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.

Delaware Professional Insurance Co. v. Hajjar

United States District Court, D. Delaware

July 11, 2014

DELAWARE PROFESSIONAL INSURANCE COMPANY, RISK RETENTION GROUP; SOVEREIGN RISK PURCHASING GROUP, LLC, Plaintiffs,
v.
JOHN HAJJAR, Defendant

Page 538

John A. Elzufon, Esquire of Elzufon Austin Tarlov & Mondell, P.A., Wilmington, Delaware, Counsel for Plaintiff.

David P. Primack, Esquire of McElroy, Deutsch, Mulvaney & Carpenter, LLP, Wilmington, Delaware, Counsel for Defendant.

Page 539

MEMORANDUM OPINION

Sue L. Robinson, District Judge.

I. INTRODUCTION

On October 4, 2013, plaintiff Delaware Professional Insurance Company, Risk Retention Group (" DelPro" ) and plaintiff Sovereign Risk Purchasing Group, LLC, formerly New Jersey Professional Risk Purchasing Group, LLC (" Sovereign" ), (collectively with DelPro, " plaintiffs" ) filed a complaint against defendant Dr. John Hajjar (" Hajjar" ) seeking damages for claims of breach of fiduciary duty, breach of the duty of loyalty, breach of the duty of good faith and tortious interference with an advantageous business relation. (D.I. 1) Presently before the court are Hajjar's motions to dismiss for lack of personal jurisdiction and for improper venue, or in the alternative, to stay or transfer venue pursuant to 28 U.S.C. § 1404. (D.I. 6)

II. BACKGROUND

DelPro was incorporated in Delaware as a captive insurance company and reorganized under Delaware law as a risk retention group with its principal place of business in Delaware. (D.I. 1 at ¶ ¶ 4, 9) Sovereign is a Delaware limited liability company with its principal place of business in Delaware. ( Id. at ¶ ¶ 5, 9) Sovereign is a risk purchasing group that allows physicians in the State of New Jersey (and elsewhere) to purchase medical malpractice insurance through DelPro. ( Id. at ¶ 5) Hajjar is a citizen of the State of New Jersey and the CEO of Surgem, LLC, which manages surgical centers in multiple states, including New Jersey. ( Id. at ¶ 6)

In 2008, Hajjar negotiated an investment in DelPro. ( Id. at ¶ 12) DelPro, which historically confined its insurance program to Delaware physicians, aspired to expand into the New Jersey market, and Hajjar represented that he could provide DelPro with a New Jersey client base. ( Id. at ¶ ¶ 11-13) The parties formalized their agreement with a term sheet on July 22, 2008, and it was agreed that Sovereign would administer the New Jersey program. ( Id. at ¶ ¶ 13-14) On July 29, 2008, Management Advisory Service, LLC (" MMB" ), a company owned and controlled

Page 540

by Hajjar, issued a check to DelPro for $981,603.47, the amount called for in the term sheet. ( Id. at ¶ 15) Consequently, Hajjar was elected to the board of directors (" the board" ) of both DelPro and Sovereign and served as a director from July 2008 to November 2010. ( Id. at ¶ ¶ 6, 15)

Expansion into the New Jersey market proved more difficult than anticipated, and the parties' relationship deteriorated. ( Id. at ¶ ¶ 18-19) Subsequently, in November 2010, Hajjar was not re-elected to the board of DelPro or Sovereign. ( Id. at ¶ 23) On October 4, 2013, plaintiffs filed the action at bar. (D.I. 1) However, this action was filed nearly six months after Hajjar, as plaintiff, filed two separate complaints against DelPro, Sovereign, and related parties in the Superior Court of New Jersey.

Hajjar filed the first complaint (" the first New Jersey complaint" ) on April 16, 2013 against DelPro and Sovereign as well as Delaware Physicians Purchasing Group, Inc. (" DPPG" ), David Gordon & Associates (" DGA" ), and David Gordon (" Gordon" ) (collectively, " the first New Jersey complaint defendants" ).[1] (D.I. 7, ex. C) The first New Jersey complaint includes claims for legal fraud, equitable fraud, fraudulent inducement, fraudulent concealment, fraudulent misrepresentation, unjust enrichment, constructive trust, injunctive relief, breach of contract, breach of implied covenant of good faith and fair dealing, negligent misrepresentation, promissory estoppel, accounting, breach of fiduciary duty of care and breach of fiduciary duty of loyalty. Id. Hajjar alleges that all of these claims relate to his involvement as a director of DelPro and MMB's initial investment of $981,603.47 in DelPro. Id.

On August 19, 2013, the first New Jersey complaint defendants removed that action to the United States District Court for the District of New Jersey based on diversity of citizenship. (D.I. 7 at 5; D.I. 9 at 8) On September 13, 2013, Hajjar filed a motion to remand the first New Jersey complaint to the Superior Court of New Jersey. (D.I. 7, ex. B) The motion was denied. Hajjar v. Delaware Prof'l Ins. Co., Civ. No. 13-4988, D.I. 35 (D.N.J. March 6, 2014).

Hajjar, along with several entities that are owned, controlled, and/or affiliated with Hajjar, filed a second complaint (" the second New Jersey complaint" ) on the same date as the first New Jersey complaint against DGA and Gordon seeking damages for breach of contract, breach of covenant of good faith and fair dealing, breach of fiduciary duty, fraudulent misrepresentation, negligent misrepresentation and consumer fraud. (D.I. 7, ex. A) The claims against DGA and Gordon in the second New Jersey complaint relate to ...


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.