United States District Court, N.D. Iowa, Eastern Division
Leonard T. Strand, Chief Judge.
case is before me on a motion (Doc. No. 20) to dismiss filed
by defendants SmartTruck Undertray Systems, LLC (SmartTruck),
Stephen S. Ingham, Jr., Mitchell Greenberg, Steve Wulff and
Mike Henderson. Plaintiffs Hirschbach Motor Lines, Inc.
(Hirschbach) and Brad Pinchuk have filed a resistance (Doc.
No. 23) and defendants have replied (Doc. No. 28). I find
that oral argument is not necessary. See N.D. Iowa
August 11, 2017, plaintiffs filed a complaint (Doc. No. 1)
asserting thirteen claims for breach of contract, breach of
various warranties, fraud and negligent misrepresentation.
Defendants responded on September 21, 2017, by filing a
pre-answer motion (Doc. No. 10) to dismiss pursuant to
Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6).
Instead of resisting that motion, plaintiffs filed an amended
complaint (Doc. No. 14) on October 12, 2017. The amended
complaint substitutes current defendant Mitchell Greenberg
for former defendant Ron Pope and proceeds to assert 26
counts against the defendants. Plaintiffs invoke
this court's diversity jurisdiction, asserting no claims
that arise under federal law. Defendants filed their present
motion to dismiss the amended complaint on November 3, 2017.
seek dismissal of all of plaintiffs' claims. They argue
that the court lacks personal jurisdiction over the
individual defendants and that plaintiffs fail to state
claims upon which relief can be granted.
Rule 12(b)(2) - Lack of Personal Jurisdiction
Federal Rules of Civil Procedure permit a pre-answer motion
to dismiss for “lack of personal jurisdiction.”
Fed.R.Civ.P. 12(b)(2). Personal jurisdiction refers to the
power of a court to hear and determine a lawsuit involving a
defendant by virtue of the defendant's having some
contact with the place where a court is located. To properly
allege personal jurisdiction, “a plaintiff ‘must
state sufficient facts in the complaint to support a
reasonable inference that the defendant[ ] can be subjected
to jurisdiction within the state.'” Dever v.
Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir.
2004), cert. denied, 543 U.S. 1147 (2005) (quoting
Block Indus. v. DHJ Indus., Inc., 495 F.2d 256, 259
(8th Cir. 1974)). In resisting a Rule 12(b)(2) motion, the
plaintiff has the burden of proving facts supporting such
jurisdiction. Wells Dairy, Inc. v. Food Movers Int'l,
Inc., 607 F.3d 515, 518 (8th Cir.), cert.
denied, 131 S.Ct. 472 (2010). The court may consider the
allegations of the complaint along with any affidavits and
exhibits submitted by the parties. Id. The
plaintiff's burden, in the absence of an evidentiary
hearing, is to make a “minimal” prima facie
showing of personal jurisdiction. K-V Pharm. Co. v.
Uriach & CIA, S.A., 648 F.3d 588, 592 (8th Cir.
2011). The court “must view the evidence in the light
most favorable to the plaintiff and resolve all factual
conflicts in its favor in deciding whether the plaintiff has
made the requisite showing.” Id.
diversity case, such as this, personal jurisdiction exists
“only to the extent permitted by the long-arm statute
of the forum state and by the Due Process Clause.”
Dever, 380 F.3d at 1073 (internal quotation marks
omitted). Iowa Rule of Civil Procedure 1.306 authorizes the
exercise of personal jurisdiction to the full extent allowed
by the United States Constitution, meaning the court's
inquiry is limited to whether the exercise of personal
jurisdiction comports with due process. Wells Dairy,
607 F.3d at 518 (citing Hammond v. Fla. Asset Fin.
Corp., 695 N.W.2d 1, 5 (Iowa 2005)).
general, due process requires that a nonresident defendant
have at least “certain minimum contacts” with the
forum state to support the exercise of personal jurisdiction.
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945). Those contacts must be sufficient that requiring the
defendant to litigate in the forum state would not
“offend traditional notions of fair play and
substantial justice.” Id. at 316 (internal
quotations marks and citation omitted). They “must come
about by an action of the defendant purposefully directed
toward the forum State.” Asahi Metal Indus. Co. v.
Super. Ct. of Cal., 480 U.S. 102, 112 (1987) (internal
“‘purposeful availment' requirement ensures
that a defendant will not be hauled into a jurisdiction
solely as a result of ‘random, ' ‘fortuitous,
' or ‘attenuated' contacts, ” or due to
“the ‘unilateral activity of another party or a
third person.'” Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 475 (1985) (citations omitted).
If the defendant made the deliberate choice to “engage[
] in significant activities within a State, ” or to
create “‘continuing obligations' between
himself and residents of the forum, ” then “it is
presumptively not unreasonable to require him to submit to
the burdens of litigation in that forum as well.”
Id. at 475-76 (citations omitted). Thus:
By requiring that individuals have “fair warning that a
particular activity may subject [them] to the jurisdiction of
a foreign sovereign, ” the Due Process Clause
“gives a degree of predictability to the legal system
that allows potential defendants to structure their primary
conduct with some minimum assurance as to where that conduct
will and will not render them liable to suit[.]”
Id. at 472-73 (1985) (citations omitted).
Eighth Circuit applies a five-factor test to determine
whether a defendant's contacts with the forum state are
sufficient to establish personal jurisdiction. Myers v.
Casino Queen, Inc., 689 F.3d 904, 911 (8th Cir. 2012).
Those factors are: (1) the nature and quality of the contacts
with the forum state; (2) the quantity of those contacts; (3)
the relationship of those contacts with the cause of action;
(4) the forum state's interest in providing a forum for
its residents; and (5) the convenience or inconvenience to
the parties. Id. (citing Precision Const. Co. v.
J.A. Slattery Co., 765 F.2d 114, 118 (8th Cir. 1985)).
The first three factors are considered to be of primary
importance. Precision Const., 765 F.2d at 118.
jurisdiction can be either general or specific. General
jurisdiction arises when a nonresident maintains
“continuous and systematic” contacts with the
forum state. Helicopteros Nacionales de Colom., S.A. v.
Hall, 466 U.S. 408, 415-16 (1984). Under those
circumstances, jurisdiction over the nonresident is
appropriate even when the claims at issue do not arise out of
or relate to its activities in the forum state. Id.
at 414-15. Specific jurisdiction arises “when the
defendant purposely directs its activities at the forum state
and the litigation ‘result[s] from injuries . . .
relating to [the defendant's] activities [in the forum
state.]'” Myers, 689 F.3d at 912-13
(quoting Steinbach v. Cutler, 518 F.3d 580, 586 (8th
Cir. 2008)). Specific jurisdiction “requires a
relationship between the forum, the cause of action, and the
defendant. Id. at 912 (citing Helicopteros
Nacionales, 466 U.S. at 414). The third factor of
the five-factor test “distinguishes between specific
and general jurisdiction.” Id. at 911 (citing
Johnson v. Arden, 614 F.3d 785, 794 (8th Cir. 2010).
Rule 12(b)(6) - Failure to State a Claim
Federal Rules of Civil Procedure authorize a pre-answer
motion to dismiss for “failure to state a claim upon
which relief can be granted.” Fed.R.Civ.P. 12(b)(6).
The Supreme Court has provided the following guidance in
considering whether a pleading properly states a claim:
Under Federal Rule of Civil Procedure 8(a)(2), a pleading
must contain a “short and plain statement of the claim
showing that the pleader is entitled to relief.” As the
Court held in [Bell Atlantic Corp. v. Twombly, 550
U.S. 544 (2007)], the pleading standard Rule 8 announces but
does not require “detailed factual allegations, ”
but it demands more than an unadorned,
the-defendant-unlawfully-harmed-me accusation. Id.,
at 555, 127 S.Ct. 1955 (citing Papasan v. Allain,
478 U.S. 265, 286 (1986)). A pleading that offers
“labels and conclusions” or “a formulaic
recitation of the elements of a cause of action will not
do.” [Twombly, ] 550 U.S. at 555. Nor does a
complaint suffice if it tenders “naked
assertion[s]” devoid of “further factual
enhancement.” Id., at 557.
To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to “state
a claim to relief that is plausible on its face.”
Id., at 570. A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged. Id., at 556. The
plausibility standard is not akin to a “probability
requirement, ” but it asks for more than a sheer
possibility that a defendant has acted unlawfully.
Id. Where a complaint pleads facts that are
“merely consistent with” a defendant's
liability, it “stops short of the line between
possibility and plausibility of ‘entitlement to
relief.'” Id., at 557 (brackets omitted).
Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009).
assess “plausibility” by “‘draw[ing]
on [our own] judicial experience and common
sense.'” Whitney v. Guys, Inc., 700 F.3d
1118, 1128 (8th Cir. 2012) (quoting Iqbal, 556 U.S.
at 679). Courts “‘review the plausibility of the
plaintiff's claim as a whole, not the plausibility of
each individual allegation.'” Id. (quoting
Zoltek Corp. v. Structural Polymer Grp., 592 F.3d
893, 896 n.4 (8th Cir. 2010)). While factual
“plausibility” is typically the focus of a Rule
12(b)(6) motion to dismiss, federal courts may dismiss a
claim that lacks a cognizable legal theory. See,
e.g., Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir.
2013); Commonwealth Prop. Advocates, L.L.C. v. Mortg.
Elec. Reg. Sys., Inc., 680 F.3d 1194, 1202 (10th Cir.
2011); accord Target Training Int'l, Ltd. v.
Lee, 1 F.Supp.3d 927, 937 (N.D. Iowa 2014).
amended complaint (Doc. No. 14) includes the following
is an Iowa corporation with its principal place of business
in Dubuque, Iowa. Doc. No. 14 at ¶ 1. Prior to 2015,
Hirschbach was headquartered in East Dubuque,
Illinois. Hirschbach is an interstate motor carrier
offering semi-tractor transportation services. Id.
at ¶ 12. Pinchuk is the president and CEO of Hirschbach.
is a South Carolina limited liability company with its
principal place of business in Greenville, South Carolina.
Id. at ¶ 3. SmartTruck designs, builds, markets
and sells aerodynamic design components to be affixed to
semi-tractor trailers in order to reduce the size of high air
flow drag-wake, resulting in fuel savings. Id. at
¶ 13. Each of the individual defendants are employees
and agents of SmartTruck: Ingham is the president, Wulff is
the senior vice president of product development, Henderson
is the chief scientist and Greenberg was a former president.
Id. at ¶¶ 4-7. None of the individual
defendants are Iowa residents. Id. at ¶ 8.
2011, the parties negotiated for Hirschbach's purchase
and installation of 2, 000 SmartTruck products for
Hirschbach's fleet. Id. at ¶ 14. Over the
course of various meetings and conversations in 2011, prior
to Hirschbach's purchase of SmartTruck products,
defendants Ingham, Greenberg, Wulff and Henderson verbally
represented that Hirschbach would see improved fuel
efficiency of 10% at highway speeds using SmartTruck
products. Id. at ¶ 16. One of these meetings
between Pinchuk, Greenberg and Wulff occurred in Greenville,
South Carolina, while another meeting occurred in East
Dubuque, Illinois. Id. at ¶¶ 15(b), 15(o).
Plaintiffs assert that while Pinchuk, Greenberg and Wulff
were meeting in East Dubuque, Greenberg and Wulff stayed at
hotels and ate in restaurants in Dubuque, Iowa. Id.
at ¶ 16. One sales meeting was held over lunch at a
restaurant in Dubuque, Iowa. Id. Greenberg disputes
that he ever travelled to Iowa or Illinois to visit Pinchuk.
Doc. No. 20-7 at 3. Although plaintiffs allege that Wulff
travelled to Iowa on six occasions, Wulff contends that he
only travelled to Hirschbach's headquarters once. Doc.
No. 20-6 at 3. Plaintiffs do not allege that Ingham or
Henderson ever travelled to Iowa.
of the negotiation process, SmartTruck offered Hirschbach a
discount in exchange for Pinchuk providing a testimonial for
SmartTruck to use in its advertising materials. Doc. No. 14
at ¶¶ 25-26. Hirschbach purchased SmartTruck
products and installed them on its fleet between 2011 and
2013. Id. at ¶ 27. Plaintiffs do not identify a
particular written, integrated agreement governing
Hirschbach's purchase of SmartTruck's products.
Instead, it contends that an agreement was formed and that
Hirschbach then placed written purchase orders “in
reliance upon Smart Truck's prior written and oral
representations.” Id. at ¶ 35.
support of its motion to dismiss, SmartTruck relies on three
documents that, it contends, control the scope of its
obligations to Hirschbach. SmartTruck claims that Exhibits A
and B are “the 2011 and 2013 Product Manuals with the
operative limited warranty during the 2011-2017 time period,
” while Exhibit C is “the SmartTruck limited
warranty from 2015 through the present.” Doc. No. 20-1
at 4 (referencing Doc. No. 20-2 at 4, Doc. No. 20-3 at 2 and
Doc. No. 20-4 at 2). Collectively, I will refer to these
documents as the Limited Warranty Documents. Details
concerning the contents of the Limited Warranty Documents
will be described as necessary below.
2014, Pinchuk became aware of independent testing of
SmartTruck's products by a Canadian engineering company.
Id. at ¶ 30. Those results showed that
SmartTruck's products were not as effective as claimed.
Id. Plaintiffs conducted their own testing in 2016
and 2017, which revealed no meaningful difference in fuel
efficiency as a result of installing SmartTruck products.
Id. at 31. Plaintiffs assert that they have been
damaged by defendants' failure to improve the fuel
efficiency of their semi-trucks to the extent promised. The
26 counts set forth in the amended complaint are based on
these representations, and the parties' agreement, as
Count I Breach of Contract (Hirschbach v. SmartTruck)
Count II Breach of Written Contract due to Poor Performance
(Hirschbach v. SmartTruck)
Count III Breach of Implied Warranty of Fitness for
Particular Purpose (Hirschbach v. SmartTruck)
Count IV Breach of Express Warranty (Hirschbach v.
Count V Fraud (Hirschbach v. Greenberg)
Count VI Fraud (Hirschbach v. Wulff)
Count VII Fraud (Hirschbach v. Henderson)
Count VIII Fraud (Hirschbach v. Ingham)
Count IX Constructive Fraud (Hirschbach v. Greenberg)
Count X Constructive Fraud (Hirschbach v. Wulff)
Count XI Constructive Fraud (Hirschbach v. Henderson)
Count XII Constructive Fraud (Hirschbach v. Ingham)
Count XIII Negligent Misrepresentation (Hirschbach v.
Count XIV Intentional Misrepresentation (Hirschbach v.
Count XV Detrimental Reliance/Promissory Estoppel (Hirschbach
Count XVI Unjust Enrichment (Hirschbach v. SmartTruck)
Count XVII Unjust Enrichment (Pinchuk v. SmartTruck)
Count XVIII Fraud (Pinchuk v. Greenberg)
Count XIX Fraud (Pinchuk v. Wulff)
Count XX Fraud (Pinchuk v. Henderson)
Count XXI Fraud (Pinchuk v. Ingham)
Count XXII Constructive Fraud (Pinchuk v. Greenberg)
Count XXIII Constructive Fraud (Pinchuk v. Wulff)
Count XXIV Constructive Fraud (Pinchuk v. Henderson)
Count XXV Constructive Fraud (Pinchuk v. Ingham)
Count XXVI Civil Conspiracy (Hirschbach v. All Defendants)
See Doc. No. 14. Plaintiffs seek monetary damages,
punitive damages, attorneys' fees and any other relief