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Plains Marketing, L.P v. George Kuhn

October 17, 2011

PLAINS MARKETING, L.P., PLAINTIFF,
v.
GEORGE KUHN DEFENDANT.



The opinion of the court was delivered by: Glasser, United States District Judge:

Memorandum and Order

Plaintiff Plains Marketing, L.P. ("plaintiff" or "Plains Marketing") brought this diversity action against defendant George Kuhn ("defendant" or "Kuhn"), an officer of SAFE *T* TRANSPORT, Inc. ("Safe T Transport"), claiming he is personally liable for the corporation's breach of various sales agreements. Plaintiff seeks damages in the amount of $435,451.30. Before the Court is defendant's motion to dismiss the complaint, pursuant to Rules 12(b)(2), (3), and (6) of the Federal Rules of Civil Procedure. Defendant argues that: 1) plaintiff has pleaded insufficient facts to pierce the corporate veil of Safe T Transport and hold him personally liable and therefore the complaint fails to state a claim upon which relief may be granted; 2) venue in this jurisdiction is not proper; and 3) the court lacks personal jurisdiction over the defendant. For the following reasons the Defendant's motion is GRANTED.

BACKGROUND

The facts alleged in the complaint are assumed to be true for the purpose of this motion. See Nechis v. Oxford Health Plans Inc., 421 F. 3d 96, 100 (2d Cir. 2005). In addition, for the reasons discussed more fully below, the Court will consider certain documents that are incorporated by reference or integral to the complaint. See DiFolco v. MSNBC Cable LLC, 622 F. 3d 104, 111 (2d Cir. 2010). Supplementary affidavits submitted by the parties that are not incorporated into the complaint will be considered for purposes of deciding the venue issue only. See Fine Foods Int'l, L.P. v. N. Am. Fine Foods Inc., No. 99-CV-1062(ILG), 1999 WL 1288681, *1 (E.D.N.Y. Nov. 8, 1999) (citation omitted).

Plaintiff is a Texas limited partnership with its place of business in Houston, Texas. Complaint, dated May 24, 2010 ("Compl.") ¶1. Between September 7, 2007 and September 2, 2008, plaintiff entered into 16 separate written sales agreements (the "Sales Agreements") with Safe T Transport, which the plaintiff now alleges is a "fictitious corporate entity." Compl. ¶¶ 4-7; Mot. to Dismiss, Ex. A; Affidavit in Opposition of Mike McBride ("McBride Aff."), Ex. B. By these Sales Agreements, Plains Marketing agreed to make scheduled deliveries of 60,000 gallons of propane gas per month to Safe T Transport at an address in Indianapolis, Indiana. Compl. ¶¶ 5, 9; Mot. to Dismiss, Ex. A; McBride Aff. Ex. B. Under "SOLD TO" and "SHIP TO," the Sales Agreements listed Safe T Transport. McBride Aff., Ex. B The Sales Agreements also state "THIS CONSTITUTES A CONTRACT BETWEEN OUR RESPECTIVE COMPANIES." Id. The Sales Agreements were executed by George Kuhn, on behalf of Safe T Transport, and John DeJean, on behalf of Plains Marketing GP Inc., the General Partner of Plains Marketing. Id.

Immediately beneath the parties' signatures are references to terms and conditions governing the Sales Agreements. One of these agreements, dated September 7, 2007, was "Subject to Terms & Conditions attached" (the "General Terms & Conditions"). Mot. to Dismiss, Ex. A. The other fifteen agreements, all dated August 14, 2008, stated "This contract shall be governed by Plains Marketing Canada L.P. General Terms and Conditions for Non-Crude Products Sales and Purchases Dated June 1, 2008" (the "Canada Terms & Conditions"). McBride Aff., Ex. B.

Section 16.0 of The Canada Terms & Conditions includes the following:

16.0 GOVERNING LAW AND JURISDICTION

16.1 Canada or the United States: If custody transfer from Seller to Buyer under this Agreement takes place in Canada, Section 16.1.1 shall apply. If custody transfer from Seller to Buyer under this Agreement takes place in the United States, Section 16.1.2 shall apply. If no custody transfer occurs, Section 16.1.1 shall apply.

16.1.1 Laws of Alberta: This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta. . . . Each of the Parties hereto irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts located in Alberta, Canada for any action suits or proceedings arising out of or relating to this Agreement. . . .

16.1.2 Laws of New York: this agreement shall be governed by and construed in accordance with the laws of the State of New York . . . . Each of the Parties hereto irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts located in the United States Federal District Court for the Southern District of New York and the United States Federal District Court for the Eastern District of New York, or, if such courts decline to exercise or do not have jurisdiction, then New York State District Courts. . . .

McBride Aff., Ex. A. Plaintiff claims that, under these terms and conditions, Kuhn consented to venue in this jurisdiction. Compl. ¶ 2.

Plains Marketing purchased propane to fulfill its obligations under the Sales Agreements. Compl. ¶ 11. Defendant failed to take delivery pursuant to the terms of the Sales Agreements. Id. ¶ 12. After giving notice of default via certified mail, plaintiff sold the propane inventory at a loss. Id. ¶¶ 14-15. On May 24, 2010, plaintiff commenced this action, seeking compensation ...


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