Cerner Middle East Limited v. Belbadi Enterprises LLC

Summarized by:

  • Court: Oregon Court of Appeals
  • Area(s) of Law: Corporations
  • Date Filed: 07-15-2020
  • Case #: A166877
  • Judge(s)/Court Below: Armstrong, P.J. for the Court; Tookey, J.; & Shorr, J.
  • Full Text Opinion

"A court of this state having jurisdiction of the subject matter has jurisdiction over a party served in an action pursuant to Rule 7 under any of the following circumstances. . . [i]n any action, whether arising within or without this state, against a defendant who when the action is commenced. . . [i]s a corporation created by or under the laws of this state." ORCP 4(A)(3).

When iCapital defaulted on its contractual burdens to Cerner, Cerner sought arbitration. Before any decision was reached, the sole proprietor (Al Dhahaeri) of iCapital’s parent-company (Belbadi) reached a settlement agreement that Belbadi would satisfy the obligation. Cerner sued Belbadi to enforce this agreement. The trial court found that it lacked personal jurisdiction and dismissed the matter. On appeal, Cerner assigned error to the court’s dismissal. Cerner argued that personal jurisdiction existed where Beldbadi’s associated companies, which were mere “alter egos,” were constituted under Oregon law. Belbadi argued that it is an autonomous entity from these affiliated companies. If affiliated companies are mere “alter egos,” i.e. possess a “unity of identity,” then personal jurisdiction will be found when only one such company is constituted under the laws of the forum state. See Rice v. Oriental Fireworks Co., 75 Or App 627 (1986). A pre-trial plaintiff must assert sufficient facts for a court to find a “unity of identity.” The Court held that Oregon courts had personal jurisdiction over Belbadi. The Court found a “unity of identity” between Belbadi and its Oregon subsidiary-company because Cerner’s affidavits purport to show Al Dhahaeri intermingled finances, used such funds for personal purposes, and ignored corporate formalities. Reversed and remanded.   

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