Court Opinion

ID: 4358214
Source: CourtListenerOpinion
Date Created: 2019-01-11 20:05:19.70844+00
Date Added: 2024-06-11T14:46:41.861282
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

SRINIVASAN RAJAMANI and
SURAJ SYSTEMS INC.,

Plaintiffs,

C.A. No. N18C-07-196 FWW
V.

REVWAYS CORP. and FEAURA, INC.,

Defendants.

\/\_/\_/\-/V\/V\/\/V

Submitted: October 2, 2018
Decided: January 11, 2019

Upon Defendant Feaura, Inc. ’s Motion to Dismiss
DENIED.

ORDER

Daniel C. Herr, Esquire, 1225 North King Street, Suite 1000, Wilmington, DE
19801, Attorney for Plaintiffs.

Stephanie H. Dallaire, Esquire, Joseph B. Cicero, Esquire, Chipman Brown Cicero
& Cole, LLP, 1313 North Market Street, Suite 5400, Wilmington, DE 198()1,
Attorneys for Defendant Feaura, Inc.

WHARTON, J.

This 11th day of January, 2019, upon consideration of the Motion to Dismiss
of Defendant Feaura, Inc.1 and the Response in Opposition of Plaintiffs Srinivasan
Rajamani and Suraj Systems Inc.,2 it appears to the Court that:

(1) On July 20, 2018, Plaintiffs brought this action against corporations
RevWays Corp. (“Revways”) and Feaura, Inc. (“Feaura”), alleging breach of
contract.3 Plaintiffs allege that it entered into a contract With Revways to provide
information technology services for RevWays, Who they allege did not pay in full for
Plaintiffs’ Work.4 Plaintiffs allege that Revways owner, Arbas Ahmed Siddiqui
(“Siddiqui”), eventually abandoned Revways and began operating Feaura, Which
performs the same Work that Revways had.5 Plaintiffs allege that Siddiqui
abandoned Revways and began operating through Feaura, a continuation of

Revways, to avoid liabilities associated With Revways.6

(2) On September l, 2018, Feaura filed a Motion to Dismiss.7 Feaura first
asserts that this Court lacks personal jurisdiction pursuant to Superior Court Civil
Rule l2(b)(2).8 Furthermore, Feaura moves to dismiss for failure to state a claim,

pursuant to Superior Court Civil Rule l2(b)(6).9

 

lD.I. 5.

2 D.I. 7.

3 Pl.’s Compl., at l.

4 Id., at 2.

5 Id., at 3.

6 Id.

7 Defs. Mot. to Dismiss, at 1.
8 Ia'.

9 Ia'.

(3) On October 2, 2018, Plaintiffs filed an answer opposing Feaura’s
Motion to Dismiss.10 Plaintiffs argue that they have properly stated a claim against
Feaura as successor-in-interest to Revways.11 Plaintiffs also contend that this Court
does have personal jurisdiction over Feaura, as a successor entity of Revways, a

Delaware resident.12

(4) 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

”13 The Court's review is limited to the well-pled allegations in the

complaint
complaint.14 In ruling on a 12(b) motion, the Court “must draw all reasonable factual
inferences in favor of the party opposing the motion.”15 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.”16

(5) In a motion to dismiss for lack of personal jurisdiction pursuant to
Superior Court Civil Rule l2(b)(2), the plaintiff bears the burden of showing a basis
for the trial court's exercise of jurisdiction over a defendant.17 Absent an evidentiary
hearing or jurisdictional discovery, the plaintiff need only make a prima facie

showing that the exercise of personal jurisdiction is appropriate.18 In making its

 

111 Pl.'s Resp. Mot. Dismiss, at l.

11Id., at 4.

12 Ia'., at 5.

13 Browne v. Robb, 583 A.2d 949, 950 (Del. 1990).

14 Doe v. Cahill, 884 A.2d 451, 458 (Del. 2005).

15 Id.

16 Ia’.

17 Wiggins v. Physiologz'c Assessment Ser'vs., LLC, 138 A.3d 1160, 1164 (Del.
Super. 2016) (citing Greenly v. Davis, 486 A.2d 669, 670 (Del. 1984)).

181d., at 1165.

3

determination, the Court must accept all well-pleaded factual allegations as true and

draw all reasonable inferences in favor of the plaintiff.19

(6) The dispositive issue here is whether a successor-to-interest of an entity
can be subject to personal jurisdiction and held liable for acts of the predecessor
entity. If an entity transfers its assets to another company, the transferee is generally
not responsible for the liabilities of the transferor.20 However, four exceptions exist
where the avoidance of liability would be unjust: “(l) the buyer’s assumption of
liability; (2) de facto merger or consolidation; (3) mere continuation of the
predecessor under a different name; or (4) fraud.”21 Plaintiffs assert that exceptions
(2), (3), and (4) apply to its Complaint, and plead that Feaura and Revways are one

and the same as a result of Siddiqui’s fraudulent misconduct22

(7) This Court has consistently held that successor liability can be
appropriate “where the new entity is so dominated and controlled by the old
company that a separate existence must be disregarded.”23 Plaintiffs plead that
Feaura and Revways are one and the same, and as such have stated a claim against
Feaura as the successor-in-interest to Revways and its reputed breach of contract
with Plaintiffs. Because Plaintiffs sufficiently pled a claim against Feaura for breach

of contract, it has satisfied its requirements under Rule l2(b)(6).

 

19 Id.

20 See Ross v. DESA Hola'z'ngs Corp., 2008 WL 4899226, at *4 (Del. Super. Sept.
30, 2008).

21Ia'. (citing Fountain v. Colom`al Chevrolet Co., 1988 WL 40019, at *7 (Del.
Super. April 13, 1988).

22 Pl.'s Resp. Mot. Dismiss, at 4.

23 Ross, 2008 WL 4899226, at *4 (citing Elmer v. Tenneco Resins, Inc., 698
F.supp. 535, 542 (D. Del. 1988)).

4

(8) Delaware law is settled that a successor entity can be subject to personal
jurisdiction related to acts of its predecessor entity.24 Plaintiff asserts that Revways
was a “resident” of- organized in and pursuant to the laws of- Delaware.25 Accepting
Plaintiffs’ well-pleaded factual allegations as true, Feaura as a successor entity can
be subject to personal jurisdiction for the acts of Revways.26 Thus, Plaintiffs have
made a prima facie showing that the exercise of personal jurisdiction is appropriate

Accordingly, this Court maintains personal jurisdiction over Feaura.27

THEREFORE, Defendant Feaura, Inc. ’S Motion to Dismiss is DENIED.

itt/ff

Ferris_’llV. Whartori, J.

l

IT IS SO ORDERED.

 

24 See Fehl v. S. W.C. Corp., 433 F. Supp 939, 947 (D. Del. 1977) (“personal
jurisdiction may be asserted over a successor corporation, on basis of acts of its
predecessor”); Fountaz`n, 1988 WL 40019, at *7.

25 Pl.’s Compl., at l.

26 See Doe, 884 A.2d at 458.

27 See Wiggins, 138 A.3d at 1165.