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CloudOne LLC v. Auto Trakk, LLC

United States District Court, W.D. Washington, Tacoma

October 10, 2017

CLOUDONE LLC, a Washington limited liability company, Plaintiff,
v.
AUTO TRAKK, LLC, a Pennsylvania limited liability company, and BAMA COMMERCIAL LEASING, LLC, a Pennsylvania limited liability company, Defendants.

          ORDER ON DEFENDANT AUTO TRAKK LLC'S MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(B)(2)

          Ronald B. Leighton, United States District Judge

         THIS MATTER comes before the Court on Defendant Auto Trakk, LLC's Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(2). Dkt. 20. The Court has considered the motion, Plaintiff Cloud One LLC's Response (Dkt. 26), Auto Trakk's Reply (Dkt. 28), CloudOne's Surreply (Dkt. 32-1), and the remainder of the file herein. The Court deems oral argument unnecessary. The Court has personal jurisdiction over Auto Trakk, because Auto Trakk has sufficient “minimum contacts” with the State of Washington. Auto Trakk's motion should be denied.

         BACKGROUND

         The Complaint centers on the theory that the named defendants, Auto Trakk and BAMA Commercial Leasing breached a contract (“the Agreement”) by failing to pay the plaintiff, CloudOne, for calling center services provided. Dkt. 1. Default judgment has been entered against BAMA Commercial Leasing. Dkt. 31.

         CloudOne is a company based in Vancouver, Washington, with two directors relevant to the present motion, CTO Bryan Hunter and CEO Jim Crouse. Dkt. 27 at ¶3. According to the declaration of Mr. Hunter, in 2014, Mr. Hunter and Mr. Crouse were first introduced to “an executive with Auto Trakk, ” Joel Breneman, who “represented to Mr. Crouse and [Mr. Hunter] that he was ‘running' Auto Trakk.” Id. at ¶4. Mr. Hunter narrates that he and Mr. Crouse traveled to Pennsylvania in January of 2015 to meet with “Mr. Breneman and other Auto Trakk executives” about the possibility of a business relationship. Id. at ¶5; Dkt. 32-2 at ¶2. Per Mr. Hunter, in early 2015, Mr. Breneman called Mr. Crouse and Mr. Hunter by telephone to solicit CloudOne's call center services so that Auto Trakk could meet obligations on a deal it had secured as Uber's automotive leasing broker. Id. at ¶¶6, 7. During this conversation, to which Mr. Hunter was privy, Mr. Crouse and Mr. Breneman agreed to terms of a contract, which was later memorialized in writing (“The Agreement”). Id. at ¶¶7-9.

         Mr. Hunter vouches for CloudOne's performance pursuant to the Agreement, where between March 2015 and March 2017, CloudOne purportedly built out a computer-based call center and processed approximately 300, 000 “leads” and 50, 000 auto lease applications, work for which CloudOne regularly invoiced Auto Trakk. Dkt. 27 at ¶¶8, 10, 16. Mr. Hunter personally received nearly 500 emails from individuals using “autotrakk.com” addresses, including Mr. Breneman, Zach Monaghan, and Kenneth Dickey. Id. at ¶¶12, 13. Another unspecified CloudOne employee received over 1, 400 emails from “autotrakk.com” addresses. Id. Mr. Hunter represents that Mr. Breneman and Mr. Monaghan travelled to CloudOne's Vancouver, Washington offices in mid-2016 “to discuss updates and changes to the system.” Id. at ¶15.

         Auto Trakk has a different take on the circumstances surrounding the formation and execution of the Agreement, maintaining that CloudOne contracted with BAMA Commercial Leasing, not Auto Trakk. According to Merril Davis, CEO of Auto Trakk, Auto Trakk and BAMA Commercial Leasing are both corporations with principal places of business in Pennsylvania, but they are distinct corporate entities, with no shared officers or employees. Dkt. 21 at ¶¶1, 2, 4, 5. Mr. Davis further declares that Auto Trakk's “only connection” to CloudOne stems from the services Auto Trakk provided to BAMA Commercial Leasing, including “servicing the leases of [Uber] drivers referred to [BAMA Commercial Leasing] by CloudOne.” Id. at ¶8. Auto Trakk has submitted an unsigned copy of the Agreement, which names CloudOne and BAMA Commercial Leasing, not Auto Trakk. Dkt. 21.

         Auto Trakk acknowledges that Mr. Breneman and Mr. Monaghan used “autotrakk.com” email addresses, but, according to Mr. Winters, CFO to Auto Trakk, Mr. Breneman and Mr. Monaghan are President and COO, respectively, for BAMA Commercial Leasing, and neither individual was ever an “executive” of or employed by Auto Trakk. Dkt. 30 at ¶¶3, 7, 8. Further, Mr. Winters states, “no one from Auto Trakk met with CloudOne” in Pennsylvania as Mr. Hunter has described, because at that time, when Auto Trakk's CEO was on a leave of absence, “[Mr. Winters] would have been present if any such meeting occurred, ” and Mr. Winters has no recollection of that meeting. Id. at ¶4. Further, although CloudOne may have invoiced Auto Trakk for call center services received, BAMA Commercial Leasing, not CloudOne, paid out the invoices, which were “mislabeled” by CloudOne. Id. at ¶¶9, 10.

         Auto Trakk seeks dismissal for lack of personal jurisdiction on the basis that it has not had sufficient minimum contacts with the forum state, Washington. Dkt. 20. Auto Trakk seeks dismissal with prejudice and requests the recovery of attorneys' fees. Dkt. 20 at 9, 10.

         DISCUSSION

         A. Fed. R. Civ. P. 12(b)(2) legal standard.

         Fed.R.Civ.P. 12(b)(2) governs the dismissal of an action based on lack of personal jurisdiction. Where a defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that jurisdiction is appropriate. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir.2004). Plaintiff cannot simply rest on the bare allegations of its complaint, but rather is obligated to come forward with facts, by affidavit or otherwise, supporting personal jurisdiction. Amba Marketing Systems, Inc. v. Jobar International, Inc., 551 F.2d 784, 787 (9th Cir.1977). Where, as here, the motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts. Schwarzenegger, 374 F.3d at 800. A prima facie showing means that the plaintiff has produced admissible evidence, which if believed, is sufficient to establish the existence of personal jurisdiction. Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir.1995). Conflicts between parties over statements contained in affidavits must be resolved in the plaintiff's favor. Id.

         Where no applicable federal statute addresses the issue, a court's personal jurisdiction analysis begins with the “long-arm” statute of the state in which the court sits. Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1123 (9th Cir.2002). Washington's long-arm statute extends the court's personal jurisdiction to the broadest reach that the United States Constitution permits. Byron Nelson Co. v. Orchard Management Corp., 95 Wn.App. 462, 465 (1999). Because Washington's long-arm jurisdictional statute is coextensive with federal due process requirements, the jurisdictional analysis under state law and federal due process are the same. Schwarzenegger, 374 F.3d at 800-01.

         To exercise personal jurisdiction over a nonresident defendant, that defendant must have at least “minimum contacts” with the relevant forum state such that exercising jurisdiction “does not offend traditional notions of fair play and substantial justice.” Schwarzenegger, 374 F.3d at 801, citing International Shoe v. Washington, 326 U.S. 310, 316 (1945). In determining whether a defendant had minimum contacts, courts focus on the relationship among the defendant, the forum, and the litigation. Shaffer v. Heitner, 433 U.S. 186 (1977). Personal jurisdiction exists in two forms, general[1] and specific. Dole Food Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir.2002). To establish specific jurisdiction, the plaintiff must show that: (1) defendant purposefully availed itself of the privilege of conducting activities in Washington, thereby invoking the benefits and protections of its laws; (2) plaintiff's claims arise out of defendant's Washington-related activities; and (3) the exercise of jurisdiction would be reasonable. Easter v. American West Financial, 381 F.3d 948, 960-61 (9th Cir.2004); Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir.2000). If the plaintiff makes a sufficient showing as to the first two prongs, the burden shifts to the defendant.

         B. Specific jurisdiction.

         1. ...


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