United States District Court, S.D. Ohio, Eastern Division
Deavers Magistrate Judge.
OPINION & ORDER
ALGENON L. MARBLEY UNITED STATES DISTRICT JUDGE.
matter comes before the Court on Third-Party Defendant Mark
Schrader's Motion to Dismiss. (ECF No. 35). CCL Label,
Inc. (“CCL”), a Defendant in this case, filed a
Third-Party Complaint against Mark Schrader, formerly the
Chief Financial Officer (“CFO”) of Wesex
Corporation (“Wesex”), for fraudulent
misrepresentation. Wesex is also named as a defendant in this
case. CCL, the manager of a construction project in New
Albany, Ohio, alleges that Schrader executed false affidavits
to conceal the fact that Wesex, the project's general
contractor, was not using their payments from CCL to
compensate the project's subcontractors for their
materials and labor. Schrader has filed a Motion to Dismiss,
arguing that he is not subject to Personal Jurisdiction in
Ohio, and that CCL has failed to state a claim. For the
reasons below, this Court DENIES Third-Party
Defendant Schrader's Motion to Dismiss.
hired Wesex Corporation (“Wesex”) to build an
office building in New Albany, Ohio and the two parties
entered into a Design-Builder agreement on December 15, 2015.
(ECF No. 36-1 at ¶ 6). Mark Schrader
(“Schrader”) was CFO of Wesex from January 2016
to October 13, 2017 and was heavily involved with the
project, which ran from early March 2016 until early 2017.
(ECF No. 9 at 15 ¶ 13; ECF No. 35-1 at ¶ 3; ECF No.
36-1 at ¶ 11). Upon earning the contract, Wesex
contracted with a series of subcontractors; it would be
Wesex's responsibility to pay the subcontractors. (ECF
No. 3 at ¶¶ 6-8). Wesex would submit pay
applications to CCL asking to be reimbursed for paying the
subcontractors, pursuant to the contract. (ECF No. 9 at
¶¶ 15-16). Schrader regularly called CCL's
Manager of Design and Construction Worldwide in Ohio about
these pay applications to make sure they were going smoothly.
(ECF No. 36-1 at ¶ 12). With these pay applications,
Schrader executed affidavits promising that the
subcontractors had been paid. (Id. at ¶ 16).
CCL, relying on the veracity of these affidavits, continued
work on the project and did not terminate Wesex as general
contractor. (Id. at ¶ 15). However, CCL alleges
that these affidavits turned out to be false and that Wesex
was not paying its subcontractors. (Id. at ¶
17). Subcontractors began complaining to CCL and filed
actions in Ohio state courts. (Id.). Schrader spoke
with CCL representatives in Ohio on the phone, promising that
the issues were being cleared up, but CCL contends they never
were. (Id. at ¶ 19). CCL also alleges that
Wesex's failure to pay the subcontractors led to lawsuits
being filed against CCL as the project manager and liens
being placed on the project. (ECF No. 36 at 17).
plaintiff in this lawsuit, Decker Construction Company
(“Decker”), was one of the subcontractors
allegedly not compensated by Wesex. Decker filed suit in the
Licking County Court of Common Pleas against CCL for Unjust
Enrichment and against Wesex for Breach of Contract, Unjust
Enrichment, and violating Ohio's Prompt Pay Act. Ohio
Rev. Code Ann. § 4113.61 (2011). CCL subsequently
removed this case to federal court. CCL then filed an answer
to Decker's Complaint (ECF No. 1; ECF No. 9) and filed a
Third-Party Complaint against Schrader, alleging fraudulent
misrepresentation. (ECF No. 9). CCL also filed a Crossclaim
against Wesex (Id.) and a Counterclaim against
this Court is Third-Party Defendant Schrader's Motion to
Dismiss, in which he argues he is not subject to personal
jurisdiction in Ohio. (ECF No. 35). He also argues CCL fails
to state a claim for which relief can be granted.
LAW & ANALYSIS
Standard of Review The burden of proof for
establishing personal jurisdiction always rests on the
plaintiff. See CompuServe Inc. v. Patterson, 89 F.3d
1257, 1262-63 (6th Cir. 1996). When the defendant moves to
dismiss for lack of personal jurisdiction, the plaintiff must
specifically establish jurisdiction through an affidavit or
some similar instrument and cannot just point to the
pleadings as evidence of the propriety of personal
jurisdiction. See Theunissen v. Matthews, 935 F.2d
1454, 1458 (6th Cir. 1991) (citing Weller v. Cromwell Oil
Co., 504 F.2d 927, 930 (6th Cir. 1974)). Without an
evidentiary hearing for the issue of personal jurisdiction,
the plaintiff just has to make “‘a prima facie
showing of jurisdiction.'” Bird v.
Parsons, 289 F.3d 865, 871 (6th Cir. 2002) (quoting
Neogen Corp. Neo Gen Screening, Inc., 282 F.3d 883,
887 (6th Cir. 2002)) (internal citation omitted). To meet
this requirement, plaintiff must “‘[establish]
with reasonable particularity sufficient contacts between
[the Defendants] and the forum state to support
jurisdiction.'” Neogen Corp., 282 F.3d at
887 (quoting Provident Nat'l Bank v. Cal. Sav. &
Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987)).
determining whether to grant a motion to dismiss under Rule
12(b)(2), the Court must construe facts in the light most
favorable to the non-movant. Most importantly, the Court
shall not consider any of the movant's assertions that
contradict the plaintiff's. See CompuServe, 89
F.3d at 1262 (citing Theunissen, 935 F.2d at 1459).
This rule serves to prevent defendants defeating personal
jurisdiction by denying any facts plead related to
jurisdiction. See Id.
whether the underlying claims arise out of federal or state
law is a court's threshold task. For federal claims,
courts evaluate only whether due process is violated by
applying personal jurisdiction. For state-law diversity
claims, however, courts must also examine whether personal
jurisdiction is valid under the applicable state law and then
whether personal jurisdiction would violate the Due Process
clause of the Fourteenth Amendment. See Tharo Sys., Inc.
v. cab Produkttechnik GmbH & Co. KG, 196 Fed.Appx.
366, 369 (6th Cir. 2006) (quoting Neogen Corp. v. Neo Gen
Screening, Inc., 282 F.3d 883, 888 (6th Cir. 2002)). The
Sixth Circuit has “recognized that Ohio's long-arm
statute is not coterminous with federal constitutional
limits, ” and has “consistently focused on
whether there are sufficient minimum contacts between the
nonresident defendant and the forum state so as not to offend
‘traditional notions of fair play and substantial
justice'” when analyzing the propriety of personal
jurisdiction under Ohio's long-arm statute.
Bird, 289 F.3d at 871 (quoting Int'l Shoe
Co. v. Washington, 326 U.S. 310, 316 (1945)). ...