Marcellx, Llc et al v. Sbarra

REPLY BRIEF re Brief in Opposition to Motion to Dismiss Amended Complaint

W.D. Pa.February 17, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA MARCELLX, LLC, DAVID M. PRUSHNOK, G. DANIEL PRUSHNOK, and JOHN P. PRUSHNOK, Plaintiffs, v. DONALD D. SBARRA, Defendant. ) ) ) ) ) ) ) ) ) ) ) Civil Action No. 16–cv–1319 REPLY BRIEF IN SUPPORT OF MOTION TO DISMISS AMENDED COMPLAINT Defendant Sbarra, by and through his undersigned counsel, submits the within reply brief in further support of his motion to dismiss the Amended Complaint.1 A. Sbarra is Not Subject to Personal Jurisdiction in Pennsylvania In order to establish personal jurisdiction over Sbarra, Plaintiffs must satisfy all three prongs of the Calder test. Because they cannot satisfy the third element — that Sbarra "expressly aimed" his purportedly tortious conduct at Pennsylvania — Plaintiffs attempt to collapse the second and third elements together. Plaintiffs argue that they have satisfied the third element because "Sbarra called into question the title to Pennsylvania real property, sought to damage the reputations of Pennsylvania citizens, and succeeded in disrupting prospective business relations between a Pennsylvania limited liability company and an entity doing business in Pennsylvania on the Pennsylvania real property it had just acquired." Opposition Brief at 5. In other words, Plaintiffs argue that the fact that they suffered harm in Pennsylvania (the second element of the Calder test) establishes that Sbarra aimed his conduct at Pennsylvania (the third element). This transparent attempt to conflate the separate elements fails. 1 Unless otherwise defined herein, all capitalized terms shall have the meaning ascribed to them in the Memorandum of Law in Support of Motion to Dismiss Amended Complaint. Case 2:16-cv-01319-MPK Document 26 Filed 02/17/17 Page 1 of 6 2 As the court explained in QSR Automations, Inc. v. KRS Corp., LLC, No 3:09CV–242–S 2010 WL 1416700 (W.D. Ky. March 31, 2010), such conflation of the second and third Calder elements is improper. In that case, a computer hardware and software developer in Kentucky (QSR) alleged that the defendant (KRS) copied the features, form and function of a keypad that QSR had developed in order to sell a competing product. Id. at *1. However, KRS was located in Kansas and did not sell the competing product in Kentucky. Id. The court dismissed the action for lack of personal jurisdiction, stating: QSR conflates two of the Calder elements. It urges that because QSR could be expected to feel the effects of the theft of its trade secrets and KRS' misuse of the technology in Kentucky where it is headquartered, the court should find that KRS intended to cause QSR injury here. However, the elements are separate and distinct precisely because due process requires more than just fortuitous injury resulting from an intentional act committed out-of-state. The conduct must be aimed at the forum state. Id. at *3 (emphasis added); see also ABC Med. Holdings, Inc. v. Home Med. Supplies, Inc., No. 15–2457, 2015 WL 5818521, at *5 (E.D. Pa. Oct. 6, 2015) ("While [plaintiff] alleges that because the harm was felt in Pennsylvania, HMS's conduct was directed at Pennsylvania, this conflates the second and third elements of the Calder test.") (emphasis added). For this reason, Plaintiffs' assertion that Sbarra caused harm in Pennsylvania does not satisfy the third element that Sbarra aimed his conduct at Pennsylvania. B. Venue is Not Proper in This Court 1. The Swamp Angel Property is Not the Subject of Plaintiffs' Action Without any citation to legal authority, Plaintiffs summarily conclude that "[t]he subject of this action is the Swamp Angel Property, Pennsylvania real estate consisting of shallow mineral rights in McKean County." Opposition Brief at 9. Plaintiffs misconstrue Section Case 2:16-cv-01319-MPK Document 26 Filed 02/17/17 Page 2 of 6 3 1391(b)(2), which establishes venue in a jurisdiction in which "a substantial part of the property that is subject of the action is situated." The court's ruling in Spain v. Eagleburger Law Group, 04 CV 01817 WDM PAC, 2006 WL 650191 (D. Colo. Mar. 9, 2006), is particularly instructive. The plaintiff alleged that the defendants made "fraudulent statements in a bankruptcy case . . . regarding the ownership of land in Creede, Colorado, which [plaintiff] claim[ed] to own." Id. at *1. In ruling that venue was improper in Colorado, the court explained that plaintiff "contends the property 'at issue' is in Colorado, but he does not sue to recover the property or clear title to it, nor does not he ask me to declare rightful ownership of the property. While his claims refer to property in Colorado, I cannot conclude that the property is the 'subject' of this action." Id. at *3. In another case involving similar causes of action, the court likewise held that venue was improper: [P]laintiffs argue the second clause of [Section 1391(b)(2)] supports venue because the property that is the subject of the action, namely the apartment complex, is located in . . . Kansas. This argument misconceives the nature of this lawsuit. It is not a suit centering on any rights, title or interest in real property. Rather, it is a fraud and negligent misrepresentation case. Although the facts giving rise to plaintiffs' allegations flow from the sale of the apartment complex, the apartment complex itself is not the subject of the action. The "property" at issue is the money the defendants allegedly obtained as a result of their fraudulent conduct. The court rejects the notion that (2) applies whenever real property is tangentially involved in a dispute. Monarch Normandy Square Partners v. Normandy Square Assocs. Ltd. P'ship, 817 F. Supp. 899, 904 (D. Kan. 1993). Here, Plaintiffs are not asking the Court to consider or declare any right, title, or interest in the Swamp Angel Property. Plaintiffs instead seek to recover monetary damages that allegedly result from a statement that Sbarra made (in Kansas) to Parker (in Florida) about the property. The above law makes clear that the property is not the "subject" of such an action. Case 2:16-cv-01319-MPK Document 26 Filed 02/17/17 Page 3 of 6 4 2. A Substantial Part of the Events giving Rise to Plaintiffs' Claims Did Not Occur in Pennsylvania "To determine whether an act or omission giving rise to the claims is substantial, the court must look at the nature of the dispute." Lomanno v. Black, 285 F. Supp. 2d 637, 642 (E.D. Pa. 2003) (internal quotation omitted). Sbarra therefore cited to cases analyzing venue for defamation and tortious interference claims. In contrast, Plaintiffs rely upon an inapplicable First Circuit case and an equally–inapplicable breach of contract case. In Lomanno, the court held that venue was improper in the Eastern District of Pennsylvania for the plaintiff's defamation and tortious interference claims. In accordance with the Third Circuit's instruction examine the nature of the dispute, the court focused on where the defendants were located (Virginia), where they resided and worked (Virginia), and where they directed the allegedly defamatory statement (Virginia). Id. at 643. Therefore, a substantial part of the events giving rise the claims did not take place in Pennsylvania. Id. The Lomanno case is directly on point. Sbarra was located in Kansas when he made the telephone call at issue, and directed the allegedly defamatory statement to Parker in Florida. Sbarra Aff. at ¶¶ 1–6. While a substantial part of the events giving rise to Plaintiffs' claims may have occurred in Kansas and Florida, a substantial part did not occur in Pennsylvania. Conspicuously absent from the 13–page Opposition Brief is the citation to a single case involving venue over defamation or tortious interference–related claims. Plaintiffs have not cited to any such case law because none supports their position that venue is proper. C. The Tortious Interference Claims Fail to State a Claim Upon Which Relief Many Be Granted Plaintiffs repeatedly assert that Paragraph 49 of the Amended Complaint refers to a prospective contract. Opposition Brief at 10 ("The prospective contract Sbarra interfered with Case 2:16-cv-01319-MPK Document 26 Filed 02/17/17 Page 4 of 6 5 was for the operation of the property's oil and gas interests."), 12 ("The Amended Complaint does allege a particular contract: a contract with Prime whereby Plaintiffs would serve as operators of the oil and gas interest on the property they had conveyed to Prime."), and 12 ("Plaintiff here do not rely on generalized allegations of lost business, but have alleged the loss of a particular contract with a specific third injury."). However, a plaintiff cannot merely refer to a contract that it hoped to enter in the future. Plaintiffs' own case law makes clear that the complaint must set forth the "particular contract or express offer" that the parties were discussing. Opposition Brief at 11–12 (quoting Monroeville Chrysler, LLC v. DaimlerChrysler Motors Co. LLC, 2007 WL 4150344, at *7 (W.D. Pa. Nov. 19, 2007)). Here, Plaintiffs have not plead facts regarding any negotiations with Prime regarding a future contract. The merely assert instead that "there was a prospective business relationship between Plaintiff[s] and Prime." Am. Compl. ¶ 49. The words "contract" and "offer" are notably absent. In fact, Plaintiffs do not even allege that the ever communicated with Prime regarding the purported "prospective business relationship." Because they have not plead facts regarding the "particular contract or express offer," the Tortious Interference Claims fail as a matter of law and must be dismissed. Respectfully submitted, BUCHANAN INGERSOLL & ROONEY PC By: /s/ Gregory J. Krock Gregory J. Krock (Pa. I.D. No. 78308) Eric M. Spada (Pa. I.D. No. 311446) One Oxford Centre 301 Grant Street, 20th Floor Pittsburgh, PA 15219–1410 (412) 562–3983/3743 Case 2:16-cv-01319-MPK Document 26 Filed 02/17/17 Page 5 of 6 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing Reply Brief in Support of Motion to Dismiss Amended Complaint was filed with the Court via the CM/ECF system on the 17th day of February, 2017, which system will provide notice of the filing to the following counsel of record: Scott M. Hare LAW OFFICE OF SCOTT MICHAEL HARE 1806 Frick Building 437 Grant Street Pittsburgh, PA 15219 Matthew T. Logue James R. Thornburg QUINN LOGUE LLC 200 First Avenue, Third Floor Pittsburgh, PA 15222 /s/ Gregory J. Krock Gregory J. Krock Case 2:16-cv-01319-MPK Document 26 Filed 02/17/17 Page 6 of 6