United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON MOTION TO DISMISS
ALLISON D. BURROUGHS U.S. DISTRICT JUDGE
March 2015, Defendant Vision Technologies, Inc.
(“Vision”) agreed to acquire Plaintiff Scallop
Imaging, LLC's (“Scallop”) camera technology,
but formed a subsidiary, Defendant Blackhawk Imaging, LLC
(“Blackhawk”), which ultimately purchased the
assets from Scallop. Blackhawk has since defaulted on
numerous payments due under the purchase agreement as well as
several follow-on agreements between Scallop and Blackhawk.
Scallop asserts claims for breach of contract, unjust
enrichment, and misrepresentation against Blackhawk and seeks
to pierce the corporate veil to hold Vision liable for
Blackhawk's acts and omissions. [ECF No. 28]
(“Amended Complaint”). Blackhawk answered the
Amended Complaint and admitted many of the allegations
concerning its missed payments. [ECF No. 34]
(“Answer”). Currently pending before the Court is
Vision's motion to dismiss for lack of personal
jurisdiction, or, alternatively, for failure to state a
claim. [ECF No. 35]. For the reasons stated herein, the
motion to dismiss is DENIED.
Vision moves to dismiss for lack of personal jurisdiction,
the following factual summary draws from “the pleadings
and whatever supplemental filings (such as affidavits) are
contained in the record, ” giving credence to
Scallop's version of the genuinely contested facts, as
well as from the undisputed facts proffered by Vision.
Baskin-Robbins Franchising LLC v. Alpenrose Dairy,
Inc., 825 F.3d 28, 34 (1st Cir. 2016).
(a Delaware corporation with its principal place of business
in Arkansas) and Scallop (a Massachusetts limited liability
company with its principal place of business in
Massachusetts) both develop and/or distribute camera systems.
Am. Compl. ¶¶ 7-9; [ECF Nos. 28-19]; [ECF No. 37 at
¶¶ 3, 5] (“Affidavit of Lee Thompson”
or “Thompson Aff”). In July 2014, Vision
President Lee Thompson contacted Scallop Manager Olaf Krohg,
and they entered into an agreement whereby Vision became a
distributor of Scallop's products. Am. Compl. ¶ 17;
Thompson Aff. ¶ 5. In March 2015, after Scallop
initiated a discussion with Vision, Vision and Scallop signed
a letter of intent memorializing a proposal for Vision to
acquire substantially all of Scallop's assets. Thompson
Aff. ¶ 5. Vision then formed a wholly-owned subsidiary,
Blackhawk (a Delaware limited liability company with its
principal place of business in Arkansas), for the purpose of
entering into the transaction with Scallop. Id.
¶ 6; Am. Compl. ¶¶ 8, 18. Following the
formation of Blackhawk, (1) Vision's Vice President,
Chuck Thompson, concurrently served as Blackhawk's
President and Chief Operating Officer; (2) Harvey Weiss, who
resigned from Vision's board of directors when Blackhawk
was formed, served as Blackhawk's Chief Executive
Officer; and (3) Vision accountant John Uitz concurrently
served as Blackhawk's Chief Financial Officer. Thompson
Aff. ¶¶ 6-9. Vision President Lee Thompson is also
the father of Chuck Thompson. Id. ¶ 4.
April 21, 2015, Blackhawk and Scallop entered into an Asset
Purchase Agreement. Am. Compl. ¶ 18. In exchange for
acquiring substantially all of Scallop's assets,
Blackhawk executed two promissory notes representing a $700,
000 loan made from Scallop to Blackhawk. Id. The
notes required Blackhawk to pay Scallop $100, 000 on May 31,
2015 and $600, 000 on June 30, 2015. Id. Blackhawk
also agreed under a separate note to pay Scallop an earnout
amount of $125, 000. Id.; [ECF No. 32 at ¶ 3]
(“Krohg Aff.”). As collateral for the loan,
Blackhawk granted Scallop a security interest in its assets
and licensed to Scallop, on a royalty-free basis, the
intellectual property that Blackhawk acquired under the Asset
Purchase Agreement. Am. Compl. ¶ 18; Krohg Aff. ¶
defaulted on the payments due on May 31 and June 30, and
never paid any of the amounts owed to Scallop under those
notes. Krohg Aff. ¶¶ 4-5. Less than one month after
Blackhawk failed to meet these payment obligations, Vision
transferred 75% of its equity in Blackhawk “to people
affiliated with the company” as follows:
10% to Lee Thompson, President of Vision;
25% to Chuck Thompson, Vice President of Vision and President
and COO of Blackhawk;
25% to Harvey Weiss, CEO of Blackhawk and former director of
5% to John Uitz, accountant at Vision and CFO of Blackhawk;
5% to William Bowen, Engineering Vice President at Vision;
5% to Ki Pho Hong.
Aff. ¶ 11. Vision nonetheless continued to claim on its
website that Blackhawk was a wholly-owned subsidiary.
Id.; Am. Compl. ¶ 55. Blackhawk also shared
Vision's office from its formation in March 2015 until
moving to ...