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.

Marks v. Worldwide Robotic Automated Parking, LLC

United States District Court, N.D. Illinois, Eastern Division

July 13, 2017

JOHN MARKS, Plaintiff,
v.
WORLDWIDE ROBOTIC AUTOMATED PARKING, LLC, DONALD JAGODA, and 5BY2 B.V., Defendants.

          MEMORANDUM OPINION AND ORDER

          Robert M. Dow, Jr. United States District Judge.

         Plaintiff John Marks brings suit against Defendants 5BY2 B.V. (“5BY2”), Worldwide Robotic Automated Parking, LLC (“WRAP”), and Donald Jagoda alleging breach of contract, unjust enrichment, and tortious interference with prospective economic advantage. Currently before the Court is Plaintiff's motion to conduct jurisdictional discovery regarding the Court's personal jurisdiction over 5BY2 [43]. For the reasons set forth below, the Court denies Plaintiff's motion to conduct jurisdictional discovery [43]. Plaintiff is given until August 3, 2017 to file a response brief to Defendant 5BY2's motion to dismiss for lack of personal jurisdiction [19]; Defendant 5BY2 is given until August 17, 2017 to file a reply brief. The Court will issue a ruling by mail.

         I. Background

         At the center of this dispute is a sales agency agreement (“SAA”) between Defendant 5BY2 and Defendant WRAP. 5BY2 is a Dutch company that manufactures automated parking systems, and WRAP is a Michigan company that is in the business of marketing such systems. In November 2014, 5BY2 and WRAP entered into a SAA whereby WRAP would serve as the exclusive sales agent of 5BY2 in the United States, Mexico, the Dominican Republic, and Puerto Rico for a five-year period. [1, at ¶¶ 1, 19.] In exchange for WRAP's services as sales agent, 5BY2 agreed to pay WRAP commissions on all products sold to customers resulting from orders procured by WRAP, as well as other commissions and referral fees. [Id. at ¶ 20.]

         Plaintiff, a resident of Florida, contends that in November 2014, WRAP arranged for Plaintiff to meet with 5BY2 representatives in Chicago to discuss Plaintiff's potential financing of WRAP's promotion and marketing of 5BY2 parking systems under the SAA.[1] [Id., at ¶ 2.] Plaintiff asserts that on January 2, 2015, Plaintiff, WRAP, and WRAP's principal, Defendant Donald Jagoda, entered into a Funding Agreement, a collateral assignment of contracts, and a promissory note and security agreement, by which Plaintiff would provide funding to WRAP and Jagoda to support WRAP's promotion and marketing of 5BY2's parking systems. [Id., at ¶¶ 3, 24.] Plaintiff alleges that the Funding Agreement also provides that Plaintiff would receive royalty payments of 25% of the commission or other payments that WRAP and Jagoda received as a result of any sales under the SAA. [Id., at ¶ 25.] Plaintiff asserts that as security for the Funding Agreement, WRAP and Jagoda provided Plaintiff with a $200, 000 promissory note and a security agreement, pursuant to which WRAP collaterally assigned and conveyed to Plaintiff “all rights to payment under or related to the SAA.” According to Plaintiff, the Funding Agreement was negotiated in part in this district and provides that this district shall be the forum for resolving controversies under the agreement. Plaintiff contends that the parties executed a separate Collateral Assignment of Contracts and Power of Attorney, dated January 2, 2015, confirming the assignment of rights under the SAA to Plaintiff. [Id., at ¶ 29.] Plaintiff asserts that he made an initial advance of $15, 400 to WRAP and Jagoda and provided monthly funding to WRAP and Jagoda pursuant to the Funding Agreement. [Id., at ¶ 26.]

         Plaintiff contends that by April 2016, WRAP and Jagoda had defaulted on the $200, 000 promissory note and Funding Agreement. [Id. at ¶ 32.] Plaintiff further contends that in breach of the Funding Agreement, WRAP and Jagoda failed to pay amounts due to Plaintiff, including royalty payments. [Id. at ¶ 33.] Plaintiff alleges upon information and belief that from November 2014 through April 2015, WRAP received commission payments from 5BY2 totaling approximately $133, 970 pursuant to the SAA. [Id. at ¶ 32.] On April 4, 2016, Plaintiff sent a notice of default and demand for payment to WRAP and Jagoda and a letter to 5BY2 indicating that Plaintiff was a secured creditor of WRAP and that all further payments with respect to the SAA should be made to Plaintiff because of WRAP and Jagoda's default. [Id. at ¶¶ 35-36.]

         Plaintiff alleges upon information and belief that during this same period of time, WRAP and 5BY2 were negotiating the terms of an agreement to end their relationship. [Id. at ¶ 37.] On April 7, 2016, WRAP and 5BY2 entered into an early termination agreement terminating the SAA (“the Termination Agreement”). Under the Termination Agreement, 5BY2 agreed to pay WRAP $450, 000 over a period of approximately eight months. [Id. at ¶¶ 38-39.] Plaintiff contends that on April 11, 2016, 5BY2 paid WRAP $210, 000 in accordance with the payment schedule set forth in the Termination Agreement, and the funds were deposited into an escrow account. [Id. at ¶ 40.] Plaintiff contends that he learned about the Termination Agreement shortly after it was executed. [Id. at ¶ 41.] Plaintiff asserts that on April 13, 2016, with the consent of WRAP, he again wrote to 5BY2 and advised that any monies owed to WRAP under the SAA or Termination Agreement should be preserved until the issues could be resolved. [Id. at ¶ 10, 42.]

         In late April 2016, 5BY2 claimed that the SAA prohibited WRAP's Collateral Assignment of rights under the SAA to Plaintiff. 5BY2 claimed that upon WRAP's Collateral Assignment, the SAA became terminable at the option of 5BY2, and thus 5BY2 was terminating the SAA retroactively, effective January 2, 2015, the date of the Collateral Assignment to Plaintiff. [Id. at ¶ 43.] Plaintiff alleges that 5BY2 also claimed that WRAP fraudulently induced 5BY2 to enter into the Termination Agreement because WRAP had collaterally assigned its rights to Plaintiff and had not obtained Plaintiff's consent to enter into the Termination Agreement. 5BY2 allegedly asserted that had it known about the Collateral Agreement, it could have terminated the SAA without penalty or any other form of payment obligation. 5BY2 allegedly claimed that the Termination Agreement was therefore void. [Id. at ¶ 44.] Plaintiff alleges, however, that he gave his consent to enter into the Termination Agreement, that the Collateral Agreement was not a prohibited assignment under the SAA, and that nothing in the SAA allows a party to retroactively terminate the agreement. Thus, in Plaintiff's view, 5BY2's retroactive termination of the SAA and its repudiation of its obligation under the Termination Agreement were improper. [Id. at ¶¶ 43, 45.] Plaintiff contends that 5BY2 is refusing to pay any further amounts it owes to WRAP under the Termination Agreement and is seeking through arbitration the $210, 000 it paid to WRAP under the Termination Agreement, as well as the $133, 970.44 in commission that it paid to WRAP under the SAA since January 2, 2015. [Id. at ¶ 46.]

         Plaintiff contends that since WRAP and 5BY2 entered into the Termination Agreement, 5BY2 has benefited from numerous sales resulting from the sales leads that WRAP identified and developed from funds provided by Plaintiff. Plaintiff alleges upon information and belief that these sales total in excess of $2, 000, 000. [Id. at ¶ 47.] Plaintiff asserts that as of July 31, 2016, Plaintiff has advanced over $280, 000 to WRAP and Jagoda for 5BY2 marketing activities and that only a portion of this funding has been repaid. [Id. at ¶ 49.]

         Plaintiff brought suit against Defendants WRAP, 5BY2, and Jagoda on September 2, 2016. In Count I (against all Defendants), Plaintiff seeks a declaration that the SAA was not terminable upon collateral assignment and that the Termination Agreement is not void. In Count II, Plaintiff brings a breach of funding agreement and promissory note claim against WRAP and Jagoda. In Count III, which is pled in the alternative to Count I, Plaintiff brings an unjust enrichment claim against 5BY2. In Count IV, Plaintiff asserts a tortious interference with prospective economic advantage claim against 5BY2.

         5BY2 filed a 12(b)(2) motion to dismiss for lack of personal jurisdiction [19]. According to the declaration of Kamiel Koot, 5BY2's director and CEO, 5BY2 is incorporated in the Netherlands, has its principal place of business in the Netherlands, does not conduct corporate operations in Illinois, does not maintain an office in Illinois, does not own, hold, use, possess, or lease any real or personal property in Illinois, has no employees in Illinois, is not registered to do business in Illinois, does not sell products, advertise, or solicit business in Illinois, has never executed a contract in Illinois, is not party to any contract with an Illinois resident, and has never consummated a business transaction in Illinois. [19, Exhibit B, at ¶¶ 19-31.] Plaintiff filed a motion to conduct jurisdictional discovery [43], which is currently before the Court. Plaintiff argues that he has established a prima facie case of general jurisdiction such that the Court should grant him leave to take jurisdictional discovery. 5BY2 also filed a 12(b)(6) motion to dismiss for failure to state a claim [21], which the Court entered and continued. [See 31.]

         II. Legal Standard

         A plaintiff does not have an automatic right to jurisdictional discovery in every case. Gilman Opco LLC v. Lanman Oil Co., Inc., 2014 WL 1284499, at *6 (N.D. Ill. Mar. 28, 2014). Rather, “it is within the discretion of the district court to allow a plaintiff to conduct limited discovery in order to establish that jurisdiction exists.” Sanderson v. Spectrum Labs, Inc., 248 F.3d 1159 (7th Cir. 2000). The plaintiff must establish a colorable or prima facie showing of personal jurisdiction before discovery is permitted. Indag GmbH & Co. v. IMA S.P.A, 150 F.Supp.3d 946, 971 (N.D. Ill. 2015). In other words, the plaintiff must advance “proof to a reasonable probability” of the facts necessary to establish personal jurisdiction. Pentwater Equity Opps. Master Fund, Ltd. v. Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., 2016 WL 6476541, at *1 (N.D. Ill. Nov. 2, 2016) (quoting Anthony v. Sec. Pac. Fin. Servs., Inc., 75 F.3d 311, 316 (7th Cir. 1996)) (internal quotation marks omitted). Courts generally will grant jurisdictional discovery if the plaintiff “can show that the factual record is at least ambiguous or unclear on the jurisdictional issue.” Gilman Opco LLC, 2014 WL 1284499, at *6 (citation and internal quotation marks omitted). “Although the standard to obtain jurisdictional discovery is low, courts will not permit discovery based only upon bare, attenuated, or unsupported assertions of personal jurisdiction or when a plaintiff's claim appears to be clearly frivolous.” Id. (citation and internal quotation marks omitted). The Seventh Circuit has cautioned that “[f]oreign nationals usually should not be subjected to extensive discovery in order to determine whether personal jurisdiction over them exists.” Cent. States, Se. & Sw. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 946 (7th Cir. 2000).

         In ruling on a motion to take jurisdictional discovery, the Court accepts as true the factual allegations relevant to jurisdiction made in Plaintiff's complaint and draws all reasonable inferences in Plaintiff's favor. Cent. States, Se. & Sw. Area Pension Fund v. Phencorp Reinsurance Co., Inc., 440 F.3d 870, 878 (7th Cir. 2006). However, to the extent that Defendant 5BY2 has submitted affidavits opposing jurisdiction or contradicting Plaintiff's allegations, Plaintiff must go beyond the pleadings and submit affirmative evidence supporting the ...


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.