United States District Court, E.D. Michigan, Southern Division
RAVI DEVNANI, an individual residing in Beverly Hills, Michigan d/b/a Viatechno, Plaintiff,
DKM SOLUTIONS, INC., a Texas Corporation, JEFF GRAZIOPLENE, an individual residing in Texas, SAMUEL EVANS, an individual residing in Texas, Defendants.
OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO
DISMISS FOR LACK OF PERSONAL JURISDICTION (ECF NO.
D. Borman United States District Judge.
2015, Defendant DKM Solutions, Inc. (“DKM”) hired
the Plaintiff to create a website for DKM. In this breach of
contract and copyright infringement action, Plaintiff claims
that Defendants have (1) failed to pay him for his web design
services in breach of a verbal agreement and (2) wrongfully
utilized technology that Plaintiff created and copyrighted,
which allows individuals to use and rate businesses on the
Internet, and wrongfully used Plaintiff's source code,
software, graphic designs and other copyrighted material,
without Plaintiff's permission and in breach of a verbal
agreement between Plaintiff and Defendants.
contend that Plaintiff never performed per the parties'
agreement, never created the website, and
“swindled” DKM, a Texas corporation, out of tens
of thousands of dollars but move to dismiss this action, in
lieu of an answer, for lack of personal jurisdiction over any
of the three Defendants and improper venue, and alternatively
move to transfer venue to the Western District of Texas,
Austin Division. Plaintiff has responded to Defendants'
motion (ECF No. 16) and Defendants have replied (ECF No. 18).
Court held a hearing on October 13, 2017, and GRANTED
Defendants' motion on the record. This Opinion and Order
now follows and the Court DISMISSES the action for lack of
personal jurisdiction over the Defendants.
has been an independent contractor in the field of computer
programming, web design, and graphic design since 1999. In
2003, Plaintiff began doing business as the entity
“ViaTechno.” Plaintiff never incorporated
ViaTechno, but asserts that he does business under this name
in Michigan. (ECF No. 16, Pl.'s Resp. Ex. A, June 20,
2017 Declaration of Ravi Devnani ¶ 10.) In 2003,
Plaintiff began building a web-based System that can be used
by various businesses to interface with their clients,
customers, and the public. (The “System”)
(Devnani Decl. ¶ 11.) Plaintiff has licensed this System
to dozens of small businesses in Michigan and elsewhere in
the country and a large portion of Plaintiff's income
comes from fees paid by these licensees. (Id.)
Plaintiff represents that the System is
“registered” to him and was “substantially
if not entirely created and developed in the State of
Michigan.” (Id. ¶ 12.) On or about March
10, 2017, at approximately the same time that Plaintiff filed
this lawsuit against DKM, Plaintiff applied for a copyright
registration to protect his System. (Id. Ex. E,
March 10, 2017 Certificate of Registration.)
February, 2015, Plaintiff was introduced to Mr. Grazioplene
and Mr. Evans through a mutual friend, and began working with
their corporation DKM to build a web page for a business
concept that Mr. Grazioplene and Mr. Evans had regarding a
ratings business for car salesmen in the automobile industry.
Both Mr. Grazioplene and Mr. Evans are employed by a car
dealership in Georgetown, Texas, as a finance director and
sales person respectively. (Devnani Decl. ¶ 16;
Def.'s Mot. Ex. A, April 19, 2017 Declaration of Jeff
Grazioplene ¶ 29; Def.'s Mot. Ex. B, April 19, 2017
Declaration of Samuel Evans ¶ 25.) Plaintiff and Messrs.
Grazioplene and Evans discussed, but never executed, a
license agreement and contract for Plaintiff's services.
There is no dispute, however, that the parties did begin to
perform under the terms of this “verbal
agreement” as discussed, with Plaintiff beginning work
on the website and Defendants remitting $5, 000 every other
month to Plaintiff for his services. (Devnani Decl.
¶¶ 19-20; Evans Decl. ¶ 11.) The relationship
began in approximately April, 2015, and ended in November,
2016, when DKM terminated the verbal agreement. (Grazioplene
Decl. ¶ 12; Evans Decl. ¶ 10; Devnani Decl. ¶
avers that he is a Michigan resident and has lived in
Michigan his entire life. He alleges that he currently
resides and works at 15558 Buckingham Avenue in Beverly
Hills, Michigan, where he has lived since 2014. (Devnani
Decl. ¶¶ 2, 7.) Prior to 2014 Plaintiff resided at
516 Bennaville, Birmingham, Michigan, his childhood home, for
5 years. Prior to 2009 Plaintiff was a student at the
University of Michigan. Throughout his years as a Michigan
resident, he has paid taxes as an individual in Michigan,
maintained bank accounts with local Michigan banks,
maintained a Michigan Drivers License, voted as a Michigan
resident and availed himself of Michigan health care benefits
through past and present state health care plans.
(Id. ¶ 5, Exs. A-D.) All of Plaintiff's
business and personal banking is done through Charter One
Bank in Birmingham, Michigan, which is now called Citizens
Bank. This bank has no branches in Oregon. (Id.
states that his job as an independent contractor enables him
to travel and spend stretches of time in other cities, but he
claims that he returns home to Michigan, “after some
time away, ” to have face-to-face meetings with
clients. (Devnani Decl. ¶ 13.) Plaintiff does not claim
to have ever had a meeting with anyone from DKM in Michigan
and the individual Defendants deny that either of them has
ever been in the State of Michigan. (Grazioplene Decl.
¶¶ 27; Evans Decl. ¶ 23.) Plaintiff does claim
that Mr. Grazioplene and Mr. Evans once called Plaintiff at
his Michigan home on his Michigan telephone number. (Devnani
Decl. ¶ 17.) Both Mr. Grazioplene and Mr. Evans testify
that all of their dealings with Plaintiff, except for a few
phone calls from Plaintiff to DKM in response to DKM's
request for updates while Plaintiff was purportedly visiting
his grandmother in Michigan, were with Plaintiff in Oregon.
(Grazioplene Decl. ¶¶ 15, 18; Evans Decl.
January, 2014, Plaintiff has traveled back-and-forth
frequently to Portland, Oregon, sometimes spending several
weeks at a time staying with his mother who relocated to
Portland, Oregon in 2014, to live near Plaintiff's
brother. (Id. ¶¶ 14, 15.) Although
Plaintiff avers that he does business under the d/b/a of
ViaTechno in Michigan, it is clear (and Plaintiff does not
dispute) that he does business under the ViaTechno name in
the State of Oregon as well. According to Defendants, and not
disputed by the Plaintiff, at the time that DKM negotiated
the verbal agreement with Plaintiff, and during the entire
time that DKM worked with Plaintiff, DKM understood that
Plaintiff lived at 6935 N. Michigan, Portland, Oregon 97217.
(Def.'s Mot. Ex. A, April 19, 2017 Declaration of Jeff
Grazioplene ¶¶ 14-15.) During their working
relationship with Plaintiff, DKM sent all payments to
Plaintiff at Plaintiff's Oregon address, pursuant to the
parties' verbal agreement. DKM purchased a plane ticket
for Plaintiff to fly from Portland, Oregon to Austin, Texas
to meet with DKM and once sent a gift of Texas Barbeque to
Plaintiff at his Portland, Oregon address. (Id.
¶¶ 15-16, PgID #s 90-95, 119-24.) Plaintiff offers
no assertions to contradict these factual representations by
the Defendants. Plaintiff offers no evidence, emails or other
forms of correspondence, that would permit even an inference
that Defendants should have believed that Plaintiff was
running ViaTechno out of the State of Michigan. Indeed, as
discussed further infra, all evidence in the record
is to the contrary.
in March, 2016, Plaintiff had DKM set up an account with
RackSpace, a Texas-based cloud hosting service that could
perform geo-tracking services for DKM's web-based system.
(Devnani Decl. ¶ 28.) Plaintiff was the administrator on
the account and RackSpace utilized Plaintiff's Portland,
Oregon address for purposes of RackSpace billings
consistently from April, 2016 through the termination of the
relationship with DKM. (Devnani Decl. ¶ 28; Grazioplene
Decl. at PgID #s 96-118.) Although DKM paid the RackSpace
bills, RackSpace sent the bills to Plaintiff at his Portland,
Oregon address. (Id.)
social media presence clearly indicates that both he and his
d/b/a are based in Portland, Oregon. Plaintiff's LinkedIn
Account indicates that he does motion graphics at ViaTechno
in the “Portland, Oregon Area.” (Grazioplene
Decl. at PgID # 125.) Plaintiff's Facebook Account
represents that Plaintiff is “from” Birmingham,
Michigan and “lives” in Portland, Oregon.
(Grazioplene Decl. at PgID # 126.) And Plaintiff's
Twitter Account, RaviDevnani@ViaTechno, lists Portland,
Oregon as the operating location of the business.
(Grazioplene Decl. at PgID # 127.) None of Plaintiff's
social media accounts indicates any business presence in the
State of Michigan. Plaintiff provides no controverting
evidence regarding his social media and LinkedIN accounts.
to Defendants, and not disputed by Plaintiff, Plaintiff
represented to DKM at all times that he was present and
operating his business out of Portland, Oregon. Plaintiff
does aver, and DKM does not dispute, that he tendered to DKM
early in the business relationship a copy of his Michigan
Driver's License. (Devnani Decl. ¶ 21.) On two
occasions, Plaintiff informed Mr. Grazioplene that he was
visiting his grandmother in Michigan, and sleeping on her
futon, and was unable to do much work from Michigan due to
the lack of internet access. (Grazioplene Decl. ¶ 18.)
Plaintiff did instruct DKM to send tax paperwork to what DKM
believed was Plaintiff's grandmother's address in
Michigan, so that Plaintiff could continue to claim Michigan
residence, thereby receiving health insurance and/or medical
treatments provided by the State of Michigan. (Grazioplene
Decl. ¶ 18.) Plaintiff does not deny that he represented
to DKM that he visited and stayed with his grandmother when
he was in Michigan.
STANDARD OF REVIEW
bears the burden of establishing, in response to
Defendants' motion, that personal jurisdiction exists.
Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d
883, 887 (6th Cir. 2002). The Court has discretion to make a
determination as to the existence of personal jurisdiction
without an evidentiary hearing but plaintiff must, by
affidavit, set forth specific facts demonstrating that the
court has jurisdiction. Theunissen v. Matthews, 935
F.2d 1454, 1458-59 (6th Cir. 1991).
must consider the pleadings and affidavits submitted by the
parties in the light most favorable to the plaintiff and
cannot credit “controverting assertions of the party
seeking dismissal.” Id. at 1459. “[A]
defendant who alleges facts that would defeat the court's
personal jurisdiction can invoke the court's discretion
to order a pretrial evidentiary hearing on those
facts.” Serras v. First Tenn. Bank Nat'l
Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989).
“If the written submissions raise disputed issues of
fact or seem to require determinations of credibility, the
court retains the power to order an evidentiary hearing, and
to order discovery of a scope broad enough to prepare the
parties for that hearing.” Id. (internal
citation omitted). Where there has been no evidentiary
hearing, the plaintiff need only present a prima
facie case in support of jurisdiction to defeat
dismissal. Id. at 1458. See also Miller v. AXA
Winterthur Ins. Co., 694 F.3d 675, 678 (6th Cir. 2012)
(observing that in order to defeat a motion to dismiss for
lack of personal jurisdiction, the plaintiff's affidavits
must only make out a prima facie showing and the
pleadings and affidavits are viewed in the light most
favorable to the plaintiff). Here neither party has requested
an evidentiary hearing and the Court therefore considers the
facts presented here by competing affidavits under the
prima facie standard of proof. Plaintiff bears a
“‘relatively slight' burden at this stage of
the proceedings.” MAG IAS Holdings, Inc. v.
Schmuckle, 854 F.3d 894, 901 (6th Cir. 2017) (quoting
Air Prods & Controls, Inc. v. Safetech, 503 F.3d
544, 549 (6th Cir. 2007)).
Court must view the pleadings and affidavits “in a
light most favorable to the plaintiff and do[es] not weight
the controverting assertions of the party seeking
dismissal.” MAG IAS, 854 F.3d at 899 (internal
quotation marks and citation omitted) (alterations added). If
personal jurisdiction is found at the motion to dismiss stage
based on the pleadings and affidavits, the party opposing
jurisdiction “remain[s] free to further contest the
issue by requesting an evidentiary hearing or by moving for
summary judgement if  discovery reveals a material variance
from the facts” that were determined based on the
pleadings and affidavits.” NeoGen, 282 F.3d at
893; MAG IAS, 854 F.3d at 899.
federal court's exercise of personal jurisdiction . . .
must be both (1) authorized by the law of the state in which
it sits, and (2) in accordance with the Due Process Clause of
the Fourteenth Amendment.” Neogen, 282 F.3d at
888. Thus, jurisdiction over a non-resident defendant is
permitted in Michigan if suit can be brought against the
defendant under Michigan's long-arm statute without
violating the due process requirements of the Constitution:
A federal court sitting in diversity may not exercise
jurisdiction over a defendant unless courts of the forum
state would be authorized to do so by state law-and any such
exercise of jurisdiction must be compatible with the due
process requirements of the United States
Constitution.” Int'l Techs. Consultants v.
Euroglas S.A., 107 F.3d 386, 391 (6th Cir. 1997)
(citation omitted). Deciding whether jurisdiction exists is
not an idle or perfunctory inquiry; due process demands that
parties have sufficient contacts with the forum state so that
it is fair to subject them to jurisdiction. See Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct.
2174, 85 L.Ed.2d 528 (1985) (“[T]he Due Process Clause
gives a degree of predictability to the legal system that
allows potential defendants to structure their primary
conduct with some minimum assurance as to where that conduct
will and will not ...