JEFFERSON CITY – A federal judge refused to dismiss a complaint in an asset ownership dispute, stating that the case is subject to jurisdiction in Missouri.
In January 2017, plaintiff LearSchmidt Investment Group entered into an asset purchase agreement with IQ Payment Systems, which does business as Alpine Payment Systems, to buy the revenues from a portfolio of merchant accounts. Under the terms of that deal, Alpine would transfer all its interests in those accounts to LearSchmidt, which would have notice and right of first refusal to buy the rights or interests in the accounts whenever Alpine wanted to sell.
In an opinion issued May 28, Judge Nanette Laughrey of the U.S. District Court for the Western District of Missouri said LearSchmidt accused Alpine of breaching that deal by selling its rights and interests to AB-Alpine SPE. Since AB-Alpine is Alpine’s successor, it is named as the defendant in the litigation, and moved to dismiss the complaint for lack of personal jurisdiction since it is based in Boca Raton, Florida, and has no presence in Missouri.
LearSchmidt argued against dismissal by saying Missouri law’s “long-arm statute” means AB-Alpine can be sued in Missouri as a continuation of or corporate successor to Alpine. While the ruling states AB-Alpine said it did buy “many of the assets and liabilities of (Alpine),” it denied assuming and of the asset purchase agreement’s liabilities
“To determine whether a successor company is ‘merely a continuation’ of its predecessor the court considers whether there has been ‘a transfer or sale of all, or substantially all’ of the predecessor’s assets,” Laughrey wrote, pointing to established precedent in the U.S. 8th Circuit Court of Appeals.
Laughrey said LearSchmidt showed a substantial transfer of assets between Alpine and AB-Alpine, and that AB-Alpine acknowledged that when the suit was filed in state court, and for a time after it was removed to federal court, Brian McDevitt was a part owner of AB-Alpine, having been a part owner of Alpine and one of two people who executed the asset purchase agreement.
“...Based on the allegations in the first amended complaint, AB-Alpine continued the exact same business operations (as Alpine), at least with respect to its assistance with maintenance of the accounts and interactions with LearSchmidt,” Laughrey wrote.
She also said AB-Alpine’s assertion it doesn’t use Alpine’s name or employees is a “self-serving statement contradicts the allegations raised in LearSchmidt’s first amended complaint and basic common sense.”
LearSchmidt alleged it had phone and email communication with McDevitt as well as Darrell Dirks as both Alpine and AB-Alpine representatives, noting McDevitt continued to use an email address ending in “@iqatm.com.” It also alleged AB-Alpine contacted Alpine’s customers to advise them of a corporate name change, but didn’t tell LearSchmidt about the 2018 asset purchase.
Determining AB-Alpine is a successor, Laughrey said the only other issue is whether Alpine itself had ties to Missouri sufficient to establish her court’s jurisdiction.
“Alpine purposefully availed itself of the privilege of conducting activities within Missouri when it negotiated and entered into a contract with LearSchmidt in Missouri, agreed and delivered payments due to LearSchmidt under the APA in Missouri and attempted to solicit accounts from LearSchmidt, knowing that LearSchmidt was a Missouri company,” Laughrey wrote. “...There is a direct relationship between the contacts and the cause of action here.”
Laughrey further said the agreement itself said ensuing questions would be handled under Missouri law and that AB-Alpine didn’t argue it was inconvenient to defend itself in Missouri. She denied the motion to dismiss.