WALL RECYCLING, LLC v. 3TEK GLOBAL, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

WALL RECYCLING, LLC, )

)

Plaintiff, )

)

v. ) 1:20cv371

)

3TEK GLOBAL, LLC, )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

THOMAS D. SCHROEDER, Chief District Judge.

This is an action alleging breach of contract for the sale of

an industrial shredder. Before the court is the motion of

Defendant 3TEK Global, LLC (“3TEK”) to dismiss pursuant to Federal

Rules of Civil Procedure 12(b)(2) and 12(b)(6) or, in the

alternative, to transfer to the United States District Court for

the Northern District of Texas.1 (Doc. 6.) Plaintiff Wall

Recycling, LLC (“Wall”) opposes the motion. (Doc. 12.) For the

reasons set forth below, 3TEK’s motions to dismiss and to transfer

will be denied.

I. BACKGROUND

The allegations set out in the complaint and accompanying

documents (to the extent they can be considered as to the

particular motion), taken in the light most favorable to Wall as

1 3TEK’s earlier motion to dismiss pursuant to Federal Rule of Civil

Procedure 12(b)(3) (see Doc. 6) has been withdrawn (Doc. 14 at 8 n.6).

the non-moving party, show the following:

Plaintiff Wall is a recycling company operating in central

and eastern North Carolina. (Doc. 2 ¶ 8.) Defendant 3TEK is a

manufacturer of scrap metal processing equipment, including

industrial shredders, with its principal place of business in

Texas. (Id. ¶¶ 2, 9.) In April 2018 Dan Wall, the owner of Wall,

met Bill Padula, 3TEK’s Vice President of Sales, at the Institute

of Scrap Recycling Industries, Inc. convention is Las Vegas,

Nevada. (Doc. 12-1 ¶ 12.) Wall was familiar with 3TEK from prior

ISRI meetings and 3TEK’s advertisements in various trade

publications. (Id. ¶¶ 7-10.) After the Las Vegas meeting, Dan

Wall states that he received “several phone calls” from Padula and

that on “several occasions” Padula requested a meeting with him

“for the purpose of discussing 3TEK’s shredders and a potential

sale to Wall Recycling.” (Id. ¶¶ 13-14.) Dan Wall further states,

“At first, I declined [Padula’s] requests because I typically do

not take meetings with vendors. However, given my interest in

potentially acquiring a 3TEK shredder, I accepted one of Mr.

Padula’s offers to meet me at Wall Recycling’s facility in Raleigh,

North Carolina.”2 (Id. ¶ 14.)

2 As discussed in Part II.A infra, the parties’ characterizations of who

initiated contact regarding a possible sale are at odds with each other.

3TEK disputes Wall’s portrayal of the key events and states that it was

Wall who first approached Padula and requested quotes for 3TEK shredders.

(Doc. 6-1 ¶¶ 4-5.) The court sets out the facts in the light most

favorable to Wall here.

According to Dan Wall, an in-person meeting between himself

and Padula occurred in North Carolina in October 2018 “during which

time Mr. Padula marketed 3TEK’s industrial shredders and sought to

complete a sale with Wall Recycling.” (Id. ¶ 15.) Communications

continued between Wall and 3TEK, including a second in-person

meeting in North Carolina in December 2018 during which Wall states

he reached a “handshake agreement” with Padula on the material

terms of a sale of a 3TEK shredder. (Id. ¶¶ 16-18.) Wall states

he signed a first written offer for an industrial shredder in

December 2018 before receiving a second written offer in February

2019, which he also signed while in North Carolina and returned to

3TEK. (Id. ¶¶ 17, 19-20.) The agreement was for a 3TEK NEXT 6820

shredder with additional components (the “NEXT Shredder”) for a

total price of $2,299,500. (Doc. 2 ¶ 10.) The complaint alleges

that the NEXT Shredder was a “unique piece of equipment

manufactured exclusively by 3TEK” (id. ¶ 12), and Dan Wall further

states that 3TEK “is the only company that provides parts, service,

and support for this shredder” (Doc. 12-1 ¶ 27).

The nature of the February 2019 agreement is at the heart of

this lawsuit. The form, which is signed by both parties, is titled

“RE: NEXT 6280 with Mobile Downstream Quotation” (“Quotation”).

(Doc. 12-1 at 11-21.) Wall alleges that the Quotation is a binding

contract for the sale of a Next Shredder. In exchange for a

$100,000 deposit, Wall states the Quotation conferred on Wall a

right of first refusal for upcoming deliveries of the NEXT

Shredder.3 (Doc. 2 ¶ 20.) If 3TEK obtained a deposit and sales

contract from another customer, Wall had 72 hours to exercise its

right to keep its delivery slot. (Id. ¶ 21.) If Wall exercised

this right, the Quotation stated that 3TEK would then require

execution of a separate sales contract and payment of an additional

deposit by Wall to total 20 percent of the purchase price. (Id.

¶¶ 22.) It is undisputed that in April 2019, 3TEK informed Wall

that its right of first refusal had been triggered; Wall exercised

its right and paid the remainder of its deposit, an additional

$359,900; but Wall did not sign the separate sales contract by

3TEK.4 (Id. ¶¶ 24-28; Doc. 6-1 ¶¶ 9-11.) Wall alleges that it

was not required to execute 3TEK’s separate sales contract and,

even if it was, 3TEK waived this requirement by its conduct in

accepting Wall’s deposit, pledging a delivery date, and updating

Wall on the status of the shredder. (Doc. 2 ¶¶ 27-29.) In reply,

3TEK says that the signed Quotation was merely a right of first

refusal and that the Quotation expressly required Wall to sign a

separate sales contract by the end of 2019 to hold purchase of the

shredder. (Doc. 6-1 ¶ 8.)

3 It appears that 3TEK manufactured each NEXT Shredder one at a time,

procuring commitments from individual buyers several months in advance

before starting a new manufacturing cycle. (Doc. 2 ¶ 18.)

4 Wall sent back proposed modifications to 3TEK’s sales contract, but

the parties never signed either version. (Doc. 2 ¶ 28; Doc. 6-1 ¶¶ 11-

12.)

Wall alleges that 3TEK set, and then failed to abide by, three

separate delivery deadlines for the shredder -- the end of

September 2019, December 31, 2019, and January 24, 2020. (Doc. 2

¶¶ 30, 35, 37.) Wall further alleges that as a result of missing

the December 2019 deadline, 3TEK modified its contract to give

Wall a 10 percent discount on the shredder and a $15,000 credit

for use on replacement parts, and to assemble the shredder for

free in North Carolina. (Id. ¶ 36.) Wall alleges that in February

2020, 3TEK informed Wall that a NEXT Shredder was complete but

3TEK would not deliver it because the parties did not have a

contract, rejected Wall’s offer to purchase, and refunded Wall’s

deposit. (Id. ¶¶ 39-40.) This amounts, in Wall’s view, to a

material breach of the contract.5 (Id. ¶ 41.)

Wall filed a complaint in the General Court of Justice,

Superior Court Division in Durham County, North Carolina, on March

23, 2020. (Doc. 2.) 3TEK timely removed the case to this court

and moved to dismiss. (Doc. 6.) Wall filed a response in

opposition (Doc. 12), and 3TEK filed a reply (Doc. 14). The issues

are fully briefed and ready for decision.

5 Once again, and as discussed in Part II.B infra, 3TEK’s

characterizations of these events is different. 3TEK states that it

gave Wall’s delivery slots to other customers because Wall never signed

the separate sales contract, that Wall cancelled the Quotation in October

2019, and that 3TEK sent Wall a new quote with certain concessions in

February 2020 but the parties again never finalized a sales contract,

at which point 3TEK refunded Wall’s original deposit. (Doc. 6-1 ¶¶ 12-

21.)

II. ANALYSIS

A. Motion to Dismiss Pursuant to Rule 12(b)(2)

3TEK first moves to dismiss for lack of personal jurisdiction

pursuant to Federal Rule of Civil Procedure 12(b)(2). (Doc. 6

¶ 2.) When properly raised, personal jurisdiction is a threshold

question that precedes consideration of the merits of a claim. See

Sucampo Pharm., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 548

(4th Cir. 2006)(“[T]he dismissal of a case on an issue relating to

the merits of the dispute, such as failure to state a claim, is

improper without resolving threshold issues of jurisdiction,

including personal jurisdiction.”). Accordingly, the court will

address this ground for dismissal first.

“[W]hen the court addresses the personal jurisdiction

question by reviewing only the parties’ motion papers, affidavits

attached to the motion, supporting legal memoranda, and the

allegations in the complaint, a plaintiff need only make a prima

facie showing of personal jurisdiction to survive the

jurisdictional challenge.” Grayson v. Anderson, 816 F.3d 262, 268

(4th Cir. 2016) (citing Combs v. Bakker, 886 F.2d 673, 676 (4th

Cir. 1989)). The court “must construe all relevant pleading

allegations in the light most favorable to the plaintiff, assume

credibility, and draw the most favorable inferences for the

existence of jurisdiction.” Combs, 886 F.2d at 676. Where both

parties present evidence regarding personal jurisdiction, “factual

conflicts must be resolved in favor of the party asserting

jurisdiction for the limited purpose of determining whether a prima

facie showing has been made.” Vision Motor Cars, Inc. v. Valor

Motor Co., 981 F. Supp. 2d 464, 468 (M.D.N.C. 2013) (citing Mylan

Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 62 (4th Cir. 1993).

Analysis of personal jurisdiction consists of a two-part

inquiry: first, whether the exercise of jurisdiction is authorized

under the state’s long-arm statute; and second, whether the

exercise of jurisdiction comports with the due process

requirements of the Fourteenth Amendment. Pan-Am. Prods. &

Holdings, LLC v. R.T.G. Furniture Corp., 825 F. Supp. 2d 664, 677

(M.D.N.C. 2011). Under North Carolina’s long-arm statute, N.C.

Gen. Stat. § 1-75.4, North Carolina courts are permitted to

exercise “personal jurisdiction over a defendant to the outer

limits allowable under federal due process.” Universal Leather,

LLC v. Koro AR, S.A., 773 F.3d 553, 558 (4th Cir. 2014). Thus,

the two-part inquiry merges into a single question: whether the

exercise of jurisdiction comports with due process. Id. at 559.

Under the Due Process Clause, a court can have personal

jurisdiction over a defendant in either of two ways: either general

personal jurisdiction over a defendant who has “‘continuous and

systematic’ contacts with the forum state regardless of where the

relevant conduct occurs,” or specific personal jurisdiction, which

“requires only that the relevant conduct have such a connection

with the forum state that it is fair for the defendant to defend

itself in that state.” Pan-Am., 825 F. Supp. 2d at 677 (quoting

CFA Inst. v. Inst. of Chartered Fin. Analysts of India, 551 F.3d

285, 292 n.15 (4th Cir. 2009).

Construing the complaint and affidavits in the light most

favorable to Wall, the court finds no contention or evidence that

general jurisdiction exists. The inquiry will therefore proceed

solely as to the question of specific jurisdiction. See Auto-

Owners Ins. Co. v. LBC Landscaping Servs., Inc., No. 1:19CV1011,

2020 WL 3893284, at *3 (M.D.N.C. July 10, 2020).

Specific personal jurisdiction exists when the cause of

action arises out of the defendant’s contacts with the forum state.

Pan-Am., 825 F. Supp. 2d at 677. Specific jurisdiction requires

the court to determine: “(1) the extent to which the defendant

‘purposefully avail[ed]’ itself of the privilege of conducting

activities in the State; (2) whether the plaintiff’s claims arise

out of those activities directed at the State; and (3) whether the

exercise of personal jurisdiction would be constitutionally

reasonable.” Id. at 680 (quoting ALS Scan, Inc. v. Digital Serv.

Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002)). Each prong

must be satisfied. Consulting Eng’rs Corp. v. Geometric Ltd., 561

F.3d 273, 278–79 (4th Cir. 2009).

The first prong directs the court to consider “the extent to

which the defendant purposefully availed itself of the privilege

of conducting activities in the State.” Id. at 278. The

purposeful availment inquiry is “grounded on the traditional due

process concept of ‘minimum contacts’” in which the court asks

whether the defendant’s conduct and connection with the forum state

makes it reasonably foreseeable that he could be “haled into court

there.” Universal Leather, 773 F.3d at 559. The analysis is

“flexible,” id. at 560, and requires a defendant to have a

“substantial connection” to the forum state rather that contacts

that are merely “random, fortuitous, or attenuated.” Burger King

Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985). The Fourth Circuit

has articulated a non-exhaustive list of factors to consider in

determining whether a business has purposefully availed itself of

the privilege of conducting business in a forum state:

(1) whether the defendant maintains offices or agents in

the forum state; (2) whether the defendant owns property

in the forum state; (3) whether the defendant reached

into the forum state to solicit or initiate business;

(4) whether the defendant deliberately engaged in

significant or long-term business activities in the

forum state; (5) whether the parties contractually

agreed that the law of the forum state would govern

disputes; (6) whether the defendant made in-person

contact with the resident of the forum in the forum state

regarding the business relationship; (7) the nature,

quality and extent of the parties’ communications about

the business being transacted; and (8) whether the

performance of contractual duties was to occur within

the forum.

Consulting Eng’rs Corp., 561 F.3d at 278 (internal citations

omitted).

After careful consideration of all the relevant factors, the

court finds that Wall has made out a prima facie case for the

existence of specific personal jurisdiction at this time.

As to the first two factors, it is uncontested that 3TEK does

not have an office or agents or own property in North Carolina.

(Doc. 7 at 14; Doc. 12 at 8.)

The third factor asks whether 3TEK “reached into” North

Carolina to solicit or initiate business. See Consulting Eng’rs

Corp., 561 F.3d at 278. Under Fourth Circuit precedent, “special

weight” is given to this factor. CFA Inst., 551 F.3d at 295 n.17.

Courts will often find a defendant’s contacts insufficient for

personal jurisdiction if the plaintiff initiated contact with the

defendant. See, e.g., Diamond Healthcare of Ohio, Inc. v. Humility

of Mary Health Partners, 229 F.3d 448, 451 (4th Cir. 2000);

Worldwide Ins. Network, Inc. v. Trustway Ins. Agencies, LLC, No.

1:04CV00906, 2006 WL 288422, at *5 (M.D.N.C. Feb. 6, 2006); Sea-

Roy Corp. v. Parts R Parts, Inc., No. 1:94CV00059, 1996 WL 557857,

at *6 (M.D.N.C. July 30, 1996) (“[P]ersonal jurisdiction cannot be

exercised over a foreign supplier who has no contact with the forum

other than being solicited to contract by an individual in the

forum.”); cf. Burlington Indus., Inc. v. Yanoor Corp., 178 F. Supp.

2d 562 (M.D.N.C. 2001) (personal jurisdiction exists when out-of-

state defendant initiated contact with North Carolina plaintiff

and parts of the contract were negotiated over two in-person

meetings in North Carolina, even though the defendant had no office

or agent in North Carolina). The rationale for giving this factor

such importance appears to be to ensure the nonresident defendant’s

contacts with the forum state arose out of its deliberate actions,

and not merely because the plaintiff happened to be located there.

See Worldwide Ins., 2006 WL 288422, at *5 (“[T]he evidence suggests

that the contacts that exist between Defendants and North Carolina

arose because [Plaintiff] was located in North Carolina and not

because Defendants purposely directed their activities at the

state of North Carolina.”).

Given the importance the Fourth Circuit has placed on this

factor, it is understandable that the parties devote significant

attention to it in their briefs. (See Doc. 7 at 15-18; Doc. 12 at

8-9; Doc. 14 at 1-3.) Each party’s version of who initiated

contact is at odds with the other. 3TEK states that it was Wall

CEO Dan Wall who “initiated contact with 3TEK in Nevada to

establish a business relationship with 3TEK in Texas, and 3TEK’s

contacts with North Carolina all relate to Wall’s solicitation.”

(Doc. 7 at 15.) Wall, while acknowledging that Dan Wall and Bill

Padula first met in Las Vegas, alleges that 3TEK was the main

pursuer: “3TEK pursued Wall Recycling as a potential customer in

North Carolina. Padula called Wall to promote 3TEK’s products and

repeatedly requested meetings with Wall in North Carolina. Wall

agreed to a meeting in Raleigh in October 2018, during which Padula

solicited Wall Recycling’s business. Communications between Wall

and Padula continued thereafter, and in December 2018, Wall and

Padula reached the material terms of an agreement while together

in Wall’s office in Raleigh.” (Doc. 12 at 8-9; see also Doc. 12-

1 ¶¶ 13-18.)

At this juncture, “factual conflicts must be resolved in favor

of the party asserting jurisdiction for the limited purpose of

determining whether a prima facie showing has been made.” Vision

Motor Cars, 981 F. Supp. 2d at 468 (citation omitted). Construing

the evidence in the light most favorable to Wall, the court finds

that Wall has plausibly stated that 3TEK initiated contact with

Wall, thereby reaching into North Carolina to solicit business.

This third factor weighs in favor of exercising jurisdiction.

The fourth factor, whether 3TEK deliberately engaged in

significant or long-term business in North Carolina, is also

disputed. 3TEK states that it “has not deliberately engaged in

any significant or long-term business activities in North

Carolina,” (Doc. 7 at 14), and the record before the court does

not reveal the extent or nature of 3TEK’s business in North

Carolina before the events giving rise to the present litigation.

Wall responds that even this single contract can evince a

“substantial connection” to North Carolina due to its size -- $2.3

million -- and the possibility of a long-term relationship. (Doc.

12 at 9-10.) Specifically, Dan Wall states that because the

shredder was unique, Wall would be required to purchase replacement

parts exclusively from 3TEK over the course of the product’s

expected ten-year life and notes that 3TEK offered Wall a $15,000

credit during contract negotiations for this very purpose. (Doc.

12-1 ¶¶ 28-29.)

3TEK is correct that the alleged contract by its terms

contemplated a more limited relationship, i.e., a single sale whose

activity in North Carolina was limited to final assembly of the

shredder and one to two weeks of on-site training. (Doc. 14 at 4;

see also Doc. 12-1 at 12.) Nevertheless, given the nature of the

goods involved, it was certainly foreseeable that by this sale

3TEK would have future contacts in North Carolina. The shredder

was an expensive, proprietary piece of equipment. (Doc. 2 ¶ 12;

Doc. 12-1 ¶ 27.) The express warranty was for potentially 14

months (Doc. 12-1 at 21) and Dan Wall has stated that he expected

the shredder to last ten years (id. ¶ 29), a contention 3TEK did

not dispute. If that is the case, it is foreseeable that 3TEK

would have future shipments of parts into North Carolina and

assembly therein, possibly for as long as ten years and at

substantial cost. A contract for the shredder thus would not

create a relationship with North Carolina that is based on merely

“attenuated” contacts but points to a more substantial, long-term

connection. See Burger King, 471 U.S. at 475.

The fifth factor is whether the parties contractually agreed

that the law of North Carolina would govern disputes. The

existence of a contract, of course, is disputed in this case.

However, there is nothing to indicate that the parties agreed that

North Carolina law would govern. Wall signed the Quotation, which

does not contain a choice-of-law provision. (See Doc. 12-1 at 11-

21.) 3TEK’s standard sales contract, however, does contain a

choice-of-law provision in favor of Texas law. (Doc. 6-7 at 5;

Doc. 7 at 14.) Wall did not sign that standard contract, although

the company circulated proposed revisions to it. (Doc. 2 ¶ 28;

Doc 6-8.) As 3TEK states, and Wall does not dispute, none of the

proposed revisions objected to the Texas choice-of-law provision.

(See Doc. 7 at 15.) In any event, it is Wall’s contention that

the Quotation constituted a binding contract and did not require

Wall to sign 3TEK’s standard sales contract, and that even if it

did, 3TEK waived this requirement by its conduct. (Doc. 2 ¶¶ 27-

29.) Viewed in the light most favorable to Wall, it cannot be

said that the parties contractually agreed to a Texas -- or any

other state -- choice-of-law provision.

The final three factors focus on the nature and extent of the

parties’ interactions, including performance of the contract.

According to Dan Wall, Bill Padula made three in-person visits to

Wall’s facility in North Carolina, specifically in October 2018,

December 2018 -- at which point, Wall alleges, the parties reached

a “handshake agreement” on the terms of a deal -- and January 2020.

(Doc. 12-1 ¶¶ 15, 18, 24.) Wall alleges that he signed 3TEK’s

offer while in North Carolina and returned it to 3TEK. (Id. ¶

20.) In addition, the parties engaged in various communications

over email, phone, and text message about the agreement during

this time period. (Doc. 7 at 17-18; Doc. 12 at 11.) Finally, it

appears that the shredder was to be manufactured primarily in Texas

before being shipped to Wall in North Carolina for final assembly

for up to five days, plus one to two weeks of on-site training.

(Doc. 12-1 at 12; Doc. 14 at 4.)

Any one of these facts would be insufficient to confer

jurisdiction. A course of correspondence, some of which reaches

the forum state, is not enough. See Consulting Eng’rs Corp., 561

F.3d at 281 (the “exchange of four brief emails, several telephone

conversations . . . and the exchange of the various drafts” do not

confer jurisdiction over a nonresident defendant based in India

who did not initiate contact nor even visit plaintiff’s home

state). Nor are limited in-person visits to the forum state during

contract negotiations shorn of additional facts. See Worldwide

Ins., 2006 WL 288422, at *5 (no jurisdiction in North Carolina

when defendant visited North Carolina only a single time, the rest

of the contract was negotiated in defendant’s home state of Georgia

or over the phone, and all of defendant’s work was to be performed

in Georgia).

But the court is not limited to any single fact and must

consider all the relevant factors. See Consulting Eng’rs Corp.,

561 F.3d at 278 (noting that the purposeful availment inquiry “is

not susceptible of mechanical application” and providing the eight

non-exclusive factors to consider in the business context). Having

done so, the court finds that, at this juncture, Wall has made out

a prima facie case as to the exercise of personal jurisdiction

over 3TEK. 3TEK is based in Texas and does not own property or

have an office or agents in North Carolina. However, construing

the evidence in the light most favorable to Wall and “draw[ing]

the most favorable inferences for the existence of jurisdiction,”

as the court is bound to do at this stage, see Combs, 886 F.2d at

676, it can be fairly said that 3TEK “purposefully directed” its

activities toward North Carolina, see Pan-Am., 825 F. Supp. 2d at

683. Wall alleges that “3TEK pursued Wall Recycling as a potential

customer” in the form of repeated calls and requests for meetings

and three in-person visits. (Doc. 12 at 8.) According to Dan

Wall, he initially declined 3TEK’s requests before finally

accepting an offer to meet in North Carolina. (Doc. 12-1 ¶ 14.)

Wall further states the parties negotiated while in North Carolina

such that they came to a “handshake agreement,” (id. ¶ 18), and

that he later signed the alleged contract in North Carolina (id.

¶ 20). The contract was for a $2.3 million proprietary shredder

that would be partially completed in North Carolina, and for which,

Wall alleges, Wall would be required to go to 3TEK for replacement

parts and services for the lifespan of the shredder -- up to ten

years. (Id. ¶¶ 23-29.) While 3TEK’s standard sales contract

contained a Texas choice-of-law provision, it does not appear from

the record before the court that the parties ever signed a contract

with that provision. (See Doc. 6-7 at 5; Doc. 2 ¶ 28.)

In sum, it can be fairly said that 3TEK “reached into” North

Carolina -- in the form of communications and visits spanning over

a year -- to solicit a multi-million-dollar contract that could

have led to further business for up to ten years had the deal gone

through. Pan-Am., 825 F. Supp. 2d at 680. The court thus finds

that the first prong of the personal jurisdiction analysis,

purposeful availment, is met here, at least for the purposes of a

prima facie case.

The second and third prongs are more easily addressed. As to

the second prong -- whether Wall’s claims arise out of 3TEK’s

activities directed at North Carolina -- it is clear that they do.

Wall brings a breach of contract claim for a contract that

allegedly comes from the very contacts that form the basis of

3TEK’s activities into North Carolina. In other words, it is

precisely because of 3TEK’s targeted activities into North

Carolina that the alleged contract was created and then breached.

The third prong -- whether exercising personal jurisdiction

could be “constitutionally reasonable” -- requires the court to

consider if litigation is “so gravely difficult and inconvenient

as to place the defendant at a severe disadvantage in comparison

to his opponent.” CFA Inst., 551 F.3d at 296 (quotations and

citations omitted). The court should also consider the interests

of North Carolina as the forum state and Wall’s interest in

obtaining relief. See id. These considerations also weigh in

favor of exercising personal jurisdiction here. It would not be

“gravely difficult” for 3TEK to litigate in North Carolina; after-

all, 3TEK had prior in-person visits to North Carolina to negotiate

the alleged contract. Cf. id. at 296 (no grave difficulty in

requiring a company based in India to litigate in Virginia on the

facts presented). Finally, North Carolina has a valid interest in

the resolution of disputes involving its businesses, especially

when North Carolina law is potentially involved, and Wall clearly

has an interest in obtaining any possible relief.

Accordingly, the court finds that Wall has made out a prima

facie case of specific personal jurisdiction over 3TEK, and 3TEK’s

motion to dismiss is therefore denied as to that ground.

B. Motion to Dismiss Pursuant to Rule 12(b)(6)

3TEK next moves to dismiss the complaint for failure to state

a claim upon which relief can be granted pursuant to Federal Rule

of Civil Procedure 12(b)(6). (Doc. 6 ¶ 4.) Specifically, 3TEK

argues that Wall has failed to plausibly allege a breach of

contract because there was no contract between the parties. (Doc.

7 at 19.)

A motion to dismiss under Rule 12(b)(6) is meant to “test[]

the sufficiency of a complaint” and not to “resolve contests

surrounding the facts, the merits of a claim, or the applicability

of defenses.” Republican Party of N.C. v. Martin, 980 F.2d 943,

952 (4th Cir. 1992). To survive such a motion, “a complaint must

contain sufficient factual matter, accepted as true, to ‘state a

claim to relief that is plausible on its face.’” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 570 (2007)). In considering a Rule 12(b)(6)

motion, a court “must accept as true all of the factual allegations

contained in the complaint,” Erickson v. Pardus, 551 U.S. 89, 94

(2007) (per curiam), and all reasonable inferences must be drawn

in the non-moving party’s favor, Ibarra v. United States, 120 F.3d

472, 474 (4th Cir. 1997). “Rule 12(b)(6) protects against

meritless litigation by requiring sufficient factual allegations

to raise a right to relief above the speculative level so as to

nudge the claims across the line from conceivable to plausible.”

Sauers v. Winston-Salem/Forsyth Cty. Bd. of Educ., 179 F. Supp. 3d

544, 550 (M.D.N.C. 2016) (alterations and quotations omitted). In

reviewing a 12(b)(6) motion, the court may “consider documents

attached to the complaint, see Fed. R. Civ. P. 10(c), as well as

those attached to the motion to dismiss, so long as they are

integral to the complaint and authentic.” Philips v. Pitt Cnty.

Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009).

As a threshold matter, the parties debate which state’s law

should apply to Wall’s breach-of-contract claim. (Doc. 7 at 19;

Doc. 12 at 14-16.) They do not appear to have agreed to a choice-

of-law provision. When a federal court sits in diversity, the

court applies the forum state’s choice-of-law rule. Klaxon Co. v.

Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). In North

Carolina, for claims for breach of contract, in the absence of an

agreement between the parties, North Carolina law applies to

“transactions bearing an appropriate relation to this State.” N.C.

Gen. Stat. § 25–1–301(b). North Carolina courts have interpreted

this provision to mean the applicable law is that of the state

with the “most significant relationship” to the contract. See

Dassault Falcon Jet Corp. v. Oberflex, Inc., 909 F. Supp. 345, 352

(M.D.N.C. 1995) (citing Boudreau v. Baughman, 368 S.E.2d 849, 855

(N.C. 1988)).

The court need not decide at this juncture whether North

Carolina or Texas is the state with the “most significant

relationship” to the claim and, hence, which state’s law will

apply. The material requirements for contract formation appear to

be the same in either state.6 See Vault, LLC v. Dell Inc., No.

6 Compare USAA Texas Lloyds Co. v. Menchaca, 545 S.W.3d 479, 501 n.21

(Tex. 2018) (elements of a valid contract under Texas law are offer,

acceptance, a meeting of the minds on the essential terms of the contract

(mutual assent), each party’s consent to the terms, and execution and

delivery of the contract with the intent that it be mutual and binding),

with Se. Caissons, LLC v. Choate Constr. Co., 784 S.E.2d 650, 654 (N.C.

Ct. App. 2016) (North Carolina law requires offer, acceptance,

consideration, and mutuality of assent to the contract’s essential terms

to form a valid contract).

1:18CV00633, 2019 WL 113726, at *5 n.7 (M.D.N.C. Jan. 4, 2019)

(“[W]hen the resolution of a choice-of-law determination would not

alter the disposition of a legal question, a reviewing court need

not decide which body of law controls.” (citation omitted)). The

parties likewise direct their contract-formation arguments to

these essential requirements, with Wall specifically alleging that

under either Texas or North Carolina law a contract was formed.

(Doc. 12 at 16-21.) The court will thus analyze Wall’s breach-

of-contract claim under North Carolina law. See Vault, 2019 WL

113726, at *5 n.7.

The alleged contract between the parties is governed by

Article 2 of the Uniform Commercial Code (“UCC”) as it concerns

the sale of goods. See N.C. Gen. Stat. § 25–2–102. “The Uniform

Commercial Code applies more liberal rules governing the formation

of contracts than the rules applied under traditional common law.”

Neugent v. Beroth Oil Co., 560 S.E.2d 829, 834 (N.C. App. 2002)

(quoting Fordham v. Eason, 521 S.E.2d 701, 705 (N.C. 1999)). Under

the UCC, “[a] contract for sale of goods may be made in any manner

sufficient to show agreement, including conduct by both parties

which recognizes the existence of such a contract.” N.C. Gen.

Stat. § 25-2-204(1); id. § 25–2–207(3) (“Conduct by both parties

which recognizes the existence of a contract is sufficient to

establish a contract for sale although the writings of the parties

do not otherwise establish a contract.”). “Even though one or

more terms are left open a contract for sale does not fail for

indefiniteness if the parties have intended to make a contract and

there is a reasonably certain basis for giving an appropriate

remedy.” Id. § 25–2–204(3).

Wall argues that the Quotation the parties signed in February

2019 is an enforceable contract for a NEXT Shredder. (Doc. 12 at

16-21.) However, the Quotation appears to be just that -- a quote.

The document is titled “RE: NEXT 6280 with Mobile Downstream

Quotation,” and the first line reads “Attached is the quote

requested for our NEXT 6820 Shredder.” (Doc. 12-1 at 11.) In

general, price quotations are not offers. See J.D. Fields & Co.

v. U.S. Steel Int’l, Inc., 426 F. App’x 271, 276 (5th Cir. 2011);

Audio Visual Assocs., Inc. v. Sharp Elecs. Corp., 210 F.3d 254,

259 (4th Cir. 2000) (applying the UCC as adopted in Maryland and

concluding “[w]ithout more, [price quotations] amount to an

invitation to enter into negotiations, but generally they are not

offers that can be accepted to form binding contracts”). However,

if a price quotation is sufficiently detailed, it can constitute

an offer capable of acceptance. See U.S. Steel, 426 F. App’x at

276; 77A C.J.S. Sales § 43 (2019) (“[P]rice quotations may be

‘offers,’ if they are sufficiently definite, in that they include

a description of the goods and the quantity, price, delivery terms,

and the time the price would be held, and only the buyer’s assent

is necessary to form a binding contract.”). For this to be the

case, “it must reasonably appear from the price quote that assent

to the quote is all that is needed to ripen the offer into a

contract.” U.S. Steel, 426 F. App’x at 277 (citation omitted).

If the price quote contains language that “would condition the

formation of a contract on some further step,” id. at 279, or “is

expressly qualified by statements that . . . look[] toward some

future contract,” 77A C.J.S. Sales § 43 (2019), then it is unlikely

to constitute an offer.

Here, the Quotation was considerably detailed. It came after

almost a year of conversations between Wall and 3TEK. It was

transmitted only to Wall. See Restatement (Second) of Contracts

§ 26, cmt. c (“In determining whether an offer is made relevant

factors include the terms of any previous inquiry, the completeness

of the terms of the suggested bargain, and the number of persons

to whom a communication is addressed.”). It included: 1) price;

2) quantity; 3) detailed product specifications; 4) shipping and

assembly details; 5) payment terms; 6) warranty information; and

7) a validity period. Under the liberal UCC contract-formation

rules, this would likely be enough to constitute a valid offer

that Wall could accept. See U.S. Steel, 426 F. App’x at 278 n.6

(collecting cases where similarly detailed price quotations were

valid offers and noting the “UCC tolerates a great deal of

incompleteness and even contradiction in offer and acceptance”).

However, and importantly, the Quotation also required the

execution of a separate sales contract and stated that it expired

at the end of 2019 if Wall did not pay the remainder of its deposit

and sign this separate contract, i.e., the Quotation was “expressly

qualified by statements that . . . look[] toward some future

contract.” See 77A C.J.S. Sales § 43 (2019). In full, the relevant

provision reads:

If 3TEK receives a signed Sales Contract with deposit

from another customer, we will extend to Elite Waste

Services seventy-two (72) hours to determine your course

of action. If for example you elect to take the second

slot, then 1.) Signing of the 3TEK Sales Contract will

be required; 2.) Payment of the balance of the initial

20% will be due and payable; and 3.) A finalized ready

to ship date from 3TEK will be pledged. If you elect to

pass, then your name will be attached to the next

machine.

(Doc. 12-1 at 12) (emphasis added). Even read in the light most

favorable to Wall, the Quotation appears by its terms to be a

separate agreement, i.e., that in return for Wall paying the first

$100,000 of its deposit, 3TEK would give Wall a right of first

refusal for a future shredder. The Quotation itself expressly

stated that a separate sales contract and deposit would be required

in order to receive the shredder if Wall exercised this right. In

other words, it does not “reasonably appear from the price quote

that assent to the quote is all that is needed to ripen the offer

into a contract” since additional requirements were included. See

U.S. Steel, 426 F. App’x at 277 (emphasis added). And it is

undisputed that Wall did not sign 3TEK’s separate sales contract,

despite the parties exchanging proposed revisions.

Nevertheless, Wall contends that 3TEK waived the requirement

of this separate sales contract in its course of dealing with Wall.

(Doc. 12 at 20-21.)

Waiver is “an intentional relinquishment or abandonment of a

known right or privilege.” Ernst v. N. Am. Co. for Life & Health

Ins., 245 F. Supp. 3d 680, 687 (M.D.N.C. 2017) (quoting Bombardier

Cap., Inc. v. Lake Hickory Watercraft, Inc., 632 S.E.2d 192, 196

(N.C. App. 2006)). Waiver may be express or “may arise from the

acts and conduct of the party which would naturally and properly

give rise to an inference that the party intended to waive the

agreement.” Guerry v. Am. Tr. Co., 68 S.E.2d 272, 275 (N.C. 1951).

There is no allegation of express waiver of the requirement of a

separate sales contract. Instead, Wall alleges that 3TEK waived

through its conduct. (Doc. 12 at 20-21.) In reply, 3TEK states

that Wall “cannot plead waiver as an affirmative claim.” (Doc. 7

at 22 n. 4; Doc. 14 at 7.)

But 3TEK misconstrues Wall’s position. Wall is not “pleading”

waiver -- Wall is pleading breach of contract.7 Wall is alleging

that the Quotation became a binding contract for the sale of a

7 This distinguishes Ernst v. N. Am. Co. for Life & Health Ins., 245 F.

Supp. 3d 680 (M.D.N.C. 2017), cited by 3TEK. There, the plaintiff pled

both breach of contract and a separate claim for “estoppel/waiver.” Id.

at 684. This court found that the waiver “claim” was “no more than a

restatement of [plaintiff’s] contract claim” and dismissed it. Id. at

687. Here, Wall brings a claim for breach of contract, not for “waiver.”

NEXT Shredder and, to the extent the Quotation required a separate

contract, 3TEK waived that requirement. (Doc. 12 at 20-21.)

“[T]he concept of waiver [is] . . . designed to prevent the waiving

party from lulling the other party into a belief that strict

compliance with a contractual duty will not be required and then

either suing for noncompliance or demanding compliance for the

purpose of avoiding the transaction.” 13 Williston on Contracts

§ 39:15 (4th ed.) (emphasis added). Wall alleges that “3TEK waived

the requirement [of a separate sales contract] through its

conduct.” (Doc. 2 ¶ 29.) Wall alleges that “the issue of a

sperate sales contract was dropped by 3TEK.” (Id. ¶ 28.)

Specifically, Wall claims that 3TEK “pledged a firm delivery date,

continued to provide Wall Recycling updates regarding the

manufacture of the second NEXT Shredder, accepted Wall Recycling’s

deposit, and repeatedly acknowledged Wall Recycling’s right to the

second delivery slot for a NEXT Shredder, without requiring Wall

Recycling to execute 3TEK’s standard sales contract.” (Id. ¶ 29.)

These are factual questions that the court, restricted in its

review to the complaint and limited attached materials, cannot

resolve at this juncture.8 To be sure, at least some of these

8 Each party has provided, in the form of declarations and supporting

exhibits, conflicting facts as to waiver. However, because a motion to

dismiss “tests the sufficiency of a complaint,” see Martin, 980 F.2d at

952, the court is “generally limited to a review of the allegations of

the complaint itself.” Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159,

165–66 (4th Cir. 2016). A court can consider documents explicitly

incorporated into the complaint by reference or attached as exhibits,

allegations are equally consistent with 3TEK performing under the

terms of the Quotation as they are with waiver.9 However, if it

is true that 3TEK “dropped” the issue of a separate sales contract

and “repeatedly acknowledged” Wall’s right to a shredder “without

requiring Wall Recycling to execute 3TEK’s standard sales

contract,” then Wall has at least pled facts that, taken as true

at the motion to dismiss stage, plausibly allege waiver of the

separate sales contract. (Doc. 2 ¶¶ 28-29.) Given the detailed

terms of the Quotation and the UCC’s liberal contract-formation

rules, see N.C. Gen. Stat. §§ 25-2-204(1), 25-2-207(3), the

combination of the Quotation and subsequent actions plausibly

state a valid contract. While the court finds Wall’s complaint

survives the relatively low hurdle of plausibility, it remains to

be determined whether Wall’s version of the facts (in the face of

as well as documents submitted by the party moving for dismissal but

only if the document was integral to the complaint and there is no

dispute about its authenticity. See id. at 166. Despite the potentially

sweeping language, that last category -- documents attached by the moving

party -- is very narrow. It includes, for example, a document that forms

the basis of plaintiff’s fraud claim and which plaintiff explicitly

references in its complaint, but which was provided by the defendant in

its motion to dismiss and not by the plaintiff. See Am. Chiropractic

Ass’n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004).

Here, the court can consider the Quotation, which was expressly

referenced in Wall’s complaint (see Doc. 2 ¶¶ 10, 20-22) and whose

authenticity is not in dispute, but it will not consider the parties’

dueling exhibits, such as emails and declarations about the meaning of

the Quotation or whether waiver occurred. Such factual disputes must

be resolved another day.

9 For example, 3TEK’s providing a delivery date and Wall’s payment of

the remainder of its deposit were required under the Quotation for Wall

to be eligible to exercise its right of first refusal.

express contrary language of the Quotation), if believed, is

sufficient to make out a prima facie claim. See Wright v. North

Carolina, 787 F.3d 256, 264 n.4 (4th Cir. 2015) (“The Supreme Court

has admonished courts not to confuse evidentiary standards that

govern plaintiffs’ burden at summary judgment with the liberal

pleading requirements established by Rule 8(a) of the Federal Rules

of Civil Procedure.”).

C. Motion to Transfer

Finally, 3TEK moves in the alternative for a transfer of venue

to the Northern District of Texas. (Doc. 6 ¶ 5.)

The federal transfer statutes provides that, “For the

convenience of parties and witnesses, in the interest of justice,

a district court may transfer any civil action to any other

district or division where it might have been brought or to any

district or division to which all parties have consented.” 28

U.S.C. § 1404(a). In considering a motion to transfer under

§ 1404(a), a court weighs the following discretionary factors:

(1) the plaintiff’s initial choice of forum; (2)

relative ease of access to sources of proof; (3)

availability of compulsory process for attendance of

unwilling witnesses, and the cost of obtaining

attendance of willing and unwilling witnesses; (4)

possibility of a view of the premises, if appropriate;

(5) enforceability of a judgment, if one is obtained;

(6) relative advantage and obstacles to a fair trial;

(7) other practical problems that make a trial easy,

expeditious, and inexpensive; (8) administrative

difficulties of court congestion; (9) local interest in

having localized controversies settled at home; (10)

appropriateness in having a trial of a diversity case in

a forum that is at home with the state law that must

govern the action; and (11) avoidance of unnecessary

problems with conflicts of laws.

Speed Trac Techs., Inc. v. Estes Express Lines, Inc., 567 F. Supp.

2d 799, 802 (M.D.N.C. 2008). The moving party bears the burden of

proving that the balance of factors weighs in favor of transfer.

Id. “[A] plaintiff’s choice of forum is given considerable weight

and, ‘unless the balance is strongly in favor of the defendant,

the plaintiff’s choice of forum should rarely be disturbed.’”

Vient v. Sanford Herald, No. 1:19CV2, 2020 WL 4572711, at *4

(M.D.N.C. Aug. 7, 2020) (quoting Collins v. Straight, Inc., 748

F.2d 916, 921 (4th Cir. 1984).

3TEK devotes relatively little space in its briefs arguing

for transfer and centers its argument on the fact that the unsigned

sales contract contained a Texas choice-of-law provision. (See

Doc. 14 at 8 (“The dispositive issue here is that the Parties, by

way of the Sales Agreement, contemplated that any disputes arising

between them would be settled in Texas.”).) As discussed above,

the parties did not sign this separate contract, so it is not at

all clear that they “contemplated” that any disputes would be

resolved in Texas. The balance of the other factors weighs against

transfer. In particular, Wall initially filed this action in

Durham County Superior Court, which is in the Middle District of

North Carolina, and there is nothing to indicate that this choice

should be disturbed. Cf. Speed Trac, 567 F. Supp. 2d at 803

(plaintiff’s initial choice of forum receives less weight if the

plaintiff chooses a foreign forum or the cause of action bears

little or no relation to the chosen forum). There is also no

reason to believe that access to witnesses or other logistical

issues regarding a fair trial would favor another district.

Indeed, as Wall notes, it appears that one of 3TEK’s principal

witnesses, Mr. Padula, is located in South Carolina, which is

closer to this district. (See Doc. 12 at 24.) Accordingly, 3TEK’s

motion to transfer venue will be denied.

III. CONCLUSION

For the reasons stated above,

IT IS THEREFORE ORDERED that Defendant 3TEK Global, LLC’s

motion to dismiss or, in the alternative, to transfer venue (Doc.

6) is DENIED.

/s/ Thomas D. Schroeder

United States District Judge

October 28, 2020