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PIZONKA, McGRORY, REILLEY, BELLO & McGRORY, P.C.

BY: JOSEPH P. PIZONKA, ESQUIRE

ATTORNEY I.D. NO. 23866

144 East DeKalb Pike, Suite 300

King of Prussia, PA 19406

(610) 992-1300 ATTORNEYS FOR PLAINTIFF

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

 

:

BANK EXPRESS INTERNATIONAL : CIVIL ACTION NO.: 02-CV-4076

Plaintiff :

:

v. :

:

KANG, BANKCARD SERVICES, et al. :

Defendants :

PLAINTIFF’S MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS AND STRIKE PLAINTIFF’S COMPLAINT

The Plaintiff, Bank Express International, Incorporated (“Bank Express”), by and through its

attorneys, Pizonka, McGrory, Reilley, Bello & McGrory, P.C., hereby files this Response to

Defendants’ Motion to Dismiss and Strike Plaintiff’s Complaint. For all the reasons set forth herein

Plaintiff requests this Court to deny Defendants’ Motion to Dismiss and Strike Plaintiff’s Complaint, or,

in the alternative, grant discovery on the issue of Defendants’ contacts with this forum.1

I. INTRODUCTION

In the Complaint, which is incorporated herein, Bank Express alleges that Defendant, Credit

Card Services, Incorporated, dba BankCard Services (“BCS”) violated Pennsylvania law by

intentionally inducing eleven (11) business owners to terminate their binding contracts with Bank

Express. Bank Express alleges BCS knowingly, intelligently and voluntarily used confidential

information, which BCS improperly obtained from a former Bank Express employee, to unfairly

 

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 No discovery has taken place and Defendants filed this Motion within several days after filing to

remove this action, therefore, Plaintiff respectfully requests a period for discovery.

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compete with Bank Express. BCS used the information gained from Plaintiff’s former employee when it

approached business owners legally contracted with Bank Express and induced them to breach their

contracts with Bank Express. Bank Express contends that BCS knew that Bank Express was a

Pennsylvania corporation and that BCS was knowingly, intelligently and willfully committing intentional,

wrongful acts against a Pennsylvania corporation. 

In its Motion, BCS now comes to this Court and asserts that requiring BCS to defend its

intentional acts, within the forum state where their acts caused significant monetary damages, does not

comport with fair play and substantial justice. Because, however, the facts as set forth in Plaintiff’s

Complaint are sufficient to establish the Court’s jurisdiction over the defendants, the defendants’ Motion

should be denied. In the alternative, in accordance with the Third Circuit’s directive in Renner v.

Lanard Toys Limited, 33 F.3d 277 (1994), Bank Express requests the Court to order a period of

discovery so that Bank Express may determine the full scope and nature of defendants’ contacts with

this forum.

II. PROCEDURAL AND FACTUAL BACKGROUND

Bank Express initiated this matter by filing its complaint, with attached exhibits, in the Court of

Common Pleas of Montgomery County, Pennsylvania, on May 23, 2002. Defendants removed this

matter to this Court on June 27, 2002.

In Plaintiff’s Complaint, Bank Express has averred that it is a Pennsylvania corporation

authorized to operate pursuant to the laws of the Commonwealth of Pennsylvania and having a place of

business located at 489 Shoemaker Road, Suite 110, King of Prussia, Pennsylvania 19406. Bank

Express has also attached copies of its written contracts with some of the Owner Defendants.2

The other eleven (11) Defendants to this action are business owners in California who

 

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 The omission of one (1) of the contracts does not render Bank Express’s claims in viable, and in any

event, the omission can easily be cured if this Court directs Bank Express to file an amended complaint.

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knowingly and voluntarily entered commercial contracts with a Pennsylvania Corporation. These

Owner Defendants, after inducement by BCS, knowingly, willfully and intentionally terminated binding

contracts between themselves and Bank Express.3 The Owner Defendants entered these contracts with

Bank Express, whereby each Owner Defendant requested that Bank Express perform automated teller

machine processing services (“processing services”) for five (5) years. Bank Express performed all of

its contractual obligations; the amounts of money charged by Bank Express were fair and reasonable

prices for its processing services and Plaintiff’s prices reflected the amounts the Owner Defendants

agreed to pay Bank Express.

Each and every Owner Defendant was on notice that he/she/it was forming a contractual

relationship with a Pennsylvania Corporation. Bank Express and the Owner Defendants utilized two (2)

different drafts of contracts that are at issue in this litigation. The first contract draft begins

“WHEREAS, Bank Express International, Inc. (BEI), a Pennsylvania Corporation located at

489 Shoemaker Road Suite 110, King of Prussia, Pennsylvania 19406 is in the business of

providing Automated Teller Machine [ ] processing services.” Paragraph eleven (11) of the first

contract draft also states “[t]his contract shall not be effective until accepted by BEI and signed

by its duly authorized representative.” Paragraph twelve (12) of the first contract draft also states

“[t]his contract shall be governed by, construed and enforced in accordance with the laws of

the Commonwealth of Pennsylvania.” At least seven (7) of the Owner Defendants signed Plaintiff’s

contract containing this language. 

The second draft of the contracts between Bank Express and the Owner Defendants identifies

Plaintiff’s original business address, in large font, across the bottom of the contract as Cynwyd

Road, Suite 100, Bala Cynwyd, Pa 19004.” Additionally, the Owner Defendant, Jung Soo Kim,

 

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 For the purposes of this Response, Bank Express will refer to the Defendants, identified in Plaintiff’s

Complaint as “Defendants one (1) through (11),” collectively as the “Owner Defendants.”

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Trading as Danny’s Market, signed the second contact draft which indicated that contract formation

occurred within Montgomery County, Pennsylvania. At least three (3) of the Merchant Defendants

signed the second draft of Plaintiff’s contract. The Owner Defendants have no one but themselves, with

the clear exception of BCS, to blame for having an action commenced against them by Bank Express in

Pennsylvania.

Bank Express has also averred that:

A. BCS is in the business of providing ATM services to companies such as the

Owner Defendants, and;

B. BCS hired a former employee of Bank Express, namely an individual known as

Joone Johe (“Johe”) and that at all times relevant hereto, Johe acted in his individual capacity as an

officer, agent, authorized representative, servant and/or employee of BCS, and;

C. Prior to being employed by BCS, Johe was employed by Bank Express as a

sales representative for its ATM services, and;

D. Pursuant to his employment with Bank Express, Johe was responsible for

soliciting customers for Bank Express in the geographical areas wherein the Merchant Defendants are

located, and;

E. During the term of his employment with Bank Express, Johe had access to

Plaintiff’s confidential information. Including, but not limited to, customer lists, sources of supply,

employees, personnel policies, sales and services merchandising, business plans, and pricing/billing

schedules, and;

F. All of the confidential information and items set forth above were, and should

have been known by Johe, and later BCS, to be competitively sensitive information which Bank

Express treated, and Johe, and later BCS, knew or should have known were given to Johe while Johe

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was held by Bank Express in a position of confidence and trust by Plaintiff. Johe, and later BCS, knew,

or should have known, that Johe was to treat, as confidential, proprietary information inasmuch as the

disclosure of such information and items would operate to the detriment of Bank Express, and to the

commercial advantage of Plaintiff’s competitors, such as BCS, and;

G. During the term of Johe’s employment with Bank Express, Johe was Plaintiff’s

representative in dealing with various of Plaintiff’s customers, including the Owner Defendants, and;

H. Shortly after leaving Plaintiff’s employ, Johe went to work with BCS, and;

I. At and around the time Johe left employ with Bank Express, Johe took for his

future use and for the future use of BCS, without express or implied consent or permission of Bank

Express, various confidential information and other assets belonging to Bank Express, including but not

limited to confidential information concerning the Owner Defendants. This information included but was

not limited to files, pricing information, literature and sales copies of orders directly connected to the

Owner Defendants and that Johe provided and gave BCS such confidential information, and;

J. Johe and BCS used, and will continue to use, the confidential information

belonging to Bank Express to their commercial and competitive advantage and to the commercial and

competitive detriment of Bank Express, and;

K. Johe and BCS have made disparaging and untrue comments about Bank

Express to several of Plaintiff’s customers, including the Merchant Defendant’s, for the sole purpose of

L. Sometime after leaving his employ with Bank Express, Johe, acting on his own

behalf and on behalf of BCS, or other BCS representatives, approached one or more of Plaintiff’s

customers, in particular the Owner Defendants, for the purpose of inducing Plaintiff’s customers to

cancel and breach their contracts with Bank Express, and;

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M. That subsequently, The Owner Defendants all left ATM servicing with Bank

Express and went to servicing with BCS, and;

N. Bank Express has will continue to suffer irreparable harm if the actions of Johe

and BCS are not enjoined, including but not limited to the loss of clients, profits, business reputation and

market share, and the loss of confidential business information, and;

O. BCS, through its agents, authorized representatives, servants and/or employees

has willfully, repeatedly and without justification made untrue comments to Plaintiff’s clients and

perspective clients for the sole purpose of causing injury to Plaintiff’s business reputation and good will,

and;

P. As a direct and proximate result of the aforesaid actions of BCS, Bank Express

has suffered and will continue to suffer irreparable injury and harm is likely to continue unless enjoined,

and;

Q. BCS on its own behalf has induced certain of Plaintiff’s customers to breach

their contracts with Bank Express and switch their ATM servicing from Plaintiff to BCS, and;

R. Said acts of BCS were and continue to be without privilege, are otherwise

wrongful and tortuous, are in complete disregard of the rights of Bank Express and are intended only to

benefit BCS, to the complete detriment of Bank Express, and;

S. Said wrongful acts will continue unless enjoined.

Bank Express also asserts monetary damages in the amount of Eighty Five Thousand Nine

Hundred and Ninety Dollars ($85,990.00) and it is clear those damages have been imposed upon a

Pennsylvania Corporation, in Pennsylvania, by the intentional acts of out of state Defendants.

All Defendants now come to this Court and assert that these proceedings cannot proceed in

Pennsylvania because their intentional acts were not committed in Pennsylvania. All Defendants assert

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these proceedings should be dismissed or that Bank Express should be forced to travel extensively to

California to defend its contractual rights against all Defendants’ wrongful and intentional acts. All

Defendants also state that the Pennsylvania’s long-arm statute, 42 

grant Pennsylvania jurisdiction in this case. As set forth below, the applicable facts and law require

denial of Defendants’ Motion.

III. ARGUMENT

Section 5322(a)(4) of Pennsylvania’s long-arm statute4 provides that a tribunal in this

Commonwealth may exercise personal jurisdiction to the maximum extent allowed under the

Constitution, including over an entity that “cause[s] harm or tortuous injury in this Commonwealth by an

Contrary to Defendants’ position, Bank Express has satisfied the standard set forth in Imo

Indus., Inc. v. Kiekert, A.G., 155 F.3d 254, 260 (3d Cir. 1998) by asserting Defendants engaged in a

pattern of conduct (i.e. interfering with and breaching eleven (11) Pennsylvania contracts) that

Defendants knew would cause substantial harm in Pennsylvania. Indeed, Defendants ignore many

Federal cases, in which a court conducted fact intensive inquiries and thereafter concluded that an out of

state tortfeasor was subject to the personal jurisdiction of distant forums for conduct that did not occur

in that forum. See Remick v. Manfredy, 238 f.3d 248 (3d Cir. 2001). Likewise, Defendants’ venue

argument fails since Bank Express has averred that contract formation occurred when the contracts

were accepted in Pennsylvania and, therefore, a “substantial part of the alleged events or omissions

Pennsyvania.

In this action, Bank Express has initiated a cause of action against BCS for, 1) the intentional

interference with Plaintiff’s contractual relations, and 2) defamation/slander. Bank Express asserts and

has pled all the elements necessary to support these causes of action. It is important to note that BCS is

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accused of soliciting eleven (11) different business entities to breach their binding contracts with Plaintiff.

BCS’s conduct is not merely related to one entity with a contract with Plaintiff but to many. BCS

undertook systematic, intentional and tortious steps to eviscerate eleven (11) binding contracts with

Bank Express, a Pennsylvania corporation and the plain wording of Pennsylvania’s long-arm statute

specifically authorizes personal jurisdiction in such an instance. These allegations are sufficient for this

Court to assume jurisdiction over all Defendants. See Remick supra.

The Owner Defendants maintain that their formation of commercial contracts with Plaintiff does

not establish the necessary minimum contacts with Pennsylvania so as to confer personal jurisdiction

over this controversy. The Owner Defendants clearly ignore Burger King Corp. v. Rudzewicz, 471

U.S. 462 (1995) and See Remick supra. The Owner Defendants’ acts, when viewed with those of

BCS, demonstrate that all Defendants are subject to this Court’s jurisdiction.

In the alternative, Bank Express requests a period of time within which to conduct discovery

regarding Defendants’ conduct in and directed towards Pennsylvania.

 

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 42 Pa.C.S.A. §5322(a)(4).

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