Florida. /d. §7. Defendant Anthony Ricciardo (“Ricciardo”), a citizen of Florida, is the principal and controlling member of Blue Clover. See id q§ 8-10. b. The parties’ dealings Plaintiff endeavored to “purchase and develop real property in Virginia” from a buyer, Guy Travers (“Travers”). /d. at 3-4, 9] 14, 25. Ricciardo learned of Plaintiff's endeavor through a mutual acquaintance, and initiated contact with Plaintiff by phone during January 2018 to solicit his business. Dkt. 27-1, at 1. Specifically, Ricciardo offered to finance Plaintiff's

purchase of the Travers property. /d. The parties subsequently negotiated and ratified a non- binding “Term Sheet” on February 28, 2018 that set forth tentative loan terms. /d. at 4-9. Plaintiff executed the Term Sheet from its office in Prince William County, Virginia. To enable Defendants to secure funding for the loan pursuant to the Term Sheet, Plaintiff wired $25,000 to them on February 28, 2018. Dkt. 27-1 The provisions in the Term Sheet were later incorporated into a Lender Commitment Letter that was signed by Plaintiff on January 14, 2019. Dkt. 1-2, at 6. The parties agreed in the Lender Commitment Letter that Blue Clover would loan Plaintiff the funds to purchase the Travers property. Dkt. 1-1. When the property deal between Plaintiff and Travers closed, the terms of the Lender Commitment Letter were set to merge into a $22,050,440.28 Loan and Security Agreement, which was pre-drafted. Id. at 2,915 n.1. With financing apparently secured, Plaintiff moved forward with efforts to close on its purchase of the Travers property. See id. § 18. Unfortunately for Plaintiff, funding was not, in fact, secured. Over a six-month period between October 2019 and March 2020, Defendants subjected Plaintiff to a proverbial run-around that is best presented chronologically: e Initially, Plaintiff was scheduled to close on the Travers property on October 21, 2019. □□□ □ 17. Right before closing, Defendants advised Plaintiff that “Blue Clover could not close on that date and rescheduled the closing to occur on November 5, 2019. /d. On November 4, 2019, Plaintiff emailed Ricciardo to confirm that Blue Clover was on track to close the next day. Jd. 4.18. Ricciardo did not respond. Id e On November 5, 2019, Plaintiff emailed Ricciardo again, seeking an update. /d. Again, Ricciardo did not respond. See id. at 4, J 20. On November 7, 2019, Plaintiff emailed Ricciardo again, warning him that Blue Clover’s “no show” was subjecting Plaintiff to legal risk. Id. at 3-4, | 19. Again, Ricciardo did not respond. See id. at 4, § 20. ¢ On November 8, 2019, an agent of Blue Clover finally responded, notifying Plaintiff that Blue Clover was “close” to closing. Jd. On November 13, 2019, Plaintiff spoke with Ricciardo by phone. /d. q 21.

¢ On November 15, 2019, Plaintiff followed up on the November 13, 2019 phone call with an email that sought clarification from Ricciardo on Blue Clover’s position. /d. e On November 19, 2019, Plaintiff spoke with Ricciardo by phone. Jd. | 22. Ricciardo assured Plaintiff that the funds were available and that closing “would take place imminently.” /d. e On November 21, 2019, Ricciardo doubled back, informing Plaintiff that Blue Clover “had a delay in [the] availability of funds that is causing [it] to not be able to fund this Friday. We expect to have funds available in the next 14 calendar days.” Id. J 23. On November 22, 2019, Ricciardo contacted Travers, the seller, asking for an extension to the closing date. /d. at 4-5, 25. In this email, Ricciardo explained that Blue Clover “expect[ed] to have funds available in the next 14 calendar days.” Id. On November 30, 2019, Plaintiff emailed Ricciardo asking about “the financing that was to take place in the ‘next 14 calendar days.’” Jd. at 5,27. Ricciardo “did not respond until December 2, 2019,” at which point he provided no material update. /d. e On December 5, 2019, counsel for Blue Clover emailed Plaintiff, confirming that Clover had “the clearance to close this loan next Wednesday.” Jd. § 29. Based on this information, the closing was rescheduled for December 11, 2019. Id. at J 30. ¢ December 11,2019 came and went, and Blue Clover again failed to deliver financing. Id. at 6,931. e On December 15, 2019, Plaintiff emailed Ricciardo, asking for a status update. Id. □ 33. He again received no response. /d. On December 31, 2019, Plaintiff again followed up by email. /d. at □ 34. e On January 7, 2020, Ricciardo finally responded to Plaintiff to advise him that Clover “won’t have the ability to close on any projects until the end of February.” /d. at 935. ¢ February came and went, and no funding was ever made available to Plaintiff. /d. at 7, □□□ Plaintiff, at all times, was “willing and able” to close in full compliance with the terms of the Commitment Letter.” Jd. 37. Over the course of the parties’ dealings and communications, Plaintiff estimates that it made “well over one hundred (100) telephone calls” to Ricciardo and other agents of Blue Clover. Dkt. 27-1, at 2. Plaintiff attests that “[e]ach of these phone calls was made or received while [Plaintiff] was present in Virginia.” Jd. Plaintiff also attests that “there were hundreds of emails exchanged” between Plaintiff and the Defendants, all of which were sent or received while Plaintiff was present in Virginia. /d. Finally, Plaintiff states that he was obligated to make loan payments pursuant to the Commitment Letter and Term Sheet, and that these payments were “to

be made from Virginia.” Jd. This reaffirms what is clear from the complaint: that the dealings and communications between Plaintiff and the Defendants were calculated to culminate in □ Plaintiff's purchase and development of property in Virginia. /d. at 3. c. Procedural history On July 28, 2020, Plaintiff filed a complaint against Defendants in this Court, asserting breach of contract, unjust enrichment, fraudulent misrepresentation, negligent misrepresentation, and tortious interference with contract under Virginia law. See Dkt. 1. The Court has proper subject matter jurisdiction over the case, as there exists complete diversity between the parties and the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332. Il. LEGAL STANDARD Rule 12(b)(2) authorizes dismissal of an action where the court lacks personal jurisdiction. Fed. R. Civ. P 12(b)(2); see also Henderson v. Fairfax-Falls Church Community Serv. Bd., 2018 WL 6037522, at *2 (E.D. Va. Nov. 15, 2018), aff'd sub nom. 771 F. App’x 205 (4th Cir. 2019) (“An entity that does not have capacity to be sued is outside the personal jurisdiction of the court.”). When a defendant challenges a court’s personal jurisdiction on a Rule 12(b)(2) motion, “the jurisdictional question thus raised is one for the judge, with the burden on the Plaintiff ultimately to prove the existence of a ground for jurisdiction by a preponderance of the evidence.” Combs v.

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Potomac Auto Mall Holdings, LLC v. Blue Clover Financial, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/potomac-auto-mall-holdings-llc-v-blue-clover-financial-llc-vaed-2020.