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Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 06 2:00 PM-18CV002305
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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.
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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
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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).
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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
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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.
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(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.
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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
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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)