Free Opening Brief in Support - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE ROBERT D. CHRIST, Plaintiff, v. BRETT J. CORMICK, ELAN SUISSE INTERNATIONAL HOLDINGS (USA) LLC, ELAN SUISSE (PTY) LTD., NICOGEL LTD., JOHN WALTERS, DIANNE MARSHALL and MERCARI FINANCIAL SERVICES (PTY) LTD., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) )

C.A. No. 06-275-GMS

OPENING BRIEF OF DEFENDANTS BRETT J. CORMICK, ELAN SUISSE INTERNATIONAL HOLDINGS (USA) LLC, ELAN SUISSE (PTY) LTD., NICOGEL LTD., JOHN A. WALTERS AND DIANNE E. MARSHALL IN SUPPORT OF THEIR MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND FAILURE TO STATE A CLAIM, OR, IN THE ALTERNATIVE, TO STAY PENDING RESOLUTION OF A PRIOR-FILED ACTION IN SOUTH AFRICA, AND FOR SANCTIONS

David L. Finger (DE Bar ID #2556) Finger & Slanina, LLC One Commerce Center 1201 Orange Street, Suite 725 Wilmington, DE 19801-1155 (302) 884-6766 Attorney for defendants Brett J. Cormick, Elan Suisse International Holdings (USA) LLC, Elan Suisse (Pty) Ltd., Nicogel Ltd., John A. Walters and Dianne E. Marshall Dated: May 22, 2006

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TABLE OF CONTENTS

NATURE AND STAGE OF THE PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SUMMARY OF ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 STATEMENT OF FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A. B. THE PARTIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 THE TRANSACTION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 I. THERE IS NO BASIS TO ASSERT PERSONAL JURISDICTION OVER DR. CORMICK, ELAN SUISSE, NICOGEL, DR. WALTERS OR DR. MARSHALL .................................................................6 A. DR. CORMICK IS NOT SUBJECT TO JURISDICTION PURSUANT TO 6 DEL. C. §18-109(a) OF THE DELAWARE LIMITED LIABILITY COMPANY ACT, AS ANY ALLEGED ACTIONS WERE NOT UNDERTAKEN IN HIS CAPACITY AS A MANAGER OF AN LLC. OR RELATED TO THE BUSINESS OF THE LLC. . . . . . . . . . . . . . . . . . . . . 7 THERE IS NO BASIS FOR JURISDICTION UNDER A CONSPIRACY THEORY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 THE COURT SHOULD NOT PERMIT JURISDICTIONAL DISCOVERY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

B.

C.

II. III.

THE COMPLAINT FAILS TO STATE A CLAIM FOR CONSPIRACY. . . . . . 15 THE FRAUD AND CONSPIRACY CLAIMS ARE BARRED BY THE STATUTE OF LIMITATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 A. B. PENNSYLVANIA LAW APPLIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 PENNSYLVANIA'S TWO-YEAR STATUTE OF LIMITATIONS APPLIES TO MR. CHRIST'S TORT CLAIMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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IV.

THE COURT SHOULD STAY THIS ACTION PENDING RESOLUTION OF PRIOR-FILED PARALLEL LITIGATION INSTIGATED BY MR. CHRIST IN SOUTH AFRICA.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 THIS COURT SHOULD SANCTION MR. CHRIST FOR HIS UNJUSTIFIED ACTIONS DESIGNED TO HARASS AND INCREASE EXPENSE. . . . . . . . . 25

V.

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

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TABLE OF AUTHORITIES Cases AAR Intern., Inc. v. Nimelias Enterprises, S.A., 250 F.3d 510 (7th Cir. ), cert. denied, 534 U.S. 995 (2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Alfero v. E.F. Hutton &Co, Inc., 606 F. Supp. 1100 (E.D. Pa. 1985). . . . . . . . . . . . . . 20 Ammlung v. City of Chester, 494 F.2d 811 (3rd Cir. 1994). . . . . . . . . . . . . . . . . . . . . . 19 Arunga v. AIPAC, No. Civ. A. 93-24, 1993 WL 533177, Yohn, J. (E.D, Pa. Dec. 20, 1993), aff'd mem., 37 F.3d 1485 (3rd Cir. 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Assist Stock Management L.L.C. v. Rosheim, 753 A.2d 974 (Del. Ch. 2000). . . . . . . . 8 Atlantic Paper Box Co. v. Whitman's Chocolates, 844 F.Supp. 1038 (E.D. Pa. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Autrey v. Chemtrust Industries Corp., 362 F.Supp. 1085 (D. Del. 1973). . . . . . . . . . 19 Beauty Time, Inc. v. VU Skin Systems, Inc., 118 F.3d 140 (3rd Cir. 1997). . . . . . . . . 20 Callahan v. A.E.V., Inc., 182 F.3d 237 (3rd Cir. 1999).. . . . . . . . . . . . . . . . . . . . . . . . . 19 Colorado River Water Conservation Dist. v. U.S., 424 U.S. 800 (1976). . . . . . . . . . . 22 Computer People, Inc. v. Best International Group, Inc., C.A. No. 16648, 1999 WL 288119, Jacobs, V.C. (April 27, 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Crescent/Mach I Partners, L.P. v. Turner, 846 A.2d 864 (Del. Ch. 2000).. . . . . . . . . 11 David B. Lilly Co., Inc. v. Fisher, 18 F.3d 1112 (3rd Cir. 1994). . . . . . . . . . . . . . . . . . 19 de la Mata v. American Life Ins. Co., 771 F.Supp. 1375 (D. Del. 1991).. . . . . . . . . . . 23 Deleski v. Raymark Industries, Inc., 819 F.2d 377 (3rd Cir. 1987).. . . . . . . . . . . . . . . 19 Deutschman v. Beneficial Corp., 132 F.R.D. 359 (D. Del. 1990), recons. denied, 761 F.Supp. 1080 (D. Del. 1991). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Drelles v. Manufacturers Life Ins. Co., 881 A.2d 822 (Pa. Super. 2005). . . . . . . . . . . 20

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E.I. DuPont de Nemours & Co. v. Rhodia Fiber & Resin Intermediates, 197 F.R.D. 112 (D. Del. 2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 EFCO Corp. v. Aluma Systems USA, Inc., 983 F.Supp. 816 (S.D. Iowa 1997). . . . . . 24 Evergreen Marine Corp. v. Welgrow Intern., Inc., 954 F.Supp.101 (S.D.N.Y. 1997).23 Finova Capital Corp. v. Ryan Helicopters U.S.A., Inc., 180 F.3d 896 (7th Cir. 2005).22 Harris v. Carter, 582 A.2d 222 (1990). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Hirshman v. Vendamerica, Inc., C.A. No. 90C-AP-40-1CV, 1992 WL 52141, Toliver, J. (Del. Super. Mar. 9, 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 ICT Pharms., Inc. v. Boehringer Ingelheim Pharms., Inc., 147 F.Supp.2d 268 (D. Del. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 In re Freuhauf Trailer Corp., 250 B.R. 168 (D. Del. 2000).. . . . . . . . . . . . . . . . . . . . . 20 In re Student Finance Corp., 335 B.R. 539 (D. Del. 2005). . . . . . . . . . . . . . . . . . . . . . 15 Iotex Communications, Inc. v. Defries, C.A. No. 15817, 1998 WL 914265, Lamb, V.C. (Del. Ch. Dec. 21, 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Istituto Bancario Italiano SpA v. Hunter Engineering Co., 449 A.2d 210 (Del.1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Joint Stock Society v. Heublein, 936 F.Supp. 177 (D. Del. 1996). . . . . . . . . . . . . . . . . . 6 Kalmanovitz v. G. Heilman Brewing Co., Inc., 595 F.Supp. 1385 (D. Del. 1984). . . . 15 Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 457 (1941). . . . . . . . . . . . . . . . . . . 18 Marketing Products Management, LLC v. Healthandbeautydirect.com, Inc., C.A. No. 02C-04-256 CLS, 2004 WL 249581, Scott, J. (Del. Super. Jan. 28, 2004).. . . . . . . . . . . 13 Resources Ventures, Inc. v. Resource Management Intern., Inc., 42 F.Supp.2d 423 (D. Del. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Reyes v. State, 819 A.2d 305 (Del.), cert. denied, 540 U.S. 862 (2003). . . . . . . . . . . . . 12 Robinson v. Johnson, 313 F.3d 128 (3rd Cir. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

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Steinman v. Levine, C.A. No. 19107, 2002 WL 31761252, Lamb, V.C. (Del. Ch. Nov. 27, 2002), aff'd mem., 822 A.2d 397 (Del. 2003).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Telcordia Technologies, Inc. v. Alcatel S.A., No. Civ. A. 04-874 GMS, 2005 WL 1268061, Sleet, J. (D. Del. May 27, 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Transportes Aeros de Angola v. Ronair, Inc., 544 F.Supp. 858 (D. Del. 1982). . . . . . . 6

Other authorities 6 Del. C. §18-109(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 7, 8, 10 10 Del. C. §3104. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 14 10 Del. C. §8106. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 10 Del. C. §8121. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 42 Pa. Cons. Stat. §5524(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Federal Rule of Civil Procedure 11(c)(1)(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Federal Rule of Civil Procedure 12(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Federal Rule of Civil Procedure 12(b)(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Restatement (Second) of Torts §148, comment g.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Restatement (Second) of Torts §541.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

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NATURE AND STAGE OF THE PROCEEDINGS On April 27, 2006, plaintiff Robert D. Christ filed the present action against Brett J. Cormick, Elan Suisse International Holdings (USA) LLC, Elan Suisse (Pty) Ltd., Nicogel Ltd., John A. Walters, Dianne E. Marshall (collectively, the "Defendants") and Mercari Financial Services (Pty) Ltd.1 The Complaint asserts claims against Mr. Cormick for promissory estoppel, breach of contract and fraud, and asserts a conspiracy claim against all of the defendants. On May 22, 2006, the Defendants filed a motion (i) to dismiss the Complaint for lack of personal jurisdiction, (ii) to dismiss the conspiracy claim for failure to state a claim, (iii) to dismiss the fraud claim as being outside the statute of limitations, and (iv) to stay this action pending resolution of a prior-filed action initiated by Mr. Christ in South Africa. Separately, in accordance with Federal Rule of Civil Procedure 11(c)(1)(a), the Defendants filed a motion for sanctions. This is the Defendants' opening brief in support of those motions.

1

Mercari Financial Services (Pty) Ltd., a South African corporation (Complaint ¶8), apparently is defunct. 1

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SUMMARY OF ARGUMENT 1. 6 Del. C. §18-109(a), the LLC manager consent statute, cannot provide a basis

for jurisdiction over Dr. Cormick, as the alleged misrepresentations was made and the alleged oral agreement was entered into before the formation of the Delaware LLC. Moreover, the statute does not apply to a claim arising from an arms-length negotiated sale of an equity interest which does not address management rights and obligations, does not involve Delaware law, and as to which Delaware has no particular interest. Further, the "conspiracy theory" of jurisdiction cannot be applied here. The basis for Mr. Christ's assertion of the conspiracy theory is that Elan Suisse USA was formed in Delaware. Delaware court's have consistent rejected the formation or use of a Delaware corporation as a nexus for the application of the "conspiracy theory" of jurisdiction, especially where (as here) the claim does not arise from the formation of the Delaware entity. 2. The Complaint fails to state a claim for conspiracy, as it does not allege any

specific facts establishing how or when the conspiracy was formed or its intended scope, as required by applicable Pennsylvania and Third Circuit law. 3. The fraud claim is barred by the applicable statute of limitations, as the

Complaint fails to allege any facts showing that Mr. Christ could not have discovered his injury or claim before two years of the date of filing. 4. The Court should stay this action in favor of a parallel action filed by Mr.

Christ in South America in 2005 as a matter of international comity, in order to avoid a duplication of effort, a waste of judicial and litigant resources, and to avoid the possibility of inconsistent rulings. 2

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5.

The Court should exercise its inherent power and sanction Mr. Christ for his

harassing, vexatious and cost-increasing actions in (i) bringing a duplicative proceeding in Delaware while simultaneously maintaining an action against Mr. Cormick that he previously filed in South Africa over one year ago, thereby putting Mr. Cormick to the cost of addition attorneys' fees; (ii) bringing in action in Delaware against foreign defendants in the absence of a colorable basis for jurisdiction; (iii) falsely alleging a conspiracy without any factual support, relying solely on the fact of a prior business relationship between Dr. Cormick and Dr. Walters.

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STATEMENT OF FACTS2 A. THE PARTIES.

Plaintiff Robert D. Christ is a citizen of the State of Pennsylvania who resides in Pottstown, Pennsylvania. (Compl. ¶1). Mr. Christ is also the plaintiff in a lawsuit filed and presently pending against Dr. Cormick in South Africa arising from the same transaction giving rise to the present suit. (Cormick Decl. Exs A-1 & A-23). Defendant Brett J. Cormick is a citizen of the Commonwealth of Australia who resides in the United Kingdom and the Republic of Zimbabwe. (Compl. ¶2). Defendant Elan Suisse International Holdings (USA) LLC ("Elan Suisse USA") is a limited liability company organized under the laws of the State of Delaware. (Compl. ¶3). Defendant Elan Suisse (Pty) Ltd. "(Elan Suisse") is a corporation organized under the laws of the Republic of South Africa. (Compl. ¶4). Defendant Nicogel Ltd. ("Nicogel") is a corporation formed and organized under the laws of the United Kingdom. (Compl. ¶5). Defendant John Walters is a citizen of the United Kingdom, and is the Chief Executive Officer of Nicogel. (Compl. ¶6).

2

Defendants strongly deny the facts as alleged in the Complaint, but recognize that, for the limited purpose of a motion to dismiss, the allegations must be taken as true.
3

The Declaration of Dr. Brett J. Cormick is appended hereto as Exhibit A. The Declaration of Nicogel Ltd. by Dr. Dianne E. Marshall is appended hereto as Exhibit B. The Affidavit of Dr. Dianne E. Marshall is appended hereto as Exhibit C. The Declaration of Dr. John A. Walters is appended hereto as Exhibit D. Unreported opinions cited to herein are appended hereto in alphabetical order beginning at Exhibit E. 4

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Defendant Dianne Marshall is a citizen of the United Kingdom, and an officer and shareholder of Nicogel. (Compl. ¶7). Defendant Mercari Financial Services (Pty) Ltd. ("Mercari") is a corporation organized under the laws of the Republic of South Africa. (Compl. ¶8). B. THE TRANSACTION.

Over the course of early 2004, Mr. Christ and Dr. Cormick discussed a business proposal whereby, according to Mr. Christ's version of events, in exchange for Mr. Christ investing $350,000, Dr. Cormick would transfer to Mr. Christ a 50% equity interest in Elan Suisse and another entity that was to be subsequently formed (Elan Suisse USA). (Compl. ¶¶15-18). Elan Suisse would be used to market United States-based financial products and investment vehicles to investors located in South Africa, and Elan Suisse USA would hold certain intellectual property rights. (Compl. ¶18). In March, 2004, Mr. Christ wired an initial investment of $250,000 to Dr. Cormick's personal bank account in London. (Compl. ¶19). Mr. Christ complains that he has never received documentation to prove his ownership interest in Elan Suisse and Elan Suisse USA. (Compl. ¶20). Mr. Christ alleges that on September 9, 2004, Dr. Cormick offered to refund Mr. Christ's investment, which offer Mr. Christ accepted, but Mr. Christ has yet to receive the funds. (Compl. ¶20). Mr. Christ further alleges that his money was used by Dr. Cormick, Dr. Walters and Dr. Marshall to capitalize Nicogel when it was formed in 2005, over nine months later. (Compl. ¶37). 5

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ARGUMENT I. THERE IS NO BASIS TO ASSERT PERSONAL JURISDICTION OVER DR. CORMICK, ELAN SUISSE, NICOGEL, DR. WALTERS OR DR. MARSHALL. Federal Rule of Civil Procedure 12(b)(2) requires a court to dismiss defendants from a case upon motion when the court lacks personal jurisdiction over them. E.I. DuPont de Nemours & Co. v. Rhodia Fiber & Resin Intermediates, 197 F.R.D. 112, 119 (D. Del. 2000). In determining whether personal jurisdiction exists, courts engage in a two-step analysis. First, the Court must decide whether jurisdiction is authorized by the laws of the forum state. Transportes Aeros de Angola v. Ronair, Inc., 544 F.Supp. 858, 864-65 (D. Del. 1982). If the first test is satisfied, the Court must then determine whether there are "minimum contacts" between the defendant and the forum state such that exercising jurisdiction comports with fair play and substantial justice under the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States. Id. The burden is on Mr. Christ, as plaintiff, to allege facts sufficient to make a prima facie showing over the defendants. ICT Pharms., Inc. v. Boehringer Ingelheim Pharms., Inc., 147 F.Supp.2d 268, 270-71 (D. Del. 2001). To meet this burden, Mr. Christ must allege facts which "`establish with reasonable particularity'" that jurisdiction over the defendants exists. Id. (quoting Joint Stock Society v. Heublein, 936 F.Supp. 177, 193 (D. Del. 1996)).

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As demonstrated below, there is no basis in Delaware law for exercising personal jurisdiction over the non-Delaware defendants (i.e., all defendants other than Elan Suisse USA), much less justification under the Due Process Clause. A. DR. CORMICK IS NOT SUBJECT TO JURISDICTION PURSUANT TO 6 DEL. C. §18-109(a) OF THE DELAWARE LIMITED LIABILITY COMPANY ACT, AS ANY ALLEGED ACTIONS WERE NOT UNDERTAKEN IN HIS CAPACITY AS A MANAGER OF AN LLC. OR RELATED TO THE BUSINESS OF THE LLC.

Mr. Christ alleges that Dr. Cormick is subject to personal jurisdiction in Delaware pursuant to 6 Del. C. §18-109(a) because he is "a person who participates materially in the management of Elan Suisse USA." (Compl. ¶11). Section 18-109(a) states, in pertinent part, that: A manager ... of a limited liability company may be served with process in the manner prescribed in this section in all civil actions or proceedings brought in the State of Delaware involving or relating to the business of the limited liability company or a violation by the manager ... of a duty to the limited liability company, or any member of the limited liability company.... A manager's ... serving as such constitutes such person's consent to the appointment of the registered agent of the limited liability company ... as such person's agent upon whom service of process may be made as provided in this section. Such service as a manager ... shall signify the consent of such manager ... that any process when so served shall be of the same legal force and validity as if served upon such manager ... within the State of Delaware and such appointment of the registered agent (or, if there is none, the Secretary of State) shall be irrevocable. 6 Del. C. §18-109(a). Initially, it should be noted that the Complaint is not clear whether Elan Suisse was even in existence at the time Mr. Christ sent his money to Dr. Cormick. Elan Suisse USA

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was formed on March 15, 2004. (Compl. ¶19). Mr. Christ alleges that he sent his money in March 2004, but curiously does not identify the date. (Id.). If Elan Suisse was not in existence when the alleged fraud was perpetrated and Mr. Christ sent his money, then Section 18-109(a) is not applicable. Moreover, the alleged false representations and oral agreement were made in January and February, 2004, prior to the formation of Elan Suisse on March 15, 2004. (Compl. ¶¶16-19). As such, the statute cannot be applied as there was no Elan Suisse at that time and therefore any alleged actions of Dr. Cormick were not in furtherance of the business or management of Elan. Even if the Court were to disregard these facts (which, of course, it should not), Section 18-109(a) still is not applicable to Mr. Christ's claims. The statute clearly applies to claims alleging breaches of fiduciary duties, which have not been alleged here. Beyond fiduciary claims, however, the statute has to be interpreted in such a way as to avoid being unconstitutionally overbroad. To do this, in cases not alleging breaches of fiduciary duty, the Court of Chancery has taken a case-by-case approach in analyzing the connection between the claim asserted and the business of the company. Assist Stock Management L.L.C. v. Rosheim, 753 A.2d 974, 980 (Del. Ch. 2000). In Rosheim, the plaintiff brought an action to determine what management rights each member of the LLC had. The Court found that the assertion of jurisdiction was justified because (i) the claim asserted directly related to the issue of the managers' rights, duties and obligations to the LLC; (ii) resolution of the issue was inextricably tied up in Delaware law; and (iii) Delaware has a strong interest in providing a forum to resolve disputes regarding the proper discharge of managerial functions of Delaware entities. Id. at 981. 8

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The present action provides a stark contrast. First, there is no issue requiring an analysis or determination of the rights, duties or obligations any manager of Elan Suisse USA. Indeed, Mr. Christ is not seeking a determination that he has any managerial rights in Elan Suisse USA, or that Dr. Cormick has breach any duties arising from Dr. Cormick's alleged status as a manager of Elan Suisse USA. To the contrary, he is seeking to avoid this by demanding a return of his money as opposed to confirming his equity ownership. As such, all Mr. Christ is asserting is a simple breach of a contract (and alleged fraud in the inducement of entry of a contract) that was the result of an arms-length negotiation outside of Delaware, with any breach occurring outside of Delaware. Second, with a transaction between a Pennsylvania resident and citizen of Australia who resides in England and Zimbabwe (Compl. ¶¶1, 2), Delaware law will not apply in resolving the matter. Indeed, as shown in Section III, infra, Pennsylvania law will apply. Finally, "the State of Delaware does not have an interest in providing a forum for claims ... where those claims involve events occurring out of state, caused no injury in Delaware, and involve a plaintiff and defendants who are not Delaware residents." Steinman v. Levine, C.A. No. 19107, 2002 WL 31761252, WL Op. at 11, Lamb, V.C. (Del. Ch. Nov. 27, 2002), aff'd mem., 822 A.2d 397 (Del. 2003).4

4

Although Mr. Christ may emphasize the fact that Elan Suisse USA was formed in Delaware, there is no allegation that this formation was itself the cause of any injury to him, that the formation itself gave rise to any cause of action, that Elan Suisse USA received the money (which it did not, see Compl. ¶¶20, 37), or that the formation itself is anything other than peripheral to his claims. 9

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This action does not relate to the management of the business and affairs of a Delaware entity. All that the Complaint presents is a request for damages arising from the alleged breach of an arms-length relationship. See Harris v. Carter, 582 A.2d 222, 232 (1990) ("[m]erely selling shares of stock in a company on whose board one sits is not a directorial act within the meaning of the statute"). Mr. Christ does not allege a single tortious act or contractual breach occurring in Delaware, or that any wrongful act had any impact in Delaware. Interpreting Section 18-109(a) as authorizing the assertion of personal jurisdiction over Mr. Cormick in these circumstances would be overbroad and constitutionally impermissible. See Hirshman v. Vendamerica, Inc., C.A. No. 90C-AP-401CV, 1992 WL 52141, WL Op. at *3, Toliver, J. (Del. Super. Mar. 9, 1992) (allegation that corporate director breached contract and made false representations inadequate under analogous corporate director consent statute). B. THERE IS NO BASIS FOR JURISDICTION UNDER A CONSPIRACY THEORY.

Mr. Christ alleges jurisdiction over Dr. Cormick, Nicogel, Dr. Walters, Dr. Marshall and Mercari "pursuant to 10 Del. C. § 3104, as they individually and/or in conspiracy with each other formed and utilized a Delaware entity to defraud and cause harm" to Mr. Christ. (Compl. ¶12). Initially, as to Nicogel, it is difficult to imagine how Nicogel could have participated in the formation of Elan Suisse USA in Delaware since Elan Suisse USA was formed on March 15, 2004 (Compl. ¶19), and Mr. Christ alleges that Nicogel was founded "in early

10

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2005...." (Compl. ¶37). Aside from that metaphysical puzzle, Mr. Christ has failed to satisfy the strict pleading requirements to invoke the conspiracy theory of jurisdiction. Under the conspiracy theory of obtaining personal jurisdiction, a court may in certain circumstances exercise personal jurisdiction over nonresidents based on the forum contacts of their co-conspirators. In order to establish personal jurisdiction, Mr. Christ must establish that: (1) an unlawful conspiracy existed; (2) the defendants were a member of that conspiracy; (3) a substantial act or substantial effect in furtherance of the conspiracy occurred in Delaware; (4) the defendants knew or had reason to know of the act in Delaware or that acts outside Delaware would have an effect in Delaware; and (5) the act in, or effect on, Delaware was a direct and foreseeable result of the conduct in furtherance of the conspiracy. Resources Ventures, Inc. v. Resource Management Intern., Inc., 42 F.Supp.2d 423, 432 (D. Del. 1999) (citing Istituto Bancario Italiano SpA v. Hunter Engineering Co., 449 A.2d 210, 225 (Del.1982)). This test is considered a strict one with a narrow scope. Istituto Bancario Italiano SpA, 449 A.2d at 225. Mr. Christ is obligated to allege specific facts establishing each element, not mere conclusory allegations. Crescent/Mach I Partners, L.P. v. Turner, 846 A.2d 864, 876 (Del. Ch. 2000). The first issue is whether there was a conspiracy. As set forth in more detail in Section II, infra, the Complaint offers nothing but a conclusory statement that there was a conspiracy. Such a conclusory allegation is inadequate. Additionally, there is a question of timing. As noted previously, Mr. Christ avoided alleging whether he sent the money to Dr. Cormick before or after the formation of Elan 11

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Suisse USA in March 2004. (See Compl. ¶19). If Mr. Christ sent the money before Elan Suisse USA was formed, it could not be argued that the formation of the Delaware entity was an act in furtherance of a conspiracy, as the alleged purpose of the alleged conspiracy (obtaining Mr. Christ's money) would have already been achieved. "Generally, a conspiracy terminates upon accomplishment of the principal objective unless evidence is introduced indicating that the scope of the original agreement includes acts taken to conceal the [wrongdoing]." Reyes v. State, 819 A.2d 305, 312 (Del.), cert. denied, 540 U.S. 862 (2003). Here the alleged principal objective may have been completed before any alleged conspiracy could be formed, and there is no allegation of any agreement to conceal any conspiracy. The Court, however, need not dwell on those issues, as there is a more fundamental reason why the conspiracy theory of jurisdiction does not apply: The formation of Elan Suisse USA does not satisfy the third element, i.e.,a substantial act or substantial effect in furtherance of the conspiracy occurring in Delaware. Mr. Christ's entire basis for jurisdiction in this Court is the formation in Delaware of Elan Suisse USA. However, "[m]ere use of a Delaware corporate entity in connection with a civil conspiracy has never been held to satisfy this element" of the conspiracy theory of jurisdiction. Iotex Communications, Inc. v. Defries, C.A. No. 15817, 1998 WL 914265, WL Op. at *7, Lamb, V.C. (Del. Ch. Dec. 21, 1998). In IOTEX, the plaintiff claimed that a Delaware entity was used to commit the fraud. Id. In the present case, the facts are even more attenuated. Here, Elan Suisse USA played no part other than simply existing. Mr. Christ did not send money to Elan Suisse USA. Instead, he sent the money directly to Dr. Cormick. (Compl. ¶19). As such, the formation 12

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of Elan Suisse USA not only does not constitute a substantial act or substantial effect in Delaware, it also was not a direct or foreseeable result of any conduct in furtherance of the alleged conspiracy. See also Marketing Products Management, LLC v.

Healthandbeautydirect.com, Inc., C.A. No. 02C-04-256 CLS, 2004 WL 249581, WL Op. at *3, Scott, J. (Del. Super. Jan. 28, 2004) (incorporation in Delaware is not a "substantial act" in furtherance of a conspiracy in breach of contract case); Computer People, Inc. v. Best International Group, Inc., C.A. No. 16648, 1999 WL 288119, WL Op. at *7, Jacobs, V.C. (April 27, 1999) (incorporation is not a "substantial act or effect"). In light of the foregoing, there is no basis under either Delaware law or the Due Process clause of the Constitution of the United States to assert personal jurisdiction over any of the non-Delaware parties (all but Elan Suisse). C. THE COURT DISCOVERY. SHOULD NOT PERMIT JURISDICTIONAL

Mr. Christ may ask the Court to permit him to engage in jurisdictional discovery. This Court has stated that, in order to obtain jurisdictional discovery: "[t]he court must be satisfied that there is some indication that this particular defendant is amenable to suit in this forum." For example, "a plaintiff may not rely on the bare allegations in his complaint to warrant further discovery." Likewise, "a mere unsupported allegation that [a] defendant `transacts business' in an area is `clearly frivolous.'" Rather, "there must be some competent evidence to demonstrate that personal jurisdiction over [a] defendant might exist before allowing discovery to proceed." Furthermore, "[w]hen the lack of personal jurisdiction is clear, ... further discovery serves no purpose and should be denied.

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Telcordia Technologies, Inc. v. Alcatel S.A., No. Civ. A. 04-874 GMS, 2005 WL 1268061, WL Op. at *9, Sleet, J. (D. Del. May 27, 2005) (citations omitted, italics in original). Mr. Christ's claims of jurisdiction, as alleged in his Complaint, have been proven untenable as a matter of law, and it is unlikely that Mr. Christ can point to any evidence suggesting additional facts that would change the results. Additionally, Mr. Christ has not asserted that jurisdiction could be asserted based on any of the specific provisions of Delaware's long-arm statute, 10 Del. C. §3104, or alleged any facts suggesting that any of the non-Delaware defendants had any connection with Delaware. As such, allowing jurisdictional discovery would amount to a fishing expedition. In these circumstances, the Court should exercise "special vigilance" to protect these foreign defendants from unduly burdensome and expensive discovery. See id. WL Op. at 8-9.

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II.

THE COMPLAINT FAILS TO STATE A CLAIM FOR CONSPIRACY. Mr. Christ alleges that "[a]s these facts demonstrate, defendants Elan Suisse, Elan

Suisse USA, Nicogel, Walters, Marshall and Mercari conspired with defendant Cormick to defraud plaintiff and to unlawfully misappropriate the $250,000 paid by plaintiff to Cormick." (Compl. ¶38). The meager facts alleged, however, do not "demonstrate" a conspiracy sufficient to withstand a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Under applicable Pennsylvania law5: In order to state a claim for civil conspiracy under Pennsylvania law, a plaintiff must allege:"(1) a combination of two or more persons acting with a common purpose to do an unlawful act or to do a lawful act by unlawful means or for an unlawful purpose; (2) an overt act done in pursuance of the common purpose; and (3) actual legal damage." In addition "[p]roof of malice, i.e., an intent to injure, is essential in proof of a conspiracy." In re Student Finance Corp., 335 B.R. 539, 552 (D. Del. 2005) (applying Pennsylvania law) (citations omitted). Moreover, as this Court stated in Kalmanovitz v. G. Heilman Brewing Co., Inc., 595 F.Supp. 1385 (D. Del. 1984): It is a longstanding rule in the Third Circuit that a mere general allegation of conspiracy is insufficient. A general averment of conspiracy or collusion without alleging the facts which constituted such conspiracy or collusion is a conclusion of law and is insufficient. As has been noted: Generally, fraud, conspiracy and collusion must be charged by allegations of fact; and general allegations of fraud, fraudulent intent, and conspiracy or collusion, without a statement of supporting facts, are conclusions of law and are insufficient.
5

Why Pennsylvania law applies is addressed in Section III. 15

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The plaintiffs must plead with particularity the "circumstances" of the alleged wrongdoing in order to place the defendants on notice of the precise misconduct with which they are charged. . Only allegations of conspiracy which are particularized, such as those addressing the period of the conspiracy, the object of the conspiracy, and certain actions of the alleged conspirators taken to achieve that purpose, will be deemed sufficient. Id. at 1400-01 (citations omitted). As bare conclusory allegations of "conspiracy" or "concerted action" will not suffice. Mr. Christ must expressly allege facts leading to an agreement or make averments of communication, consultation, cooperation, or command from which such an agreement can be inferred. Arunga v. AIPAC, No. Civ. A. 93-24, 1993 WL 533177, WL Op. at 2, Yohn, J. (E.D, Pa. Dec. 20, 1993), aff'd mem., 37 F.3d 1485 (3rd Cir. 1994). Mr. Christ's allegations fail to meet this standard. Indeed, he even hedges his bets as to whether there was a conspiracy. In paragraph 12 of the Complaint, Mr. Christ alleges that the defendants acted "individually and/or in conspiracy with each other" in forming Elan Suisse USA. In any event, this allegation is conclusory. There are no allegations of any facts indicating that there was a mutual understanding among the defendants at the time of the formation of Elan Suisse USA that this entity would be used somehow as part of a scheme to defraud Mr. Christ. The only other allegation is that "the $250,000 paid by plaintiff to Cormick...was used by Cormick and defendants Walters and Marshall to capitalize defendant Nicogel, a start-up company which was known originally as Aquacine Ltd." (Compl. ¶37). Assuming, purely for the sake of this motion, that this allegation is true (which it is not), there is nothing

16

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anywhere in the Complaint which suggests that either Dr. Walters or Dr. Marshall had any knowledge of the source of this money, much less that they participated in obtaining this money from Mr. Christ. Nor is there any allegation suggesting that the parties agreed to use this money for the purpose of hiding it from Mr. Christ. In the absence of any specific allegations establishing the conclusion of conspiracy, this Count should be dismissed.

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III.

THE FRAUD AND CONSPIRACY CLAIMS ARE BARRED BY THE STATUTE OF LIMITATIONS. The statute of limitations may be raised in a motion to dismiss if the allegations of

the Complaint show that the requirements of the statute have not been satisfied. Robinson v. Johnson, 313 F.3d 128, 135 (3rd Cir. 2002). According to the Complaint, Dr. Cormick allegedly made fraudulent representations in e-mails sent to Mr. Christ in Pennsylvania in January and February 2004, which induced Mr. Christ to wire $250,000 to Dr. Cormick in March, 2004. (Compl. ¶¶16-20). As demonstrated below, Pennsylvania law, including Pennsylvania's two-year statute of limitations, applies to the causes of action for fraud and conspiracy to defraud, and so the fraud claim and the derivative conspiracy claim are time-barred. A. PENNSYLVANIA LAW APPLIES.

The Complaint does not allege that any alleged misrepresentations were either made from or communicated to Delaware. The Complaint alleges that (i) Mr. Christ resides in Pennsylvania (Compl. ¶1), and (ii) the alleged fraudulent representations were delivered to Mr. Christ via e-mail. (Compl. ¶¶16-17). Thus, it appears that Mr. Christ received allegedly fraudulent e-mails in Pennsylvania. In diversity actions, federal courts look to the conflicts of law rules applied by the forum state. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 457, 496 (1941). Under Delaware's conflicts law, in tort actions, where the injury claimed is purely financial, the law of the state where the economic injury is felt applies. Deutschman v. Beneficial Corp., 132 F.R.D. 359, 379 (D. Del. 1990), recons. denied, 761 F.Supp. 1080 (D. Del. 1991). See also

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Autrey v. Chemtrust Industries Corp., 362 F.Supp. 1085, 1090 (D. Del. 1973) (where tort is misrepresentation, the wrong is deemed to occur where the misrepresentation operated to cause the injury or loss, not where the fraudulent representation was made); Restatement (Second) of Torts §148, comment g ("the place where a plaintiff acted in reliance on defendant's representation is more important than the place where the defendant made or the plaintiff received the representations"). Thus, Mr. Christ's tort claims are governed by Pennsylvania law. B. PENNSYLVANIA'S TWO-YEAR STATUTE OF LIMITATIONS APPLIES TO MR. CHRIST'S TORT CLAIMS.

Delaware's limitations period for fraud claims is three years. 10 Del. C. §8106. However, Delaware's "borrowing" statute provides that, where a cause of action arises outside of the state, the Court applies the shorter of the limitations period of Delaware and the state where the cause of action accrued. 10 Del. C. §8121. The choice of law principles which were applied above to determine what law applies also determine which state's statute of limitation applies. See David B. Lilly Co., Inc. v. Fisher, 18 F.3d 1112, 1117 (3rd Cir. 1994); Deleski v. Raymark Industries, Inc., 819 F.2d 377, 379 n.2 (3rd Cir. 1987). As demonstrated above, application of those principles results in the determination that Pennsylvania law applies. Pennsylvania's statute of limitations requires that fraud claims be filed within two years of their accrual. 42 Pa. Cons. Stat. §5524(7). This includes the conspiracy claim, which is dependant upon the fraud claim. Ammlung v. City of Chester, 494 F.2d 811, 81415 (3rd Cir. 1994); Callahan v. A.E.V., Inc., 182 F.3d 237, 246 n.7 (3rd Cir. 1999).

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The Third Circuit has ruled that this two year period is subject to the "discovery rule" in fraud cases, meaning that the two-year period is tolled until the plaintiff learns or reasonably should have learned through the exercise of due diligence of the existence of a claim. Beauty Time, Inc. v. VU Skin Systems, Inc., 118 F.3d 140 (3rd Cir. 1997). This rule of tolling, however, does not assist Mr. Christ. First, where, as here, the Complaint sets forth facts showing on its face that the statute of limitations applies, a plaintiff is obligated to plead facts demonstrating why he is entitled to the benefit of the tolling rule. Atlantic Paper Box Co. v. Whitman's Chocolates, 844 F.Supp. 1038, 1044 (E.D. Pa. 1994) (when statute of limitation is raised on a motion to dismiss, plaintiff must allege facts that permit court to conclude that the statute does not apply); In re Freuhauf Trailer Corp., 250 B.R. 168, 186 (D. Del. 2000) ("the plaintiff bears the burden of alleging facts to prove that the statute should be tolled"). In other words, given that he filed suit on April 26, 2006, he must allege facts explaining why he could not, in the exercise of reasonable diligence, have determined prior to April 27, 2004 (two years less one day prior to the date of filing), whether Dr. Cormick misled him about (i) his personal credentials and background, (ii) his relationship with investors in South Africa, and (iii) the validity and operation of his business venture. (See Compl ¶31).6 See Alfero v. E.F. Hutton &Co, Inc.,

6

Defendants further suggest that Mr. Christ is not entitled to the benefit of the tolling rule since there are no allegations that Mr. Christ, a sophisticated businessman who owned his own business (Compl. ¶14), undertook any investigation prior to investing in Dr. Cormick's business idea. See Drelles v. Manufacturers Life Ins. Co., 881 A.2d 822, 840 (Pa. Super. 2005) (a plaintiff may not recover for fraud "if he blindly relies upon a misrepresentation the falsity of which would be patent if he had used his opportunity to make a cursory examination or investigation," quoting Restatement (Second) of Torts §541). 20

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606 F.Supp. 1100, 1112 (E.D. Pa. 1985) (complaint must state why discovery could not be made earlier). Any alleged injury occurred almost immediately, when Mr. Christ did not receive his "equity shares" or written agreement. (Compl. 20). The Complaint alleges that the next contact with Dr. Cormick was in September, 2004, some five months later. (Id.). There is no explanation about what was, if anything, Mr. Christ did to investigate why he had not received his documents. Absent any allegation to establish due diligence after not receiving his shares, Mr. Christ is not entitled to the benefit of the tolling rule.

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IV.

THE COURT SHOULD STAY THIS ACTION PENDING RESOLUTION OF PRIOR-FILED PARALLEL LITIGATION INSTIGATED BY MR. CHRIST IN SOUTH AFRICA. In early 2005, Mr. Christ filed suit against Dr. Cormick in the High Court of South

Africa, seeking to recover the same money that is the crux of the present action. (Cormick Decl. Ex. A-1). Dr. Cormick filed a plea in response in June, 2005. (Id. Ex. A-2). That case is currently awaiting a trial date. (Id. ¶10). Federal courts should stay actions and await the outcome of parallel proceedings in foreign courts as a matter of international comity and "wise judicial administration, giving regard to the conservation of judicial resources and comprehensive disposition of litigation." Finova Capital Corp. v. Ryan Helicopters U.S.A., Inc., 180 F.3d 896, 898 (7th Cir. 2005) (quoting Colorado River Water Conservation Dist. v. U.S., 424 U.S. 800, 817 (1976)). In determining whether to stay an action pending resolution of a prior-filed foreign action, the Court must first determine whether the federal and foreign cases are parallel, i.e., whether substantially the same parties are litigating substantially the same issues simultaneously. Finova Capital Corp., 180 F.3d at 898. There is no legitimate argument that the two actions here are parallel. In both actions, Mr. Christ is seeking to recover the same money from Dr. Cormick, which Mr. Christ claims Dr. Cormick wrongfully took and/or refused to return. Mr. Christ will likely point out that the present action involves a number of parties who are not in the South African action. This is of little consequence. "Suits need not be identical to be parallel, and the mere presence of additional parties or issues in one of the cases will not necessarily preclude a finding that they are parallel." AAR Intern., Inc. v. 22

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Nimelias Enterprises, S.A., 250 F.3d 510, 518 (7th Cir. ), cert. denied, 534 U.S. 995 (2001). The conspiracy claim against parties other than Dr. Cormick (to the extent it survives) is derivative of the claim against Dr. Cormick. If Dr. Cormick is successful on the merits in South Africa, then, assuming the judgment is recognized in the U.S. under principles of comity, see de la Mata v. American Life Ins. Co., 771 F.Supp. 1375, 1381 (D. Del. 1991), it will be res judicata and will require dismissal of any remaining claim against the other defendants. As such, the suits are parallel notwithstanding the additional conspiracy claim. Once it has been established that the two actions are parallel, then the Court must balance the considerations that weigh in favor of and against abstention, Finova Capital Corp., 180 F.3d at 898, including: 1. The order in which the respective proceedings were filed. Mr. Christ filed the

South African action well over a year before he filed the present action (and has had the benefit of this time to prepare his case for trial and seek a trial date). This militates in favor of a stay. 2. The relative inconvenience of the federal forum. All of the defendants, except

Elan Suisse USA, are residents of foreign nations (England and South Africa). (Compl. ¶¶28). As such, litigation in the United States would be inconvenient. By contrast, since Mr. Christ was the one who selected South Africa as the location to file the first suit, he cannot now claim inconvenience as to the foreign forum. Moreover, the forum choice of a nonresident plaintiff is entitled to less deference. Evergreen Marine Corp. v. Welgrow Intern., Inc., 954 F.Supp.101, 105 (S.D.N.Y. 1997). 23

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3.

Whether federal or foreign law applies. Mr. Christ does not assert any federal

law claim, or even any Delaware law claim. As demonstrated previously, Pennsylvania law governs. Although this Court is certainly capable of interpreting and applying Pennsylvania law, there is no special policy emphasizing the need for this Court to do so. 4. Whether the foreign action protects the federal plaintiff's rights. There is no

indication that Mr. Christ will be denied a fair trial in South Africa. Moreover, a judgment in Delaware would still need to be registered in England and/or South Africa, since there is no indication that Dr. Cormick or any of the other defendants has any assets in Delaware. 5. The relative progress of the federal and foreign proceedings. This action is

in its infancy, whereas the South African case has been pending for over one year. 6. Whether a stay will promote judicial efficiency. "Maintaining two concurrent

and simultaneous proceedings would consume a great amount of judicial, administrative, and party resources for only speculative gain." EFCO Corp. v. Aluma Systems USA, Inc., 983 F.Supp. 816, 824 (S.D. Iowa 1997). All of these elements support staying this action.

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V.

THIS COURT SHOULD SANCTION MR. CHRIST FOR HIS UNJUSTIFIED ACTIONS DESIGNED TO HARASS AND INCREASE EXPENSE. The Court should exercise its inherent power and sanction Mr. Christ7 and award

defendants their attorneys' fees for the following reasons8: 1. Mr. Christ initiated this action while maintaining a prior-filed action alleging

the same facts and seeking the same relief against Dr. Cormick in South Africa (and without first dismissing the South Africa action). This has now required Dr. Cormick to engage a lawyer in Delaware in addition to his lawyer in South Africa to defend parallel proceedings. Such action is vexatious and harassing and designed merely to increase expense to Dr. Cormick. 2. Mr. Christ impleaded Dr. Cormick, Elan Suisse, Nicogel Ltd., Dr. Marshal

and Dr. Walters (all based in either England or South Africa) without any reasonable basis for the assertion of jurisdiction in Delaware, and contrary to well-established Delaware law. 3. Mr. Christ made false accusations that Nicogel, Dr. Walters and Dr. Marshall

conspired with Dr. Cormick to defraud him. First, Mr. Christ claims that Nicogel and/or Dr. Walters and/or Dr. Marshall formed Elan Suisse USA. (Compl. ¶12). This accusation was made without a shred of evidence to support it, and is false (particularly as to Nicogel, which Mr. Christ alleged to have been formed after the formation of Elan Suisse USA (Compl. ¶¶19, 37; see also Cormick Decl. ¶7, Nicogel Decl. ¶9; Marshall Decl. ¶¶7-8; Walters Decl.
7

Defendants' claim for sanctions is limited to Mr. Christ. Defendants do not suggest any wrongdoing by Mr. Christ's attorney.
8

In asserting these reasons for sanctions, defendants do not imply that anything else Mr. Christ has done or alleged in this action has any merit. 25

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¶9). Indeed, Mr. Christ contradicts himself by attributing the formation of Elan Suisse only to Dr. McCormick at paragraph 19 of the Complaint. Mr. Christ also falsely alleged, without any reasonable basis in fact, that Dr. Cormick, Dr. Walters and Dr. Marshall used Mr. Christ's money to capitalize Nicogel. (Compl. ¶37). This is absolutely false and unjustified. Indeed, there is not even an allegation that either Dr. Walters, Dr. Marshall or Nicogel had any knowledge of Dr. Cormick's dealings with Mr. Christ. (Cormick Decl. ¶8; Nicogel Decl. ¶8). The only "reason" Mr. Christ has for this allegation is that he is aware that Dr. Walters at some point briefly had a business relationship with Dr. Cormick. Thus, Mr. Christ is suing Dr. Walters because of "guilt by association." The only rationale Mr. Christ appears to have for suing Dr. Marshall (who never even met Dr. Cormick until August 2005 (Marshall Decl. ¶10)) is the fact that she is associated with Dr. Walters and Nicogel. This is not sufficient justification for dragging citizens of foreign nations into a Delaware court. This conduct should not be tolerated by this Court.

26

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CONCLUSION WHEREFORE, for the foregoing reasons, Dr. Cormick, Elan Suisse USA, Elan Suisse, Nicogel Ltd., Dr. Walters and Dr. Marshall respectfully request that this Court either dismiss this action for want of personal jurisdiction, or, alternatively, dismiss the conspiracy claim for failure to state a claim, dismiss the fraud claim as being outside the relevant statute of limitations, and stay the balance of the suit pending resolution of the suit Mr. Christ previously filed in South Africa. Defendants also request that the Court sanction Mr. Christ for his vexatious and harassing conduct. Dated: May 22, 2006

Respectfully submitted,

/s/ David L. Finger David L. Finger (DE Bar ID #2556) Finger & Slanina, LLC One Commerce Center 1201 Orange Street, Suite 725 Wilmington, DE 19801-1155 (302) 884-6766 Attorney for defendants Brett J. Cormick, Elan Suisse International Holdings (USA) LLC, Elan Suisse (Pty) Ltd., Nicogel Ltd., John Walters and Dianne Marshall

27

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CERTIFICATE OF SERVICE I, David L. Finger, hereby certify that on this 22nd day of May, 2006, I electronically filed the foregoing document with the Clerk of the Court using CM/ECF which will send electronic notification to the following counsel of record:

Thad J. Bracegirdle, Esq. Buchanan Ingersoll PC The Nemours Building 1007 North Orange Street, Suite 1110 Wilmington, DE 19801-1236

/s/ David L. Finger David L. Finger (DE Bar ID #2556) Finger & Slanina, LLC One Commerce Center 1201 Orange Street, Suite 725 Wilmington, DE 19801-1155 (302) 884-6766

Case 16: 21 22/05/2006 1:06-cv-00275-GMS 00442078238962

Document 17-2 Filed 05/22/2006 CnNNECTING LONDON IN

Page 1PAGE 01 of 19

IN THE UNITED STATES DISTRlCT COURT FOR THE DISTRICT OF DELAWARE
'ROBERT D.CHRIST,
Plaintiff,

1

j
.>

1
)

C.A. NO.06-00275GMS

BRETT J. CORMICK, ELAN SUISSE INTERNATIONAL HOLDINGS (USA) LLC, ELAN SUISSE (PTY) LTD., NICOGEL LTD., JOHN WALTERS, DIANNE MARSHALL and MERCARI FINANCIAL SERVICES (PTY) LTD.,
Defendants.

1
j

1 1

1. 1

DECLARATION OF DR.BRETT J. CORMICK
1. My name is Dr. Brett J. Connick. I make this declaration in support of my

Motion EO Dismiss or Stay and for Sanction$.
2,

I have never transacted any business in or with anyone from Ddaware

(apart from causillg Elan Suisse Internalional Holdings (USA) LLC ?Elan Suisse USA")
to be formed in Delaware). I have never sold anything to ox provided any services to

anyone located in Delaware, nor have I ever purchased goods or services from anyone
Iocated in Delaware (apart from causing Elan Suisse USA tsr be formed in Delaware) .

3.
4.

I have never set foot in Delaware.
1 do not possess, have any interest in,

or use any rcal property in

Delaware.

5.

I have never contracted to insure or act as a surcty for or on any person,

property, risk, contract, obligation or agreement located, cxccuted or to be performed

within Delaware at the rime any such contract was made.

Case 1:06-cv-00275-GMS

CONNECTING LONDON IN Document 17-2 Filed 05/22/2006

Page 2 PAGE 02 of 19

6.

I am not aware of any action or transaction I may have undertaken outside

aEDeIawan having any impact on anyone in Delaware.
7.

1, stnd 1 alone, caused Elan Su.isseUSA ro be formed, in Delaware. Neither

Dr. Walters nor Dr. Marsl~allnor Nicogel Ltd. (which was nor in existence at the time
Elan Suisse
was formed) had anything

to do with the fomat.ion of Elan Suisse. Any

statement to the contrary is pure fiction.

8.

1 never gave any money from . receivsd fralll Mr. Christ (or its equivalent) I

to Dr. Waiters andlor Dr. Marshal'l and or Nicogel Ltd. to fund. Nicogel Ltd., and neither

did any company I control. Any statement to the contrary by Mr. Christ is pure fi.ct:ion.

9.

Attached. to this declaration as Exhibit A-1 is a true and correct wpy o f a

summons issued in 2005 in a lawsuit in the High Court of South Africa styled In the

nlatter between Robert D.Christ andBretl John Carmick, Case No. 0512033.
10.

Attached to this declaration as Exhibit A-2 is a true and correct copy of the

plea I filed in response to the summons issued in the lawsuit in thc High Court o f South
Africa styled h the nzalkr behgsen Robert z

D. Chrisl

and .John Cormick, Case No.

0512033. I am currently waiting for Mr. Christ to apply to the African court for a trial

1 1.

I declare, under penalty oF erjury under the laws of the United States and
1748, that the Foregoing is true and correct.

of Delaware, pursuant to 28 U.S,C.

Executed on this 22nd day of May, 2006, in England.

I

Dr. Brett J. Connick

Case 1:06-cv-00275-GMS

Document 17-2

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Exhibit A-1

22.MRY.2886

Case 1:06-cv-00275-GMS

14:53

JJ

LOOTS INC 8 0 5 4633

Document 17-2

Filed 05/22/2006

N0.637

Page 4 of 19

P.l

~
V
I

~
'

p r SUMMONS COMBINED
IN THE WlGH COURT OF SOUTH AFRICA

(witwatersrand Local Division)
.- . ....

CASE NO:
In the matter between:ROBERT D CHRIST
,.. .

I. ; i.

%

,

Plaintiff

.

and
BRETT JOHN CORMICK
-

Defendant
.-

To the Sheriff w his Deputy
INFORM:

THAT:
ROBERT D CHRIST, an adult rqale businessman

Road, Pottstown, PA 19465, United States of Am
as "the Plaintiff') hereby institutes action against

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JJ LOOTS I N C 865 4633

Case 1:06-cv-00275-GMS i

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action the Plaintiff claims the relief on the ground set out in the Particulars of Claim annexed hereto.
INFORM the Defendant'Fufiher that if Defendant disputes the claim and
wishes to defend the action, the Defendant shall:-

(i)

Within 10 (ten) days of. the service upon the Defendant of this
Summons, file with the Registrar of this Court at the Witwatersrand
Local Division, Notice of Defendant's intention to defend and serve

a

copy thereof on the Attorneys o the Plaintiff, which notice shall given f
an address (not being a post office at poste restante) as referred to in Rule 6(5)(b)

for service upon t h e Defendant

of

all notices

and

documents in the action.

(ii)

Thereafter and withit1 21 (twenty one) days after filing and serving

Notice of Intention to Defend as aforesaid, file with the Registrar and serve upon the Plaintiff a Plea, Exception, Notice to Strike Out, with o i

without a counter claim.
INFORM the Defendant further that if the Defendant fails to file and serve the

n~ticesas aforesaid, Judgment as

claimed may be given against the

Defendant without further notice to the Defendant, or if having filed and

served such notice, the Defendant failing to plead, except, make application to
strike our or counter claim, judgment may be given against the Defendant. AND immediately thereafter serve on the Defendant a copy of this Summons
and return the same to the Registrar with whatsoever you have done

thereupon.

DATED AT JOHANNESBURG ON 12 JANUARY 2005

REGISTRAR OF THE HIGH COURT

Case 1:06-cv-00275-GMS

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JJ LOOTS INC 805 4633

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4
(Sna ) C. J
LEF

ASSHETON-SMITH INC PLAINTIFF'S ATTORNEY TEL: (021) 685-6766 REF: C B ASSHETON-SMlTHisejCHR 002 C/O CHRISTOPHER LEE ATTORNEYS 75 KING STREET BERARIO TEL: (01I) 476-3217 FAX: (011) 476-9863 REF: C J LEEIAOGCJ

Case 1:06-cv-00275-GMS

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PARTICULARS 01:

1.

The Plaintiff is Mr Robert D Christ, an adulf

male businessman whose

address is a reflecfedon the Summons. s

2.

The Defendant is Dr Brett John Cormirk,

an

carries on business

3.

In and during December 2003 to February 2004, the Plainfiff and the

Defendant held certain discussions pertaining to an investment of

US$350,000,00 be made by the Ploiniiff in two companies, being: to

3.1

Elan Sbisea (Pty) Ltd, a company incarpuroted in fhe Republic

of South Africa ("theSouth African company"); and

3.2

a company to be incorporated in Delaware. Unifed States of
America ("the United States company").

4.

The Defendant represented the following in regard to the proposed

investment:

4.1

The Plaintiff would invert the sum of USU50.000.00;

JJ Case 1:06-cv-00275-GMS

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LOOTS INC 805 17-2 Document 4633

Filed 05/22/2006

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4.2

in

exchange for the oforeeraid investment the Plaintiff would

receive:

4.2.1

50% of the issued shore capitol

in the United States

compony, which wos to hold certain intellectuai
property, and

4.2.2

a proporlionol rhoreholding in the South African compony, worth R350.000,00;

4.3

That the South African compony was engaged in certain

'financial engineering' und had access to a large number of
brokers and institutions through which certain United States

based financial products would be sold to can investor base
accessed through such brokers and institutions in the Republic
of Sou"r Africa.

4.4

That the South African company held certain intellectual

property rlghts which would be ceded and delivered to the
United States company.

5.

In contemplation of t h e conclusion of s written agreement to regulate t h e investment by the Plaintiff In t h e aforestoted entities, the Plaintiff

,

22,MfiY. 2006 14'54 JJ Case 1:06-cv-00275-GMS

LMTS

INC 805 4633 Document 17-2

Filed 05/22/2006

Page 9 of 19

attended to deporif ? h e sum of US$250.MIOBO to the accounf of t h e
Defendant, in and during March 2004.

6.

Despite variaUa dis~ursions held between t h e Plaintiff and t h e

~sfenda;,

the Plaintiff and Defendant were unable i o conclude the

terms kf such written agreement.

7.

On or about 9 September 2004, and in writing, the Defendant offered
to refund t h e Plaintiff She sum paid to him of US$250.000,00. Such offer
Was

accepted in'writing by the Plaintiff on 30 November 2004, and t h e

Plaintiff simwltaneously demanded repayment of the said

sum

af

US$250.000,00.

8% Despite such demand, the ~efendahthas failed and/or refused

and/or neglected to pay t h e omaunt of USf250.000.W to t h e Plaintiff.

WHEREFORE the Plaintiff prays for judgment against the Defendant for:

(a)

Payment of t h e sum of US$250.000,00 [or the Rand equivalent thereof

us at the date of judgment herein);

(b)

Inierest thereon at the rote of 15.5% a fernpore morae, ta dote o f
payment;

Case 1:06-cv-00275-GMS JJ Document80s 4533 Filed 05/22/2006 .. 22. M W . 2006 14:54 LOOTS INC 17-2
1 .

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-4(c) Costs of suit on the attorney and client scale;

DATED at

on this

day of DECEMBER 2004.

J-H RdUX Counsel far Plaintiff

ASSHETON SMITH INC

-

Per:
Attorneys for Plainfiff Gf~und Haor, West Block
Tahnery Park

Belrnont Road

TO:

THE REGISTRAR

I I .

.".

22. MRY. 2006
2 -

14: 54

Case 1:06-cv-00275-GMS
i d

JJ LOOTS INC 885 4633

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AND To:

DR B E JOHN CORMlCK Rn

Defendant

Ground Floor Oxford Gd'e Hyds Park Lane Hyds Park
JOHANNESBURG

-

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Exhibit A-2

22.MRY.2006
-5

Case 1:06-cv-00275-GMS

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JJ LOOTS I N C 805 4633

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Filed 05/22/2006

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d'

In the matter between:
CHRIST: ROBERT D.
and

CQRMICK: B R E n JOHN

DEFENDANT

DEFENDANT'S PLEA

The Defendant pleads as follows to the PlaintWs particulars of claim:

I.

SPECIAL PLEA I UMINE: N
The Defendant pleads in limine: I I

The Defendant is an Australian Citizen;
The Defendant permanently resides in Zimbabwe;
The Defendant, for 'the purposes of visiting

1.2
1.3

South Africa, tempora.rily

resides from time to time in Hermanus, in the Western Cape Province;

1.4

The Defendant neither resides nor wmes on business at any place

within the area of jurisdiction o the Honourable Court; f

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9.5
1.6

The Plaintiff resides i the United Slates of America; n

The Plaintiff is employed i me United Slates of America; n
The Plaintii owns no property within the area of jurisdiction of the

17 .

Honourable hurt;
1.8

The Defendant owns no property within the a m of jurisdiction of the

Honouable Caurt;
' .9 I

Plaintiffs claim against the Defendant is for the amount of US250 000 which was:

1.9.1 deposited by the Plainti from the United States crf America m two

amounts of US$125 000 each into the bank amounts of the Defendant

in Londorl in heUnited Kingdom; and
4.9.2 agreed to be so deposited while the Plaintiff and the Defendant were

outsick the borders d the Republicof South Africa.
1

sum of money fmm the Defendant is that, on or about the 9* of Sepkrnber 2 3 4 and 10, in writing, fhe Defendant oflered to refund the Plaintiff the said sum and said offer was accepted in writing by the Plaintiff an or about the 3 ' o 0" f
The basis on which the Plainti deims the afomsaid

November2QW,and
1.1I

In this regard, while making the alleged affer, the Defendant was resident or arrying on business within the area of jurisdiction o the f

Honourabie Court and while accepting such offer the Plaintiff was not
residing or

cawing on business within the area of jurisdiction uf the

Honourable Caurt.

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2. In the premises the Defendant pleads: I
2.1.4 Neither the Plaintiff nor the Defendant is ordinarily resident or carries
on business Within the 'area o jurisdiction 'of the Hahourable Court; f

and

.

2 j 2 The