Lenape Properties Management, Inc. v. Prudential Insurance Company of America ( 2022 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
LENAPE PROPERTIES )
MANAGEMENT, INC., )
)
Plaintiff, )
)
v. ) C.A. No. N22C-04-065 CEB
)
THE PRUDENTIAL )
INSURANCE COMPANY )
OF AMERICA, )
)
Defendant. )
Submitted: October 7, 2022
Decided: December 20, 2022
Upon Consideration of Defendant The Prudential Insurance Company of
America’s Motion to Dismiss,
GRANTED.
ORDER
On this 20th day of December 2022, in consideration of Defendant The
Prudential Insurance Company of America’s (“Prudential”) motion to dismiss, it
appears to the Court that:
1
1. Plaintiff Lenape Properties Management, Inc. (“Lenape”) is a Delaware
corporation.1 Prudential is a New Jersey corporation headquartered in Newark, New
Jersey.2
2. On April 17, 2006, Prudential leased commercial property in Chalfont,
Pennsylvania from Plaintiff Lenape Properties Management, Inc (“Lenape”).3 The
lease was extended until July 31, 2021.4 Prudential did not vacate the premises until
July 31, 20225 and the parties are now engaged in dispute over rent due during the
holdover period. Thus, a Delaware corporation has sued a New Jersey corporation
in a Delaware court over a leasehold on property located in Pennsylvania.
3. A plaintiff may invoke the Court’s jurisdiction over a defendant under one
of two theories: (1) general jurisdiction, which attaches to conduct by the defendant
regardless of where it occurred;6 and (2) specific jurisdiction, which attaches to
conduct occurring in the forum jurisdiction.7
1
Compl. ¶ 1, D.I. 1 [hereinafter “Compl.”].
2
Id.
3
Id. ¶ 3.
4
Id. ¶ 4.
5
Id.
6
Genuine Parts Co. v. Cepec, 137 A.3d 123, 129 (Del. 2016) (“[General jurisdiction]
grants authority to a state’s courts to assert jurisdiction over a nonresident defendant
on the basis of wholly unrelated contacts with the forum.” (internal quotations
omitted)).
7
Id. at 130 (“Courts can also exercise specific jurisdiction over a corporate defendant
where the suit arises out of or relates to the corporation’s contacts with the forum.”
(internal quotation marks omitted)).
2
4. A nonresident defendant may move to dismiss for lack of personal
jurisdiction under Rule 12(b)(2).8 When Rule 12(b)(2) is invoked, the plaintiff bears
the burden to make out a prima facie case establishing jurisdiction.9 A prima facie
case requires the “production of enough evidence to allow the fact-trier to infer the
fact at issue and rule in the party’s favor.”10 The Court “is not limited to the pleadings
and can consider affidavits, briefs of the parties, and the record as a whole.”11 “Still,
unless contradicted by affidavit, the Court must (1) accept as true all well-pleaded
allegations in the complaint; and (2) construe the record in the light most favorable
to the plaintiff.”12
5. General jurisdiction may be invoked in very few fora: the forum in which
the defendant is incorporated or in which it has its principal place of business such
that it has treated the forum as its home.13 From this record, it can be said that
Prudential is subject to general jurisdiction in New Jersey: it is both incorporated
and has its principal place of business there. The Court can also say that Prudential
8
Super. Ct. Civ. R. 12(b)(2).
9
In re Talc Prod. Liability Litig., 2018 WL 4340012, at *2 (Del. Super. Sept. 10,
2018).
10
Prima facie case, Black’s Law Dictionary (11th ed. 2019).
11
Green Am. Recycling, LLC v. Clean Earth, Inc., 2021 WL 2211696, at *3 (Del.
Super. June 1, 2021) (internal quotation marks omitted).
12
Id. (internal quotation marks omitted).
13
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011)
(identifying a corporations domicile for purposes of general jurisdiction as its place
of incorporation and principal place of business).
3
is not subject to general jurisdiction in Delaware. Prudential cannot be sued in
Delaware on a theory of general jurisdiction for conduct that is unconnected to
Delaware, merely because it “does business” in Delaware.14
6. Specific jurisdiction arises from the specific conduct in question.15 For
example, if a defendant commits a tort in Delaware, specific jurisdiction arises
because it is the locus of the tort. Delaware courts may adjudicate the tort, regardless
of the Defendant’s state of incorporation or principal place of business.
7. The plaintiff bears the burden of showing that specific jurisdiction is
appropriately asserted over a nonresident defendant.16 From the complaint, we learn
that Plaintiff is a Delaware corporation that negotiated a lease across state lines with
a New Jersey corporation for land in Pennsylvania.
8. Merely contracting with an entity incorporated in Delaware is not enough
to support a finding of specific jurisdiction. 17 Rather, the Court must evaluate the
14
Genuine Parts Co., 137 A.3d at 148 (applying the due process limits of Daimler
AG v. Bauman, 571 U.S. 117 (2014) that a corporation which operates in many
places can scarcely be deemed at home in all of them).
15
Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984)
(“It has been said that when a State exercises personal jurisdiction over a defendant
in a suit arising out of or related to the defendant’s contacts with the forum, the state
is exercising specific jurisdiction over the defendant.” (internal quotation marks
omitted)).
16
AeroGlobal Cap. Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428, 437-38 (Del.
2005).
17
E.g., Techview Invs., 2021 WL 3891573, at *7 (citing Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 478 (1985)); see also Abajian v. Kennedy, 1992 WL 8794(Del. Ch. Jan 17, 1992).
4
parties “prior negotiations and contemplated future consequences, along with the
terms of the contract and the parties’ actual course of dealing.”18 Courts have
repeatedly rejected reliance on any single factor.19
9. Lenape contends that because Prudential contracted with a Delaware entity
and sent rent payments and other correspondence to Lenape’s Wilmington address
specific jurisdiction should be found.20 Prudential asserts that the lease was
negotiated and executed via phone and email communications.21 Lenape has not
offered evidence to contradict that point.
10. Mailing rent payments to Delaware has been found to be insufficient to
establish specific jurisdiction.22 And many courts have determined that specific
jurisdiction cannot be established when the use of mail and telephone
18
Burger King, 471 U.S. at 478.
19
See, e.g., North Sails Grp., LLC v. Boards and More GmbH, 264 A.3d 1, 11 (Conn.
2021); IDS Publishing Corp. v. Reiss Profile Europe, B.V., 2017 WL 4217156, *7
(S.D. Ohio Sept. 19, 2017) (“despite the [parties’] [l]icense [agreement] being in
place for more than ten years, the [c]ourt’s focus is on the quality of the parties’
relationship rather than its duration”); Consulting Eng’r Corp. v. Geometric Ltd.,
561 F.3d 273 (4th Cir. 2009).
20
Pl.’s Opp’n ¶ 2, D.I. 12.
21
See Def.’s Decl. of Gerard Sica, Ex. A to Def.’s Mot to Dismiss ¶¶ 9-10, D.I. 7.
22
See Kane v. Coffman, 2001 WL 914016, at *4 (Del. Super. Aug. 10, 2001) (“[M]ail
and telecommunications [are] not sufficient minimum contact[s] to give in personam
jurisdiction over nonresidents” (quoting Bank of Am. Nat’l & Sav. Ass’n v. GAC
Prop. Credit Inc., 389 A.2d 1304, 1310 (Del. Ch. 1978)); Blue Ball Prop., Inc. v.
McClain, 658 F. Supp. 1310, 1319-20 (D. Del. 1987) (rejecting the argument that
“calling for, receiving, and cashing the check establishes minimum contacts between
Delaware and [the defendant]”).
5
communications are “ancillary” to the contract’s execution and performance.23
While it is true that the parties’ communications involved their contractual
relationship, there is no evidence that it created a continuous or extensive
collaborative relationship regarding business beyond negotiating the lease and
addressing payments in accordance with that lease. These communications appear
to be ancillary to the contractual relationship and occurred in Delaware merely
because the Lenape happens to be located here.
11. The contract of lease at the center of this dispute concerns property in
Pennsylvania. It is logical that specific jurisdiction would lie in the state where the
property is located. The parties negotiated a Pennsylvania choice of law provision
in the lease.24 While giving the parties a right to negotiate the Court’s jurisdiction
23
See, e.g., North Sails Grp., 264 A.3d at 310 (communications addressed to
Connecticut occurred only because the plaintiff was located there and did not
establish specific jurisdiction); Jutalia Recycling, Inc. v. CAN Metals Ltd., 542
S.W.3d 90, 99 (Tex. Ct. App. 2017) (payments addressed to Texas were insufficient
to persuade the court that specific jurisdiction applied when the parties never met in
Texas and signed jurisdictional clauses with foreign state choice of law provisions);
Freudensprung v. Offshore Technical Services, Inc., 379 F.3d 327, 344-45 (5th Cir.
2004) (no specific jurisdiction found despite an approximately three-year contractual
relationship, including extensive communication, when contract performance was to
occur outside forum); Reynolds v. Int’l Amateur Athletic Fed’n, 23 F.3d 1110, 1119
(6th Cir. 1994) (communications in Ohio were superficial and insufficient to satisfy
due process when defendant owned no property nor transacted business in Ohio);
Scullin Steel Co. v. Nat’l Ry. Utilization Corp., 676 F.2d 309, 314 (8th Cir. 1982)
(“The use of interstate facilities (telephone, the mail), the making of payments in the
forum state, and the provision for delivery within the forum state are secondary or
ancillary factors. . .”).
24
Ex. A to Def.’s Mot. to Dismiss ¶ 32, D.I. 7.
6
seems a dubious proposition,25 it is equally true that Delaware should be circumspect
in recognizing jurisdiction merely because one of contracting parties is a resident
here. The Court holds that Delaware’s connection to this dispute is insufficient to
confer specific jurisdiction in Delaware consistent with due process. Accordingly,
the Court will dismiss the matter.
12. For the foregoing reasons, Defendant’s motion to dismiss is GRANTED.
IT IS SO ORDERED.
Charles E. Butler, Resident Judge
25
Burger King, 471 U.S. at 482 (“[A choice of law] provision standing alone would
be insufficient to confer jurisdiction.”).
7