U.S. Fire Pump Co. v. Alert Disaster Control (Middle East) Ltd.

US FIRE PUMP COMPANY, LLC v. ALERT DISASTER CONTROL (MIDDLE EAST) LTD., ET AL.

CIVIL ACTION 19-335-SDD-EWD

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

January 28, 2021

RULING

Before the Court is a Motion to Dismiss¹ under Rule 12(b)(2) and Rule 12(b)(5) and a Motion for Partial Dismissal² under Rule 12(b)(6) filed by Alert Disaster Control (Asia) PTE. Ltd ("Alert Asia"), Alert Disaster Control (Middle East) Ltd. ("Alert Middle East"), and Michael E. Allcorn ("Allcorn") (collectively, "Defendants"). US Fire Pump Company, LLC ("Plaintiff") filed an Opposition³ to each Motion, to which Defendants filed two Replies.⁴ For the following reasons, Defendants' Motion to Dismiss⁵ under Rule 12(b)(2) and Rule 12(b)(5) shall be DENIED, and Defendants' Motion for Partial Dismissal⁶ under Rule 12(b)(6) shall be GRANTED in part and DENIED in part.

I. BACKGROUND

This is at core a breach of contract case. However, Plaintiff brings several causes of action against three foreign defendants with different citizenships and asserts a veilpiercing theory. The Court will provide the following summary of the salient facts in this complex dispute.

A. The Parties

Plaintiff is an LLC whose sole member is Louisiana domiciliary Christopher Ferrara ("Ferrara").⁷ Plaintiff is a provider of "industrial fire solutions" and a manufacturer of firefighting systems operated in Holden, Louisiana.⁸ Alert Middle East is a company incorporated in Cyprus with its "place of business in the United Arab Emirates and other locations outside of the United States."⁹ Alert Asia is a company organized in Singapore with its principal place of business in Singapore.¹⁰ Both Alert companies are engaged in emergency response and risk management, with an emphasis on "oilfield firefighting and blowout control, well control engineering and project management, marine and industrial firefighting, hazardous material control, integrated QHSE management, safety and survival training, toxic environment protection, and fire and safety OEM and product sales."¹¹ Allcorn is the common tie between these companies, allegedly serving as sole shareholder and operator of each.¹² Allcorn is also, by his own admission, the managing director of each company.¹³ Allcorn is a permanent resident of Singapore, and a registered resident of the UAE.¹⁴

B. Facts Alleged

Plaintiff and Alert Middle East, via Allcorn, began negotiations on December 5, 2018, for Plaintiff to sell firefighting equipment to Alert Middle East.¹⁵ Who initiated contact is a matter of dispute. Plaintiff alleges that Allcorn and Plaintiff traded a flurry of emails, phone calls, and text messages over several months related to specifications for the equipment, pricing, payment terms, and delivery.¹⁶ Although Plaintiff tendered several contracts, the parties never executed one. Plaintiff alleges that a contract formed through communications which evidence offer and acceptance. In sum, beginning in December 2018 and into February 2019, Alert Middle East, via Allcorn, allegedly agreed to purchase more than $3.4 million in materials and equipment from Plaintiff.¹⁷

On January 10, 2019, Plaintiff contacted Alert Middle East to inquire about payment.¹⁸ On January 29, 2019, Alert Middle East, via Allcorn, emailed an assurance of future payment.¹⁹ Plaintiff alleges that no payment has been made despite multiple demands.²⁰ Plaintiff filed suit on May 29, 2019, claiming breach of contract, bad faith breach of contract, fraud, a violation of the Louisiana Unfair Trade Practices Act ("LUTPA"), and failure to pay on an open account.²¹ Plaintiff seeks specific performance and damages, including interest, costs, lost profits, incidental damages, court costs, attorney fees, and treble damages.²²

II. LAW AND ANALYSIS

Subject matter jurisdiction is based on diversity of citizenship. Defendants challenge personal jurisdiction under Rule 12(b)(2) and allege improper service of process under Rule 12(b)(5); Defendants also move to dismiss under Rule 12(b)(6).

A. Personal Jurisdiction: Rule 12(b)(2) Motion to Dismiss

Plaintiff asserts that the Court has specific personal jurisdiction over Alert Middle East and Allcorn for both its contractual and tortious causes of action.²³ Plaintiff argues that Allcorn and Alert Middle East's contacts can be imputed to Alert Asia for the purpose of personal jurisdiction under a single business enterprise theory.²⁴

A federal district court sitting in diversity may exercise personal jurisdiction over a foreign defendant if: (1) the long-arm statute of the forum state enables personal jurisdiction over the defendant, and (2) the exercise of personal jurisdiction is consistent with the Due Process Clause. The due process and long-arm statute inquiries merge because Louisiana's long-arm statute extends jurisdiction coextensively with the limits of the Due Process Clause.²⁵

A court may exercise specific jurisdiction²⁶ in conformity with due process "in a suit arising out of or related to the defendant's contacts with the forum"²⁷ when the "'nonresident defendant has purposefully directed its activities at the forum state and thelitigation results from alleged injuries that arise out of or relate to those activities.'"²⁸ The Fifth Circuit follows a three-step analysis for specific personal jurisdiction. First, a court must determine "whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there."²⁹ The "'purposeful availment' must be such that the defendant 'should reasonably anticipate being haled into court' in the forum state."³⁰ Second, a court considers "whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts."³¹ Third, "[e]ven if minimum contacts exist, the exercise of personal jurisdiction over a non-resident defendant will fail to satisfy due process requirements if the assertion of jurisdiction offends traditional notions of fair play and substantial justice."³²

"When a nonresident defendant presents a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing the court's jurisdiction over the nonresident."³³ When a district court rules on a motion to dismiss without an evidentiary hearing, the plaintiff need only present a prima facie case of personal jurisdiction.³⁴ At this stage, uncontroverted allegations in the complaint must be taken as true, and conflictsbetween the parties' affidavits must be resolved in the plaintiff's favor.³⁵ To aid resolution of the jurisdictional issue, a court "may receive interrogatories, depositions or any combination of the recognized methods of discovery . . . . But even if the court receives discovery materials, unless there is a full and fair hearing, it should not act as a fact finder and must construe all disputed facts in the plaintiff's favor and consider them along with the undisputed facts."³⁶ "When deciding a motion to dismiss for lack of personal jurisdiction, the court is not limited to considering the facts pleaded in the complaint."³⁷

1. Allcorn/Alert Middle East's Contacts with Louisiana

The starting point of the fact-intensive analysis is Allcorn/Alert Middle East's contacts with Louisiana. Plaintiff asserts Allcorn contacted it first.³⁸ Defendants assert that Plaintiff contacted them first because Plaintiff's agent in the UAE, Emergency Safety Solutions ("ESS"), contacted Defendants first.³⁹ Defendants cite to the affidavit of David Jackson, Managing Director of ESS.⁴⁰ Jackson attests that on December 5, 2018, he provided Alert Middle East with Plaintiff's contact information and asked Alert Middle East to reach out to Plaintiff as a potential customer.⁴¹ Jackson also notified Plaintiff of the potential sales opportunity.⁴² Alert Middle East, via Allcorn, contacted Plaintiff on thesame day.⁴³ So while Plaintiff's agent initially contacted Alert Middle East, Alert Middle East then took the next step to contact Plaintiff directly.

From there, the parties began exchanging emails, phone calls, and text messages. The substantive emails began on December 5, 2018, when Allcorn acknowledged that the parties had spoken on the phone earlier that day and requested quotes for several items.⁴⁴ Later that day, Plaintiff's representative sent Allcorn a quote.⁴⁵ The following day, December 6, Allcorn sent an additional email acknowledging that another phone call had occurred and "confirm[ing] [Alert Middle East's] interest in the immediate purchase of the following. . . ."⁴⁶ Plaintiff's representative responded with an updated proposal and draft contract.⁴⁷ Plaintiff alleges that this contract provided for Louisiana choice of law and F.O.B. Holden, Louisiana.⁴⁸ However, Defendants did not sign this or any other contract.

On the following day, December 7, Allcorn sent one email with pictures of Defendants'⁴⁹ current equipment⁵⁰ and one email acknowledging a phone call that had occurred that day and providing a timeline for Allcorn/Alert Middle East's payment to Plaintiff.⁵¹ Plaintiff's representative emailed Allcorn that night requesting that Allcorn signand return the proposal and contract or ask for revisions.⁵²

On the following day, December 8, Allcorn responded to the previous email and indicated that Allcorn/Alert Middle East would sign the contract if the reference to ENOC⁵³ was removed and the client name was amended to Alert Middle East—instead of Alert Asia and Allcorn as it had been written.⁵⁴ In the same email, Allcorn requested preferential pricing and indicated that "we wish to establish a long-term relationship between ALERT - US Fire Pump."⁵⁵ On the same day, Allcorn sent another email with 32 pictures of Alert equipment for reference.⁵⁶ Plaintiff's representative responded with a revised contract in conformance with Allcorn's request.⁵⁷

On December 10, Plaintiff's representative sent Allcorn an...