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Paglioni & Associates, Inc. v. Winner Comm

March 16, 2007


The opinion of the court was delivered by: Judge Graham


On April 14, 2006, Paglioni & Associates, Inc. ("Paglioni") filed suit against WinnerComm, Inc. ("WinnerComm") for breach of contract, unjust enrichment, and quantum meruit. Paglioni filed suit in this Court based on diversity jurisdiction under 28 U.S.C. § 1332. In response to the complaint, on June 8, 2006, Winnercomm filed a motion to dismiss for lack of personal jurisdiction.

Paglioni then filed an amended complaint naming WinnerComm's wholly-owned subsidiary, Innovative Media Solutions, as an additional defendant to the suit. Because of the amended complaint, this Court found that WinnerComm's original motion to dismiss was moot. In response to that order, WinnerComm filed a motion to dismiss Paglioni's amended complaint for lack of personal jurisdiction, claiming that Paglioni failed to make any additional allegations in the amended complaint that would subject WinnerComm to personal jurisdiction.

For the following reasons, this Court concludes that it lacks personal jurisdiction over Winnercomm, and WinnerComm's motion to dismiss the amended complaint is granted.

I. Factual Background

The following statement is taken from the amended complaint, the motion to dismiss, and all documents that the parties submitted in connection with the motion to dismiss. Plaintiff Paglioni is a company that sells sponsorships and commercials for national broadcast television events. Paglioni is incorporated in Ohio with its principal place of business in Dublin, Ohio. Defendant WinnerComm is a production company that broadcasts television events. WinnerComm is incorporated in Oklahoma with its principal place of business in Tulsa, Oklahoma.

Paglioni alleges that it entered into a business relationship with WinnerComm in September 2004. Paglioni contends that it would take companies who wanted to purchase sponsorships or commercials and direct them to advertise their products on WinnerComm's television broadcasts. In return, WinnerComm would pay Paglioni a 10% commission for the directed sale. WinnerComm claims that no such relationship or contract was formed with Paglioni, and they paid Paglioni a commission on only one prior occasion.

Paglioni contends that WinnerComm breached the contract in April 2005 when Paglioni set up a business meeting between Cingular Wireless and WinnerComm. Cingular Wireless contacted Paglioni, and from there, Paglioni referred Cingular to WinnerComm. Following the business meeting, WinnerComm secured a $15,000,000 deal with Cingular but refused to pay Paglioni the 10% commission for the sale. Paglioni asserts claims for breach of contract, unjust enrichment, and quantum meruit.

WinnerComm filed a motion to dismiss, denying the existence of personal jurisdiction. WinnerComm's President and CEO, James Wilburn, stated in an affidavit that WinerComm does not own or lease property in Ohio, or have employees, offices, current customers, or debts in Ohio. June 5, 2006, Declr. of James Wilburn, ¶2-5. WinnerComm argues that they do not have sufficient connections to Ohio to be subjected to personal jurisdiction. Additionally, WinnerComm argues that Paglioni failed to establish the particular details of the business relationship between the two parties that is necessary for personal jurisdiction.

Paglioni responds that this Court has personal jurisdiction, both specific and general jurisdiction, based on eight contacts that WinnerComm has with Ohio. First, WinnerComm sent at least one commission payment to Paglioni in Ohio, and any further payments under the agreement with Paglioni would be sent to Ohio. Second, in February and May of 2005, WinnerComm received three checks from Ohio for commercials Paglioni purchased from WinnerComm. August 3, 2006, Declr. of Lawrence Paglioni, ¶2. Third, WinnerComm traveled to Ohio to make a business proposal to Nationwide Insurance in October 2005. Id., ¶3. Fourth, WinnerComm produces highlight tapes for Major League Soccer teams, including the Columbus Crew located in Ohio. Id., ¶5. WinnerComm rented production equipment from an Ohio company to produce highlight tapes for the Columbus Crew games. Id. Fifth, Winnercomm produces the Three Tour Golf Challenge in Las Vegas, Nevada. August 2, 2006, Declr. of Kip Eriksen, ¶4. The tournament benefits an Ohio charity, Tournaments for Charity. Id. In preparing for the event, Paglioni provided an affidavit from an employee of Tournaments for Charity who states that WinnerComm works and interacts with Tournaments for Charity in preparation for the annual event. Id. Sixth, WinnerComm, on one occasion, traveled to Wendy's International Headquarters in Ohio for a marketing trip in April 2004. August 3, 2006, Declr. of Lawrence Paglioni, ¶4. Seventh, Paglioni documents email communication between Paglioni and WinnerComm, demonstrating that WinnerComm sent emails to Ohio. Id., ¶5. Lastly, Paglioni contends that the contract between the two parties was formed in part in Ohio.

II. Personal Jurisdiction

A. Standard

The party asserting personal jurisdiction bears the burden of proving that personal jurisdiction exists. CompuServe v. Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996). In this case, the burden of proof rests on the plaintiff, Paglioni. When a court does not conduct an evidentiary hearing, as in this case, the plaintiff needs to make only a prima facie, or threshold, showing that personal jurisdiction exists. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). Without an evidentiary hearing, the court may consider only the pleadings and affidavits submitted by the parties. CompuServe, 89 F.3d at 1262. If there is a discrepancy between the plaintiff's and defendant's allegations, the court must consider the information in a light most favorable to the plaintiff. Id.

When a federal district court sitting in diversity jurisdiction faces a personal jurisdiction issue, the court must apply the law of the forum state regarding personal jurisdiction, and it also must determine whether jurisdiction is within the limits of constitutional due process. Theunissen, 935 F.2d at 1459. The applicable state law, in this case, is Ohio's Long-Arm Statute found in Ohio Rev. Code Ann. § 2307.382.The Ohio Supreme Court has held that Ohio's Long Arm statute does not reach the limits of due process, requiring this Court to conduct analysis under both laws. Goldstein v. Christiansen, 638 N.E.2d 541, 545 n.1 (Ohio 1994); Calphalon Corp. v. Rowlette, 228 F.3d 718, 720 (6th Cir. 2000). The issue then becomes whether Paglioni provided a prima facie showing that personal jurisdiction exists under both constitutional due process and Ohio's Long-Arm Statute.

B. Constitutional Due Process

This Court must first determine whether personal jurisdiction is proper under constitutional due process. Paglioni alleges that this Court has both general and specific jurisdiction over WinnerComm. A court has general jurisdiction over a defendant when the defendant's contacts with the state are so high that a party has the ability to sue that defendant in the state for any claim, even those not arising in the state. Conti v. Pneumatic Prod. Corp., 977 F.2d 978, 981 (6th Cir. 1992). A court typically has specific jurisdiction over a defendant when the claim has some connection with the forum ...

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