United States District Court, D. South Dakota, Southern Division
VERMILLION AREA CHAMBER OF COMMERCE AND DEVELOPMENT COMPANY, Plaintiff,
EAGLE CREEK SOFTWARE SERVICES, INC., a Minnesota Corporation, KEN BEHRENDT, KEVIN BURKHART, BOB DILLON, and LAURA BEHRENDT, Defendants.
MEMORANDUM OPINION AND ORDER
E. SCHREIER, UNITED STATES DISTRICT JUDGE.
Vermillion Area Chamber of Commerce and Development Company
(VCDC), moves for an order remanding the case to Clay County
Circuit Court, in the First Judicial District. Docket 6. VCDC
also moves to strike portions of an affidavit filed by one of
defendants' attorneys, Michael E. Obermueller. Docket 17.
Defendants resist the motions. For the following reasons, the
motions are denied.
a non-profit corporation that operates in Vermillion, South
Dakota. Eagle Creek is a technology company, and its
principal place of business is located in Eden Prairie,
Minnesota. Ken Behrendt, Laura Behrendt, Kevin Burkhart, and
Bob Dillon are Minnesota residents and shareholders of Eagle
dispute stems from negotiations among VCDC, Eagle Creek, and
the State of South Dakota through the Governor's Office
of Economic Development (GOED). While specific details are
not before the court, the negotiations considered an
arrangement where Eagle Creek would expand its South Dakota
business operations into Vermillion, South Dakota, in
exchange for certain monetary benefits to aid in the
expansion. The parties also agreed that VCDC would construct
a building that it would lease to Eagle Creek. On June 13,
2013, VCDC and Eagle Creek signed a written agreement
memorializing the terms of the lease.
initiated this action against Eagle Creek in state court on
October 27, 2014, by serving the summons and complaint on CT
Corporation System in Pierre, South Dakota. CT Corporation
was the registered agent for Eagle Creek at the time. The
complaint alleged claims for breach of contract and
detrimental reliance. Due to communication errors between
Eagle Creek and CT Corporation, Eagle Creek did not receive
actual notice of the lawsuit from CT Corporation. Instead, an
Eagle Creek employee noticed a newspaper article that was
published on December 8, 2014, that indicated VCDC had moved
for default judgment against Eagle Creek.
Eagle Creek successfully obtained additional time to respond
to the complaint from the state court, the parties conducted
discovery. Both parties submitted and responded to requests
for admissions, production of documents, and interrogatories.
The parties also deposed multiple people. VCDC deposed three
Eagle Creek representatives: Kurt Egertson, Ken Behrendt, and
Jeff Brusseau. Eagle Creek deposed four VCDC representatives:
Nate Welch, Paul Preister, Sheila Gestring, and Steve Howe.
Eagle Creek also deposed five GOED representatives.
parties also sought final adjudication of the lawsuit through
motions for summary judgment. VCDC filed a motion for summary
judgment on May 11, 2015. Eagle Creek filed a motion for
summary judgment on September 14, 2015. Approximately one
week prior to the hearing scheduled to address both motions
for summary judgment, the parties entered into a stipulation
that allowed VCDC to amend its complaint. VCDC filed its
amended complaint on October 5, 2015.
amended complaint added as named defendants the four
shareholders of Eagle Creek: Ken Behrendt, Laura Behrendt,
Kevin Burkhart, and Bob Dillon. In addition to the original
causes of action, the amended complaint alleged claims of
fraud and deceit and sought to pierce the corporate veil to
subject the shareholders to personal liability. On October
13, 2015, the individual shareholders, with written consent
from Eagle Creek, filed notice of removal of the action to
this court pursuant to 28 U.S.C. §§ 1441(a) and
1446. Defendants relied upon diversity of citizenship as the
basis for this court's jurisdiction under 28 U.S.C.
§ 1332. VCDC moves to remand the case to Clay County
Circuit Court in the First Judicial District of South Dakota.
party invoking federal jurisdiction bears the burden of
establishing that all the prerequisites for jurisdiction are
satisfied. Hatridge v. Aetna Cas. & Sur.
Co., 415 F.2d 809, 814 (8th Cir. 1969). “Federal
courts are to ‘resolve all doubts about federal
jurisdiction in favor of remand' ” because removal
statutes are construed strictly. Dahl v. R.J. Reynolds
Tobacco Co., 478 F.3d 965, 968 (8th Cir. 2007).
Motion to Strike.
moves to strike portions of an affidavit that Attorney
Obermueller filed in support of defendants' opposition to
the motion to remand. VCDC asserts that the affidavit is
“replete with inadmissible hearsay, legal conclusions,
speculation, conjecture, and statements lacking personal
knowledge of which the affiant is not qualified to
testify.” Docket 17 at 2. VCDC relies upon Federal Rule