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Westbury Group LLC v. Specialty Fuels Bunkering LLC; F. Javier Brito; Ingram Lee; and Victor Brossett

June 27, 2011

WESTBURY GROUP LLC,
PLAINTIFF,
v.
SPECIALTY FUELS BUNKERING LLC; F. JAVIER BRITO; INGRAM LEE; AND VICTOR BROSSETT, DEFENDANTS.



The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge

ORDER GRANTING MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

Defendants Specialty Fuels Bunkering LLC ("Specialty"), F. Javier Brito, Ingram Lee and Victor Brossett, move to dismiss the complaint for lack of subject matter jurisdiction and lack of personal jurisdiction and for change of venue. Plaintiff Westbury Group LLC ("Westbury") opposes all motions. Pursuant to Local Rule 7.1(d)(1), this matter is appropriate for decision without oral argument. For the reasons set forth below, the motion to dismiss for lack of subject matter jurisdiction is denied without prejudice, the motion to dismiss for lack of personal jurisdiction is granted, and the motion to transfer is denied as moot. The Clerk of Court is instructed to close the file.

BACKGROUND

On March 16, 2011, Westbury commenced this action alleging claims against all Defendants for breach of contract, breach of the covenant of fair dealing and good faith, and unjust enrichment. Westbury seeks compensatory damages as well as injunctive relief.

Westbury, a limited liability company with its principal place of business in Connecticut, brings claims arising from an October 18, 2010 Agreement ("Agreement") entered into between Specialty and Navitas Corporate Finance, LLC ("Navitas"). (Compl. ¶¶2, 8). On November 8, 2010 Navitas, with the consent of Specialty, an Alabama LLC with its principal place of business in Alabama, (Compl. ¶3), assigned its rights under the Agreement to Westbury. (Compl. ¶9, 10). Westbury does not allege the citizenship of its individual members nor that of the individual defendants, all alleged shareholders in Specialty. (Compl. ¶4).

Navitas provides corporate financing activities and Specialty is a company providing fueling services. Pursuant to the Agreement,

Navitas agreed to provide corporate finance services to Specialty including advising with respect to Specialty's strategic growth plan, advising, and assisting Specialty with respect to its financing requirements, identifying, contracting, introducing and negotiating with financing sources and advising Specialty with respect to the structure of any financing transactions. In return, Specialty agreed to compensate Navitas with a "success fee" for any "Transactions" during the time of the engagement or a tail period. Inter alia, the success fee provides for a fee of 2% in cash (plus warrants) on the amount of any senior debt issued by the company during the term of the engagement and 12 months thereafter. (Compl. ¶8). Westbury alleges that it performed all required obligations under the Agreement, including, among other things, identifying, contacting, introducing and negotiating with financing sources. (Compl. ¶13). Ultimately, Westbury "recommended a transaction with PNC and then negotiated a proposal from PNC which was accepted by" Specialty. (Compl. ¶14). Specialty did not pursue the financing offered by PNC. (Compl. ¶15). Westbury has since learned that Specialty obtained financing of $30-50 million and estimates that Specialty "will enter into additional financing aggregating at least $80 million over the next 12 months." (Compl. ¶17).

Westbury alleges that Specialty breached the Agreement by, "among other things, refusing to cooperate with the implementation of the agreement, refusing to communicate with Navitas/Westbury and refusing to pay Navitas/Westbury its agreed-upon 'success fee.'" (Compl. ¶18).

Specialty now moves to dismiss the complaint for lack of subject matter jurisdiction, to dismiss for lack of personal jurisdiction, and to transfer venue. All motions are opposed.

DISCUSSION

Subject Matter Jurisdiction

Specialty moves to dismiss the complaint for lack of subject matter jurisdiction because Westbury does not allege the citizenship of either parties' member entities, whether individual partners or corporations. Specialty correctly argues that the citizenship of limited liability companies is the citizenship of its members. Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006).

The court denies this motion without prejudice because Westbury represents that all parties are diverse and that it can amend the complaint to assert, to the extent known, the citizenship of all parties. The court notes that the discovery process will ...


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