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Nichols v. Morris

United States District Court, W.D. Missouri, St. Joseph Division

February 26, 2015

ANTHONY L. NICHOLS, et al., Plaintiffs,
v.
RYAN J. MORRIS, et al., Defendants.

ORDER

NANETTE K. LAUGHREY, District Judge.

Plaintiffs Anthony Nichols and Chris DiVirgilio filed this lawsuit against Defendants Ryan Morris and Tripwire Operations Group arising out of agreements Morris made with both Nichols and DiVirgilio to purchase their interest in Tripwire. (Counts I-IV). Plaintiffs also seek an accounting of all the financial activities of Tripwire from 2010 through the present and allege that Morris and Tripwire have violated Tripwire's Operating Agreement which requires the company to provide annual financial statements to its members (Counts V-VI).

Before the Court is Defendants' Motion to Dismiss, or in the alternative, Motion to Transfer Venue. [Doc. 8]. For the reasons set forth below, Defendants' Motion to Dismiss is granted in part and denied in part. All claims against Morris are dismissed for lack of personal jurisdiction. The claims against Tripwire in Counts I-IV are dismissed for failure to state a claim. Defendants' Motion to Transfer Venue is denied.

I. Background

Plaintiff Anthony Nichols resides in Gower, Missouri. Plaintiff Chris DiVirgilio resides in Voorhes, New Jersey. Defendant Ryan Morris resides in Biglersville, Pennsylvania. Defendant Tripwire is a limited liability company formed under the laws of Pennsylvania, and its registered office is located at Morris' residence in Pennsylvania. Tripwire Operations Group is a supply and operations company that specializes in products such as explosives and training materials used by persons performing law enforcement and other safety functions. [Doc. 1-2, p. 3].

Tripwire is governed by an Operating Agreement signed in April 2010 by Morris, Plaintiff Chris DiVirgilio, and non-party, David Ford, who all owned a portion of the company. Id. The Operating Agreement was amended in September 2010 to add Plaintiff Anthony Nichols as a member of the company. [Doc. 1-3].

Since 2010, when Nichols joined the company, Morris, as manager of Tripwire, advertised Nichols' home in Gower, Missouri as a magazine storage site, even though Tripwire did not have a federal explosive license to store or operate a storage facility in Missouri. See e.g., [Doc. 16-1, p. 49]. On one occasion, in June 2013, Morris arranged for a former customer to drop off explosives at Nichols' home. [Doc. 16-1, pp. 71-72]. Tripwire was able to make this arrangement without a license because Nichols owned a separate company, ARMR, LLC, which held a federal explosive license in Missouri. Morris met the customer at Nichols' home to pick up the explosives and at the same time picked up products Tripwire purchased from Nichols' separate company, ARMR, LLC. Other than the drop-off described above, Tripwire has never used Nichols' home in Missouri to store explosives or to operate a magazine storage site.

Morris also made occasional trips to Missouri. In June 2011, Morris and DiVirgilio travelled to Nichols' home in a vehicle containing explosives for delivery. Morris and DiVirgilio spent the night at Nichols' home, and DiVirgilio left the next day to deliver the explosives to Texas. Morris stayed another night with Nichols and discussed future storage of explosives at Nichols' home. In October 2011, Morris flew to Kansas City, Missouri, was picked up by Nichols, and the two of them drove a truck with explosives to Texas, New Mexico, Arizona, and Nevada. In spring 2012, Morris drove through Missouri to establish a credit line at a bank in Kansas City, Kansas.

Morris also advertised Nichols' home as a place customers could pick up goods. In February 2012, an Iowa Sheriff's Department picked up an order of products produced by Tripwire in Missouri at Nichols' home. The customer was not a Missouri resident, and Morris negotiated and completed the transaction on Tripwire's behalf from Pennsylvania. Morris met the customer at Nichols' home in Missouri while driving through Missouri to handle business in another state.

In January 2014, Morris and Nichols entered into a Limited Liability Membership Interest Purchase Agreement (Nichols Agreement) whereby Morris agreed to buy Nichols' membership units in Tripwire for $360, 000. [Doc. 1-4]. The Nichols Agreement was signed first by Nichols on January 28, 2014, in Missouri, and forwarded via email to Morris in Pennsylvania. [Doc. 27-1, p. 3]. Morris then signed the Nichols Agreement in Pennsylvania and sent it back to Nichols on January 31, 2014. Id. at 8. Also in January 2014, Morris and DiVirgilio entered into a Limited Liability Membership Interest Purchase Agreement (DiVirgilio Agreement) whereby Morris agreed to purchase DiVirgilio's membership units in Tripwire for $120, 000. [Doc. 1-5]. After both Nichols and DiVirgilio indicated to Morris that they were prepared to fulfill all conditions required of them by their respective purchase agreements, Morris refused to purchase the membership units, and Nichols and DiVirgilio now seek damages for Morris' breach of the purchase agreements (Counts I, III), or, alternatively, specific performance of the purchase agreements (Counts II, IV).

In Count V, Nichols and DiVirgilio allege that Morris, as manager of Tripwire, and Tripwire have failed and refused to issue all distributions to which DiVirgilio and Nichols were entitled since 2010 pursuant to § 4.06 of the Operating Agreement. As a result, Nichols and DiVirgilio seek an accounting of all the financial activities of Tripwire since 2010 and all distributions that should have been made to them since 2010. In Count VI, Nichols and DiVirgilio seek damages for breach of contract because Morris and Tripwire did not furnish them with annual financial statements as required by § 9.02 of the Operating Agreement.

Defendants argue dismissal against Morris is appropriate because the Court lacks personal jurisdiction over him. Defendants also argue that the claims against Tripwire should be dismissed because Plaintiffs have failed to allege that Tripwire owed any contractual duty to Nichols or DiVirgilio under the purchase agreements (Counts I-IV) or that Tripwire committed any wrongdoing under the Operating Agreement (Counts V-VI). Defendants also argue that should this Court decline to dismiss this case entirely, the case should be transferred to the Middle District of Pennsylvania.

II. Discussion

A. Personal ...


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