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NOA, LLC v. EL Khoury

United States District Court, E.D. North Carolina, Western Division

March 31, 2015

NOA, LLC and INSAF NEHME, Plaintiffs,
v.
WALID EL KHOURY; EDWARD EL KHOURY; and HOPE COMERCIO E INDUSTRIA LIMITADA, Defendants.

ORDER

LOUISE W. FLANAGAN, District Judge.

This matter comes before the court on defendant Walid El Khoury's motion to dismiss, pursuant to Federal Rules of Civil Procedure 12(b)(2), 12(b)(3), and 12(b)(5) for lack of personal jurisdiction, improper venue, and insufficient service of process. The issues raised have been briefed fully, and in this posture are ripe for ruling.[1] For the reasons that follow, defendant's motion is denied.

STATEMENT OF THE CASE

Plaintiff NOA, LLC ("NOA"), a North Carolina limited liability company located in Wake County, North Carolina, and plaintiff Insaf Nehme ("Nehme"), a resident of North Carolina and NOA's lone member, commenced this action by complaint filed February 28, 2014, against defendant Walid El Khoury, plaintiff Nehme's first cousin and a resident of both the Republic of Angola ("Angola") and the Republic of Lebanon ("Lebanon"), alleging (1) breach of partnership agreement; (2) breach of fiduciary duty; (3) constructive fraud; (4) conversion; and (5) breach of contract. In addition, plaintiffs seek an accounting in order to obtain financial information regarding defendant Hope Comercio E Industria Limitada ("Hope Comercio"), a joint business venture between the parties, located in Angola and managed by defendant Walid El Khoury and his son, defendant Edward El Khoury.[2]

On May 7, 2014, process, including both the complaint and summons, were served on defendant personally in the Republic of Liberia. Plaintiffs filed a return evidencing service, on May 9, 2014. On May 30, 2014, upon the expiration of 21 days with no answer, plaintiffs filed a motion for entry of default. Subsequently, on June 13, 2014, defendant filed a motion for extension of time to plead or otherwise respond to the complaint. In the brief supporting his motion, defendant argued he had been served improperly, because plaintiffs' agent failed to leave with him a copy of the summons. After extensive briefing on the issue, defendant's motion was allowed, over plaintiffs' objection, on July 29, 2014. (DE 32)

Prior to the court's order allowing defendant's motion for extension of time, on July 7, 2014, defendant filed the instant motion to dismiss, pursuant to Federal Rules of Civil Procedure 12(b)(2), 12(b)(3), and 12(b)(5). Therein, defendant argues he does not have the requisite minimum contacts with the state of North Carolina such that suit may be maintained against him there. Moreover, he argues venue is improper in this district, because an insignificant portion of the acts or omissions giving rise to plaintiffs' complaint occurred in North Carolina, where all Hope Comercio's business activities occurred in Angola. Defendant finally argues service of process was defective, because plaintiffs' agent failed to leave a copy of the summons in his possession.[3]

STATEMENT OF FACTS

On a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2), "the plaintiff need only make a prima facie showing of personal jurisdiction, " where no evidentiary hearing is held. Carefirst of Md., Inc. v. Carefirst Pregnancy Centers, Inc., 334 F.3d 390, 396 (4th Cir. 2003). " In deciding whether the plaintiff has made the requisite showing, the court must take all disputed facts and reasonable inferences in favor of the plaintiff." Id.

Plaintiff NOA is a limited liability company existing under the laws of North Carolina. (See Nehme Decl., DE 33-1, ¶2). Plaintiff Nehme, a resident of North Carolina, is the only member. (See id.). NOA holds several shipping contracts obligating American corporations to ship used clothing to River Way Stores, a Liberian company also owned by plaintiff Nehme. See generally NOA, LLC v. Atlantic Clothing, LLC, No. 5:14-CV-100-FL, 2014 WL 3667230, at *1 (E.D. N.C. July 22, 2014);[4] see also (Compl. ¶15).

Defendant is a foreign national born in Lebanon and currently residing in both Lebanon and Angola. (Second El Khoury Decl., DE 28, ¶¶2, 5). Up to and including 2008, defendant was the owner and operator of a business that manufactured and sold powder marble statues. (Id. ¶¶6, 10). Around May 2007, defendant traveled to North Carolina to attend the High Point Furniture Market, in High Point, North Carolina, with the intent of selling his statues there. (Nehme Decl. ¶7). While visiting North Carolina, defendant was hosted and accompanied by his cousin, plaintiff Nehme. (Id. ¶¶7, 11).

During defendant's May 2007, trip, defendant asked plaintiff Nehme whether plaintiff Nehme would consider going into business with him. (Id. ¶11).[5] Specifically, defendant inquired as to whether plaintiff Nehme would consider establishing a clothing business, similar to River Way Stores, in Angola.[6] (Id.). Thereafter, defendant returned to Lebanon, but discussions regarding the proposed Angolan business were ongoing between defendant and plaintiff Nehme. (Id. ¶¶11-12).

In September or October 2007, defendant again returned to North Carolina, where he and plaintiff Nehme continued to negotiate and refine the details of their proposed business arrangement. (Id. ¶13; see also Second El Khoury Decl. ¶11). The parties' negotiations were fruitful, and they agreed on the formation and operation of their new company, Hope Comercio. (Nehme Decl. ¶13). Plaintiff Nehme and defendant agreed to be equal partners in Hope Comercio, with plaintiff providing administrative and operational support, and defendant managing the business day-to-day. (Id.). After defendant returned to Lebanon, he and plaintiff Nehme continued to discuss the development of Hope Comercio through phone calls and emails, some of which were initiated by defendant to plaintiff in North Carolina. (Id. ¶14).

In early 2008, defendant returned to North Carolina three times. First, in February 2008, defendant traveled to North Carolina, met with plaintiff Nehme to discuss the development of Hope Comercio, and the two men subsequently departed North Carolina for Angola.[7] (Id. ¶15). Twice more, in the spring of 2008, defendant returned to North Carolina on other business, but engaged plaintiff in significant discussions regarding the development of Hope Comercio.[8] (See id.). One of these trips lasted approximately two months, during which time defendant resided with plaintiff Nehme in Raleigh, North Carolina. (Id.).

By fall 2008, Hope Comercio was operational. Pursuant to the parties agreement, NOA paid for its suppliers to ship used clothing to Hope Comercio in Angola, (id. ¶¶21-22), defendant retrieved the merchandise from port, (id. ¶19), and subsequently defendant wired money to NOA's bank account, at a bank located in North Carolina. (Id. ¶22). Over the course of five years, NOA arranged more than $8, 000, 000 in shipments to Hope Comercio, and received millions of dollars from defendant, deposited into its North Carolina bank account, in return. (Id.).

Between 2008 and 2013, plaintiff Nehme and defendant communicated multiple times a day regarding various aspects of Hope Comercio's business. (Id. ¶20). Often, these communications were initiated by defendant to plaintiff in North Carolina. (Id.). On at least one occasion, defendant was unable to pay the import fees owed on a shipment (Id. ¶19). To resolve this financial difficulty, defendant called plaintiff Nehme and requested he leverage a long-standing business relationship with Maersk Line ("Maersk"), a company with which NOA was affiliated through contracts related to River Way Stores, to have Maersk waive the fees. (Id.). In addition to constant communication between the parties, defendant visited North Carolina in both 2010 and 2011, once by plaintiff's invitation, to address concerns regarding the operation of Hope Comercio. (Id. ¶¶ 23; Second El Khoury Decl. ¶¶18-19).

In 2013, defendant withheld from plaintiff NOA payment for a shipment of used clothing valued at approximately $1, 200, 000. (Compl. ¶27). Subsequently, plaintiff Nehme discovered defendant had been paying himself and his son unreasonably high salaries, inflating certain company expenses, and negotiating directly with Hope Comercio's suppliers, in violation of the parties' agreement. (Id. ¶¶27-29). The instant suit followed.

COURT'S DISCUSSION

A. Motions to Dismiss for Lack of ...


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