Knickerbocker v. AvePoint, Inc.

ROBERT KNICKERBOCKER Plaintiff, v. AVEPOINT, INC., et al. Defendants

Civil No.: BPG-20-505

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

March 11, 2021

MEMORANDUM OPINION

Currently pending before the court are Avepoint's Motion to Dismiss Knickerbocker's Complaint ("Motion") (ECF No. 14), Avepoint's Memorandum in Support of Motion to Dismiss (ECF No. 15), Plaintiff's Response Brief ("Opposition") (ECF No. 20),¹ and Avepoint's Reply in Support of Motion to Dismiss ("Reply") (ECF No. 21). The issues are fully briefed, and no hearing is necessary. Loc. R. 105.6. For the reasons stated below, Avepoint's Motion to Dismiss Knickerbocker's Complaint (ECF No. 14) is denied.

I. BACKGROUND

Plaintiff, a resident of Maryland, was hired as a Senior Account Executive by defendant AvePoint Public Sector, Inc. ("APSI"), a Virginia company, on or about November 13, 2017. (ECF No. 15 at 3). In addition to plaintiff's salary, plaintiff earned commissions when he secured contracts for defendants. (ECF No. 20 at 2). At the heart of this dispute is an APSI contract relatedto the Internal Revenue Service ("IRS") office in New Carrollton, Maryland (the "IRS contract"). (Id. at 3). Plaintiff contends that he secured the IRS contract for defendants in late 2018 for which, in addition to other contracts, he never received the appropriate commissions. (Id.) Defendants terminated plaintiff on or about August 7, 2019, and maintain that plaintiff is not entitled to any additional commissions. (ECF No. 15 at 4-5).

On February 26, 2020, plaintiff filed his complaint in this court with two claims: Count I - Violation of the Maryland Wage Payment and Collection Law ("MWPCL"); and Count II - Unjust Enrichment. (ECF No. 1). Defendants move to dismiss plaintiffs' complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction; Federal Rule of Civil Procedure 12(b)(3) for improper venue; and Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (ECF No. 13 at 1).

II. ANALYSIS

A. Personal Jurisdiction

Defendants argue that this court does not have personal jurisdiction given defendants' lack of connection to the forum. (ECF No. 15, 13-15). A challenge to personal jurisdiction under Rule 12(b)(2) "is to be resolved by the judge, with the burden on the plaintiff ultimately to prove grounds for jurisdiction by a preponderance of the evidence." Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003) (quoting Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 59-60 (4th Cir.1993)). "[W]hen, as here, the court addresses the question on the basis only of motion papers, supporting legal memoranda and the relevant allegations of a complaint, the burden on the plaintiff is simply to make a prima facie showing of a sufficient jurisdictional basis in order to survive the jurisdictional challenge." Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). "Inconsidering a challenge on such a record, the court must construe all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of jurisdiction." Id.

A court may exercise two types of jurisdiction: "'general' (sometimes called 'all-purpose') jurisdiction and 'specific' (sometimes called 'case-linked') jurisdiction." Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty., 137 S. Ct. 1773, 1780 (2017). In this case, plaintiff argues only that the court has specific jurisdiction over defendants, not general jurisdiction, in Maryland. (ECF No. 20 at 7 n.30). Specific jurisdiction arises when there is "an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation." Id.; Carefirst of Maryland, Inc., 334 F.3d at 397. As in this case where defendants are nonresidents of Maryland, the federal district court may exercise specific jurisdiction only if "(1) an applicable state long-arm statute confers jurisdiction and (2) the assertion of that jurisdiction is consistent with constitutional due process." Nichols v. G.D. Searle & Co., 991 F.2d 1195, 1199 (4th Cir. 1993) (citing Blue Ridge Bank v. Veribanc, Inc., 755 F.2d 371, 373 (4th Cir. 1985)).

1. Maryland Long-Arm Statute

"The Maryland courts have consistently held that the state's long-arm statute [Md. Code Ann., Courts & Jud. Proc. § 6-103] is coextensive with the limits of personal jurisdiction set by the due process clause of the Constitution." Carefirst of Maryland, Inc., 334 F.3d at 396. The Maryland long-arm statute provides, in relevant part, that "[a] court may exercise personal jurisdiction over a person, who directly or by an agent: (1) [t]ransacts any business or performs any character of work or service in the [s]tate." Md. Code Ann., Cts. & Jud. Proc. § 6-103(b)(1)-(2).

In this case, plaintiff has shown the requirements of the long-arm statute are met by the defendants' "transact[ing] any business or perform[ing] any character of work or service" in Maryland. Md. Code Ann., Cts. & Jud. Proc. § 6-103(b)(1). Plaintiff asserts that work was performed by plaintiff on defendants' behalf in New Carrolton, Maryland at the IRS office ("New Carrollton office") related to the IRS contract at issue in this case. (ECF No. 20 at 12). Defendants counter that the contract in question was with a Virginia company and subject to Virginia law. (ECF No. 15 at 10, 14-15). Defendants do not contest that the New Carrollton, Maryland office of the IRS received defendants' services, but argue that the services were provided remotely from Virginia. (Id.) Plaintiff also provided proof of his work on behalf of defendants at the New Carrollton office through multiple affidavits. Stephen Dvoranchik, an IRS contractor at the New Carrollton office, stated that plaintiff "attended numerous in-person meetings" during contract negotiations for the IRS contract and after defendants were awarded the IRS contract. (ECF No. 20-1). Plaintiff also affirms that he regularly traveled to the New Carrollton office in connection with the IRS contract. (ECF No. 20-2).

Although the initial contract for the services performed at the New Carrollton office may have occurred in Virginia, the court concludes that the meetings conducted and the work performed at the New Carrollton office, as detailed in plaintiff's affidavits, fall within the long-arm statute's definition of "transact[ing] any business or perform[ing] any character of work or service." Md. Code Ann., Cts. & Jud. Proc. § 6-103(b)(1). Indeed, "the location of any contract formation leading to the transaction of business is irrelevant because 'the statutory test [of transacting any business] may be satisfied by a showing of other purposeful acts performed by the [defendant] in this [s]tate in relation to the contract, albeit preliminary or subsequent to its execution.'" Hausfieldv. Love Funding Corp., 16 F. Supp. 3d 591, 599 (D. Md. 2014) (quoting Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 209 N.E.2d 68, 75 (N.Y. 1965)).

In concluding that the Maryland long-arm statute confers jurisdiction over the defendants, the court found the reasoning in Hausfield to be instructive. In Hausfield, the plaintiff worked for the Washington, D.C.-based defendant but closed loans in Maryland and attended one meeting in Maryland. Hausfield, 16 F. Supp. 3d at 598. This court found that the plaintiff had sufficiently alleged a relationship between his claims and acts that occurred in Maryland to survive defendant's motion to dismiss. Id. at 600. The same holds true in the instant case. Plaintiff sufficiently alleges a relationship between his claims and acts that occurred in Maryland and, accordingly, has met his burden to prove by a prima facie showing that the Maryland long-arm statute is satisfied. Combs, 886 F.2d at 676.

2. Due Process

In addition to satisfying the long-arm statute, a court may only exercise jurisdiction over a nonresident defendant "if the defendant has 'minimum contacts' with the forum, such that to require the defendant to defend its interests in that state 'does not offend traditional notions of fair play and substantial justice.'" Carefirst of Maryland, Inc., 334 F.3d at 397 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). The Fourth Circuit has noted three relevant considerations in determining if these due process requirements have been met: "(1) the extent to which the defendant 'purposefully avail[ed]' itself of the privilege of conducting activities in the State; (2) whether the plaintiff['s] claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally 'reasonable.'" ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002).

Regarding the first consideration, the extent to which defendants "purposefully avail[ed]" themselves of the privilege of conducting activities in Maryland, the Fourth Circuit lists a set of "non-exhaustive factors to consider." Hausfield, 16 F. Supp. at 600. In relevant part, these factors include "whether [defendants] deliberately engaged in significant or long-term business activities in the forum state" and "whether the performance of contractual duties was to occur within the forum." Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 278 (4th Cir. 2009). In this case, plaintiff signed his employment contract with defendants at his home in Maryland, completed work for defendants from his home in Maryland, and attended meetings regarding defendants' work at the New Carrollton office. (ECF No. 20 at 17). Defendants argue that plaintiff did not have permission to work from home and that plaintiff's employment contract was sent to plaintiff's work email, which defendants assumed plaintiff would open and sign at defendants' office in...