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Tulkoff Food Products, Inc. v. WM. E. Martin and Sons Co., Inc.

United States District Court, D. Maryland

July 7, 2017

TULKOFF FOOD PRODUCTS, INC., Plaintiff,
v.
WM. E. MARTIN AND SONS CO., INC., Defendant.

          MEMORANDUM OPINION

          ELLEN L. HOLLANDER, UNITED STATES DISTRICT JUDGE

         Plaintiff Tulkoff Food Products, Inc. (“Tulkoff Food”) brought suit against defendant Wm. E. Martin and Sons Co., Inc. (“Martin and Sons” or “Martin Spices”) (ECF 1), alleging breach of a “Sales Booking” agreement. Id. ¶¶ 23-28; see ECF 1-1 (“Agreement” or “Sales Booking”). Under the Agreement, Martin and Sons sold thirty-six full container loads (“FCL”) of minced Chinese garlic to Tulkoff Food, to be delivered on a particular schedule. See ECF 1-1. Tulkoff Food claims that Martin and Sons failed to deliver nine of the 36 FCLs, as required by the Agreement. ECF 1, ¶ 27. As a result, Tulkoff Food alleges that it has incurred more than $564, 000 in “direct, consequential, and incidental damages.” Id. ¶ 28.

         Martin and Sons has moved to dismiss for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2). ECF 7. The motion is supported by a memorandum of law (ECF 7-1) (collectively, “Motion”) and an exhibit. ECF 7-2. Tulkoff Food opposes the Motion (ECF 12, “Opposition”) and has submitted an exhibit. ECF 12-1. Martin and Sons has replied. ECF 13 (“Reply”).

         The Motion has been fully briefed and no hearing is necessary to resolve it. See Local Rule 105.6. For these reasons that follow, I shall deny the Motion.

         I. Factual Background

         Tulkoff Food is a Maryland corporation with its principal place of business in Baltimore. ECF 1, ¶ 1. According to Tulkoff Food, it is a “leading manufacturer of food service goods, supplying a variety of full-flavored, high-quality condiments, specialty sauces and ingredients for co-pack, private label, food service, industrial and retail customers nationwide.” Id. ¶ 6. Philip Tulkoff is the president of Tulkoff Food. ECF 12-1 (Tulkoff Affidavit), ¶ 1.

         William Martin is vice president of Martin and Sons. ECF 7-2 (Martin Declaration), ¶ 1. Martin and Sons is a New York corporation with its principal place of business in Roslyn, New York. Id. ¶ 5. Mr. Martin describes defendant as an “importer of spices, seeds and herbs, which it sells for its own account from a warehouse in New Jersey.” Id. ¶ 6. Martin and Sons also “facilitates transactions between overseas shippers of spices, seeds and herbs which are delivered directly to the purchaser of the product.” Id. ¶ 7.

         Tulkoff Food and Martin and Sons entered into the Agreement on or about August 20, 2015. See ECF 1-1. As noted, under the Agreement, Martin and Sons sold to Tulkoff Food 36 FCLs of minced Chinese garlic, each containing approximately 39, 500 pounds of garlic. Id. The garlic was to be delivered over a 13-month schedule, as set forth in the Agreement. Id. Tulkoff Food agreed to pay $1.58 per pound of garlic. Id. Notably, the Agreement provides, id.: “Proper execution of this contract is the responsibility of the shipper.” In its Complaint, Tulkoff Food claims that Martin and Sons handled all aspects of shipping the garlic and entered into contracts for the transportation of the shipments. ECF 1, ¶¶ 14, 15. But, in his Declaration, Mr. Martin counters that Martin and Sons did not handle any of the aspects of shipping the garlic. ECF 7-2, ¶ 19. He also avers that Martin & Sons did not enter into contracts for the transportation of the shipments. Id. ¶ 20. According to Mr. Martin, the shipper for this contract was Shandong Sanxing Food Co., Ltd. (“Sanxing”), a producer and shipper in China. Id. ¶ 17. Mr. Martin asserts: “The identity of the Chinese shipper was known to and approved by Tulkoff [Food] at the time of the transaction.” Id.

         Mr. Martin explains that the product due under the Agreement was shipped directly by Sanxing to Tulkoff Food. Id. ¶ 18. To this end, Mr. Martin states that Martin and Sons “did not handle . . . (1) pickup of garlic from facilities in China; (2) shipping of garlic to Chinese port(s), including in Qingdao; (3) shipping of garlic from ports such as Qingdao to a port in Baltimore, Maryland; or (4) shipping of garlic from Baltimore's port to Tulkoff [Food's] facilities in Maryland.” Id. ¶ 19. Rather, Mr. Martin maintains that defendant entered into a contract with TRA Spice Inc. (“TRA Spice”) to “facilitat[e] the shipments between Sanxing and Tulkoff [Food] . . . .” Id. ¶ 21. According to Mr. Martin, all of the “activities” concerning the shipment of the garlic were handled either by Sanxing or TRA Spice. Id. ¶ 22.

         In his Affidavit, Mr. Tulkoff disputes Mr. Martin's characterization of the shipping arrangements. ECF 12-1. According to Mr. Tulkoff, no representative of Tulkoff Food “met or communicated with [Sanxing] in relation to the Sales Booking.” Id. ¶ 6. Moreover, Mr. Tulkoff states that during the course of performance of the Agreement, Martin and Sons “handled all aspects of shipping the minced garlic.” Id. ¶ 7. Specifically, Mr. Tulkoff avers, id.:

Martin Spices handled at least the following shipping activities: (1) pickup of garlic from facilities in China; (2) shipping of garlic to Chinese port(s), including in Qingdao; (3) shipping of garlic from ports such as Qingdao to a port in Baltimore, Maryland; (4) shipping of garlic from Baltimore's port to Tulkoff [Food's] facilities in Maryland; and (5) paying all duties or tariffs due to the United States government upon entry of any shipment.

         In support of its position, Tulkoff Food submitted exhibits with Mr. Tulkoff's Affidavit, consisting of emails that appear to be from Martin and Sons. See Id. at 7-97. The emails, sent from the address “import@martinspices.com”, provide information such as the date of the shipments of the containers and estimated dates of arrival. See, e.g., id. at 7-8. Several of the emails also provide updates regarding the shipments, including changes in the estimated dates of arrival (e.g., Id. at 23-24, 32-33, 43-44, 53-54) and information regarding customs and FDA inspections. Id. at 16-17.

         According to Tulkoff Food, in or around September 2016, Martin and Sons “fell significantly behind” on the shipping schedule in the Agreement. ECF 1, ¶ 16. Tulkoff Food claims that on January 18, 2017, Martin and Sons repudiated its duties under the Agreement, “claiming that [Martin and Sons] was never responsible for delivering minced Chinese garlic to Tulkoff [Food] in the first place.” Id. ¶ 19. Tulkoff Food alleges that it has been forced to pay $564, 060 to obtain cover and that it will continue to incur additional damages that are “consequential to or incidental to Martin Spices' breaches.” Id. ¶¶ 21, 22.

         In the Motion, Martin and Sons claims that this Court lacks personal jurisdiction over it. ECF 7-1 at 1. In his Declaration, Mr. Martin provides details concerning the contacts between Martin and Sons and the State of Maryland.

         In particular, Mr. Martin avers that “Martin and Sons does not own or lease any real property in Maryland.” ECF 7-2, ¶ 8. He also claims that “Martin and Sons does not have, and has never had, any office, phone listings, mailing address, bank account, authorized agents, subsidiaries, or employees in Maryland.” Id. ¶ 9. Further, Mr. Martin avers that during the past three years, Martin and Sons has had “slightly under four hundred total customers”, of which approximately seven, including Tulkoff Food, were located in Maryland. Id. ¶ 10. And, Mr. Martin asserts that “no officer or employee of Martin and Sons is regularly present in Maryland on business, and the last time any officer or employee of Martin and Sons went to Maryland for any business was approximately more than seven years ago.” Id. ¶ 11.

         In addition, Mr. Martin maintains that “Martin and Sons did not initiate the contacts that led to the transaction at issue in this lawsuit.” Id. ¶ 14. According to Mr. Martin, “neither [Mr. Martin] nor any officer or employee of Martin and Sons traveled to Maryland in connection with the transaction at issue in this lawsuit.” Id. ¶ 15.

         As noted, Tulkoff Food has submitted Mr. Tulkoff's Affidavit in support of its position that this Court has personal jurisdiction over Martin and Sons. According to Mr. Tulkoff, the relationship between Martin and Sons and Tulkoff Food dates to 1993. Mr. Tulkoff avers that “[s]ince 1993, Martin Spices and Tulkoff [Food] have entered into at least 27 sales booking contracts, under which Martin Spices sold and delivered several hundred container loads of spices” to Tulkoff Food in Maryland, consisting of “significantly more than ten million pounds of spices . . . .” Id. ¶ 11. The aggregate value of spices sold by Martin and Sons to Tulkoff Food during the length of their relationship is more than $11.5 million. Id. ¶ 13. Mr. Tulkoff also asserts: “Throughout the course of dealings between Tulkoff [Food] and Martin Spices, Martin Spices represented to Tulkoff [Food] that it controlled the manner, method, and timing of delivering spices to Tulkoff [Food] in Maryland.” Id. ¶ 15.

         According to Mr. Tulkoff, the parties “have exchanged hundreds or perhaps thousands of communications both into and out of Maryland, including phone calls, emails, letters, invoices, sales booking, and purchase orders.” Id. ¶ 17. He also avers: “At some point in or around October 2002, representatives from Martin Spices traveled in person to Tulkoff [Food's] Maryland facilities to contact Tulkoff [Food], discuss the business relationship between Tulkoff [Food] and Martin Spices, solicit further business with Tulkoff [Food], and initiate further business with Tulkoff [Food].” Id. ¶ 14.

         Additional facts are included in the Discussion.

         II. Standard of Review

         Martin and Sons's motion to dismiss for lack of personal jurisdiction is predicated on Fed.R.Civ.P. 12(b)(2). “[A] Rule 12(b)(2) challenge raises an issue for the court to resolve, generally as a preliminary matter.” Grayson v. Anderson, 816 F.3d 262, 267 (4th Cir. 2016). Under Rule 12(b)(2), the burden is “on the plaintiff ultimately to prove the existence of a ground for jurisdiction by a preponderance of the evidence.” Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989); see Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 558 (4th Cir. 2014).

         “If the existence of jurisdiction turns on disputed factual questions the court may resolve the [jurisdictional] challenge on the basis of a separate evidentiary hearing, or may defer ruling pending receipt at trial of evidence relevant to the jurisdictional question.” Combs, 886 F.2d at 676. A court may also, in its discretion, permit discovery as to the jurisdictional issue. See Mylan Laboratories, Inc. v. Akzo, N.V., 2 F.3d 56, 64 (4th Cir. 1993). However, neither discovery nor an evidentiary hearing is required in order for the court to resolve a motion under Rule 12(b)(2). See generally 5B C. Wright & A. Miller, Federal Practice & Procedure § 1351 at 274-313 (3d ed.) (“Wright & Miller”).

         “The plaintiff's burden in establishing jurisdiction varies according to the posture of a case and the evidence that has been presented to the court.” Grayson, 816 F.3d at 268. If the district court addresses the question of personal jurisdiction as a preliminary matter, it may rule solely on the basis of motion papers, supporting legal memoranda, affidavits, and the allegations in the complaint. Consulting Engineers Corp. v. Geometric Ltd., 561 F.3d 273, 276 (4th Cir. 2009); see Grayson, 816 F.3d at 268. In that circumstance, the “plaintiff need only make ‘a prima facie showing of personal jurisdiction to survive the jurisdictional challenge.'” Grayson, 816 F.3d at 268 (quoting Combs, 886 F.2d at 676). “When determining whether a plaintiff has made the requisite prima facie showing, the court must take the allegations and available evidence relating to personal jurisdiction in the light most favorable to the plaintiff.” Grayson, 816 F.3d at 268; see Carefirst of Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003). But, “district courts are not required . . . to look solely to the plaintiff's proof in drawing those inferences.” Mylan Laboratories, 2 F.3d at 62.

         Notably, “‘[a] threshold prima facie finding that personal jurisdiction is proper does not finally settle the issue; plaintiff must eventually prove the existence of personal jurisdiction by a preponderance of the evidence, either at trial or at a pretrial evidentiary hearing.'” New Wellington Fin. Corp. v. Flagship ...


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