# WALL RECYCLING, LLC v. 3TEK GLOBAL, LLC

> District Court, M.D. North Carolina · October 28, 2020

URL: https://www.frixlaw.com/law-library/cases/10253765

## Case

- **Court:** District Court, M.D. North Carolina
- **Decided:** October 28, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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Procedure 12(b)(3) (see Doc. 6) has been withdrawn (Doc. 14 at 8 n.6).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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10253765. Public record. Not legal advice.