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Filmore v. VSP North America, LLC

United States District Court, D. Massachusetts

January 14, 2019

JEFFREY FILMORE, and BARRACUDA INVESTMENTS, INC., Plaintiffs,
v.
VSP NORTH AMERICA, LLC, VSP FLORIDA, LLC, JOHN VON STACH, and RYAN WALKER, Defendants.

          MEMORANDUM AND ORDER RE: DEFENDANTS' MOTION TO DISMISS PLAINTIFFS' COMPLAINT FOR LACK OF PERSONAL JURISDICTION (DOCKET ENTRY # 6)

          MARIANNE B. BOWLER UNITED STATES MAGISTRATE JUDGE

         Pending before this court is a motion to dismiss for lack of personal jurisdiction filed by defendants VSP North America, LLC (“VSP”) and John Von Stach (“Von Stach”) pursuant to Fed.R.Civ.P. 12(b)(2) (“Rule 12(b)(2)”).[1] (Docket Entry # 6). Plaintiffs Jeffrey Filmore (“Filmore”) and Barracuda Investments, Inc. (“Barracuda”) oppose the motion.[2] (Docket Entry # 13). After conducting a hearing, this court took the motion (Docket Entry # 6) under advisement.

         PROCEDURAL BACKGROUND

         Plaintiffs initiated this action on February 8, 2018 by filing a complaint seeking damages against defendants as well as VSP Florida, LLC (“VSP-FL”) and Ryan Walker (“Walker”). (Docket Entry # 1). The complaint sets out the following claims: (1) breach of contract (Count I); (2) unjust enrichment (Count II); (3) common law fraud (Count III); and (4) unfair and deceptive trade practices in violation of Massachusetts General Laws chapter 93A, sections 2 and 11 (“chapter 93A”) (Count IV). (Docket Entry # 1). Counts I and II raise claims only against VSP and VSP-FL. (Docket Entry # 1).

         Defendants seek a dismissal under Rule 12(b)(2) for lack of personal jurisdiction, as defendants are not residents of Massachusetts. Furthermore, defendants argue that Massachusetts General Laws chapter 223A, section three (“chapter 223A, § 3”), does not authorize the exercise of personal jurisdiction over defendants.

         STANDARD OF REVIEW

         This circuit entertains different standards for reviewing a motion to dismiss for want of personal jurisdiction under Rule 12(b)(2). As suggested by both plaintiffs and defendants, “‘[t]he most conventional'” and more frequently employed method is the “‘prima facie' method.” Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 51 (1st Cir. 2002) (internal citation omitted). This method allows a court to “‘consider . . . whether the plaintiff has proffered evidence that, if credited, is enough to support findings of all facts essential to personal jurisdiction.'” Adelson v. Hananel, 510 F.3d 43, 48 (1st Cir. 2007) (quoting Boit v. Gar-Tec Products, Inc., 967 F.2d 671, 675 (1st Cir. 1992)). A plaintiff has the burden of demonstrating “‘evidence of specific facts'” with properly documented evidentiary proffers. Vysedskiy v. OnShift, Inc., Civil Action No. 16-12161-MLW, 2017 WL 4391725 at *1 (D. Mass. Sept. 29, 2017) (quoting Foster-Miller, Inc. v. Babcock & Wilcox Canada, 46 F.3d 138, 145 (1st Cir. 1995)). Such evidence includes the affidavits in the record. See Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d at 45. A plaintiff's properly documented proffers must be taken as true for the purpose “of determining the adequacy of the prima facie jurisdictional showing.” Id. at 51 (citing Foster-Miller, Inc. v. Babcock & Wilcox Canada, 46 F.3d at 145). More specifically, this court “take[s] these facts ‘as true (whether or not disputed) and construe[s] them in the light most congenial to the plaintiff[s'] jurisdictional claim.'” Id. at 51 (citing Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass'n, 142 F.3d 26, 34 (1st Cir. 1998)).

         Another standard of review requires more than a prima facie showing. This standard is appropriate “‘when the proffered evidence is conflicting and the record is rife with contradictions, or when a plaintiff's affidavits are “patently incredible.”'” Rooney v. Walt Disney World Co., No. CA 02-12433-GAO, 2003 WL 22937728 (D. Mass. Nov. 25, 2003) (quoting Boit v. Gar-Tec Products, Inc., 967 F.2d at 676). The evidentiary record in the case at bar does not suggest that plaintiffs' evidence is “rife with contradictions” or “patently incredible.” The prima facie standard therefore applies.

         FACTUAL BACKGROUND

         Filmore maintains a principal place of business in Beverly, Massachusetts. (Docket Entry # 1, ¶ 1). At all times relevant to the case at bar, Filmore was a principle of Barracuda, a Massachusetts corporation with a “usual place of business” in Beverly, Massachusetts.[3] (Docket Entry # 1, ¶¶ 2, 3).

         VSP is a “Michigan limited liability company” with a principal place of business in Grand Rapids, Michigan. (Docket Entry # 1, ¶ 4). VSP sells generators to dealers “located in approximately 15 states throughout the United States and in Africa.” (Docket Entry # 7-1, ¶ 6). Massachusetts is not one of the 15 states in which VSP's dealers are located, nor has VSP ever “sold any of its generators or other products in Massachusetts or to Massachusetts residents.” (Docket Entry # 7-1, ¶ 7). Furthermore, VSP “does not have any offices in Massachusetts, ” nor does it “employ any sales people in Massachusetts.” (Docket Entry # 7-1, ¶ 8). VSP's sales totaled $1, 000, 000 in 2017. (Docket Entry # 7-1, ¶ 6). According to the complaint, Von Stach is the “sole member of VSP.” (Docket Entry # 1, ¶ 7). He is a Canadian citizen who resides in Ontario, Canada and has never traveled to or visited Massachusetts. (Docket Entry # 1, ¶ 6) (Docket Entry # 7-1, ¶ 2).

         VSP-FL is a “Florida limited liability company” that maintained a principal place of business in Clearwater, Florida prior to September 11, 2015, when it was “involuntarily dissolved . . . for failure to file its annual report.” (Docket Entry # 1, ¶ 5). Walker, a Canadian citizen who maintains an office in Grand Rapids, Michigan, was the sole member of VSP-FL and is the “National Accounts Manager for VSP.” (Docket Entry # 1, ¶¶ 8, 9).

         VSP “designs, manufactures and sells environmentally friendly generators that run on renewable energy.” (Docket Entry # 7-1, ¶ 5). Typically, dealers “order generators from VSP on behalf of third parties” or for their showroom. (Docket Entry # 7-1, ¶ 9). Dealers often cannot pay VSP for the generators until they have received payment from the third-party. (Docket Entry # 7-1, ¶ 9). Accordingly, it is standard practice for VSP to invoice dealers for payment within 90 days of receipt. (Docket Entry # 7-1, ¶ 9).

         In order to maintain this arrangement with dealers, “VSP has a program where it sells its [dealer] invoices . . . to outside parties at a (20%) discount from the face value of the invoice.” (Docket Entry # 7-1, ¶ 10). To reach outside parties, VSP advertises in national newspapers through “an advertising broker who finds suitable locations for VSP's [advertisements] based on the most cost-effective advertising rates.” (Docket Entry # 7-1, ¶ 11). These national newspapers include USA Today, the Wall Street Journal, and the New York Times. (Docket Entry # 7-1, ¶ 11).

         Since 2015, “VSP has run approximately twenty (20) advertising campaigns” in six different newspapers, each typically running for one week. (Docket Entry # 7-1, ¶ 12). During this time, VSP sold approximately $1, 500, 000 of invoices and receivables to parties in different states. (Docket Entry # 7-1, ¶ 12).

         In September 2015, “VSP's advertising broker recommended that VSP run a national advertising campaign in the New York Times, the Boston Globe, and the Los Angeles Times, ” as these newspapers would “provide national coverage” at the lowest advertising rates due to a discount for advertisements placed in all three newspapers. (Docket Entry # 7-1, ¶ 13). VSP did not have a preference as to which newspapers it advertised in as long as it could “obtain maximum national coverage” at “the most cost-effective rate.” (Docket Entry # 7-1, ¶ 13). Although VSP had previously advertised in the New York Times and the Los Angeles Times, this was the “first and only time that VSP had advertised in the Boston Globe.” (Docket Entry # 7-1, ¶ 14). The advertisement was placed in each of the aforementioned newspapers for one week, ...


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