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LLC v. N2 Global Solutions, Inc.

United States District Court, W.D. Missouri, Western Division

March 22, 2019

N2 SELECT, LLC, et al., Plaintiffs,
N2 GLOBAL SOLUTIONS, INC., et al., Defendants.



         This case arises from an alleged scheme to defraud a group of investors. Plaintiffs, a limited liability company and eight individual investors based in Kansas City, Missouri, [1] allege the Defendants, who are based in the New York area, engaged in fraud, misrepresentation, breach of fiduciary duty, and breach of contract by failing to disclose crucial information, embezzling from the company, and providing fraudulent documentation.

         Now before the Court is pro se Defendant Paul Amelio's (“Amelio”) Motion to Dismiss Plaintiff's Second Amended Complaint (Doc. 81). Amelio, a co-founder of Defendant N2 Global Solutions, Inc. (“N2 Global”), moves to dismiss on three independent grounds: improper venue, improper service of process, and lack of personal jurisdiction. These arguments are without merit, and the motion is DENIED.

         I. Even if valid, the forum selection clause does not justify dismissal.

         Amelio argues the case should be dismissed pursuant to 28 U.S.C. § 1406(a), and presumably Federal Rule of Civil Procedure 12(b)(3), because N2 Global's bylaws contain a forum-selection clause which states:

[T]he Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation's stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, or (iv) any action asserting a claim governed by the internal affairs doctrine. . . .

         The Second Amended Complaint alleges that these bylaws are falsified and backdated. The Second Amended Complaint also observes that, in related litigation, a New York court held a forum selection clause Defendants submitted to the court was fraudulent and unreasonable.

         The Court need not decide whether the forum selection clause is valid at this time because even if it were valid, this is not grounds to dismiss the case. “Section 1406(a) and Rule 12(b)(3) allow dismissal only when venue is ‘wrong' or ‘improper.' Whether venue is ‘wrong' or ‘improper' depends exclusively on whether the court in which the case was brought satisfies the requirements of federal venue laws, and those provisions say nothing about a forum-selection clause.” Atl. Marine Constr. Co. v. United States Dist. Ct. for W. Dist. Of Texas, 571 U.S. 49, 55 (2013).

         This portion of the motion is denied.

         II. Plaintiffs properly served Amelio.

         Plaintiffs' process server attempted to serve Amelio at 160 East 89th Street, Apt. 4C, in New York City, which is N2 Global's place of business and, as Amelio acknowledges, his residence. Conspicuous Service Aff. (Doc. 5); Mot. to Dismiss ¶ 9 (Doc. 81). According to the process server's affidavit, on March 6, 2018, at 10:10 a.m., he knocked on the apartment door and no one answered. Conspicuous Service Aff. The doorman told him someone would be in after 7:00 p.m., so the process server returned at 7:30 p.m. and knocked on the door again. Id. No. one answered. Id. After making reasonable efforts to find someone legally eligible and willing to accept service, the process server affixed a copy of the summons, civil cover sheet, and complaint to the door. Id. The next day he mailed the documents to Amelio at the above address in a postpaid wrapper marked “personal & confidential” with no indication that the mailing regarded a legal matter. Id. He sent the package via U.S. Postal Service first-class, regular mail. Id.

         Federal Rule of Civil Procedure 4(e)(1) provides that an individual “may be served in a judicial district of the United States by following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made.” Since service was made in the state of New York, § 308 of New York's Civil Practice Law & Rules governs service of process. This rule provides that where, with due diligence, service cannot be made on a natural person, service may be made by affixing the summons to the door of the person's “actual place of business” and “by mailing the summons by first class mail to the person to be served at his or her actual place of business in an envelope bearing the legend ‘personal and confidential' and not indicating on the outside . . . that the communication is from an attorney or concerns” a lawsuit. This is precisely the procedure the process server followed, so service was valid.

         The Court is unpersuaded by Amelio's argument that service was defective because his building has a policy of not permitting unauthorized party access to residential units, and doormen are not authorized or permitted to receive or deliver legal documents. This assertion is not made under oath and, even if it were true, that does not mean the process server did not persuade a doorman to admit him in violation of the policy. Accordingly, the Court holds Plaintiffs have demonstrated service on Amelio was proper.

         III. The Court has personal ...

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