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Merrifield Machinery Solutions, Inc. v. JCM Engineering Corp.

United States District Court, E.D. Michigan, Southern Division

May 25, 2017




         Before the court is Defendant's motion to dismiss, filed April 5, 2017, which has been fully briefed. Pursuant to L.R. 7.1(f)(2), the court did not hear oral argument.


         Plaintiff, Merrifield Machinery Solutions, Inc. ("Merrifield")[1], entered into an agreement with Defendant, JCM Engineering Corporation ("JCM"), for the sale of a milling machine. Merrifield alleges that it delivered the equipment to JCM, but that JCM defaulted in the amount of $1, 426, 855. Merrifield filed its complaint, alleging breach of contract, unjust enrichment, lien foreclosure, and claim and delivery, on December 27, 2016. JCM seeks dismissal pursuant to Federal Rule of Civil Procedure 12(b)(2), for lack of personal jurisdiction.

         Merrifield is a Michigan entity that has its principal place of business in Pontiac, Michigan. JCM is a California corporation with its principal place of business in Ontario, California. JCM avers that it has no offices or employees in Michigan, owns no property in Michigan, does not advertise or solicit business in Michigan, and conducts no business in Michigan. See Declaration of Carlo Moyano.

         In 2014, JCM was looking for a milling machine to purchase and contacted Plaintiff. A Merrifield representative traveled to JCM's offices in California to present a proposal for the sale of a milling machine manufactured by Fooke Engineering Works, a German company. JCM alleges that the parties negotiated the purchase in California, whereas Merrifield contends that negotiations continued by telephone and email. JCM issued a purchase order containing various terms and conditions, including a California choice of law clause and forum selection clause. See Def.'s Ex. A. The copy provided by JCM is not signed by Merrifield. Merrifield states that it executed a "purchase agreement" for the equipment in Michigan, although it does not provide a copy of the alleged agreement. See Affidavit of Rich Rohn.

         JCM contends that the Fooke milling machine was shipped to its location in California directly from Germany. Merrifield asserts that it shipped the machine from Michigan. Id. Merrifield alleges that, before defaulting, JCM submitted payments for the machine to its office in Michigan.


         I. Standard of Review

         JCM seeks dismissal of this action for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2). Plaintiff bears the burden of demonstrating that jurisdiction exists and, in the face of a properly supported motion for dismissal, must "set forth specific facts showing that the court has jurisdiction." Theunissen v. Matthews. 935 F.2d 1454, 1458 (6th Cir. 1991). The court has three alternatives for dealing with a Rule 12(b)(2) motion: "it may decide the motion upon the affidavits alone; it may permit discovery in aid of deciding the motion; or it may conduct an evidentiary hearing to resolve apparent factual questions." Id. The court has discretion to select which method it will follow; however, the method selected affects the burden of proof the plaintiff must bear to avoid dismissal. Id. "Where the court relies solely on the parties' affidavits to reach its decision, the plaintiff must make only a. prima facie showing that personal jurisdiction exists in order to defeat dismissal." Id. When relying solely on the papers, the court must view the evidence in the light most favorable to the plaintiff and "does not weigh the controverting assertions of the parting seeking dismissal." Id. at 1459. "We adopted this rule ... in order to prevent non-resident defendants from regularly avoiding personal jurisdiction simply by filing an affidavit denying all jurisdictional facts...." Id. In this case, the court will rely upon the papers and consider whether Plaintiff has established a prima facie showing of personal jurisdiction.

         II. Personal Jurisdiction

         Personal jurisdiction can be general, where the defendant has continuous and systematic contact with the forum state, or limited (also known as specific), where the subject matter of the lawsuit is related to the defendant's contacts with the forum state. See Sports Auth. Mich. Inc. v. Justballs. Inc.. 97 F.Supp.2d 806, 810 (E.D. Mich. 2000) (Woods, J.). In Michigan, courts have general jurisdiction over a corporation when it incorporates under Michigan laws, consents to be sued in Michigan, or carries on a "continuous and systematic part of its general business within the state." M.C.L. § 600.711.

         JCM does not carry on a continuous and systematic part of its general business in Michigan. It does not have an office, property, bank account, employees, or a registered agent in Michigan. It does not advertise or solicit customers in Michigan. See Def.'s Ex. 1.

         Merrifield suggests that JCM conducts business in Michigan because it supplies companies that have facilities in Michigan, such as Northrop Grumman. Merrifield has not provided evidence that JCM makes sales directly to Michigan or conducts a "continuous and systematic part of its general business" within Michigan, however. Merrifield has not ...

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