THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

PORTLAND DIVISION 

MORASCH MEATS, INC., 

No. 3:16-cv-0269-PK 

Plaintiff, 

v. FINDINGS AND RECOMMENDATION 

FREVOL HPP, LLC, flea FRESHER 

EVOLUTION HPP, L.L.C., et al., 

Defendants. 

PAPAK, Magistrate Judge: 

Plaintiff Morasch Meats, Inc. brings this action for breach of contract, intentional 

interference with contractual relations, and conversion against defendants Frevol HPP, LLC; All 

Natural Freshness, Inc.; Gerald Ludwick (Mr. Ludwick); and Paige Raifsnider Ludwick (Ms. 

Ludwick). Plaintiff agreed to purchase a high pressure pasteurization machine (HPP machine) 

from defendant Frevol, HPP (Frevol), and now alleges that Defendants failed to timely provide 

an operational HPP machine. 

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Ms. Ludwick now moves to dismiss for lack of personal jurisdiction. For the following 

reasons, I recommend granting the motion, 

BACKGROUND 

I. The Claim for Intentional Interference with Contractual Relations Against Ms. Ludwick 

Plaintiff brings one claim against Ms. Ludwick, for intentional interference with 

contractual relations. 1 Plaintiff alleges that Mr. Ludwick and Ms. Ludwick "as individuals, have 

intentionally interfered with MMI [i.e., Plaintiff] and Frevol's contractual relationship in one or 

more of the following ways:" 

a. Misapplying the MMI payments to projects other than MMI's HPP 

Machine installation and operation; 

b. Diverting the MMI funds and equipment (including but not limited to 

rep01is and drawings) that were not for the MMI HPP Machine, but for themselves, 

another entity, or HPP Detroit; 

c. Directing MMI to make payments for equipment (including but not 

limited to rep01is and drawings) that were not for the MMI HPP Machine, but for 

their own, another entity, or HPP Detroit machines; 

d. Using personal assets and incurring personal debt for the Equipment 

Agreement which they claim entitles them to payment from MMI; and 

e. Using personal assets and incurring personal debt for the Equipment 

Agreement which they claim entitles them to an ownership interest in the MMI 

HPP Machine and equipment. 

Comp!. if 39. 

1

This comi denied Defendants' motion to dismiss the intentional interference claim for failure to 

state a claiin. Findings & Recommendation, ECF No. 15 (May 5, 2016), adopted, Order, ECF No. 26 

(June 15, 2016). The ruling on the merits of the claim does not determine whether personal jurisdiction 

exists. See Sher v. Johnson, 911 F.2d 1357, 1365 (9th Cir. 1990) ("Liability and jurisdiction are 

independent."). 

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II. Factual Background 

A. Ms. Ludwick's Declaration 

Ms. Ludwick lives in Three Rivers, Michigan. Since October 2015, she has been separated 

from Mr. Ludwick, her husband, and now maintains a separate household. Ludwick Deel. ii 2, ECF 

No. 48. Ms. Ludwick owns and manages a Verizon Wireless store in Three Rivers·. She has never 

been to Oregon, and she has no relatives in Oregon. She has no bank accounts in Oregon. 

Ms. Ludwick has "never served in any ownership, director or officer capacity for any of the 

commercial defendants." Ludwick Deel. ii 4. Ms. Ludwick states that she did not participate in 

contract negotiations between the parties. She has no technical background. 

Ms. Ludwick states, "I did part-time bookkeeping work for Fre Vol which I performed at 

home. On request, I used the Quik Books program to record debits and credits, and to rnn reports 

and spreadsheets that the program had available. I fielded some vendor calls for payments. I did 

not make collection calls. I paid vendor invoices as I was instrncted from the Fre Vol bank account 

on which I was a co-signor." Ludwick Deel. ii 5. 

B. PlaintifPs Evidence on Ms. Ludwick's Role 

In suppo1t of its opposition to Ms. Ludwick' s motion to dismiss, Plaintiff submits 

declarations and email conespondence. William Taylor, Plaintiffs director of maintenance, states 

that Mr. Ludwick told Plaintiffs representatives that Ms. Ludwick handled all the finances for his 

businesses. Taylor states that Ms. Ludwick accompanied Mr. Ludwick to China on a 2014 visit to 

the HPP machine's manufacturer. 

Steven Morasch, Plaintiffs CFO, states that Mr. Ludwick told him that Ms. Ludwick 

"handles all of the finances for their businesses, including bookkeeping, issuing payments, and 

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collecting debts." S. Morasch Deel. ii 4, ECF No. 55. Michael Morasch, Plaintiff's president and 

Steven Morasch's brother, states that in 2015, when Mr. Ludwick was in Oregon to discuss a 

possible new contract with Plaintiff, l'vlr. Ludwick told him that "we needed to 'make peace with 

Paige' [Ms. Ludwick] on all financial issues." M. Morasch Deel. ii 9, ECF No. 59. 

Plaintiff submits the declaration of Eric Lockovitch, who was a vice president for defendant 

All Natural Freshness.' Lockovitch states that Mr. Ludwick told Plaintiff's representatives that Ms. 

Ludwick handled financial matters, "including bookkeeping, issuing payments, and collecting 

debts." Lockovitch Deel. ii 3, ECF No. 57. 

Plaintiff submits copies of email conespondence between Ms. Ludwick, Mr. Ludwick, and 

Plaintiff. Ms. Ludwick sent an email dated December 22, 2015 to Mr. Ludwick, copied to Steven 

Morasch, stating that three of her Verizon customers who were also vendors for Defendants had 

complained to her that Defendants had not paid them for items used for the HPP Machine. Ms. 

Ludwick wrote, "I am concerned about the direction of this project and you spending anymore time 

and resources on it without some resolution to the existing balances and vendor status." M. 

Morasch Deel., Ex. C, at 2, ECF No. 59. Ms. Ludwick asked Mr. Ludwick, "Do you realize they 

[i.e., Plaintiff! have not paid you any payments since Febmaiy of this yeai·? Do you realize you 

have outstanding credit card charges amounting to over $85,000 related directly to this machine?" 

M. Morasch Deel., Ex. C, at 3. Ms. Ludwick then asked Mr. Ludwick to meet with the Morasches 

and "come up with a resolution before the end of the year. The resolution must include payment." 

'Ms. Ludwick moves to strike Lockovitch's declaration as "unlawfully acquired," 

contending that Lockovitch violated his fiduciary duty to defendant All Natural Freshness by 

allowing opposing counsel to interview him for this litigation. Def. Reply 4, ECF No. 62. 

Because of my conclusion on the merits of the motion to dismiss, I decline to address this issue. 

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Id Ms. Ludwick concluded, "You cannot afford to continue working on a project that you are not 

and have not been even getting reimbursed for your costs. . .. I ask that you please take care of this 

and get a resolution that does not leave this debt hanging over my head." Id. 

Steven Morasch forwarded Ms. Ludwick's email to Michael Morasch, who then emailed 

Ms. Ludwick in late December 2015, asking that she call him. Ms. Ludwick responded to Michael 

Morasch by email dated Januaq 6, 2016, stating, "This communication is an attempt to get answers 

to questions that I have. [Mr. Ludwick] has been unable to provide me with these answers." Id, 

Ex. C, at 1. Ms. Ludwick continued, 

It is unfortunate that I have been pulled into this, as it is counterproductive to my 

own business getting involved in this. I have been pulled in for two reasons 1. Jeny 

[i.e., l'vfr. Ludwick] uses many [businesses] here locally as his vendors, and many of 

them are my customers at Verizon also. I regret that these people are now reaching 

out to me for payment concerns. 2. When Jerry failed to get the 30% installment 

from Morasch when the machine was shipped (this is my understanding from the 

agreement), we floated many of the costs on credit cards that are now canying a 

large balance and have large finance charges associated with them. My expectation 

was that once the final payment was received all these charges would be taken care 

of and vendors would be paid in full. Unfmtunately, that has not happened. 

Id. Ms. Ludwick noted, "I also realize I do not know eve1ything about the project as I am on the 

outside." Id. 

Michael Morasch states that Ms. Ludwick telephoned him in late Janumy 2016, telling him 

that she had incurred a debt of about $160,000 on two credit cards "for purchases that she believed 

were related to the HPP machine." M. Morasch Deel. if 12. Michael Morasch states, "Her purpose 

in calling me was to collect on bills that she believed [Plaintiff] owed to her personally on the HPP 

machine contract. Ms. Ludwick' s claimed credit card expenses were never stated on the total 

invoice sunnnmy presented by Mr. Ludwick to Steven Morasch and Michael Morasch.". Id 

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MOTIONS TO DISJVIISS FOR LACK OF PERSONAL JURISDICTION 

A defendant may move to dismiss for lack of personal jurisdiction under Federal Rule of 

Civil Procedure 12(b )(2). There are two types of personal jurisdiction, general and specific. Here, 

Plaintiff does not contend that this court has general jurisdiction over Ms. Ludwick, so only specific 

jurisdiction is at issue. 

When a defendant moves to dismiss under Rule 12(b )(2), "the plaintiff bears the burden of 

establishing that jurisdiction is proper." Bosche/to v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 

2008). If the court bases its dete1mination on written materials rather than an evidentiary hearing, 

the plaintiff must make only "a prima facie showing of jurisdictional facts." Id. (quotation marks 

and citation omitted). Although a plaintiff cannot rest solely on the bare allegations of its 

complaint, the court must take uncontrove1ied allegations in the complaint as hue. Id. '"Conflicts 

between the pmiies over statements contained in affidavits must be resolved in the plaintiffs 

favor."' Id (quoting Schwarzenegger v. Fred 1\Iartin }vfotor Co., 374 F.3d 797, 800 (9th Cir. 

2004)). 

DISCUSSION 

In a diversity action, this co mi's asse1iion of personal jurisdiction must comply with the 

requirements of the Oregon long-mm statute and federal due process. Gray & Co. v. Firstenberg 

1'1fach. Co., 913 F.2d 758, 760 (9th Cir. 1990). Because Oregon authorizes personal jurisdiction to 

the limits of federal due process, this court may proceed directly to the federal due process analysis. 

Id.; Or. R. Civ. P. 4L. 

This comi uses a three-pmi test to determine whether the exercise of specific personal 

jurisdiction over a nomesident defendant is proper: 

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(1) The non-resident defendant must purposefully direct his activities or 

consummate some transaction with the forum or resident thereof; or perform some 

act by which he purposefully avails himself of the privilege of conducting activities 

in the forum, thereby invoking the benefits and protections of its laws; 

(2) the claim must be one which arises out of or relates to the defendant's 

forum-related activities; and 

(3) the exercise of jurisdiction must comport with fair play and substantial justice, 

i.e. it must be reasonable. 

Schwarzenegger, 374 F.3d at 802 (quoting Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987)). If 

the plaintiff shows that it can satisfy the first two prongs of the test, the burden shifts to the 

defendant to '"present a compelling case' that the exercise of jurisdiction would not be reasonable." 

Id (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78 (1985)). 

Here, because Plaintiff's only claim against Ms. Ludwick sounds in tort, this co mt applies 

the purposeful direction test, "and look[ s] to evidence that the defendant has directed his actions at 

the fmum state, even if those actions took place elsewhere." Picot v. Weston, 780 F.3d 1206, 1212 

(9th Cir. 2015) (applying purposeful direction test to claim for intentional interference with 

contract). Under this test, "a defendant purposefully directed his activities at the forum if he: 

'(l) committed an intentional act, (2) expressly aimed at the forum state, (3) causing hmm that the 

defendant knows is likely to be suffered in the forum state."' Id at 1214 (quoting Schwarzenegger, 

374 F.3d at 803) (fu1ther citation and quotation marks omitted). In applying this test, the court must 

"'look[] to the defendant's contacts with the fmum State itself, not the defendant's contacts with 

persons who reside there."' Id. (quoting Walden v. Fiore,_ U.S._, 134 S. Ct. 1115, 1122 

(2014) (alteration in Picot)). 

I now tum to the factors for determining purposeful direction. 

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1. Intentional Act 

The test for an intentional act is "essentially the same as in the context of intentional torts; 

namely, the defendant must act with the 'intent to perf01m an actual, physical act in the real 

world."' Picot, 780 F.3d at 1214 (quoting Schwarzenegger, 374 F.3d at 806). Here, Ms. Ludwick 

allegedly diverted Plaintiffs payments to defendant Frevol for personal gain, interfering with the 

contract between Plaintiff and defendant Frevol. This allegation is sufficient to show an intentional 

act. See id. 

2. Express Aiming 

If the defendant committed an intentional act, the court then looks to "whether the 

defendant's allegedly tortious action was 'expressly aimed at the forum."' Id. (quoting Brayton 

Purcell LLP v. Record.on & Record.on, 606 F.3d 1124, 1129 (9th Cir. 2010)). Here, the issue is 

whether Ms. Ludwick "expressly aimed" her alleged interference with the contract at Oregon. Id. 

The complaint alleges that Mr. Ludwick and Ms. Ludwick misapplied Plaintiffs payments 

to defendant Frevol to projects other than the HPP machine, and that they used personal assets and 

incmTed personal debt "for the Equipment Agreement which they claim entitles them to payment 

from [Plaintiffj," and "to an ownership interest" in the HPP machine. Comp!.~ 39. Although 

Plaintiff claims it was injured in Oregon by Ms. Ludwick's alleged conduct, a "mere injury to a 

forum resident is not a sufficient connection to the forum" because "an injmy is jurisdictionally 

relevant only insofar as it shows that the defendant has formed a contact with the forum State." 

Walden, 134 S. Ct. at 1125. Here, Ms. Ludwick's only Oregon contacts were several emails and a 

telephone call to Michael Morasch. A plaintiff cannot establish personal jurisdiction when the 

plaintiff is "the only link between the defendant and the forum. Rather, it is the defendant's conduct 

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that must fmm the necessmy connection with the forum State that is the basis for its jurisdiction 

over him." Id., at 1122. Ms. Ludwick had no contacts with anyone in Oregon other than Michael 

Morasch, and her contacts with him were minimal. Taking the evidence in the light most favorable 

to Plaintiff, I conclude Plaintiff has failed to show that Ms. Ludwick "fmmed [any] jurisdictionally 

relevant contacts" with Oregon. Walden, 134 S. Ct. at 1124. 

Plaintiff emphasizes that Mr. Ludwick described Ms. Ludwick as playing an important role 

in Defendants' businesses, but Plaintiff has not shown why her role, without more, would justify 

asserting jurisdiction over her. The existence of personal jurisdiction over i\lfr. Ludwick does not 

show personal jurisdiction over Ms. Ludwick. See 1\;faguire v. Coltrell, No. 14-cv01255-PHX-DGC, 2015 WL 1966471, at *4 (D. Ariz. April 30, 2015) ("Maniage alone does not 

create an agency relationship between the married couple."). Because the effects of Ms. Ludwick's 

alleged conduct are "'not connected to the fornm State in a way that makes those effects a proper 

basis for jurisdiction,"' Plaintiff "has failed to make a prima facie showing of specific personal 

jurisdiction" over Ms. Ludwick. Picot, 780 F.3d at 1215 (quoting Walden, 134 S. Ct. at 1125). 

CONCLUSION 

For the reasons provided above, Ms. Ludwick's Motion to Dismiss, ECF No. 47-1, should 

be granted. The claim against Ms. Ludwick should be dismissed without prejudice for lack of 

personal jurisdiction. 

SCHEDULING ORDER 

The Findings and Recommendation will be referred to a district judge. Objections, if any, 

are due fourteen (14) days from service of the Findings and Recommendation. Ifno objections are 

filed, then the Findings and Recommendation will go under advisement on that date. 

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If objections are filed, then a response is due fourteen (14) days after being served with a 

copy of the objections. When the response is due or filed, whichever date is earlier, the Findings 

and Recommendation will go under advisement. 

Dated this / 8+~ay of Janu 

norable Paul Papak 

United States Magistrate Judge 

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