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  • ED MAP INC Vs DELTA CAREER EDUCATION CORPORATION VS.DELTA CAREER EDUCATION CORPORATION ET ALOTHER CIVIL document preview
  • ED MAP INC Vs DELTA CAREER EDUCATION CORPORATION VS.DELTA CAREER EDUCATION CORPORATION ET ALOTHER CIVIL document preview
  • ED MAP INC Vs DELTA CAREER EDUCATION CORPORATION VS.DELTA CAREER EDUCATION CORPORATION ET ALOTHER CIVIL document preview
  • ED MAP INC Vs DELTA CAREER EDUCATION CORPORATION VS.DELTA CAREER EDUCATION CORPORATION ET ALOTHER CIVIL document preview
  • ED MAP INC Vs DELTA CAREER EDUCATION CORPORATION VS.DELTA CAREER EDUCATION CORPORATION ET ALOTHER CIVIL document preview
  • ED MAP INC Vs DELTA CAREER EDUCATION CORPORATION VS.DELTA CAREER EDUCATION CORPORATION ET ALOTHER CIVIL document preview
  • ED MAP INC Vs DELTA CAREER EDUCATION CORPORATION VS.DELTA CAREER EDUCATION CORPORATION ET ALOTHER CIVIL document preview
  • ED MAP INC Vs DELTA CAREER EDUCATION CORPORATION VS.DELTA CAREER EDUCATION CORPORATION ET ALOTHER CIVIL document preview
						
                                

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Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 06 2:00 PM-18CV002305 0E224 - K62 IN THE COURT OF COMMON PLEAS FRANKLIN COUNTY, OHIO ED MAP, INC., Plaintiff, Case No. 18-CV-002305 vs. DELTA CAREER EDUCATION Judge David Cain CORPORATION, ET AL., Defendants. REPLY MEMORANDUM OF THE ANCORA DEFENDANTS IN SUPPORT OF THEIR MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION I INTRODUCTION In its rather perfunctory response to the Ancora Defendants’ motion to dismiss for lack of personal jurisdiction, Plaintiff clings stubbornly — and incorrectly — to the notion that the Court must assume the truth of facts and legal conclusions pled in the First Amended Complaint.! In stark contrast to the detailed affidavit tendered by the Ancora Defendants’ CEO (the “Zawisky Affidavit”), Plaintiff offers no evidence whatsoever in support of its various theories of personal jurisdiction Instead, it merely recites allegations from its own unverified First Amended Complaint and does not even acknowledge, much less refute, the evidence presented by the Ancora Defendants showing that they never assumed the contract which lies at the heart of this case or had any other relevant contact with Ohio. Plaintiff, therefore, has failed to meet its burden under Rule 12(B)(2) to make a prima facie showing of personal jurisdiction. | Capitalized terms in this Reply Memorandum are used as defined in the June 15, 2018 Motion of Defendants STVT-AAI Education, Inc. and Ancora Intermediate Holdings, LLC To Dismiss For Lack of Personal Jurisdiction. Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 06 2:00 PM-18CV002305 0E224 - K63 IL. LAW AND ARGUMENT A. Plaintiff Cannot Make Its Required Prima Facie Showing Of Personal Jurisdiction Without Evidence Plaintiff relies heavily on Goldstein v. Christiansen, 70 Ohio St. 3d 232 (1994), for the proposition that the trial court, in deciding a motion to dismiss, must “view allegations in the pleadings and the documentary evidence in a light most favorable to the plaintiffs, resolving all reasonable competing inferences in their favor.” Goldstein, 70 Ohio St. 3d at 236. As the Court in Goldstein itself makes clear, however, this statement does not relieve a plaintiff of the obligation to introduce at least some evidence in support of personal jurisdiction, particularly once a defendant has challenged its existence with competent evidence. See, e.g., id. at 239 (holding that judge must “constru[e] the evidence most favorably to the opponents of [a] Civ. R. 12(B)(2) motion” (emphasis supplied)) As the Tenth District Court of Appeals has made clear, Rule 12(B)(2) does not give a plaintiff a free pass to ignore evidence tendered by a defendant challenging personal jurisdiction: “To]nce a defendant moves to dismiss for lack of personal jurisdiction, a plaintiff must establish that the trial court had personal jurisdiction over the defendant.” Joffe v. Cable Tech, Inc., 163 Ohio App. 3d 479, 468 (10th Dist. 2005). To meet its initial burden, a plaintiff must, at minimum, make a prima facie showing which includes “sufficient evidence to allow reasonable minds to conclude that the trial court has personal jurisdiction.” /d. (emphasis supplied) It is thus well established in the Tenth District and elsewhere that a plaintiff, when faced with a Rule 12(B)(2) motion properly supported by affidavits or exhibits, must fairly meet such evidence with enough support to create a triable issue of fact on the jurisdictional question. This point was made manifest in Robinson v. Koch Refining Co., No. 98-AP-900, 1999 Ohio App LEXIS 2682 (10th Dist. June 17, 1999). There, the trial court dismissed a complaint for lack of Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 06 2:00 PM-18CV002305 0E224 - K64 personal jurisdiction where the plaintiff failed to present any evidence of an alleged principal- agent relationship between the defendant and another entity. The Tenth District affirmed, holding that “[w]hile the trial court must view all evidence most favorably to the non-moving parties and resolve all competing inferences in their favor, [plaintiffs] were required to present some evidence supporting their claim of agency.” /d.; see also Varnau v. Frank W. Winne & Son, Inc., No. C-76012, 1977 Ohio App. LEXIS 8760, *2-3 (1st Dist. Mar. 16, 1977) (“Mere allegations of personal jurisdiction contained in the pleadings are, when challenged, insufficient to meet the pleader’s burden of proof; the record must contain ‘proof , either by way of counter-affidavits or sworn testimony’ of the ‘minimal contacts’ which are essential to the acquisition of personal jurisdiction over a foreign party.”). This approach is derived from common sense and basic notions of fairness. Any other interpretation of Rule 12(B)(2) would permit the absurd and unconstitutional result of forcing a party over whom personal jurisdiction should not exist to defend a claim in a foreign jurisdiction simply because the plaintiff asserts, without support or credible basis, that jurisdiction does exist B. Plaintiff Has Introduced No Evidence To Support The Exercise Of Personal Jurisdiction Plaintiff advances four arguments in support of personal jurisdiction over the Ancora Defendants. Each is entirely dependent upon factual assertions that, in addition to lacking any evidentiary support in the record, are squarely refuted by the Zawisky Affidavit As such, it is legally impossible for Plaintiff to satisfy its prima facie burden under these circumstances. ? The consideration of evidentiary materials does not, as Plaintiff implies, require conversion to a motion for summary judgment. See Memo Contra at 14. To the contrary, consideration of extrinsic evidence is a core aspect of adjudication of a Rule 12(B)(2) motion. Joffe, 163 Ohio App. 3d at 486; see also Giachetti v. Holmes, 14 Ohio App. 3d 306, 307 (8th Dist. 1984) (“Where a defendant asserts that the court lacks personal jurisdiction over him, the plaintiff has the burden to establish the court’s jurisdiction. In deciding the merits of the defense, the court may hear the matter on affidavits... Matters of jurisdiction are very often not apparent on the face of the summons or complaint.”) (internal citation omitted). Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 06 2:00 PM-18CV002305 0E224 - K65 Plaintiff's first argument is that “the Ancora Defendants consented to jurisdiction by becoming the successor-in-interest to a contract with a valid forum selection clause.” Memo Contra at 5. The forum selection clause to which Plaintiff points is contained in the Delta Contract Memo Contra at 7. Nothing apart from Plaintiff's unsworn allegations in the First Amended Complaint supports the proposition that the Ancora Defendants became successors-in-interest to the Delta Contract. Further, the only evidence in the record, the Zawisky Affidavit, expressly contradicts Plaintiff's allegations: Ancora Defendants are not, and never were, parties to the Delta Contract Ancora Defendants did not participate in the negotiation of the Delta Contract, are not assignees of the Delta Contract, and did not receive any services or benefits under the Delta Contract. * * * Delta agreed to transfer specified assets, including certain Delta career education facilities outside of Ohio, to Ancora, but neither of the Ancora Defendants acquired Delta itself or assumed any Delta liabilities or debts other than those expressly identified in the APA. The Delta Contract was neither purchased nor assumed by Ancora Defendants. Zawisky Aff. at J 7,9 Plaintiff's second argument is that the Ancora Defendants transacted business in Ohio. In support of this claim, it points to the same unsworn and unsubstantiated allegations that “[t]he Ancora Defendants acquired the [Delta Contract] and its ongoing business relationship with Ed Map.” Memo Contra at 10. As discussed in relation to Plaintiff’s first argument, the Zawisky Affidavit is the only evidence of record and explicitly refutes these assertions. Plaintiff's third argument is that the Ancora Defendants caused tortious injury in Ohio. This claim is predicated on the baseless assertion that Bill Nance and Tim Ryder were agents of the Ancora Defendants in December 2017 and, in that capacity, made payment assurances to Plaintiff with respect to the Delta Contract. Memo Contra at 2, 10-12. Plaintiff offers no evidence Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 06 2:00 PM-18CV002305 0E224 - K66 in support of these allegations.? The Zawisky Affidavit expressly refutes them and is the only evidence in the record. Zawisky Aff. at Jf 11-16. Plaintiff's fourth and final argument is that personal jurisdiction over the Ancora Defendants passes constitutional muster because they “benefitted from Ed Map’s goods and services when Ed Map, pursuant to the [Delta Contract], delivered textbooks to the Ancora Defendants’ students for the term beginning in January 2018.” Memo Contra at 13. Plaintiff has introduced no evidence concerning the students to whom it delivered textbooks under the Delta Contract (including, notably, whether such students were enrolled at institutions acquired by the Ancora Defendants, which did not acquire all Delta-affiliated schools). Further, despite admitting that its deliveries were directly to students, Plaintiff has offered no evidence concerning how the Ancora Defendants are purported to have benefitted financially from these deliveries, even assuming the students were enrolled at an institution acquired from Delta. Memo Contra at 2-3, 4, 13. The only evidence in the record, the Zawisky Affidavit, specifically states that the Ancora Defendants “did not receive any services or benefits under the Delta Contract.” Zawisky Aff. at 7. Cc Plaintiff Is Not Entitled To Jurisdictional Discovery Without meaningful argument in support of its request, Plaintiff asks that the Court defer resolution of the Ancora Defendants’ motion to dismiss and order the parties to conduct discovery limited to any jurisdictional issues identified by the Court. Memo Contra at 14-15. As an initial matter, briefing on this motion is complete, and therefore the proper time for such a request has passed. D’Antonio vy. Allegheny Gen. Hosp., No. 94-CA-191, 1995 Ohio App. LEXIS 3992, *7-8 3 Plaintiff attached as an exhibit to its First Amended Complaint a December 28, 2017 email from Greg Smith of Plaintiff to Tim Ryder and Bill Nance of Delta. The date of this email is well before the January 18, 2018 transaction through which the Ancora Defendants acquired certain assets from Delta. See Zawisky Aff at § 8. The text of the email does not reflect any payment assurance or other representation to Plaintiff on behalf of the Ancora Defendants. Further, the record contains no evidence disputing the statements in the Zawisky Affidavit that the Ancora Defendants provided no assurances to Plaintiff relative to the Delta Contract and that neither Mr. Ryder nor Mr. Nance was employed by or authorized to speak on behalf of the Ancora Defendants in December 2017. Zawisky Aff. at {¥ 11-16. Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 06 2:00 PM-18CV002305 OE224 - K67 (7th Dist. Sept. 13, 1995) (affirming dismissal for lack of personal jurisdiction despite absence of discovery because plaintiff “had a duty to either initiate and pursue discovery or to request an extension of time from the court”). Plaintiff was on notice of the defense of personal jurisdiction since the May 18, 2018 filing of a motion to dismiss Plaintiffs original complaint on that basis. Nevertheless, Plaintiff has propounded no discovery requests to date, including in relation to jurisdictional issues. Further, timing issues aside, the Court has discretion to decide the Ancora Defendants’ motion without ordering jurisdictional discovery because Plaintiff has failed to establish the requisite prima facie showing of personal jurisdiction. EnQuip Techs. Group, Inc. v. Tycon Technoglass, S.r.1., 2010-Ohio-6100, 9] 34, 35 (2nd Dist. 2010) (“[JJurisdictional discovery is not required in every case involving a Civ. R. 12(B)(2) motion”). The Court should not delay resolution of this motion where Plaintiff has neither introduced any evidence in support of its jurisdictional allegations nor sought any discovery whatsoever. Til. CONCLUSION Because it has not produced any evidence in support of its allegations that personal jurisdiction lies against the Ancora Defendants, or even attempted to meet in any fashion the contrary evidence offered by these defendants, Plaintiff has not met and cannot meet its initial burden to put forth “sufficient evidence to allow reasonable minds to conclude that the [Court] has personal jurisdiction.” Joffe, 163 Ohio App. 3d at 468. As such, it would be fundamentally unfair to hold the Ancora Defendants in these proceedings, and their motion to dismiss should be granted forthwith. Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 06 2:00 PM-18CV002305 O0E224 - K68 Respectfully submitted, /s/ C. Craig Woods C. Craig Woods (0010732) Andrew H. King (0092539) Michael T. Mullaly (0090202) SQUIRE PATTON BoGcs (US) LLP 2000 Huntington Center 41 South High Street Columbus, Ohio 43215 Telephone: (614) 365-2700 Facsimile: (614) 365-2499 craig. woods@squirepb.com andrew.king@squirepb.com michael.mullaly@squirepb.com Attorneys for the Ancora Defendants Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 06 2:00 PM-18CV002305 0E224 - K69 CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and accurate copy of the foregoing was served this 6th day of July, 2018, via the Court’s electronic filing system and/or by regular U.S. Mail, upon the following Elizabeth L. Moyo Delta Career Education Corporation Allen T. Carter 99 Canal Center Plaza, Suite 501 Porter, Wright, Morris & Arthur LLP Alexandria, VA 22314 41 South High Street Columbus, OH 43215 emoyo@porterwright.com acarter@porterwright.com Attorneys for Plaintiff Atlantic Coast Colleges, Inc. Berks Technical Institute, Inc c/o Corporation Service Company c/o Corporation Service Company 2626 Glenwood Ave., Suite 550 251 Little Falls Drive Raleigh, NC 27608 Wilmington, DE 19808 McCann Education Centers, Inc. McCann School of Business and c/o Corporation Service Company Technology, Inc. 2595 Interstate Drive, Suite 103 c/o Donald C. Douglass, Jr. Harrisburg, PA 17110 3320 West Esplanade Ave. North Metairie, LA 70002 Miller-Motte Business College, Inc Palmetto Technical College, Inc. c/o Corporation Service Company c/o VB Business Services, LLC 2626 Glenwood Ave., Suite 550 500 World Trade Ctr. Raleigh, NC 27608 101 W. Main Street Norfolk, VA 23510 Piedmont Business Colleges, Inc. c/o Corporation Service Company 2626 Glenwood Ave., Suite 550 Raleigh, NC 27608 /s/ Michael T. Mullaly Michael T. Mullaly (0090202)