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Redrock Trading Partners, LLC v. Baus Management Corporation

United States District Court, S.D. Georgia, Augusta Division

October 10, 2014

REDROCK TRADING PARTNERS, LLC and COMAAR CAPITAL INTERNATIONAL CORPORATION, Plaintiffs,
v.
BAUS MANAGEMENT CORPORATION; B.A.U.S. SP. Z O.O.; B.A.U.S. ADVANCED TECHNOLOGIES SP. Z O.O.; MONIKA ANNA BAUS; and FRANZ JOSEF BAUS, Defendants.

ORDER

J. RANDAL HALL, District Judge.

Presently pending before the Court is Defendant B.A.U.S. Advanced Technologies' ("B.A.U.S. AT") motions to dismiss for lack of personal jurisdiction (Doc. 24) and insufficient process and service of process (Doc. 25). For the reasons stated below, B.A.U.S. AT's motion to dismiss for lack of personal jurisdiction is GRANTED and its motion to dismiss for insufficient process and service of process is DENIED AS MOOT. Additionally, and pursuant to this Court's order dated August 4, 2014 (Doc. 34), Defendant Franz Josef Baus is hereby DISMISSED WITHOUT PREJUDICE. Finally, Plaintiffs shall have TEN (10) DAYS from the date of this Order to SHOW CAUSE as to why the Court should not dismiss without prejudice the remaining defendants for lack of personal jurisdiction.

I. BACKGROUND

On March 8, 2013, Redrock Trading Partners LLC and Comaar Capital International Corporation ("Plaintiffs") filed their complaint against Defendants Baus Management Corporation ("Baus Management"), B.A.U.S. sp. z o.o. ("B.A.U.S."), B.A.U.S. AT, Monika Anna Baus, and Franz Josef Baus alleging claims for breach of contract and fraud. (Doc. 1, "Compl.") Monika Baus is the President of Baus Management and an eighty percent shareholder of B.A.U.S. AT. (Compl. ¶ 6.) Franz Baus is a member of the management board of B.A.U.S. AT. (Id. ¶ 7.)

The dispute arises out of three contracts. The first contract was entered into on May 8, 2008, by Comaar Capital and Baus Management, represented by Monika Baus. (Compl., Ex. A.) In this contract, Baus Management retained Comaar's services to obtain capital investment up to $6, 000, 000.00, and Comaar was to receive ten percent of the amount Baus Management received from investors as its fee. (Id.) The contract contained the following forum selection clause:

The Company irrevocably consents to the jurisdiction of the courts of the Quebec and Canada and of any federal court located in such State in connection with any action or proceeding arising out of, or relating to, this Agreement, any document or instrument delivered pursuant to, in connection with, or simultaneously with this Agreement, or a breach of this Agreement or any such document or instrument.

(Id.)

In the second contract dated September 3, 2008, Baus Management retained Redrock Trading Partners' services to obtain capital investment up to $6, 000, 000.00, with a fee for Redrock equal to six percent of the amounts received. (Id., Ex. B.) The final contract was entered into by Plaintiffs and Monika Baus on behalf of Baus Management on September 3, 2008. (Id., Ex. C.) This third contract was a "Non-Circumvent Agreement" whereby the parties agreed that all corporations, including all divisions, subsidiaries, employees, agents, or consults would not enter into any transaction with any other party so as to prevent any party from receiving fees, profits, commissions, etc. (Id.)

Defendant Monika Baus filed her answer on December 4, 2013 (Doc. 6), and a motion to dismiss under Rule 4(m) of the Federal Rules of Civil Procedure on December 11, 2013 (Doc. 8). In Ms. Baus' answer, she asserts that neither personal jurisdiction nor venue is proper before this Court. (Id.) B.A.U.S. AT filed an identical motion to dismiss on December 11, 2013, and both motions were denied on August 4, 2014. (Docs. 8, 34.) Defendant B.A.U.S. AT filed its answer on December 23, 2013. (Doc. 9.) Thereafter, Defendant B.A.U.S. AT moved for, and was granted, leave to file amended and supplemental pleadings and motions. (Docs. 18, 21.) Defendant B.A.U.S. AT filed its current motions to dismiss on June 2, 2014. (Docs. 24, 25.)

II. MOTION TO DISMISS STANDARD

"In the context of a motion to dismiss for lack of personal jurisdiction in which no evidentiary hearing is held, the plaintiff bears the burden of establishing a prima facie case of jurisdiction over the movant, nonresident defendant." Morris v. SSE, Inc. , 843 F.2d 489, 492 (11th Cir. 1988). The plaintiff establishes a prima facie case by presenting "enough evidence to withstand a motion for directed verdict." Madera v. Hall , 916 F.2d 1510, 1514 (11th Cir. 1990). A party presents enough evidence to withstand a motion or directed verdict by putting forth "substantial evidence... of such quality and weight that reasonable and fair-minded persons in the exercise of impartial judgment might reach different conclusions..." Walker v. Nations Bank of Fla. , 53 F.3d 1548, 1554 (11th Cir. 1995). The facts presented in the plaintiff's complaint are taken as true to the extent they are uncontroverted. Foxworthy v. Custom Trees, Inc. , 879 F.Supp. 1200, 1207 n.10 (N.D.Ga. 1995). If, however, the defendant submits affidavits challenging the allegations in the complaint, the burden shifts back to the plaintiff to produce evidence supporting jurisdiction. Diamond Crystal Brands, Inc. v. Food Movers Int'l, Inc. , 593 F.3d 1249, 1257 (11th Cir. 2010). If the plaintiff's complaint and supporting evidence conflict with the defendant's affidavits, the court must construe all reasonable inferences in favor of the plaintiff. Id . (citing Meier v. Sun Int'l Hotels, Ltd. , 288 F.3d 1264, 1269 (11th Cir. 2002)).

To determine whether a nonresident defendant is subject to personal jurisdiction, the Court must perform a two-part analysis. Id. at 1257-58. First, the Court must determine whether the exercise of personal jurisdiction is proper under the state's long-arm statute. Id . Next, the Court must determine whether there are sufficient "minimum contacts" with the forum state to satisfy the Due Process Clause of the Fourteenth Amendment. Id .; Int'l Shoe Co. v. Wash. Office of Unemployment Comp. & Placement , 326 U.S. 310, 316 (1945).

The Eleventh Circuit has held that "the Georgia long-arm statute does not grant courts in Georgia personal jurisdiction that is coextensive with procedural due process, " but instead "imposes independent obligations that a plaintiff must establish for the exercise of personal jurisdiction that are distinct from the demands of procedural due process." Diamond Crystal Brands, Inc. , 593 F.3d at 1259. "[C]ourts must apply the specific limitations and requirements of O.C.G.A. § 9-10-91 literally and must engage in a statutory examination that is independent of, ...


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