United States District Court, W.D. Missouri, Central Division
NANETTE K. LAUGHREY UNITED STATES DISTRICT JUDGE
AB-Alpine SPE, LLC (“AB-Alpine”) moves to dismiss
plaintiff LearSchmidt Investment Group, LLC's
(“LearSchmidt”) First Amended Complaint. Doc. 53.
For the following reasons, AB-Alpine's motion to dismiss
January 2017, LearSchmidt entered into an Asset Purchase
Agreement (“APA”) with IQ Payment Systems, LLC
doing business as Alpine Payment Systems
(“Alpine”), in which LearSchmidt purchased the
revenues produced by a portfolio of merchant accounts,
described more fully in Section 1.1 of the APA (the
“Accounts”). See Doc. 38-1 (APA). Under
the terms of the APA, Alpine was to transfer all of its
interests in the Accounts to LearSchmidt, and LearSchmidt was
to receive notice and right of first refusal to purchase the
rights or interests in the Accounts from Alpine, should
Alpine elect to sell or dispose of any of its rights.
LearSchmidt alleges, upon information and belief, that Alpine
“sold its rights and interests in the Accounts to
[AB-Alpine], ” without notice pursuant to its right of
first refusal. Doc. 38 (First Amended Complaint), ¶ 26.
LearSchmidt asserts that “the obligations and covenants
of Alpine under the [APA] are binding upon [AB-Alpine] as the
successor and assign of Alpine.” Id. at ¶
moves to dismiss LearSchmidt's claims for lack of
personal jurisdiction, pursuant to Federal Rule of Civil
Procedure 12(b)(2). LearSchmidt carries the burden of proof
and, at this stage in the case, must “make a prima
facie showing that personal jurisdiction exists.”
K-V Pharm. Co. v. J. Uriach & CIA, S.A., 648
F.3d 588, 591 (8th Cir. 2011). Although “[t]he
evidentiary showing required at the prima facie stage is
minimal, ” Johnson v. Arden, 614 F.3d 785, 794
(8th Cir. 2010) (quotations omitted), it “must be
tested, not by the pleadings alone, but by the affidavits and
exhibits” supporting or opposing the motion to dismiss,
Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072
(8th Cir. 2004) (quotations omitted). K-V Pharm.
Co., 648 F.3d at 592. The Court “must view the
evidence in the light most favorable to [LearSchmidt] and
resolve all factual conflicts in its favor in deciding
whether [LearSchmidt] made the requisite showing.”
uncontested that AB-Alpine is not a signatory to the APA
forming the basis of LearSchmidt's claims, see
Doc. 38-1, nor does AB-Alpine, a Florida limited liability
company located in Boca Raton, Florida, maintain offices, own
property, or operate facilities in Missouri, Doc. 10-1,
¶¶ 3-10. However, LearSchmidt asserts that personal
jurisdiction is proper in this Court because AB-Alpine (1) is
a mere “continuation of” or corporate
“successor to [Alpine]” and (2) “engaged in
business transactions” in Missouri, sufficient to
satisfy the Missouri long-arm statute and due process. Doc.
55, pp. 3, 5; Doc. 38 at ¶ 12.
contacts of a corporate predecessor may be imputed to its
successor without offending due process where the successor
is “merely a continuation” of its predecessor.
Koch Supplies, Inc. v. Charles Needham Indust., 1990
WL 274485, *3 (W.D. Mo. 1990); see also Lakota Girl Scout
Council, Inc. v. Havey Fund-Raising Mgmt., Inc., 519
F.2d 634, 637 (8th Cir. 1975) (explaining that “if the
corporation is [the defendant's] alter ego, its contacts
are [the defendant's] and due process is
satisfied”); Patin v. Thoroughbred Power Boats
Inc., 294 F.3d 640, 653 (5th Cir. 2002)
(“[F]ederal courts have consistently acknowledged that
it is compatible with due process for a court to exercise
personal jurisdiction over an individual or a corporation
that would not ordinarily be subject to personal jurisdiction
in that court when the individual or corporation is an alter
ego or successor of a corporation that would be subject to
personal jurisdiction in that court.”); Massi v.
Holden, No. 09-cv-1821, 2011 WL 6181258, at *5 (D. Minn.
Dec. 13, 2011) (“[P]ersonal jurisdiction over a
corporate successor may be based on its predecessor's
contacts with the forum, provided the successor would be
liable for its predecessor's acts under the forum's
law.” (quotation omitted)). The theory is that because
the predecessor and successor are the same entity, the
jurisdictional contacts of one are the jurisdictional
contacts of the other for purposes of the due process
analysis. Patin, 294 F.3d at 653; see also Green
v. Montgomery Ward & Co., 775 S.W.2d 162, 166
(Mo.Ct.App. 1989) (“The rationale for this is quite
simple. It would be all too easy for a corporation to
immunize itself from liability by utilizing such a device as
a change of name.”).
determine whether a successor company is “merely a
continuation” of its predecessor the Court considers
whether there has been “a transfer or sale of all, or
substantially all” of the predecessor's assets.
Med. Shoppe Int'l, Inc. v. S.B.S. Pill Dr.,
Inc., 336 F.3d 801, 804 (8th Cir. 2003) (quoting
Grand Labs v. Midcon Labs, 32 F.3d 1277, 1281 n.5
(8th Cir. 1994)). Where such a transfer of assets has taken
place, the Court then considers whether: (1) there is
“common identity of officers, directors and
stockholders”; (2) the incorporators of the successor
also incorporated the predecessor; (3) the “business
operations are identical”; (4) the transferee uses the
same equipment, labor force, supervisors, and name of the
transferor; and (5) notice has been given of the transfer to
employees or customers. Med. Shoppe Int'l, Inc.,
336 F.3d at 804 (citing Roper Elec. Co. v. Quality
Castings, Inc., 60 S.W.3d 708, 711-13 (Mo. App. 2001)).
Although no single factor is determinative, the first
factor-common identity of officers, directors, and
stockholders- is a “key” factor. Helms v.
Prime Tanning Corp., 2010 WL 1935952, *10 (W.D. Mo. May
argues that AB-Alpine “is a continuation of Alpine,
” Doc. 17, ¶ 36, because “some or all of the
assets of Alpine were sold and purchased by . . . ‘AB
Alpine.'” Doc. 17-1 (Affidavit of Andrew Lear),
¶ 9. AB-Alpine acknowledges purchasing “many of
the assets and liabilities of [Alpine], ” but denies
assuming any liabilities pursuant to the APA and denies acting
as a mere continuation of Alpine. Doc. 54-1 (Affidavit of
Darrell Dirks), ¶ 4; see also Doc. 50-1 (2018
APA). For purposes of this motion to dismiss, LearSchmidt has
made a prima facia showing that there has been a substantial
transfer of assets. Thus, the Court turns to its analysis of
the five Roper factors. See Med. Shoppe
Int'l, Inc., 336 F.3d at 804 (finding a
“substantial transfer of assets” sufficient to
invoke mere continuation doctrine).
AB-Alpine acknowledges that when this lawsuit was initiated,
until sometime after its removal to federal court, defendant
Brian McDevitt was a part owner of AB-Alpine. Doc. 1 (Notice
of Removal), p. 3 (identifying Brian J. McDevitt as one of
three members of AB-Alpine). Mr. McDevitt was also a part
owner of Alpine and one of two members of Alpine to execute
the APA on its behalf. Doc. 38-1, p. 11 (identifying Mr.
McDevitt as a member of Alpine). AB-Alpine asserts that Mr.
McDevitt is no longer a member of AB-Alpine. Doc. 54-1,
¶ 21. However, this does not negate the fact that at the
time of the asset transfer and alleged breach, as well as for
the first few months of this lawsuit, Alpine and AB-Alpine
shared common identity amongst their members. Thus, the first
factor weighs in favor of finding that AB-Alpine is a mere
continuation of Alpine.
AB-Alpine asserts that “[Alpine] and AB-Alpine SPE were
formed by different individuals and/or entities.” Doc.
54, p. 6 (“[Robert] Ensminger and [Mr.] McDevitt formed
[Alpine]; they did not form AB-Alpine.”). However, it
is unclear from AB-Alpine's briefing whether neither Mr.
Ensminger nor Mr. McDevitt formed AB-Alpine or simply that
this combination of individuals alone did not form AB-Alpine.
Thus, the Court is unable to determine whether the second
factor weighs in favor or against a finding of a mere
AB-Alpine asserts, without further explanation, that its
“business operations are distinguishable from
[Alpine]'s.” Id. at pp. 6-7. However,
based on the allegations in the First Amended Complaint,
AB-Alpine continued the exact same business operations, at
least with respect to its assistance with maintenance of the
Accounts and interactions with LearSchmidt. See
generally, Doc. 38. Absent further explanation from
AB-Alpine of the ...