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Berg Corp. v. C. Norris Manufacturing LLC

United States District Court, D. Maryland

April 1, 2019

BERG CORPORATION, Plaintiff
v.
C. NORRIS MANUFACTURING, LLC, Defendant.

          MEMORANDUM

          JAMES K. BREDAR CHIEF JUDGE.

         This case arises out of a business transaction between Berg Corp. and C. Norris Manufacturing, LLC. Berg, a Maryland demolition contractor, hired C. Norris, an Ohio manufacturer, to substantially modify a piece of heavy equipment. Now, Berg claims that C. Norris committed negligence in modifying the equipment. Berg initially sued in Baltimore County Circuit Court. C. Norris removed the case to this Court. Before the Court is C. Norris's motion to dismiss for lack of personal jurisdiction. See Fed. R. Civ. P. 12(b)(2). No hearing is required. See Local Rule 105.6 (D. Md. 2018). For the reasons set forth below, C. Norris's motion to dismiss will be denied.

         I. Jurisdictional Facts

         Addressing the question of personal jurisdiction, the Court construes the relevant allegations in the light most favorable to Plaintiff and draws "the most favorable inferences for the existence of jurisdiction." SEC v. Receiver for Rex Ventures Grp., 730 Fed.Appx. 133, 137 (4th Cir. 2018) (quoting Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989)).

         Transactions between Berg and C. Norris began in September 2016. At the time, Berg owned a Komatsu PC 800 LC-8 hydraulic excavator ("the Komatsu"). (Compl. ¶ 4, ECF No. 1-2.) Berg commissioned C. Norris to convert the Komatsu to include a 140-foot ultra-high demolition boom. (Id. ¶ 5.) C. Norris represented that the conversion would add 20, 000 pounds of additional counterweight. (Id. ¶ 7.) C. Norris completed the conversion in April 2017. (Id. ¶ 6.) In the end, the modification resulted in nearly five times the amount of anticipated additional counterweight. (Id. ¶ 7.) C. Norris delivered the modified Komatsu to Berg in Maryland and reassembled it there. (Id. ¶ 6.)

         In November 2018, Berg sued C. Norris for negligently converting the Komatsu and causing over a million dollars in damage. (Not. of Removal at 1-2, ECF No. 1.) In support of the negligence claim, Berg alleges that C. Norris irreparably damaged the Komatsu by adding much more counterweight than was originally anticipated and by installing couplings that immediately malfunctioned. (Compl. ¶ 7.) Relevant to personal jurisdiction, Berg alleges that it is incorporated in Maryland and has its principal place of business there; that C. Norris is incorporated in Ohio and has its principal place of business there; and, that C. Norris "conducts a regular business in the state of Maryland and in Baltimore City." (Id. at 1-2.)

         At the motion to dismiss stage, Berg has not put forward evidence in support of its own allegations.[1] C. Norris attaches two affidavits from its President and CEO, Christopher Norris, stating the following. C. Norris does not maintain any offices, employ any individuals, advertise, or directly solicit business in Maryland. (1/7/19 Affidavit ¶ 3-5, ECF No. 5-2.) Indeed, Berg is "the first and only Maryland business that C. Norris has contracted with for services."[2] (Id. ¶ 6.) During the course of their dealing, C. Norris took possession of the Komatsu in Ohio and made all modifications in Ohio, including "the installation of the quick couplers at issue, as well as the alleged addition of any weight." (2/2/19 Affidavit ¶ 3-1, ECF No. 9-2.) Berg travelled to Ohio to observe the Komatsu's testing, and, while there, Berg approved the modifications. (Id. ¶ 5.) C. Norris disassembled the Komatsu, delivered it to Berg in Maryland, and reassembled it there. (Id. ¶ 6.) While in Maryland, C. Norris performed a limited reassembly, which did not involve any alterations to the quick couplers or the amount of counterweight. (Id. ¶ 7.) The quick couplers and amount of counterweight are the alterations at issue in the negligence claim.

         II. Analysis

         The only question for the Court is whether it has personal jurisdiction.[3] C. Norris argues that it does not and that the Court should dismiss the complaint. Berg argues that it does and that the Court should not dismiss. Alternatively, Berg requests leave to amend its complaint, an evidentiary hearing on personal jurisdiction, or a transfer to the United States District Court for the Northern District of Ohio. The Court acknowledges that this case presents a close call but concludes that Berg has made the requisite showing that personal jurisdiction exists in Maryland.

         A. Legal Standard

         A Rule 12(b)(2) motion to dismiss tests a court's personal jurisdiction over a defendant, Lewis v. Willough at Naples, 311 F.Supp.3d 731, 734 (D. Md. 2018). Where, as here, the court addresses personal jurisdiction "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 to survive the jurisdictional challenge." ..New Wellington Fin. Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290, 294 (4th Cir. 2005). The court must construe the relevant allegations in the light most favorable to the plaintiff and draw "the most favorable inferences for the existence of jurisdiction." Receiver for Rex Ventures Grp., 730 Fed.Appx. at 137 (quoting Combs, 886 F.2d at 676). In drawing its inferences, the court may look outside the plaintiffs proof, to the defendant's motions, legal memoranda, and declarations. Armstrong v. Nat'l Shipping Co. of Saudi Arabia, Civ. No. ELH-13-3702, 2015 WL 751344, at *3 (D. Md. Feb. 20, 2015).

         B. Personal Jurisdiction

         This Court may exercise personal jurisdiction over a defendant 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). Berg argues that it has met the requirements of the Maryland long-arm statute and, consequently, need not reach the constitutional inquiry. This argument is problematic.

         When construing the reach of the Maryland long-arm statute, "this Court is bound by the interpretations of the Maryland Court of Appeals." Colin v. Walther & Larkin, LLP, Civ. No. RDB-03-1434, 2003 WL 23978362, at *3 (D. Md. Aug. 22, 2003). The Maryland Court of Appeals "interpret[s] the long-arm statute to the limits permitted by the Due Process Clause." Mackey v. Compass Mktg., Inc.,892 A.2d 479, 493 at n.6 (Md. 2006). This means that it is never enough to simply say that there is compliance with the long-arm statute. ...


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