United States District Court, S.D. Indiana, New Albany Division
DANIEL L. POHLE, and OTTER CREEK TRADING COMPANY, INC., Plaintiffs,
CRAIG MITCHELL, PAUL MITCHELL, and WILLIAM MOSS, Defendants.
ORDER GRANTING DEFENDANTS' MOTIONS TO
WALTON PRATT, JUDGE
matter is before the Court on Motions to Dismiss filed
pursuant to Federal Rules of Civil Procedure 12(b)(1),
12(b)(2), and 12(b)(6) by Defendants William Moss
(“Moss”), Paul Mitchell, and Craig Mitchell
(collectively, “Defendants”) (Filing No.
19; Filing No. 24; Filing No. 26). In
October 2014, Plaintiffs Daniel L. Pohle
(“Pohle”) and Otter Creek Trading Company, Inc.
(“Otter Creek”) (collectively,
“Plaintiffs”) were sued for breach of contract
and conversion by PCM Enviro PTY Limited Partnership
(“PCM”), an Australian company operated by Paul
Mitchell and Craig Mitchell. That lawsuit was filed in the
Jennings County (Indiana) Superior Court. In June 2015, PCM
was granted default judgment against the Plaintiffs. After
being denied numerous requests for relief from the default
judgment and losing on appeal at the Indiana Court of
Appeals, the Plaintiffs filed the instant lawsuit against the
Defendants, alleging fraudulent civil conspiracy both prior
to and during the state court proceedings. The Defendants
filed Motions to Dismiss, asserting lack of subject matter
jurisdiction under the Rooker-Feldman doctrine, lack
of personal jurisdiction, and failure to state a claim. For
the following reasons, the Court grants the
Defendants' Motions to Dismiss.
following facts are not necessarily objectively true, but as
required when reviewing a motion to dismiss, the Court
accepts as true all factual allegations in the Complaint and
draws all inferences in favor of the Plaintiffs as the
non-moving parties. See Bielansky v. County of Kane,
550 F.3d 632, 633 (7th Cir. 2008).
Creek is an Indiana corporation that manufactures and sells
lead smelting equipment. It has operated for approximately
twenty-five years in Jennings County, Indiana. It ships its
lead smelting equipment internationally. Pohle operates Otter
Creek and is its sole shareholder. He has extensive
experience shipping lead smelting equipment internationally
having shipped more than one hundred pieces of equipment to
thirty different countries (Filing No. 1 at 2-3).
Paul Mitchell and Craig Mitchell are citizens of Australia,
and they operate PCM. Id. Moss is a citizen of
Wisconsin. Id. at 2.
2014, Plaintiffs entered into a contract with PCM for the
sale of a lead smelter. Id. at 3. Otter Creek's
invoice noted that the lead smelter would not be released to
anyone other than an international shipper because of
liability concerns and to protect intellectual property
rights. Id. at 3-4. Around that same time PCM
purchased a machine belt, which was shipped to Plaintiffs.
PCM arranged to have the belt shipped to the Plaintiffs, who
agreed to then ship the belt with the smelter to PCM in
Australia via international shipper HTX International
(Filing No. 1 at 6; Filing No. 25 at 2;
Filing No. 37 at 3-4). PCM made the final payment on
the smelter in July 2014 (Filing No. 25-11 at 161).
PCM arranged to have Moss retrieve both the smelter and the
belt from the Plaintiffs and ship them to PCM in Australia.
In September 2014, Moss arrived in Indiana to pick up the
equipment from Pohle (Filing No. 1 at 5; Filing
No. 37 at 3). However, when Pohle realized Moss was in
the lead reclamation business and Moss told him that he would
keep the smelter for a few months before delivering it to
PCM, Pohle refused to turn over the smelter to Moss fearing
that Moss and PCM were trying to steal his intellectual
property. Pohle retained possession of the belt and smelter.
this same time, Pohle became concerned about the identity of
the individual or entity in Australia with whom he was
dealing. In early July 2014, Pohle conducted an entity search
and could not find an entity called PCM in Australia. Pohle
also asked Craig Mitchell to verify his identity through the
United States Embassy in Australia. Craig Mitchell initially
refused but later sent a copy of his new passport. Because
the passport was new, Pohle's suspicion surrounding the
transaction grew. Pohle retained possession of the smelter,
belt, and PCM's payments (Filing No. 37 at 5-6).
October 2014, PCM brought suit against Plaintiffs in the
Jennings County Superior Court for breach of contract and
conversion (Filing No. 25-4). By February 2015, the
Plaintiffs had not filed an answer to PCM's complaint,
although they had submitted correspondence to the court
(Filing No. 25-2 at 2-3). On February 5, 2015, PCM
filed a motion for default judgment. Between February 26 and
May 26, 2015, the Plaintiffs filed eight different motions to
dismiss, all of which were denied. Default judgment was
entered against the Plaintiffs. A damages hearing was held.
The state court awarded PCM actual damages, punitive damages,
and lost profits in the amount of $146, 537.80. Id.
at 3-8; Filing No. 25-5. After this judgment was
entered, the Plaintiffs filed a motion to correct errors and
to set aside the default judgment in the state trial court,
arguing that PCM made fraudulent representations to the court
in its filings and during the damages hearing (Filing No.
1 at 4-6; Filing No. 25-6). This motion was
denied, so the Plaintiffs appealed the decision to the
Indiana Court of Appeals (Filing No. 25-2 at 9).
Indiana Court of Appeals upheld the trial court's
judgment in favor of PCM and against the Plaintiffs. The
appellate court affirmed both the default judgment and denial
of the Plaintiffs' post-judgment motions. Otter Creek
Trading Co. v. PCM Enviro PTY, LTD, 60 N.E.3d 217
(Ind.Ct.App. 2016). The appellate court addressed the
Plaintiffs' claims that PCM had made fraudulent
representations to the court, explaining that the evidence
favored PCM and in any event the purported misrepresentations
would not have led to a different outcome in the trial court.
Id. at 227-29.
Plaintiffs filed additional post-appeal motions and a motion
to set aside judgment in the state trial court, attempting to
avoid the default judgment and damages award against them.
However, each of these motions were denied (Filing No.
25-2 at 10-14). While the post-appeal motions were being
litigated in state court, the Plaintiffs filed their
Complaint in this Court against Craig Mitchell, Paul
Mitchell, and Moss on April 28, 2017, alleging fraudulent
civil conspiracy (Filing No. 1). The Plaintiffs'
claim is based on the Defendants' alleged
misrepresentations to the state trial court as well as
representations made to the Plaintiffs during their
transactions involving the smelter. Specifically, the
Plaintiffs allege that the Defendants fraudulently conspired
to gain control of the Plaintiffs' lead smelting
equipment in order to infringe on the Plaintiffs'
intellectual property rights. Then they fraudulently sued the
Plaintiffs when they were unsuccessful in obtaining the
smelting equipment, and they made fraudulent representations
to the state courts while litigating that action.
Id. at 4-6.
response to the Plaintiffs' Complaint, the Defendants
each filed their Motions to Dismiss, asserting various
grounds for dismissal. They each argue that subject matter
jurisdiction does not exist based on the
Rooker-Feldman doctrine and because the amount in
controversy does not exceed $75, 000.00. They additionally
argue that the Complaint fails to state a claim and also does
not provide sufficient factual allegations for a claim based
on fraud. Paul Mitchell and Craig Mitchell also assert that
the Court lacks personal jurisdiction over them.
purposes of a motion to dismiss under Rules 12(b)(1),
12(b)(2), or 12(b)(6), district courts accept all
well-pleaded factual allegations as true and construe all
reasonable inferences in the plaintiff's favor. See
Scanlan v. Eisenberg, 669 F.3d 838, 841 (7th Cir. 2012);
Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir.
2008). A Rule 12(b)(1) or 12(b)(2) motion challenges federal
jurisdiction, and the party invoking federal jurisdiction
bears the burden of establishing the elements necessary for
jurisdiction. Scanlan, 669 F.3d at 841-42. In ruling
on a motion under Rule 12(b)(1), district courts may look