Court Opinion

ID: 8405195
Source: CourtListenerOpinion
Date Created: 2022-10-25 17:02:23.815386+00
Date Added: 2024-06-11T16:46:49.907143
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

AHP SERVICES, LLC,                         )
                                           )
           Plaintiff,                      )
                                           )
     v.                                    )
                                           )     C.A. No.: N22C-04-179 FWW
PEGGY MILES,                               )
                                           )
           Defendant.                      )

                            Submitted: August 2, 2022
                            Decided: October 25, 2022

                        Upon Defendant’s Motion to Dismiss
                                   DENIED.

                                    ORDER

Joelle E. Polesky, Esquire, STRADLEY, RONON, STEVENS, & YOUNG, LLP,
1000 North West Street, Suite 1279, Wilmington, DE 19801, Attorney for
Plaintiff, AHP Services, LLC.

Scott G. Wilcox, Esquire, MOORE AND RUTT, P.A., 1007 North Orange Street,
Suite 437, Wilmington, DE 19801, Attorney for Defendant, Peggy Miles.

WHARTON, J.
      This 25th day of October, 2022, upon consideration of Defendant Peggy

Miles’ (“Miles”) Motion to Dismiss (“Motion”),1 the Opposition of Plaintiff AHP

Services, LLC (“AHP”),2 and the record in this case, it appears to the Court:

      1.      AHP brings this action against Miles, alleging breach of contract, unjust

enrichment, and conversion related to a payment Miles received from AHP

following her election of certain benefits under a November 14, 2018, Investment

Agreement.3

      2.      Willie Miles, Defendant Miles’ deceased husband, was a client of AHP.

Pursuant to an Investment Agreement dated November 14, 2018, Willie Miles

purchased 6015.049 shares of Series A Preferred Securities at a price of $60,150.49.4

      3.      Willie Miles passed away in March, 2019.5 Miles, as her husband’s

heir, elected to redeem Willie Miles’ investment and, to accomplish that end,

completed and returned to AHP a Liquidity Request Form requesting to withdraw

$64,147.39.6 AHP paid Miles $64,147.39 on December 19, 2019.7 Later, Miles was

issued another check for $60,150.49 by AHP on January 31, 2020, which represented

1
  Def.’s Mot. to Dismiss, D.I. 16.
2
  Pl.’s Opp to Mot. to Dismiss, D.I. 20.
3
  Amend. Compl., D.I. 9.
4
  Id. The Investment Agreement is attached to the Def.’s Mot. to Dismiss, at Ex. 2,
D.I. 16.
5
  Id.
6
  Id.
7
  Id.
                                         2
Willie Mile’s initial investment under the Investment Agreement.8 AHP alleges this

check was issued by mistake.9 Despite a demand for repayment, Miles has refused.10

      4.     Miles asks the Court to dismiss AHP’S claims for lack of subject matter

jurisdiction pursuant to Delaware Superior Court Civil Rule 12(b)(1) and lack of

personal jurisdiction over Miles under Rule 12(b)(2).11 Alternatively, Miles asks the

Court to dismiss the breach of contract claim because: (1) the Amended Complaint

lacks any allegations that Miles intended to be bound by any agreements Willie

Miles entered into with AHP; (2) the agreements lack sufficient detail regarding the

withdrawal of funds; and (3) there was a failure of consideration between APH and

Miles.12

      5.     Superior Court Civil Rule 12(b)(1) mandates that the Court dismiss an

action for lack of subject matter jurisdiction if it appears from the record that the

Court does not have jurisdiction over the claim. Despite a passing reference to Rule

12(b)(1), it does not appear from the Motion, however, that AHP is challenging the

Court’s jurisdiction over the claim.13 Instead, the Motion argues that the Court lacks

jurisdiction over Miles’ person.

8
  Id.
9
  Id.
10
   Id.
11
   Def.’s Mot to Dismiss, D.I. 16.
12
   Id.
13
   Id., at ⁋⁋ 7-15.
                                          3
      6.     On a motion to dismiss pursuant to Superior Court Rule 12(b)(2) for

lack of personal jurisdiction over a defendant, “A plaintiff bears the burden of

showing a basis for a trial court’s exercise of jurisdiction over a nonresident

defendant.”14 “In ruling on a Rule 12(b)(2) motion, the Court may consider the

pleadings, affidavits, and discovery of record.”15 Normally, the Court applies a two-

pronged analysis, first considering whether Delaware’s Long Arm Statute is

applicable, and then determining whether subjecting the nonresident defendant to

jurisdiction in Delaware violates the Due Process clause of the Fourteenth

Amendment.16 Here, however, AHP asserts personal jurisdiction because “the

Investment Agreement Miles availed herself of, and received a direct benefit from,

contains a forum selection clause naming Delaware state and federal courts as the

proper fora for disputes arising from that agreement, and includes consent to

personal jurisdiction.”17 Miles contends that she is not bound by the provisions of

the Investment Agreement because she was not a party to it.18 Further, because the

Investment Agreement did not contain a provision relating to the withdrawal of

14
   AeroGlobal Capital Management, LLC v. Cirrus Industries, Inc., 871 A.2d 428,
437 (Del. 2005).
15
   Economical Steel Building Technologies, LLC v. E. West Construction, Inc., 2020
WL 1866869, at *1 (Del. Super. Ct. Apr. 14, 2020) (quoting Ryan v. Gifford, 935
A.2d 258, 265 (Del. Ch. 2007).
16
   Biomeme, Inc. v. McAnallen, 2021 WL 5411094, at *2 (Del. Super. Nov. 10,
2021).
17
   Amend. Compl., at ⁋ 4, D.I. 9.
18
   Def.’s Mot. to Dismiss, at ⁋ 9, D.I. 16.
                                            4
funds, the forum selection provision is inapplicable.19 Thus, Court must determine

whether Miles, as a non-signatory to the Investment Agreement, is bound by the

forum selection provision and whether this dispute is subject to that provision.

      7.     Personal jurisdiction may be waived through a forum selection clause

in a contract.20 A forum selection clause allows parties to agree to a specific forum

to litigate their disputes.21 Forum selection clauses are presumptively valid, and the

Court need not consider the Delaware Long Arm Statute or the nonresident's

minimum contacts with the forum.22 Delaware courts defer to forum selection

clauses and routinely “give effect to the terms of private agreements to resolve

disputes in a designated judicial forum out of respect for the parties’ contractual

designation.”23

19
   Id., at ⁋ 10.
20
   Biomeme v. McAnallen, at *3, (citing Genuine Parts Co. v. Cepec, 137 A.3d 123,
130 (Del. 2016)).
21
   Id. (citing Nat'l Indus. Grp. (Holding) v. Carlyle Inv. Mgmt. L.L.C., 67 A.3d 373,
385 (Del. 2013)).
22
   Id. See also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14 (1985)
(“Where such forum selection provisions have been obtained through ‘freely
negotiated’ agreements and are not ‘unreasonable and unjust,’ their enforcement
does not offend due process.”); Eagle Force Holdings, LLC v. Campbell, 187 A.3d
1209, 1228 (Del. 2018) (“Where a party commits to the jurisdiction of a particular
court or forum by contract, such as through a forum selection clause, a ‘minimum
contacts’ analysis is not required as it should clearly anticipate being required to
litigate in that forum.”).
23
   Id. (quoting Halpern Eye Assocs., P.A. v. E.A. Crowell & Assocs., Inc., 2007 WL
3231617, at *1 (Del. Com. Pl. Sept. 18, 2007)).
                                            5
      8.     When determining whether a non-signatory is bound by a forum

selection clause, Delaware courts apply the three-part test set forth in Capitol Group

Companies v. Armour.24 “First, is the forum selection clause valid? Second, are the

[non-signatories] third-party beneficiaries, or closely related to, the contract? Third,

does the claim arise from the standing relating to the agreement? If all three

questions are answered in the affirmative, the forum selection clause will bind the

non-signatory.”25

      9.     Here, the validity of the forum selection clause is not in dispute, so the

first Capitol Group factor is satisfied. The Court finds that the second Capitol Group

factor is satisfied as well. The closely related test is an expanded form of equitable

estoppel where either the party receives a direct benefit from the agreement or it was

foreseeable that the party would be bound by the agreement.26             When Miles

redeemed Willie Miles’ investment, as his heir, she received a direct benefit from

the Investment Agreement. But for the Investment Agreement contract between

Willie Miles and AHP, there would have been nothing for Miles to redeem. Miles,

as a nonsignatory, cannot accept the benefit of the contract - Willie Miles’

investment – and reject her obligations under that contract – to litigate in Delaware

24
   2004 WL 2521295 (Del. Ch. Oct 29, 2004)(revised Nov.3, 2004).
25
   Id., at *5.
26
   See, McWane, Inc. v. Lanier, 2015 WL 399582, at *7 (Del. Ch. Jan. 30, 2015).
                                       6
under the forum selection provision.27 Similarly, it was entirely foreseeable, that, as

Willie Miles’ heir, Miles would be bound by the Investment Agreement if she chose

to obtain benefits under it.

      10.     The third Capital Group factor is satisfied as well. This third factor

requires that “the agreement containing the forum selection clause must also be the

agreement that gives rise to the substantive claims brought by or against a non-

signatory in order for the forum selection clause be enforceable against the non-

signatory.”28 In order to answer affirmatively, the claims asserted in Amended

Complaint must arise from the Investment Agreement. They do. The fundamental

issue here is the amount of Willie Miles investment to which Miles might be entitled

as his heir. That amount is determined by the Investment Agreement. Miles’

argument that, because the Investment Agreement does not address the mechanics

of withdrawing funds, the forum selection provision does not apply, reads the forum

selection provision too narrowly. The forum selection provision of the Investment

Agreement reads in pertinent part:

             Governing Law. This agreement shall be governed by the
             internal laws of Delaware without giving effect to the
             principles of conflicts of laws. You hereby (i) consent to
             the personal jurisdiction of the Delaware courts or the
             Federal courts located in Delaware, (ii) agree that all

27
   See, Florida Chemical Co., LLC v. Flotek Industries, Inc., 262 A.3d 1066, 1091
(Del. Ch. 2021).
28
   Weygandt v. Weco, LLC, 2009 WL 1351898, at *4n.15 (Del. Ch. May, 14,
2009).
                                        7
             disputes arising from this Agreement shall be prosecuted
             in such courts, (iii) agree that any such court shall have
             personal jurisdiction over you…29

This litigation is a “dispute arising from this Agreement” because it is a dispute about

the amount of the investment to which Miles is entitled as set out in the agreement,

not the mechanics to the withdrawal. Accordingly,        this   Court   has    personal

jurisdiction over Miles.

       11.   Miles next claims that Count I (Breach of Contract) must be dismissed

for failure to state a claim pursuant to Delaware Superior Court Rule 12(b)(6)

because no contractual relationship was formed between Miles and AHP. A motion

to dismiss for failure to state a claim pursuant to Superior Court Rule 12(b)(6) will

not be granted if the “plaintiff may recover under any reasonably conceivable set of

circumstances susceptible of proof under the complaint.”30 The Court’s review is

limited to the well-pled allegations in the complaint.31 In ruling on a 12(b)(6)

motion, the Court “must draw all reasonable factual inferences in favor of the party

opposing the motion.”32 Dismissal is warranted “only if it appears with reasonable

certainty that the plaintiff could not prove any set of facts that would entitle him to

relief.”33

29
   Def.’s Mot. to Dismiss, at Ex. 2, D.I. 16.
30
   Browne v. Robb, 583 A.2d 949, 950 (Del. 1990).
31
   Doe v. Cahill, 884 A.2d 451, 458 (Del. 2005).
32
   Id.
33
   Id.
                                           8
         12.   Dismissal is not warranted here because the Amended Complaint

alleges a viable breach of contract based on a contractual relationship between Miles

and AHP. It does not appear with any reasonable certainty that AHP could fail to

prove the facts alleged. AHP’s Amended Complaint alleges that Miles stepped into

Willie Miles’ place by submitting a Liquidity Request Form requesting to withdraw

$64,147.39.34 Based on the pleadings, a contract existed and when Miles filed a

form requesting benefits, she subjected herself to the terms and conditions of the

contract, despite not signing the contract. AHP also plead that it mistakenly sent

Miles an additional $60,135.49 check, requested the amount to be returned, and that

Miles refused to return this amount, breaching the contract.35 Accordingly, the Court

determines that AHP adequately alleges a breach of contract claim against Miles.

         THEREFORE, because this Court has personal jurisdiction over Miles, and

because the Complaint adequately states a claim for breach of contract, Defendant

Peggy Miles’ Motion to Dismiss is DENIED.

         IT IS SO ORDERED.

                                             /s/ Ferris W. Wharton
                                             Ferris W. Wharton, J.

34
     D.I. 9.
35
     D.I. 9.
                                         9