Commissioning Agents, Inc. v. Long

143 F.Supp.3d 775

COMMISSIONING AGENTS, INC, Plaintiff,

v.Robert G. LONG Individually, Hugh General Management, LLC doing business as HughCx ; doing business as HughGM, HughCx, LLC doing business as HughGM doing business as Hugh General Management, Mission Critical Commissioning, LLC doing business as Hugh General Management doing business as HughCx doing business as HughGM, Defendants.

Case No. 1:15–cv–00062–TWP–DKL.

United States District Court, S.D. Indiana, Indianapolis Division.

Signed Oct. 29, 2015.

Christopher J. Bayh, T. Joseph Wendt, Barnes & Thornburg LLP, Indianapolis, IN, for Plaintiff.

Arend J. Abel, Takeena Monette Thompson, Michael Wesley McBride, Cohen & Malad LLP, Joshua B. Fleming, Michael A. Rogers, Quarles & Brady LLP, Indianapolis, IN, for Defendants.

ENTRY ON MOTIONS TO DISMISS

TANYA WALTON PRATT, District Judge.

This matter is before the Court on Defendants, Robert G. Long ("Mr. Long") and Mission Critical Commissioning LLC.'s ("MMC") Renewed Motion to Dismiss for Lack of Personal Jurisdiction (Filing No. 30) and Defendants, Hugh General Management, LLC.'s ("HughGM") and HughCx, LLC.'s ("HughCx") Motion to Dismiss for Lack of Personal Jurisdiction and Alternative Joinder in Motion to Transfer Venue (Filing No. 27) (collectively, the "Defendants"). Plaintiff, Commissioning Agents, Inc. ("CAI") is a business that provides commissioning services. According to CAI, while employed for its business, Mr. Long lied to, defrauded, and stole from CAI for the benefit of himself and CAI's competitors. Specifically, CAI alleges that Mr. Long stole proprietary information and used it on behalf of a competitor, HughGM, worked simultaneously for HughGM without CAI's knowledge, and used CAI's proprietary information to steal CAI's business for HughGM's benefit. CAI further alleges that HughGM was aware of Mr. Long's double-dealing and either actively encouraged it or deliberately turned a blind-eye to it; and that Mr. Long falsified timesheets and expense reports that he submitted to CAI, resulting in CAI paying Mr. Long unearned wages and unjustified reimbursements. In this lawsuit, CAI brings an array of claims against the Defendants, including: breach of contract and breach of fiduciary duties, actual and constructive fraud, tortious interference with business relationship, tortious and criminal conversion, theft and receiving stolen property, unjust enrichment, misappropriation of trade secrets, violations of the federal Racketeer Influenced and Corrupt Organizations Act ("RICO") and Indiana's Corrupt Business Influence Act. The Defendants seek dismissal of all claims pursuant to Fed.R.Civ.P. 12(b)(2) based on lack of personal jurisdiction. For the reasons stated below, the Defendants' Motions to Dismiss are DENIED.

I. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(2) requires dismissal of a claim where personal jurisdiction is lacking. When a defendant moves to dismiss under Rule 12(b)(2), the plaintiff bears the burden of demonstrating the existence of jurisdiction. Purdue Research Found. v. Sanofi–Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.2003) ; RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir.1997) ; Wine & Canvas Dev., LLC v. Weisser, 886 F.Supp.2d 930, 937 (S.D.Ind.2012) (J. Pratt).

When the court determines personal jurisdiction based only on reference to submissions of written materials, rather than based on evidence submitted at a hearing, a plaintiff simply needs to make a prima facie case of personal jurisdiction. Purdue Research Found.,

338 F.3d at 782 ; Wine & Canvas Dev., LLC, 886 F.Supp.2d at 937. In determining whether the plaintiff has met the prima facie standard, the plaintiff is entitled to a favorable resolution of all disputed relevant facts.¹

II. BACKGROUND

Unlike the typical pleading-stage, motion to dismiss, the facts in the amended complaint and affidavits are fairly well-developed and many are hotly-contested. Extrinsic evidence has been incorporated in the background section. Where there are factual disputes, the Court has attempted to note them by citing the opposing materials. The Court is mindful that it must resolve all competing factual inferences in favor of CAI, the non-moving plaintiff. See uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 423–24 (7th Cir.2010). Moreover, as the plaintiff, CAI is entitled to have any conflicts in the affidavits resolved in its favor. Turnock v. Cope, 816 F.2d 332, 333 (7th Cir.1987).

A. The Parties

1. CAI

CAI, an Indiana corporation with its principal place of business in Indianapolis, runs its accounting, human resources, marketing, administrative, data-management, and technology functions out of Indianapolis. In addition, its senior management, training facilities, and cloud-based information technology center are all located in Indianapolis.

CAI is in the business of providing commissioning services, which include consulting, engineering, and design services to ensure that a building is constructed to fit its intended purpose and operates accordingly. The commissioning industry bears some similarity to the construction industry in that clients put projects up for bid to qualified commissioning firms and award the business to the commissioning firm most suited to perform the work required, often based on the pricing information and technical ability manifested in a firm's proposal. The commissioning firm hired to do the work is then responsible for ensuring that the work is completed on time.

Commissioning clients usually do not advertise publicly when they have a need for commissioning services. Instead, clients typically announce their needs only to those firms with whom they have a prior relationship or with those firms that are known to have a strong reputation for quality work. Commissioning firms, therefore, invest significant resources in cultivating strong relationships with prospective clients and in building a strong reputation through consistent, excellent work.

2. HughGM and HughCx

HughGM and HughCx are both limited liability companies with their principal places of business in the state of Washington. The sole member of HughGM is George H. Amburn, Jr. ("Mr. Amburn"), a resident and citizen of Washington; and the sole member of HughCx is HughGM, which is also a citizen of Washington. Like CAI, HughGM is in the business of providing commissioning services for corporate clients.

3. Mr. Long and MMC

Mr. Long is a resident of Washington. Other than his three-day training in Indianapolis, Mr. Long has neither visited nor conducted business in Indiana. MMC is a limited liability company, allegedly owned by Mr. Long, organized under the laws of Nevada, and primarily doing business in Washington. MMC has never done any business in Indiana.

B. Mr. Long works concurrently for CAI and HughGM

1. Mr. Long is hired by CAI

In October 2012, Mr. Long contacted Nathan Temple ("Mr. Temple"), CAI's Regional Manager for Washington, Oregon and California, regarding contract work in the Washington area. In response, Mr. Temple informed Mr. Long that CAI did not hire independent contractors but he was interested in talking to Mr. Long about full-time employment with CAI.

Over the course of the next two months, Mr. Long participated in numerous electronic and telephonic communications with CAI employees and attended two interviews, one in Bellevue, Washington and one in San Francisco, California. During the California interview, CAI's CEO, Robert Chew ("Mr. Chew"), met with Mr. Long and explained that CAI was headquartered in Indianapolis but had employees who primarily worked in customer project locations. About a month into the interview process, Mr. Temple e-mailed Mr. Long a copy of CAI's employment application, which Mr. Long completed and submitted back to Mr. Temple via e-mail. Mr. Long also submitted his application to CAI's Human Resources Development Director, Stephen Knoll, in Indianapolis.

On December 6, 2012, Mr. Chew extended a formal employment offer to Mr. Long via email. By the offer's terms, CAI would provide: (1) compensation of $39.00 per hour, plus overtime, which together provided an opportunity for Mr. Long to earn over $100,000.00 per year, depending on the number of hours he worked; (2) reimbursement of expenses incurred pursuant to travel that CAI might require for CAI work; and (3) other benefits such as paid vacation, medical insurance, company-funded retirement contributions, and a 401(k) savings plan. Mr. Long accepted the offer, and Mr. Chew emailed the entire company to share the news that Mr. Long had joined CAI's "West Coast team".

On December 10, 2012, Mr. Long began his employment at CAI. Mr. Long traveled to Indianapolis for his initial training, where he signed an employment agreement with CAI. By signing the agreement, Mr. Long explicitly acknowledged that CAI's proprietary information and materials belonged exclusively to CAI. He further promised to keep those materials confidential and not to use them for his own benefit or the benefit of others. Specifically, the employment agreement read, in significant part, as follows,

Confidential Information[:] I am aware that during the course of my employment confidential information will be made available to me, for instance, product designs, employee/employment information, wage and salary data, marketing strategies, customer and employee lists, pricing policies and other related information. I understand that this information is proprietary and critical to the success of [CAI] and must not be given out or used outside of [CAI]'s premises or with non-[CAI] employees. In the event of termination of employment, whether voluntary or involuntary, I hereby agree not to utilize or exploit this information with any other individual or company.

Mr. Long personally returned the signed employment agreement to CAI's Human Resources department in Indianapolis.

Mr. Long served as a Commissioning Engineer for CAI, and was hired to effectuate growth and to service CAI's...