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Bancorp Bank v. Blackburn

United States District Court, D. Delaware

August 20, 2014

THE BANCORP BANK, Plaintiff,
v.
HARRY R. BLACKBURN, Defendant.

MEMORANDUM ORDER

JOHN McBRIDE, District Judge.

Pending before the Court are three motions. The first, a motion to dismiss, was filed by Defendant and is based on insufficient service of process, insufficient process, and lack of personal jurisdiction. (D.I. 6) Defendant later filed a second motion to dismiss based on lack of personal jurisdiction and improper venue. (D.I. 11) Finally, Plaintiff has filed a motion to strike (D.I. 17) Defendant's reference to a Pennsylvania Court of Common Pleas Order (D.I. 16). The Court addresses each of the motions below.

BACKGROUND

In November 2008, Plaintiff The Bancorp Bank ("Plaintiff') contracted with Harry R. Blackbum & Assoc., P.C. ("the Borrower") for two loan agreements: one for $500, 000 ("Loan l") and another for $100, 000 ("Loan 2"). (D.I. 1 exs. A, B) Defendant Harry R. Blackbum, who is sued in his individual capacity here, is the president of the Borrower corporation. ( See D.I. 1 ex. A-1 at 3)

Defendant simultaneously contracted with Plaintiff to guarantee Loan 1 and Loan 2 in two Commercial Guaranty Agreements ("the Guaranties"). (D.I. 1 exs. C, D) As part of the Guaranties, Defendant executed sworn Delaware non-resident affidavits which each contain a judgment by confession provision. (D.I. 1 exs. C, D at 6 ("Aff.") ¶¶ 2-3) The provision from the affidavit for the Loan 1 Guaranty states:

That Guarantor authorizes the entry of judgment against Guarantor in the Superior Court of the State of Delaware in and for New Castle County, Kent County, and Sussex County and in the United States District Court for the District of Delaware, upon the occurrence of an Event of Default (as defined in the Guaranty) for up to $500, 000.00 plus the costs and expenses incurred in the enforcement of the Guaranty.

( Id. ) The Loan 2 Guaranty provision is identical but covers only up to $100, 000. (D.I. 1 ex. D Aff. ¶ 3) Both Guaranties contain choice of law provisions in favor of Delaware law. (D.I. 1 exs. C, D at 3)

Plaintiff brings this action alleging two counts of breach of contract against Defendant for his failure to pay under the Guaranties. (D.I. 1) In response, Defendant filed a motion asking the Court to dismiss Plaintiffs claim for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2) and insufficient process under Federal Rule of Civil Procedure 12(b)(4), because Plaintiff failed to serve a summons on Defendant with a properly executed seal and signature of the Clerk of Court. (D.I. 6) Plaintiff conceded that the original service was not proper (D.I. 10 at 4), and re-served the Defendant within the amount of time allotted by Rule 4(m), with the proper seal and signature (D.I. 10 ex. I at 1-2). Defendant then filed a second motion to dismiss, maintaining his Rule 12(b)(2) grounds for dismissal and further seeking dismissal based on lack of personal jurisdiction and improper venue (pursuant to Rule 12(b)(3)). (D.I. 11)

LEGAL STANDARDS

Federal Rule of Civil Procedure 12(b)(2) directs a court to dismiss a case when it lacks personal jurisdiction over the defendant. Determining the existence of personal jurisdiction requires a two-part analysis. First, the court analyzes the long-arm statute of the state in which the court is located. See IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 259 (3d Cir. 1998). Next, the court must determine whether exercising jurisdiction over the defendant in this state comports with the Due Process Clause of the Constitution. See id. Due Process is satisfied if the court finds the existence of "minimum contacts" between the non-resident defendant and the forum state, "such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).

Once a jurisdictional defense has been raised, the plaintiff bears the burden of establishing, by a preponderance of the evidence and with reasonable particularity, the existence of sufficient minimum contacts between the defendant and the forum to support jurisdiction. See Provident Nat' Bank v. Cal. Fed. Sav. & Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987); Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 (3d Cir. 1984). To meet this burden, the plaintiff must produce "sworn affidavits or other Competent evidence, " since a Rule 12(b)(2) motion can "require[] resolution of factual issues outside the pleadings." Time Share, 735 F.2d at 67 n.9; see also Philips Elec. N. Am. Corp. v. Contee Corp., 2004 WL 503602, at *3 (D. Del. Mar. 11, 2004) ("After discovery has begun, the plaintiff must sustain [its] burden by establishing jurisdictional facts through sworn affidavits or other competent evidence").

If no evidentiary hearing has been held, a plaintiff "need only establish a prima facie case of personal jurisdiction." O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007). A plaintiff "presents a prima facie case for the exercise of personal jurisdiction by establishing with reasonable particularity sufficient contacts between the defendant and the forum state." Mellon Bank (E) PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992). On a motion to dismiss for lack of personal jurisdiction, "the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its favor." Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004). A court is always free to revisit the issue of personal jurisdiction if it later is revealed that the facts alleged in support of jurisdiction are in dispute. See Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 331 (3d Cir. 2009).

DISCUSSION

I. Motion to Dismiss ...


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