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M-R Logistics, LLC v. Riverside Rail, LLC et al

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Case 4:07-cv-40139-FDS

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Filed 02/08/2008

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UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS _______________________________________ ) ) M-R LOGISTICS, LLC, ) ) Plaintiff, ) Civil Action No. ) 07-40139-FDS v. ) ) RIVERSIDE RAIL, LLC, EDWARD ) DUNN, and JOANNE WILEY, ) ) Defendants. )

MEMORANDUM AND ORDER ON DEFENDANTS' MOTIONS TO DISMISS FOR LACK OF PERSONAL JURISDICTION SAYLOR, J. This is a dispute concerning a contract to provide rail cars to transport construction and demolition debris. Jurisdiction is based on diversity of citizenship. Plaintiff M-R Logistics, LLC, contends that defendant Riverside Rail, LLC, breached the contract and further alleges that defendants Edward Dunn and Joanne Wiley personally guaranteed Riverside's obligations under the contract. M-R is based in Massachusetts and Riverside is based in New Jersey. The contract at issue is governed, according to its terms, by Massachusetts law, and contemplated daily communications between New Jersey and Massachusetts over the life of the contract. Riverside nonetheless contends that it is not subject to personal jurisdiction in a Massachusetts court. Dunn and Wiley are New Jersey residents who have likewise moved to dismiss for lack of personal jurisdiction. For the reasons stated below, the motion to dismiss will be denied as to Riverside and granted as to Dunn and Wiley.

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I.

Statement of Facts A. The Parties

Plaintiff M-R Logistics, LLC, is a limited liability company based in Shrewsbury, Massachusetts. M-R provides transportation, logistics, and disposal services for a variety of materials, including construction and demolition debris. Clyde Ames is the only member of M-R. Defendant Riverside Rail, LLC, is a limited liability company based in Franklin Lakes, New Jersey. Riverside operates a rail transfer station in New Jersey for construction and demolition debris. Riverside does not maintain any office or operation in Massachusetts. Defendants Edward Dunn and Joanne Wiley are citizens of New Jersey. At the time of contract execution and negotiation, Dunn was the only member (and thus the managing member) of Riverside. Wiley's position is unclear, although she acknowledges that she was an "authorized agent" of Riverside. Wiley submitted an affidavit stating that Dunn had promised her membership in the LLC, but never delivered on that promise. She nonetheless signed the contract at issue in this case as a "member" of Riverside.1 B. The Contract

According to Ames, in approximately 2003 he had a "series of communications" with Wiley about the railroad waste industry. Wiley eventually introduced Ames to Dunn. The record is unclear about how these communications were initiated, who initiated them, and where they took place. Contract negotiations began in approximately early 2005. In March 2005, M-R sent a

Dunn submitted an affidavit stating that, notwithstanding Wiley's signature on the contract as a "member," she "was not a member of [the LLC] at that, or any other time." He also stated that although she "was in negotiations with [the LLC] to become a member," those negotiations did not come to fruition.

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Pricing Quotation/Service Agreement signed by Ames and (apparently) a draft Service Agreement. Riverside contends, and M-R does not dispute, that the only physical meetings to take place prior to execution of the contract took place in New Jersey. Although it appears that telephone conversations and communications between the parties occurred during the negotiations period, the details are not set forth in the record. Eventually, the parties executed both the Pricing Quotation/Service Agreement (which Wiley and Dunn signed on July 30, 2005) and the Service Agreement (which all parties signed, but did not date). Under the contract, the M-R would provide empty rail cars, such as gondolas and other open-top cars, at the Riverside transfer station in New Jersey. Riverside would fill the rail cars with construction and demolition debris and transport that material to Ohio for disposal. M-R was obliged to repair and maintain the rail cars provided. The rail cars, at least while subject to the contract, never physically entered Massachusetts. The contract was for a term of five years. The "Operations" paragraph of the contract (Paragraph 7) contemplated a "daily" exchange of information between the two parties: Customer will provide M-R daily (Monday through Saturday) with the following locations relative to the Paterson, NJ loading site: a status of the railcars located at spot, the railcars released loaded for outbound shipment, and the associated net weights of the loaded railcars released for shipment using a form provided by M-R (see attached). That information formed part of the basis for invoicing Riverside, as provided in Paragraph 8. Paragraph 5 of the contract stated that M-R (in addition to providing the railcars) is responsible for fleet tracking, tracing, and expediting; rail carrier local service; rail-based line-haul transportation; issuing bill of lading instructions; disposal service; destination logistic services 3

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(railcar unloading and motor carrier hauling); and providing monthly, quarterly and annual summaries of railcar shipments. The "Governing Law" provision of the Service Agreement states that "the Agreement and its performance shall be governed by, subject to and construed in accordance with the laws of the State of Massachusetts." C. The Alleged Personal Guarantees

The complaint alleges that Dunn and Wiley "personally guaranteed the contract's financial obligations." Complaint,

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