Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Horizon Matrix, LLC and Steven R. Zielke v. Whalehaven Capital Fund

February 3, 2012

HORIZON MATRIX, LLC AND STEVEN R. ZIELKE, PLAINTIFFS,
v.
WHALEHAVEN CAPITAL FUND, LTD. AND ALPHA CAPITAL ANSTALT, DEFENDANTS.



The opinion of the court was delivered by: Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Before the Court is the Motion of Defendants, Whalehaven Capital Fund, Ltd. and Alpha Capital Anstalt, (hereinafter, "Whalehaven" and "Alpha") to dismiss the Complaint on the following grounds: lack of subject matter jurisdiction, lack of personal jurisdiction, improper venue, failure to state a claim upon which relief can be granted and failure to join a required party. See FED R. CIV. P. 12(b)(1-3, 6, 7). For the reasons stated herein, the Motion is granted without prejudice because of a lack of personal jurisdiction. Because there is no personal jurisdiction, the Court does not address the other procedural and jurisdictional objections by Defendants.

I. BACKGROUND

Plaintiff Horizon Matrix, LLC (hereinafter, "Horizon") is an Arlington Heights, Illinois company and Plaintiff Steven R. Zielke (hereinafter, "Zielke") is its President. Zielke, on behalf of Horizon, signed a contract on October 16, 2009 with a struggling California company, One Voice Technologies, Inc., ("One Voice") to help One Voice convince a Chicago patent auctioneer to sell One Voice's patent portfolio. Under the contract, Horizon was to earn a five percent "success fee" if Horizon both convinced the auctioneer to sell One Voice's portfolio and a sale or licensing ultimately occurred. The auctioneer did take the portfolio and a sale ultimately resulted.

Plaintiffs allege One Voice, which is not a party to this lawsuit, sold its patent portfolio at auction in Chicago for $3 million in July 2010. After the auctioneer took its twenty percent fee, leaving $2.4 million, Plaintiffs allege they were due five percent of what remained, or $120,000. Instead, Plaintiffs allege, the $2.4 million was paid not to One Voice, but rather directly to Defendants, who were the primary financial backers of One Voice and were eager for a return on their investment. Defendants, Plaintiffs allege, then passed along to One Voice just $30,000 from the sale, knowing One Voice still owed money on its consulting agreement with Plaintiffs and that the retention of the bulk of the proceeds would deprive Plaintiffs of their "success fee.". Pl.'s Resp., Ex. A ¶11; Pl.'s Resp. 2; Compl. 4, ¶28.

Plaintiffs allege One Voice maintained it had only $30,000 remaining, although whether that "$30,000 remaining" referred only to One Voice's proceeds from the sale or the sum total of One Voice's assets remains unclear. Compl. 4, ¶29. In any event, Plaintiffs have not been paid.

Plaintiffs allege that Whalehaven, a Bermuda company doing business in New Jersey, and Alpha, a business operating and incorporated in Liechtenstein, had the following involvement with the deal. Before putting up its patents for sale, One Voice checked with Whalehaven, and managers of both Defendants approved of the sale knowing of Plaintiffs' planned assistance and "success fee" arrangement. Compl. 2-4 ¶¶13-14, 28; Pl.'s Resp. 6. Plaintiffs contend that around the time Horizon secured the services of the Chicago auctioneer for One Voice, Defendants engaged in "unnecessary transferring" of the One Voice patents to Defendant Whalehaven Portfolio Manager Eric Weisblum, and then back to One voice "in an attempt to avoid paying Horizon Matrix its success fee duly owed." Id. at 7 ¶52. The Complaint does not elaborate on exactly what role that transfer played in the retention of funds by Defendants.

Defendants "reached into this jurisdiction to commit a tort against a resident of this jurisdiction" and were "intimately involved in the patent portfolio sale which occurred in this district," according to Plaintiffs. Pl.'s Resp. 5. Specifically, Whalehaven and Zielke had direct telephone and e-mail communication from 2008 through 2010 regarding One Voice, and Zielke had "communications" with Alpha on numerous occasions. Pl.'s Resp., Ex. A ¶¶5-7; Pl.'s Resp. 1. Defendants were aware of Plaintiffs' Illinois residency, as well as the Chicago auctioneer's Illinois residency. Pl.'s Resp. 6. The patent sale occurred in Illinois, the proceeds received by Defendants came from Illinois, and Plaintiffs alleged that by virtue of Defendants' unspecified "intimate involvement" with the auction, Defendants "conducted business" with the Chicago auctioneer. Pl.'s Resp. 7. Plaintiffs do not allege they are in contractual privity with Defendants.

Plaintiffs allege tortious interference with contractual relations and also seek restitution under the equitable doctrines of unjust enrichment, money had and received and the procuring cause rule.

II. ANALYSIS

A. Legal Standard

In a motion to dismiss, the Court takes all of a plaintiff's well-pleaded facts as true and resolves any factual disputes in favor of the plaintiff. Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010). The Court evaluates merely whether a plaintiff has stated a prima facie case for jurisdiction and a cause of action, and resolves all disputes over factual matters in favor of the plaintiff. Id.

B. Personal Jurisdiction

In order for a court to have personal jurisdiction over a defendant, general jurisdiction or specific jurisdiction must exist. Where no federal statute authorizes nationwide service of process, personal jurisdiction is governed by the law of the forum state. Citadel Group Ltd. v. Wash. Reg'l Med. Ctr., 536 F.3d 757, 760 (7th Cir. 2008). Illinois' long-arm statute is a "catch-all" statue, allowing ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.