United States District Court, E.D. Wisconsin
ORDER GRANTING THE DEFENDANT'S MOTION TO DISMISS
FOR LACK OF PERSONAL JURISDICTION (DKT. NO. 8), AND
PAMELA PEPPER United States District Judge.
case arises from a post-termination contract dispute between
the plaintiff and the defendant. The plaintiff is a Wisconsin
limited liability company that provides revenue cycle
management services to health care systems and hospitals. The
defendant is a not-for-profit Illinois corporation that
provides health care services at locations in Illinois. Under
two professional services contracts, the plaintiff agreed to
perform revenue cycle management services for the defendant.
After the parties' first contract had been replaced by
the second, the defendant invoked its right to terminate
without cause. The plaintiff claims that the defendant failed
to make payments that became due upon termination.
defendant has moved to dismiss the complaint under Federal
Rules of Civil Procedure 12(b)(1) (lack of subject-matter
jurisdiction) and 12(b)(2) (lack of personal jurisdiction).
Dkt. No. 8. The court will deny the defendant's motion to
dismiss for lack of subject-matter jurisdiction, because the
plaintiff has submitted evidence establishing diversity of
citizenship between the parties. The court will grant the
defendant's motion to dismiss for lack of personal
jurisdiction; the court cannot exercise personal jurisdiction
over the defendant consistent with due process, because the
defendant lacks sufficient minimum contacts with Wisconsin.
ALLEGATIONS OF FACT
complaint alleges that plaintiff is a Wisconsin limited
liability corporation that assists “health care systems
and hospitals with managing their revenue cycle vendors to
drive value by reducing vendor costs and increasing vendor
recovery performance.” Dkt. No. 1 at ¶¶1, 7.
The plaintiff did not plead the identities and citizenships
of its members in the complaint. In response to the
defendant's motion to dismiss, however, it filed a
declaration from Michael Zimmerman. Dkt. No. 13. Zimmerman
declared that Healthfuse has two members-Nicholas Fricano and
Zimmerman Ventures, LLC. Id. at 1. He declared that
he is the sole member of Zimmerman Ventures, LLC; that he
lives in Franklin, Wisconsin; and that Zimmerman Ventures,
LLC was incorporated in Wisconsin and has its corporate
offices in Milwaukee, Wisconsin. Id. at 1-2. The
plaintiff also filed the declaration of Nicholas J. Fricano.
Dkt. No. 14. Fricano-the second member of Healthfuse, as well
as its president and chief executive officer-declared that he
lives in Milwaukee, and previously lived in Whitefish Bay,
Wisconsin. Id. at 1-2.
defendant is an Illinois not-for-profit corporation with its
principal place of business located at 25 North Winfield
Road, Winfield, Illinois. Dkt. No. 8-2 at ¶7. It
provides health care services at locations in Illinois.
Id. at ¶¶4, 7.
plaintiff alleges that the parties entered into a
Professional Services Agreement dated April 1, 2014, (the
“First PSA”) under which the plaintiff
“agreed to provide revenue cycle vendor performance
management services and revenue cycle support to the
[defendant] and one or more of its affiliate
corporations” for a three-year period. Dkt. No. 1 at
¶8. The defendant executed that contract after a meeting
in DuPage County, Illinois. Dkt. No. 8-1 at ¶12. The
First PSA contains a choice of law provision selecting
Illinois law as the governing law. Dkt. No. 1-1, §9.6.
the term of the First PSA, the plaintiff alleges that the
defendant “asked to renegotiate the payment
terms” of the contract. Dkt. No. 1 at ¶11. The
plaintiff alleges that it agreed to adjust the payment terms
“[a]s a business courtesy to its new client, ”
and the parties entered a second Professional Services
Agreement dated July 1, 2014, (the “Second PSA”).
Id. at ¶12. The defendant executed the Second
PSA contract in St. Charles, Illinois. Dkt. No. 8-1 at
¶13. The plaintiff alleges that, “[b]y its terms,
the Second Agreement replaced the First Agreement.”
Dkt. No. 1 at ¶12. Like the First PSA, the Second PSA is
governed by Illinois law. Dkt. No. 1-2, §9.6.
plaintiff alleges that on July 13, 2015, during the term of
the Second PSA, the defendant notified the plaintiff of its
decision to terminate the Second PSA without cause effective
August 14, 2015. Dkt. No. 1 at ¶16. According to the
plaintiff, the defendant breached the payment terms of both
the First PSA and Second PSA by failing to pay “all
earned but unpaid” amounts within thirty days of the
defendant's termination of the Second PSA. Id.
at ¶¶17-20. The plaintiff pleaded four causes of
action: breach of contract as to the First PSA (Count I, dkt.
no. 1 at 5); breach of contract as to the Second PSA (Count
II, dkt. no. 1 at 5), quantum meruit (Count III,
dkt. no. 1 at 6); and unjust enrichment (Count IV, dkt. no. 1
date the plaintiff filed the complaint (May 6, 2016), the
* “was not engaged in conducting or transacting any
business or performing any services at any location” in
Wisconsin (Dkt. No. 8-2 at ¶8(a));
* “was not authorized, licensed or registered by or
with any authority within” Wisconsin “to conduct
or transact any business or to perform any services
there” (Id. at ¶8(b));
* “did not own, operate, lease, occupy or maintain any
office, facility, or other real property” in Wisconsin
(Id. at ¶8(c));
* “did not employ any employees” in Wisconsin
(Id. at ¶8(d)):
* “had no designated, appointed or registered agent or
office for accepting service of process” in Wisconsin
(Id. at ¶8(e));
* “was under no obligation to pay, or withhold any
taxes payable, to the State of Wisconsin or to any of its