Memorandum Opinion and Order — Oto Analytics, Inc. d/b/a Womply v. Capital Plus Financial, LLC, et al., No. 3:21-cv-02636-B (N.D. Tex.)
- Date
- 2022-07-20
Source document: Memorandum Opinion And Order; document type: Memorandum opinion and order (second motion for reconsideration / leave to replead), 6 pages.
Full text
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
OTO ANALYTICS, INC. d/b/a
WOMPLY,
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Plaintiff,
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v.
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CIVIL ACTION NO. 3:21-CV-2636-B
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CAPITAL PLUS FINANCIAL, LLC,
CROSSROADS SYSTEMS, INC., ERIC
DONNELLY, BA FIN ORION LLC d/b/a
BLUEACORN, and BARRY
CALHOUN,
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Defendants.
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MEMORANDUM OPINION AND ORDER
Before the Court is Plaintiff Oto Analytics, Inc. (Womply)’s Second Motion for
Reconsideration or for Leave to Replead Its Claims Against Blueacorn (Doc. 105). Because the
proposed amendments to the complaint might alter the Court’s determination regarding a lack of
personal jurisdiction over BA Fin Orion, LLC (Blueacorn) and Barry Calhoun (collectively, the
Blueacorn Defendants), see Oto Analytics, Inc. v. Cap. Plus Fin., LLC, 2022 WL 1082368 (N.D. Tex.
Apr. 11, 2022), the Court GRANTS IN PART and DENIES IN PART the motion.
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I.
BACKGROUND1
A.
Factual Background2
This dispute involves three parties who agreed to process Paycheck Protection Program (PPP)
loans and divide the Small Business Administration (SBA) fees earned from processing these loans.
Womply is a technology company incorporated in Delaware that “developed . . . an internet portal
through which borrowers searching for PPP assistance could . . . submit an application to PPP
lenders[,] and . . . provided lenders and their partners . . . with a technology platform . . . to manage
the . . . reviewing, approving, and servicing . . . of small dollar PPP loans.” Doc. 20, Am. Compl.,
¶¶ 3, 11. “Blueacorn is a Wyoming limited liability company with its principal place of business in
Wyoming . . . that helps compile loan application paperwork for the PPP and partners with banks
to apply for and secure loans.” Id. ¶¶ 15, 46 (quotation marks omitted). Calhoun is the CEO of
Blueacorn and resides in Scottsdale, Arizona. Id. ¶ 16. “Capital Plus [Financial (Capital Plus)] was
a small regional lender [that had] less than $40 million in annual revenue,” prior to the PPP loan
program, and is a Texas limited liability company with its principal place of business in Texas. Id.
¶¶ 5, 12. Blueacorn contracts with Capital Plus and one other lender, and has received “more than
$500 million in fees” for its PPP loan facilitation with Capital Plus. Id. ¶ 9.
In January 2021, Capital Plus announced a partnership with Blueacorn to process first and
second draw PPP loan applications. Id. ¶ 46. In May 2021, Blueacorn approached Womply with a
proposal for Womply to “refer PPP applicants to Capital Plus through Blueacorn . . . and . . . provide
1 For a fuller discussion of the facts, see Oto Analytics, Inc., 2022 WL 1082368, at *1–2.
2 The facts are as alleged by Womply in the First Amended Complaint (Doc. 20).
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access to the Womply Technology Platform directly to Capital Plus” in return for “certain fees from
Blueacorn for each Womply-referred PPP loan.” Id. ¶ 55. As part of the proposal, Womply
contracted with only Blueacorn after assurances that Womply would have visibility into a joint
Blueacorn and Capital Plus SBA fee-deposit account with Evolve Bank & Trust (the Joint Account).
Id. ¶¶ 56–58, 87.
Womply entered two separate agreements with Blueacorn: one providing Womply one
percent “for each referred loan”; and a second providing Blueacorn with various documents from
PPP applicants and integrating various third-party service providers in return for “the first $250 from
any Lender Processing Fee, plus 1/3 of the remaining Lender Processing Fee after the first $250 is
subtracted.” Id. ¶¶ 62–67; Ex. 3, ¶ 2.2; Ex. 4, at 1, ¶ 3.3. Both agreements require Blueacorn to pay
Womply within five business days of Blueacorn’s receipt of its fees from the lender—Capital Plus. Id.
Ex. 3, ¶ 2.3; Ex. 4, ¶ 3.5. Blueacorn continues to insist that Capital Plus has not paid it and thus,
payment to Womply is not yet due. Id. ¶¶ 6, 84–85, 97.
Womply filed its initial complaint on October 25, 2021. See Doc. 1, Compl. Womply
subsequently amended its original complaint on December 23, 2021, bringing claims for fraud,
negligent misrepresentation, and civil conspiracy against the Blueacorn Defendants and breach of
contract claims against Blueacorn. Doc. 20, Am. Compl., ¶¶ 131–48, 164–71, 178–90. The
Blueacorn Defendants moved to dismiss under Rule 12(b)(2) for lack of personal jurisdiction on
January 24, 2022. See Doc. 31, Defs.’ Mot. The Court granted the motion because “Womply’s causes
of action do not arise from the Blueacorn Defendants’ connections to Texas.” Oto Analytics, Inc.,
2022 WL 1082368, at *9. On May 16, 2022, Womply moved for reconsideration of the Court’s
Order granting dismissal of the Blueacorn Defendants or in the alternative to amend the complaint.
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Doc. 88, Mot. Recons. The Court denied this motion because “Womply failed to comply with the
Local Civil Rule 15.1(b)” that requires filing the proposed amended complaint with the motion.
Doc. 101, Order, 2. On July 11, 2022, Womply filed the instant amended motion that includes
redacted and unredacted versions of the motion and a proposed Second Amended Complaint
(SAC). Doc. 104, 2d Mot. Recons.; Doc. 105, App. The Blueacorn Defendants responded on July
19, 2022. Doc. 109, Resp. The Court considers the motion below.
II.
LEGAL STANDARD
Under Federal Rule of Civil Procedure 15(a)(2), when a party requests leave to amend a
pleading before trial, the court “should freely give leave when justice so requires.” Normally the
Court will allow a plaintiff the opportunity to amend where it appears that more careful or detailed
drafting might overcome the deficiencies on which dismissal is based. See McClellon v. Lone Star Gas
Co., 66 F.3d 98, 103 (5th Cir. 1995). “[A] district court properly. . . denies leave to amend for a
substantial reason, such as undue delay, repeated failures to cure deficiencies, undue prejudice, or
futility.” Stevens v. St. Tammany Par. Gov’t, 17 F.4th 563, 575 (5th Cir. 2021). Absent such factors,
leave to amend should be “freely given.” Id.
III.
ANALYSIS
The Court restricts its analysis to the arguments about repleading the claims against the
Blueacorn Defendants because these arguments moot the arguments about reconsideration of the
Court’s prior order dismissing the Blueacorn Defendants for lack of personal jurisdiction.
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Womply argues that “new evidence obtained through discovery in this action” will allow it
to plead new allegations regarding the agreements between Blueacorn and Capital Plus, “that
Blueacorn and Capital Plus negotiated the Agreements with Womply together,” and “that Blueacorn
marketed its services to Texas.” Doc. 104, Mot. Recons., 16–17. These new allegations “address[]
the Court’s concerns regarding personal jurisdiction,” Womply contends. Id. at 15.
The Blueacorn Defendants respond that Womply’s new allegations fail to show that
“Blueacorn’s ‘contacts with the forum state arise from, or are directly related to, [its] cause of
action,’” and thus, amendment is futile. Doc. 110, Defs.’ Resp., 13–14. The Blueacorn Defendants
argue that Womply mostly relies on allegations from its First Amended Complaint with “purportedly
new allegations” about PPP-loan-processing activities between Blueacorn and Capital Plus that
“expand on, but add nothing new to, a basic fact that has been pleaded in this litigation from the
start.” Id. at 14–15. Further, the Blueacorn Defendants contend that the allegations about the Texas
choice-of-law provision and forum selection clause concern agreements between Blueacorn and
Capital Plus, not Womply. Id. at 16. Lastly, the Blueacorn Defendants aver that Womply’s “revived
claims against the Blueacorn Defendants would be met with another Rule 12(b)(2) motion to dismiss
for lack of personal jurisdiction that would have the same outcome.” Id. at 16.
The Court finds Womply’s new allegations regarding the Blueacorn Defendants would
substantially alter this Court’s prior analysis about whether it may exert personal jurisdiction over
the Blueacorn Defendants. The Court previously found that “Blueacorn’s one-way contacts . . . did
not solidly connect Blueacorn to Texas.” Oto Analytics, Inc., 2022 WL 1082368, at *9. However,
Womply’s new allegations provide a greater depth to the relationship between the forum, Blueacorn,
and Womply’s causes of action. Womply now includes nearly three pages of allegations detailing
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Blueacorn’s “substantial connections to Texas.” Doc. 104-2, Proposed SAC, ¶ 24. These allegations
further flesh out the relationship between Blueacorn and Capital Plus and add detail about the
amount of contacts Blueacorn had with Texas. See id. These allegations alone are enough to
convince the Court that amendment of the complaint would not be futile. See Stevens, 17 F.4th at
575. Thus, the Court GRANTS Womply leave to file the SAC. Leave to file the SAC now being
granted, the Court DENIES as MOOT the request for reconsideration.
IV.
CONCLUSION
For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART
Womply’s Second Motion for Reconsideration or for Leave to Replead Its Claims Against Blueacorn
(Doc. 105). Womply is ORDERED to file its SAC on or before July 21, 2022.
SO ORDERED.
SIGNED: July 20, 2022.
______________________________
JANE J. BOYLE
UNITED STATES DISTRICT JUDGE
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