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Maryland District Court Denies Defendant’s Motion to Dismiss in Breach of Contract Diversity Action and Grants Plaintiff’s Motion for Leave to File a Surreply

TrimGen Corporation v. Iverson Genetic Diagnostics, Inc.
United States District Court for the District of Maryland, Civil Action No. RDB-14-2850 (D. Md. May 7, 2015)

by Jhanelle A. Graham, Associate
Semmes, Bowen & Semmes (

Available at:

In TrimGen Corporation v. Iverson Genetic Diagnostics, Inc., Plaintiff, TrimGen Corporation (“TrimGen” or “Plaintiff”) brought a diversity action against Defendant, Iverson Genetic Diagnostics, Inc. (“Iverson” or “Defendant”), seeking damages of $1,468,979.98, plus pre-judgment interest, stemming from a contract dispute between the parties. TrimGen alleged that Iverson defaulted on its contract with TrimGen by failing to pay for goods manufactured and delivered by TrimGen. The Maryland district court was asked to rule on Iverson’s Motion to Dismiss and TrimGen’s Motion for Leave to File a Surreply. After reviewing the parties’ submissions, the district court denied Iverson’s Motion to Dismiss and granted TrimGen’s Motion for Leave to File a Surreply.

TrimGen, a Maryland corporation, manufactured DNA testing kits for “genotyping of drug sensitivity and . . . mutation detection of various cancers.” TrimGen’s principal place of business was located in Sparks, Maryland. Iverson, a Nevada corporation, provided genetic testing for drug sensitivity, among other services. Iverson’s executive offices were located in Seattle, Washington, and it also owned a Clinical Laboratory Improvement Amendment (CLIA)-certified laboratory in South Carolina, at which it performed the genetic testing. Iverson allegedly contacted TrimGen in Maryland to establish a contract in which TrimGen would sell genotyping test kits to Iverson. The contract negotiations occurred over the telephone, not in person, contrary to TrimGen’s allegation in its Complaint. Iverson representatives, however, traveled to Maryland on two (2) occasions to meet with TrimGen to discuss several business matters, including technical specifications for the testing kits in the subject contract dispute. Under the terms of the contract, TrimGen would manufacture the testing kits in Maryland, and then ship the kits to Iverson’s laboratory in South Carolina. Iverson would then pay TrimGen for the delivered product within ninety (90) days from the date of the invoice. From April 2012 through March 2014, Iverson placed orders of $6,755,859.98 in total, of which $1,468,979.98 allegedly remained outstanding.

TrimGen filed the subject diversity action seeking the unpaid $1,468,979.98, plus prejudgment interest. Iverson moved to dismiss the Complaint pursuant to Rules 2(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure, contending that Iverson was not subject to the personal jurisdiction of the Maryland district court, and, in the alternative, that venue was improper. After briefing was complete on the matter of Iverson’s Motion to Dismiss, Plaintiff filed a Motion for Leave to File a Surreply.

First, the district court stated that a motion to dismiss under Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction challenges a court’s authority to exercise its jurisdiction over the moving party. Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). The jurisdictional question was “one for the judge, with the burden on the plaintiff ultimately to prove the existence of a ground for jurisdiction by a preponderance of the evidence.” Id. When considering whether the plaintiff has made the requisite showing, “the court must take all disputed facts and reasonable inferences in favor of the plaintiff.” Carefirst of Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir.2003).

Similarly, a motion to dismiss pursuant to Rule 12(b)(3) for improper venue requires that the plaintiff establish that venue is proper, although the court must draw all reasonable inferences in favor of the plaintiff. Jones v. Koons Automotive, Inc., 752 F. Supp. 2d 670, 680 (D. Md. 2010) (citing Three M Enters., Inc. v. Texas D.A.R. Enters., Inc., 368 F. Supp. 2d 450, 454 (D. Md. 2005) (internal citations omitted)). As a general rule, the district court stated that it does not allow parties to file surreplies. Local Rule105.2(a) (D. Md. 2011); see MTB Servs., Inc. v. Tuckman-Barbee Const. Co., No. 1:12-cv-02109-RDB, 2013 WL 1224484, *6 (D. Md. Mar. 26, 2013). In MTB Services, the Maryland district court explained that a “party moving for leave to file a surreply must show a need for a surreply.” Id. A court may permit a plaintiff to file a surreply if “a defendant raises new legal issues or new theories in its reply brief.” Id.

With respect to Plaintiff’s Motion for Leave to File a Surreply, the district court noted that TrimGen presented factual inaccuracies bearing directly on whether the court may exercise personal jurisdiction over Iverson. Specifically, Iverson asserted that it was TrimGen, not Iverson, which initiated the contact that led to the business relationship. On the basis of this assertion, Iverson argued that its contacts with the forum state were so negligible as to preclude the Court from exercising personal jurisdiction.

The court noted that while TrimGen did not allege any continuous contacts between Iverson and Maryland, there was an allegation of specific contacts between the parties in Maryland. Accordingly, the court determined that the inquiry was with respect to specific, and not general, jurisdiction. Based on the Maryland long-arm statute, which extends personal jurisdiction to any “person, who directly or by an agent . . .[t]ransacts any business or performs any character of work or service in the State,” Md. Code Ann., Cts. & Jud. Proc., § 6-103(b)(1), the court determined that TrimGen amply satisfied its burden to defeat a Rule 12(b)(2) motion. Specifically, the court found that Iverson, while not a resident of Maryland, initiated contact with TrimGen, a Maryland resident, so as to establish a business relationship. That is, Iverson called, emailed, and otherwise contacted TrimGen in Maryland; TrimGen manufactured the testing kits ordered by Iverson in Maryland and then shipped the kits from Maryland to Iverson’s laboratory in South Carolina; Iverson’s agents traveled to Maryland to meet with TrimGen to review, among other matters, the technical specifications for the subject contract; and Iverson paid TrimGen either by mailing checks to TrimGen’s Maryland address, or wiring money directly to Plaintiff’s Maryland bank account. For these reasons, the court held that Iverson transacted business in the State of Maryland, such that the long-arm statute was satisfied.

Turning to the second prong of the personal jurisdiction analysis, the court determined that Iverson’s contacts with Maryland were such that the court’s exercise of jurisdiction over Iverson comported with the due process requirements of the Fourteenth Amendment. While TrimGen did not allege any continuous and systematic contact with Iverson, specific jurisdiction was exerted in light of the contacts between the parties. Iverson’s contacts to the forum related solely to its business relationship with TrimGen, and the litigation resulted from that business relationship—i.e., Iverson’s alleged failure to pay $1,468,979.98. Because Iverson initiated contact with TrimGen, a Maryland corporation, the court held that it “purposefully direct[ed] its activities toward [a] forum resident[].” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473(1985). The district court’s exercise of personal jurisdiction over Iverson, therefore, did not “offend traditional notions of fair play and substantial justice.” Int’l Shoe Co., 326 U.S. at 316. Upon determining that TrimGen satisfied both prongs of the personal jurisdiction inquiry, the district court denied Iverson’s Motion to Dismiss for lack of personal jurisdiction.

Further, given that the court found personal jurisdiction over Iverson, it determined that venue was also proper. According to the court, by contacting and meeting with TrimGen agents in Maryland, ordering products produced in Maryland, and paying money to a Maryland bank account, Iverson purposefully availed itself of the privilege of doing business in Maryland. Consequently, the district court denied Iverson’s Motion to Dismiss for improper venue.