Peterson v. Evapco, Inc.

Panel: Meredith, Leahy, James P. Salmon (Senior Judge, Specially Assigned), JJ. Leahy, J. ⁷ The central issue we must address in this appeal is whether, in a case arising out of a contract designating Maryland as the forum state, a Maryland court can exercise personal jurisdiction over a non-resident party who did not sign the contract but was "closely related" to the contractual relationship at issue. We adopt the relatively nascent "closely related" doctrine ⁸ embraced by most federal and state jurisdictions that have considered applying it. Featured in this case are North Carolina residents Charles A. Peterson and Carmen A. Peterson, who founded, owned, and operated Tower Components, Inc. ("TCI") in North Carolina from 1990 to 2005.

They sold TCI in 2005 through a stock purchase agreement ("SPA") to a Maryland company, Evapco Products ("EvapProducts"). EvapProducts is a holding company that ²¹⁴ Evapco, Inc., another Maryland company, created to hold TCI's stock. At the time of the sale, Mr. Peterson-but not Mrs. Peterson-signed a separate "Confidentiality and Intellectual Property Agreement" (the "Confidentiality Agreement" or "Agreement") and continued to work for TCI. The Confidentiality Agreement prohibited Mr. Peterson from using confidential information "in any way detrimental" to the interests of Evapco, Inc. or its subsidiary companies.

The Agreement also included a non-compete clause and designated Maryland as the forum in which to resolve any disputes arising from it. Mr. Peterson continued to work for TCI as a sales manager until 2014 when TCI fired him for conducting business in direct competition with Evapco, Inc. and its subsidiaries via two LLCs that he and his wife wholly owned: American Cooling Tower Products, LLC ("ACTP") and Evergreen Composite Technology, LLC ("Evergreen"). Evapco, Inc. and its wholly-owned subsidiaries, EvapTech, Inc. ("EvapTech"), EvapProducts, and TCI (collectively, "Appellees," "Evapco," and plaintiffs below), filed suit in the Circuit Court for Carroll County for injunctive relief and damages against Mr. and Mrs. Peterson, ACTP and Evergreen (collectively, "Appellants" and defendants below). The plaintiffs alleged, mainly, that Mr. Peterson breached the Confidentiality Agreement and that the other defendants tortiously interfered with the Confidentiality Agreement and with Evapco's prospective advantage.

The defendants moved to dismiss Mrs. Peterson, ACTP, and Evergreen for lack of personal jurisdiction, but the court denied the motion. The contentious litigation that ensued took a relatively unusual ⁹ course after the court entered a default judgment against the defendants as a spoliation sanction and reserved only the issues of injunctive relief and damages to be tried before the court. Appellants challenge the circuit court's exercise of personal jurisdiction over Mrs. Peterson, Evergreen, and ACTP. We hold that those parties consented to jurisdiction in Maryland because (1) the Confidentiality Agreement contained a valid forum-selection clause; (2) Evapco's claims arose out of the non-signatory Appellants' status in relation to the Confidentiality Agreement; and (3) Mrs. Peterson, Evergreen, and ACTP were closely related to the Confidentiality Agreement, thus making it foreseeable that the forum-selection clause would be enforced against them.

The remaining issues that Appellants raise on appeal stem largely from the court's spoliation sanction and the procedural rulings that followed. Discerning no error or abuse of discretion, we affirm those rulings. BACKGROUND A. The Corporate Parties Evapco, Inc. is a Maryland manufacturing company that was founded in 1976 and has its world headquarters in Taneytown, Maryland. The company provides service and products in the commercial HVAC, industrial process, power, and industrial refrigeration markets.

Evapco, Inc. manufactures products at 19 locations throughout nine countries and supplies products via a sales network of more than 170 offices. EvapTech is also a Maryland company, but its principal place of business is in Lenexa, Kansas. Founded in 2005, EvapTech conducts research and development in the industrial refrigeration and HVAC evaporative cooling tower markets. It also designs, constructs, rebuilds, and repairs large field-erected cooling towers and conducts aftermarket purchases and sales. ^{215 10} EvapProducts, another Maryland corporation, is principally located in Maryland and serves as the holding company for TCI's stock.

The Petersons founded TCI as a North Carolina corporation in or around 1990. TCI manufactures and sells components for cooling towers and heat exchangers, including Opti-Bar and Opti-Grid. TCI not only sells these products to third-party purchasers, but also supplies them to Evapco to be incorporated into the cooling towers that Evapco manufactures and sells, and to EvapTech for its field-erected cooling towers. After they sold TCI to EvapProducts, Mr. and Mrs. Peterson formed ACTP, a North Carolina LLC, in October of 2012.

They maintained its principal place of business at their home in North Carolina until they dissolved the company on June 20, 2015, after the underlying complaint was filed. ACTP was in the business of buying and selling cooling tower parts. Although Mr. Peterson claimed in his answers to interrogatories that he "had no involvement with the business," the record reveals that he was ACTP's registered agent and manager and that he signed checks and tax forms on ACTP's behalf. Evergreen was a Georgia LLC that the Petersons formed in 2007 and dissolved on May 9, 2015, roughly six weeks before they dissolved ACTP.

The ownership and business of Evergreen was contested throughout the underlying proceedings, 1 but Appellees agree with Mrs. Peterson's most recent testimony that she owned 51% and her husband owned 49%. Although Mrs. Peterson described Evergreen in her affidavit as a ¹¹ company that "was in the business of manufacturing composite decking materials," a credit application that Mr. Peterson signed described Evergreen's business as the "[r]esale of cooling tower parts." The circuit court ultimately found that both ACTP and Evergreen operated in competition with Evapco. 2 B. The Sale of TCI In 2005, EvapProducts purchased all of TCI's stock from the Petersons for roughly $3.76 million. According to Evapco, Inc. President and CEO, William Bartley, TCI was targeted for acquisition, in part, because it produced a product called "Opti-Bar, which ha[s] [ ] kind of an industry reputation as the best, most efficient splash bar in the [cooling tower] market." In consideration for the purchase of TCI stock, the parties entered into the Confidentiality Agreement, without which Evapco "would not have entered into and consummated" the SPA. Mr. Peterson, but not his wife, signed the Confidentiality Agreement.

The Confidentiality Agreement contained an assignment clause that provided in relevant part: ²¹⁶ I [Mr. Peterson] acknowledge and agree that all work product, designs, specifications, drafts, memorand[a], ideas, know how, trade secrets, inventions, improvements, modifications, enhancements and any other work product previously produced, currently produced, or produced in the future by me, solely or jointly with others while employed at [Evapco] (collectively, the "Work Product") was, is, and shall be work for hire and created to be owned by Evapco and, to the extent that any such Work Product was or is not work made for hire, for no additional consideration, I hereby assign over to Evapco all of my right, title and interest in and to such Work Product[.] ¹² The Confidentiality Agreement required Mr. Peterson to keep accurate records, which would remain Evapco's property, and to surrender those records to Evapco in the event of his termination. It imposed a duty on Mr. Peterson to keep confidential all information Evapco communicated to him during his tenure with TCI. Additionally, the Agreement contained a restrictive covenant that prohibited Mr. Peterson, "at all times during [his] employment with Evapco" from "engag[ing] in any activity, directly or indirectly, that competes with Evapco or otherwise compromises its interests." By signing the Confidentiality Agreement, Mr. Peterson agreed "not to compete with Evapco for two (2) years from the later of the date of th[e] Agreement or the date my employment with Evapco ends[,]" and further acknowledged that I shall be competing with Evapco if I participate, or engage in, or carry on directly or indirectly, within the continental United States or any foreign country within which Evapco has operations or representative sales offices at the time of my termination from employment with Evapco, for myself or on behalf of any person, partnership, corporation or other entity, any business that designs, manufactures, licenses, leases or sells goods or services that are, as of the date of termination of my employment with Evapco: (i) also offered by Evapco; (ii) under development by Evapco to bring to market in the future; or (iii) subject to plans by Evapco to bring to market in the future by means of either a business acquisition or the hiring of persons with expertise to develop such goods or services. The Confidentiality Agreement was governed by Maryland law and specified that "[a]ll claims hereunder shall be tried solely and exclusively in the Circuit Court for Carroll County (or if subject matter jurisdiction exists, in the United States District Court for the District of Maryland, Northern Division), and the parties consent to the sole and exclusive jurisdiction and venue of such court, regardless of where I [Mr. Peterson] am residing at the time[.]" ¹³ C. Mr. Peterson's Tenure at TCI Incidental to the SPA, Mr. Peterson continued working for TCI as a sales manager.

His duties included managing TCI's relationships with its customers as well as procuring and bidding on outside sales. In the spring of 2014, TCI discovered that, since at least 2009, Mr. Peterson was engaging in business activities "that not only distracted from performing his duties at TCI, but were also in direct competition with the business of [Evapco.]" Specifically, TCI accused Mr. Peterson of, individually and through Evergreen and ACTP, selling products and cooling tower parts made by Evapco's competitors to Evapco's actual and prospective customers; manufacturing replica TCI and EvapTech products to sell to Evapco's actual and prospective customers; and diverting a project from Evapco by submitting a bid to a general contractor through Evergreen. ²¹⁷ Evapco, Inc. CEO, William Bartley, later testified that he heard rumors of Mr. Peterson's side dealing but the "last [ ] straw" was when Mr. Peterson "had become careless" and left a purchase order from Evergreen in a copy machine at TCI's office. Mr. Bartley told him, "We know what you are doing, so, now you need to leave and you can't compete for two years. This is what your agreement says." TCI terminated Mr. Peterson on July 29, 2014.

D. North Carolina Employment Hearing Mr. Peterson filed for unemployment benefits, and an adjudicator with North Carolina's Division of Employment Security denied his claim, finding that TCI had terminated him for misconduct connected with his work. On January 27, 2015, an appeals referee held a hearing in Mr. Peterson's administrative appeal of that decision. In the Matter of Charles A. Peterson, Senior and Tower Components, Inc. , Appeals Decision No. VII-A-87271. At the hearing, Mr. Brian Colwell, the General Manager of TCI, testified that TCI fired Mr. Peterson for breach of the Confidentiality Agreement.

According to Mr. Colwell, TCI had been receiving invoices from EvapTech's competitors, care of Mr. Peterson, for components that TCI did not supply. TCI ¹⁴ investigated and discovered that Mr. Peterson was purchasing the parts for Evergreen and that Evergreen was paying for the purchases. After Mr. Colwell discovered an Evergreen purchase order from a competitor in TCI's copy machine, TCI terminated Mr. Peterson for appropriating confidential information and business opportunities. Mr. Colwell clarified that TCI had been aware that Mr. Peterson owned Evergreen during his employment with TCI.

In fact, TCI had permitted Mr. Peterson to conduct business on TCI's behalf through Evergreen with Grupo Unitherm, one of TCI's prior customers in Mexico that wanted to continue working with Mr. Peterson directly. 3 Mr. Colwell insisted that Mr. Peterson's sales to Grupo Unitherm through Evergreen were not the cause for his termination. Instead, TCI fired Mr. Peterson because Evergreen sold products to TCI customers that TCI did not supply, and Mr. Peterson had not made him or EvapTech aware of the other sales. On cross-examination, however, Mr. Colwell admitted that he never gave Mr. Peterson any sort of formal warning. In a decision that emphasized TCI's prior knowledge of Mr. Peterson's activities and failure to instruct him to stop, the appeals referee reversed the adjudicator's decision and held that "the evidence fails to show that [Mr. Peterson] was discharged from the job for misconduct connected with the work." E. The Underlying Case 1.

The Initial Complaints Just shy of five months after Mr. Peterson's termination from employment, TCI, along with Evapco and EvapTech, filed a complaint on December 22, 2014, against "Charles A. Peterson, II" in the Circuit Court for Carroll County. The complaint described Mr. Peterson's surreptitious business activities, ¹⁵ and alleged, inter alia , that following his termination, Mr. Peterson failed to return work product, including ²¹⁸ confidential and proprietary documents and emails. It also alleged that Mr. Peterson conducted TCI business through his personal email address, [email protected] after TCI's product-and that he continued conducting business through [email protected] on behalf of Evergreen and ACTP following his termination. Finally, the complaint alleged that, via Evergreen and ACTP, Mr. Peterson was procuring cooling tower parts from Evapco's competitors that Evapco also offered, and then sold those products to TCI's customers or prospective customers and kept the profits on those transactions.

The complaint contained three counts: (1) breach of the Confidentiality Agreement, with a request for damages over $75,000 and an injunction ordering Mr. Peterson to return all TCI work product and confidential information, and prohibiting him from competing against Evapco for two years; (2) misappropriation of trade secrets in violation of North Carolina law, with a request for injunctive relief and punitive damages; and (3) unfair and deceptive trade practices in violation of the North Carolina Deceptive Trade Practices Act ("NCDTPA"), with a request for, inter alia , injunctive relief, a money award representing Mr. Peterson's illegal gains and plaintiffs' lost profits, as well as treble damages. First and Second Amended Complaint Following a perfunctory amendment in February 2015 to delete the "II" from "Charles A. Peterson," the complaint was amended a second time on May 29, 2015, to join EvapProducts as a plaintiff and to add Mrs. Peterson, ACTP, and Evergreen as defendants. Evapco alleged that Mr. Peterson deleted TCI-related emails from his work computer before he returned it to TCI. Evapco also added Mrs. Peterson, ACTP, and Evergreen to the North Carolina statutory counts, and added two more counts to the complaint against them: tortious interference with contractual relations and tortious interference with prospective advantage. ¹⁶ Mr. Peterson filed his second answer on July 31, again denying plaintiffs' claims, and this time denying any ownership interest in or serving as a Vice President of ACTP.

He also denied that Mrs. Peterson was the owner and President of Evergreen and denied that he or his wife "exercised 'complete dominion and control over the affairs' " of the two LLCs, as plaintiffs alleged. His answer asserted fourteen affirmative defenses-including that the Confidentiality Agreement was unenforceable as "overly broad, unreasonable as applied here, and not necessary to protect any legitimate business interests of Plaintiff[s]." 2. Motion to Dismiss The same day that Mr. Peterson filed his second answer, the three remaining defendants filed a joint motion to dismiss for lack of personal jurisdiction. In it, Mrs. Peterson claimed that she had no connection to Maryland other than the sale of TCI to EvapProducts in 2005.

She argued that she "never worked for Evapco, never signed [the Confidentiality Agreement], and never consented to jurisdiction in Maryland[,]" and that "[e]ven if she had signed the same [Confidentiality] Agreement that Mr. Peterson signed in 2005, it would have expired in 2007, two years after she signed it[,]" because she never worked for Evapco. She rejected the idea that her purported awareness or knowledge of the Confidentiality Agreement could possibly form the basis for jurisdiction, and included an affidavit with the motion in which she stated that, "[u]ntil ²¹⁹ this dispute arose, [ 4 ] I was not aware of the terms of Mr. Peterson's Confidentiality and Intellectual Property Agreement with TCI, including its non-compete and jurisdiction provisions." ACTP and Evergreen asserted that they had no contact with Maryland, and bare, conclusory allegations that individual defendants "exercise complete dominion and control over the affairs" of a company are insufficient to pierce the corporate ¹⁷ veil to impose liability and assert jurisdiction over the company. The plaintiffs responded that the defendants were "all part of the same amalgamated enterprise, which has impermissibly competed with [Evapco] and used their proprietary documents and information in breach of legal obligations to [Evapco]." Evapco submitted that Maryland possessed jurisdiction over Mrs. Peterson because Evapco's "complain[t] flow[s] from the [SPA]," which Mrs. Peterson signed and thereby transacted business in Maryland by selling her stock in TCI to a Maryland company in Maryland through an SPA governed by Maryland law. In regard to the LLCs, Evapco charged, among other things, that "Mrs. Peterson, Evergreen[,] and [ACTP] are affiliates of Mr. Peterson and are bound by the forum selection clause in the [Confidentiality] Agreement; that Mr. Peterson is the agent and/or alter ego of Mrs. Peterson, Evergreen[,] and [ACTP]; and that Mrs. Peterson has transacted business in Maryland." Evapco urged that Maryland should not "countenance[ ]" the defendants' "shell game" and should enforce the Confidentiality Agreement against all defendants-even the non-signatories.

The circuit court held a hearing on October 2, 2015. At the hearing, Evapco presented, for the first time, out-of-jurisdiction cases that articulated and applied a doctrine that aligned with Evapco's theory of jurisdiction: a forum-selection clause can bind non-signatories to its jurisdiction and venue provisions if the non-signatories are found to be "closely related" to the contractual relationship. The circuit court took the matter under advisement, allowing the defendants time to respond in writing to Evapco's newly presented cases. On October 27, 2015, the circuit court issued a memorandum opinion denying the motion to dismiss.

The court began by recognizing that "the evidence is clear in this case that Mrs. Peterson was a resident of North Carolina at all times relevant[ ], that [ACTP] was organized in North Carolina, that Evergreen was organized in Georgia and conducted business principally in North Carolina, and that neither [ACTP] or ¹⁸ Evergreen existed at the time of a sale of TCI." The court concluded that "there [wa]s sufficient basis ... to exercise specific personal jurisdiction over them as to this action." In so ruling, the court found that the plaintiffs "ha[d] established minimum contact on the part of" Mrs. Peterson, ACTP, and Evergreen. 3. Defendants' Counsel's Motion to Withdraw Appearance On February 10, 2016, the defendants' counsel filed a motion to withdraw their appearance and included copies of the notice that they sent to each of the defendants. Evapco consented to the motion but "request[ed] that the withdrawal of Defendants' counsel [ ] not delay or postpone the trial date." One week later, on February 16, Evapco filed a third amended (and operative) complaint. ²²⁰ This complaint added a sixth, seventh, and eighth count: (6) fraud against Mr. Peterson, for allegedly failing to disclose his business activities in competition with Evapco; (7) aiding and abetting against Mrs. Peterson, ACTP, and Evergreen, alleging that Mrs. Peterson had actual knowledge of Mr. Peterson's tortious conduct and that she, together with ACTP and Evergreen, "provided substantial assistance, aid and encouragement in the commission and non-disclosure of" Mr. Peterson's competitive activities; and (8) breach of contract against Mr. Peterson based on fiduciary duties of loyalty and good faith, alleging that he had a duty to act for the benefit of Evapco but engaged in self-interested and self-dealing conduct. The defendants, through new counsel, filed answers on March 7, 2016, again asserting general denials and several affirmative defenses. 4.

Evapco's Motion for Sanctions When the plaintiffs filed their third amended complaint, they also filed a motion for sanctions along with a supporting memorandum and two large binders evidencing their discovery efforts and the defendants' alleged spoliation. Evapco claimed the defendants willfully destroyed discoverable evidence ¹⁹ that they were under a legal obligation to preserve. They asked the court to sanction the defendants by entering summary judgment as to liability and damages against all defendants jointly and severally. Evapco urged the court to treat the defendants as one amalgamated enterprise because each "had the right, authority, or practical ability to obtain all discoverable documents in this case[,]" and because the Petersons used Evergreen's bank account as a "slush fund" for ACTP and vice versa. 5 According to Evapco, the defendants' "meager document productions and evasive written responses" prompted the plaintiffs to "expand[ ] their third-party subpoena efforts[,]" which were excessively costly but led them to discover "the trail of destruction and the enormous scale of Defendants' operations[.]" Duty to Preserve Evapco posited that the defendants' duty to preserve began no later than Mr. Peterson's termination date, July 29, 2014.

Mr. Peterson's termination letter from TCI informed him that "TCI is considering initiating legal action against you to recover damages for the violations of the [ ] Agreement[,]" and an attached letter from TCI's counsel warned: [F]ederal and state law prohibit you from deleting, and require you to take affirmative steps to preserve, all Confidential Information and Work Product in your possession, custody or control. This includes any documents, including emails, that concern Evapco or any other business that you conducted individually or on behalf of any other person or entity. It is no excuse under the law to have deleted documents as a result of a routine or automatic document or email destruction policy. ²⁰ Because Mr. Peterson's routine practice was to delete transaction records after two years, Evapco alleged that he should have maintained, at the least, any records dating back to July 29, 2012-two years prior ²²¹ to his termination. 6 Spoliated Emails Evapco alleged that the Petersons destroyed emails from at least four different email addresses that they used in connection with their cooling tower businesses. From his primary business email address, [email protected], Mr. Peterson produced "only about 37 emails[,]" "of which 26 were from 2011, two were from 2012, and none were from the years 2013, 2014 and 2015." Four months later, he produced another 79 emails, but still did not include numerous responsive emails that Evapco recovered from third parties, including emails predating his termination.

The emails that were produced by third parties included the defendants' purchases from Evapco's manufacturers and competitors, quotes for sales in competition with Evapco, and emails indicating Mr. Peterson represented TCI but urging customers to switch payment information to Evergreen. Third-party subpoenas also uncovered emails from [email protected], including: requests to receive invoices and shipping documents from an order placed prior to Mr. Peterson's termination, bids and quotes that Mr. Peterson submitted to Evapco's competitor for TCI's products that he was not ordering from TCI, and emails directing future correspondence to be sent to [email protected]. ²¹ In his responses to interrogatories, Mr. Peterson claimed that he did not begin using [email protected] until September 2014-over a month after his termination date. Yet third-party subpoenas uncovered an internal email from a cooling tower contractor sent on Mr. Peterson's termination date to a competing cooling tower company that read, "Augie-making sure this is working." During his deposition, Mr. Peterson claimed that Yahoo! informed him sometime before December 27, 2014, that the company accidentally lost his emails. The plaintiffs, however, managed to procure what they purported to be "hundreds of destroyed emails" that were sent from [email protected] to Evapco's competitors. 7 Mrs. Peterson revealed that she continued deleting emails after receiving her subpoena but claimed that she could not remember whether any would have been responsive: "I'm not-I'm ²²² not going to testify to that.

I'm going to take it back if I said [they were not responsive]. I just delete. I delete-delete. Anything that's there that I don't want, don't need anymore, I delete." Spoliation of Other Records Evapco also cataloged the destruction of records from Mr. Peterson's laptops, the Petersons' home desktop, and paper records.

For most of these records, Evapco found either bank records without corresponding transactional records or vice versa. Evapco's damages expert estimated that, apart from the bank records, records supporting at least $3 million in ²² transactions were still missing at the time the plaintiffs filed their motion for sanctions, such as "a $62,250.05 check for work on a project in California[ ]" for which "there is no record of where it was deposited." Evapco sought summary judgment on liability and damages as a sanction based on evidence that (1) the defendants lost or intentionally destroyed documents well after litigation was imminent and even after suit was filed and (2) Evapco was prejudiced by the defendants' spoliations and the consequent absence of critical transactional documents. 8 The defendants responded by accusing the plaintiffs of "using [their] abundant resources to litigate a former employee into submission[,]" and characterized the plaintiffs' memorandum in support of sanctions as "an excessively long motion with numerous document references and picayune details, mainly serving to establish the unremarkable fact that the Petersons are not good at details and record keeping." They argued that, prior to Mr. Peterson's termination from TCI, none of the defendants had reason to know or suspect that Evapco would sue. Although the termination letter may have triggered a duty to preserve, the defendants suggested that it applied only to documents from that date forward, not those dating back to 2012 as Evapco suggested. And the defendants contended that Mrs. Peterson "was not aware that she was likely to be added as a defendant in this case until the filing of the Second Amended Complaint, on May 30, 2015." The defendants contended that there was insufficient evidence to support a finding that they deleted documents with intent to subvert discovery because (1) it was not their practice to save records or emails, (2) Mrs. Peterson made reasonable efforts to locate documents relating to ACTP, (3) her computer was damaged in a lightning storm, and (4) Mr. ²³ Peterson gave TCI complete access to all of the documents in his office and on his work computer at the time of his termination. 9 Further, they urged, all evidentiary inferences should be decided in their favor as the non-moving party and argued that Evapco's motion required the court to weigh evidence and determine witness credibility-issues that should be decided by the jury.

The defendants pressed that the plaintiffs were not prejudiced because they were able to recover "a significant quantity of similar discovery from third parties." Additionally, the defendants challenged Evapco's right to summary judgment on ²²³ damages based solely on Evapco's own, unsupported "expert" report. In reply Evapco argued that, under Cumberland Insurance Group v. Delmarva Power , 226 Md. App. 691 , 130 A.3d 1183 , cert. denied , 447 Md. 298 , 135 A.3d 417 (2016), "the proscription against the [trial] court making findings of fact and credibility determinations that are applicable in the summary judgment context do not apply in the context of discovery sanction[s], even if one of the sanctions imposed is the entry of summary judgment against the spoliating party or parties." Sanctions Hearing and Order At a hearing on March 30, 2016, the court granted judgment in favor of Evapco on each count in the third amended complaint and granted their motion to partially seal the record. The court, however, denied Evapco's motion for injunctive relief and damages and ordered that an evidentiary hearing be set with respect to Evapco's requests for equitable relief and monetary damages. The court entered a written order to this effect on April 5. ²⁴ 5.

Other Procedural Matters On April 7, the court entered an order granting defense counsel's motion to withdraw appearance and mailed a notice to employ new counsel to each defendant. Then, on April 12, Evapco filed a motion withdrawing their election for a jury trial, stating that Maryland Rule 2-433(a)(3) preserves the right to a jury trial only to the plaintiffs if the court holds a hearing on damages following a default judgment. Consequently, Evapco asked the court to modify the scheduling order to remove all deadlines related to a trial by jury and to schedule a hearing on damages. The court requested a response from the defendants; the Petersons, now pro se , wrote to the court on April 14, "request[ing] confirmation that a Trial by Jury has been requested in this matter.

If not previously requested, Defendants so request Trial by Jury and the Defendants do not waive their right to have a Trial by Jury." Four days later, the Petersons wrote the court again. This time they asked the court to vacate the order sealing items produced during discovery, arguing that "[t]o have a fair defense the Discovery Material is needed[ ]to determine the damages that the Defendants are being charged with." On April 22, the court modified the scheduling order to include "a hearing regarding damages and equitable relief" on May 2 and 3. The court also entered two orders denying the requests contained in the Petersons' April 14 and April 18 letters. The first order treated the Petersons' April 14 letter as a request for a jury trial and denied that request.

The second order denied the Petersons' request to unseal discovery documents "because the case is currently in a Default posture against the moving party and the rules prevent the Court from entertaining a motion of this type." 6. Remedies Hearing Mr. Peterson arrived at the remedies hearing on May 2 without Mrs. Peterson or an attorney. He had a doctor's note for his wife and informed the court simply that she was "was ²⁵ not able to come; she has a medical condition." The court told Mr. Peterson that he could represent himself but was not legally able to represent Mrs. Peterson. Evapco's counsel chimed in, asserting that ACTP and Evergreen could not legally appear at the hearing without counsel.

Mr. Peterson then proceeded by challenging the court's denial of his request for a jury trial and the denial of his request to unseal discovery material. He also challenged ²²⁴ the court's earlier grant of his attorney's motion to withdraw without his consent and claimed that he "never got a lot of evidence" from his counsel. The court explained that the jury trial right is not available to Mr. Peterson under the Maryland Rules because he was in default. The court also refused to postpone the trial due to the alleged failure of Mr. Peterson's former counsel to provide evidence to him, noting that there was no motion pending or any viable basis to postpone the hearing.

Presentation of Evidence Over the next three days, the court heard evidence, beginning with testimony from Mr. Bartley about Evapco's general business structure, the purchase of TCI, and Mr. Peterson's tenure and termination. Evapco's counsel then read into the record transcripts from six depositions: (1) Mr. Robert Sawyer, the designated representative of Pacific Plastic Technology, Inc., a company that purchased Opti-Grid from Evergreen; (2) Mr. Philipe Reyna, the corporate designee for West Texas Cooling Towers, which sold Dat Industries machinery to make Opti-Bar and purchased Opti-Grid from C.A. Peterson; (3) Ms. Candace Rutherford, a sales person at United Plastic Recycling, which tested product-material samples for Mr. Peterson at TCI and then sold them to Evergreen and Dat Industries, (4) Ms. Tina Galloway Ortiz, a sales person at Gerard Daniel Wire Worldwide, which sold customized parts to Mr. Peterson at both Evergreen and Dat Industries, and testified that Mr. Peterson told her he had to purchase parts under "a different company named Dat" because "[his] former employer is being difficult[,]" and "[we]re not letting [him] sell ²⁶ in the cooling tower industry"; (5) Mr. Toby Carl Moala, who helped operate Dat Industries' manufacturing department; and (6) Mr. Towfique Habib and Mr. Vivia Ramiswami of Proplant, Inc., a Texas-based engineering procurement and construction company that sought advice on and products for cooling towers from Mr. Peterson at TCI and eventually from Evergreen. The court heard live testimony from Mr. Colwell, General Manager of TCI, who explained TCI's business and operations, as well as his role supervising Mr. Peterson. Mr. Walter Joseph Whalen, Vice President of Operations at EvapTech, also testified that EvapTech provided the same services Evergreen offered to Proplant.

Mr. Michael Kresslein was accepted as a damages expert and testified that his "goal was to calculate what the plaintiffs would have earned if they had properly been referred these sales opportunities and had consummated them. So [depending on pricing] it may be the same as the profit that the defendants did earn on these sales but it may not be." Based on several categories of unauthorized transactions by the defendants and lost sales to Evapco, Mr. Kresslein estimated that the defendants caused Evapco about $3,000,000 in lost profits. Mr. Peterson presented no evidence on his own behalf. Closing Statements Following the close of evidence on May 4, the parties gave closing remarks.

Evapco argued that the evidence presented-particularly the defendants' hidden bank accounts and manufacturing operation in Texas-warranted an equitable two-year extension of the restrictive covenant. Regarding monetary damages, Evapco pointed out that Mr. Peterson failed to challenge much of their damages expert's testimony on cross-examination. The defendants couldn't complain about the unprecise nature of lost profits, Evapco averred, because their own spoliation ²²⁵ made precision impossible. Evapco then urged the court to grant punitive damages based, in part, on the Dat Industries fraudulent production of TCI products that Evergreen used to outbid TCI on a project Mr. Peterson was supposed to be working to secure for TCI. ²⁷ In his summation, Mr. Peterson argued that he had no control over Dat Industries: "[M]y name isn't on anything.

No payments were ever made to me. So, a lot of that I just have no control over." He then contended that "a lot of" the damages Evapco alleged were assumptions and that they "never proved that certain things happened, or certain things were done." The Court's Ruling In an order entered on May 23, 2016, the court reiterated that it had previously determined that it had personal jurisdiction over Mrs. Peterson, Evergreen, and ACTP based on "minimum contacts" following oral argument on defendants' motion to dismiss, which was fully briefed by competent counsel. The court also recapped its finding against the defendants, jointly and severally, on all counts of the third amended complaint as a sanction for "their willful spoliation of discoverable documents." The court then entered a final judgment denying Evapco's request for injunctive relief (reasoning that it would be duplicative to award both injunctive relief and damages for the same period) and awarding Evapco $2,187,104 in total compensatory damages. The court found that the evidence presented-including the defendants' manufacturing operation with Dat Industries and sales to Proplant-established "that Defendants' actions were motivated by actual malice toward the Plaintiffs, such that the Defendants acted with evil motive, intent to injure, ill will, and/or fraud." Accordingly, the court awarded Evapco an additional $993,950 in punitive damages, bringing the total award to $3,181,054.

Finally, the court awarded attorneys' fees to Evapco, concluding that the defendants "willfully and maliciously violated the [NCTSA]" and that "there was unwarranted refusal by Defendants to resolve fully the matter which constitutes ... the bases of the suit[.]" Motion for Reconsideration and Appeal Evapco filed a motion for reconsideration on June 2, 2016, asking the court to reconsider its denial of injunctive relief. ²⁸ The defendants, once again represented by counsel, responded and asked the court to deny the motion. They noted their appeal on June 16. The circuit court denied Evapco's motion for reconsideration in an order entered on June 24. Appellants present the following five issues in their opening brief: 1.

"Did the Circuit Court err when it denied Appellants Carmen Peterson, Evergreen, and ACTP's Motion to Dismiss for lack of personal jurisdiction when those Defendants performed no business in and lacked minimum contacts with Maryland?" 2. "Did the Circuit Court err when it entered a discovery sanction depriving Appellants of their constitutional right to present evidence in their defense with respect to liability when the documents at[ ]issue were on computers Appellee seized at the time it terminated Appellant Charles A Peterson?" 3. "Did the Circuit Court err when it refused to provide a jury trial despite the fact that Appellants had timely demanded a jury?" 4. "Did the Circuit Court err in denying Mr. Peterson's motion for a continuation of the trial because his wife, who was also a defendant in the case, was ill and because Appellants needed additional time to obtain new counsel?" ²²⁶ 5.

"Did the Circuit Court err in refusing to allow Mr. Peterson to present evidence to rebut Appellee's inflated damages claim because the evidence he wished to offer were business records of Evergreen and ACTP who he did not represent?" DISCUSSION I. Personal Jurisdiction Appellants assign error to the circuit court's exercise of personal jurisdiction over Mrs. Peterson, Evergreen, and ²⁹ ACTP. They reiterate most of the arguments raised below and maintain that Mrs. Peterson has no connection to Maryland other than the sale of TCI in 2005, which Appellants agree, was pursuant to the SPA governed by Maryland law. They contend that Mrs. Peterson's conduct does not fall within the purview of Maryland's long-arm statute, Maryland Code (1973, 2013 Repl. Vol.), Courts and Judicial Proceedings Article ("CJP"), § 6-103 and that Maryland's exercise of personal jurisdiction would offend the Due Process Clause of the Fourteenth Amendment.

Appellants insist that neither ACTP nor Evergreen has engaged in any meaningful conduct in this State and that, even if Mr. Peterson did act as their agent, he did not act as their agent in Maryland. They note that the acts on which Appellees rely-"Mr. Peterson signing a document as an officer of [ACTP], Mr. Peterson signing an [ACTP] check for an Evergreen invoice, Mr. Peterson signing an Evergreen check made out to [ACTP], and Mr. Peterson transitioning work from Evergreen to [ACTP]"-occurred in North Carolina. Otherwise, Appellants suggest that Evapco's only argument is that Evergreen and ACTP are somehow bound by the forum-selection clause in the Confidentiality Agreement, but that Appellees fail to "point to any language in the forum selection clause that would suggest anyone other than Mr. Peterson was intended to be bound." Appellees counter that we need not consider Maryland's long-arm statute or the corresponding Fourteenth Amendment analysis because Mrs. Peterson, Evergreen, and ACTP are all closely related to Mr. Peterson and the transactions that violated the Confidentiality Agreement-meaning they are bound by the forum-selection clause that Mr. Peterson signed. 10 ²²⁷ To demonstrate this close relationship, Appellees ³⁰ note that "[t]he Petersons jointly established, owned, controlled, and operated, from their family home, various enterprises [including Evergreen and ACTP] engaging in cooling tower transactions that [Mr.] Peterson's Agreement prohibited, from which all [Appellants] benefited." Moreover, Mrs. Peterson signed the SPA, which explicitly referenced the Confidentiality Agreement, so she should have been fully aware that it included a forum-selection clause. Appellees concede that whether third parties can be bound by the contracts of another with whom they are "closely related" is an issue of first impression in Maryland.

Appellants reply that even in those states that apply the "closely related" approach to assert jurisdiction based on a forum-selection clause, it is not enough that the nonsignatory is the signatory's spouse. According to Appellants, the clause ³¹ must be "clearly and directly communicated" to the non-signatory so that it is foreseeable that he or she will be bound. They argue that Evapco produced no evidence that the forum-selection clause was communicated to Mrs. Peterson or that she was ever aware of it before the second amended complaint. Additionally, if Appellees intended Mrs. Peterson to be bound by the same non-compete and forum-selection clause as her husband, "they had every opportunity" to include it in the SPA or to have Mrs. Peterson sign a separate contract as they had her husband do.

Appellants reiterate that ACTP did not have the requisite relationship with Mr. Peterson. They also argue that Evergreen could not have expected to be bound by the Agreement's forum-selection clause because, like ACTP, it was not a party and, additionally, all the transactions in which Evergreen engaged with TCI's customers were open and "collaboratively billed" with Evapco. 1. Jurisdiction by Consent The circuit court seemed to base its ruling on a minimum contacts theory of personal jurisdiction-stating that the plaintiffs "established minimum contact" on the part of Mrs. Peterson, ACTP, and Evergreen. That rationale does not confine us, however, because we view determinations of personal jurisdiction de novo .

CSR, Ltd. v. Taylor , 411 Md. 457 , 472, 983 A.2d 492 (2009) (citations omitted). We apply the same standard of review to the enforceability of a forum-selection clause. See Baker v. LeBoeuf, Lamb, Leiby & Macrae , 105 F.3d 1102 , 1104 (6th Cir. 1997) ; Hugel v. Corp. of Lloyd's , 999 F.2d 206 , 207 (7th Cir. 1993). We recently addressed the circumstances under which Maryland may assert personal jurisdiction-specifically or generally-over non-resident corporations and their non-resident officers based on their contacts in Maryland under the constitutional minimum contacts test.

See Stisser v. SP Bancorp, Inc. , 234 Md. App. 593 , 174 A.3d 405 (2017). To resolve the instant dispute, however, we need not reach those considerations. Maryland may also assert ²²⁸ personal jurisdiction over non-resident corporations and their officers based on the non-residents' ³² consent to personal jurisdiction in Maryland. CoStar Realty Info., Inc. v. Field , 612 F.Supp.2d 660 , 668 (D. Md. 2009) (citing Heller Fin.

Inc. v. Midwhey Powder Co. , 883 F.2d 1286 , 1290 (7th Cir. 1989) ). The Supreme Court has ruled that personal jurisdiction is a waivable right and one of the ways by which a party may waive its right is its "express or implied consent to personal jurisdiction of the court." Ins. Corp. of Ire. v. Compagnie de Bauxites de Guinee , 456 U.S. 694 , 703, 102 S.Ct. 2099 , 72 L.Ed.2d 492 (1982) (emphasis added); see also Burger King Corp. v. Rudzewicz , 471 U.S. 462 , 472 n.14, 105 S.Ct. 2174 , 85 L.Ed.2d 528 (1985). Similarly, this Court has ruled that non-resident parties may consent to personal jurisdiction in Maryland through forum-selection clauses.

Dynacorp Ltd. v. Aramtel Ltd. , 208 Md. App. 403 , 483, 56 A.3d 631 (2012). 11 The Court of Appeals, in adopting the federal standard for analyzing the enforceability of forum-selection clauses, explained, (1) a forum-selection clause is presumptively valid and enforceable and the party resisting it has the burden of demonstrating that it is unreasonable, (2) a court may deny enforcement of such a clause upon a clear showing that, in the particular circumstance, enforcement would be unreasonable, and (3) the clause may be found to be unreasonable if (i) it was induced by fraud or overreaching, (ii) the contractually selected forum is so unfair and inconvenient as, for all practical purposes, to deprive the plaintiff of a remedy or of its day in court, or (iii) enforcement would contravene a strong public policy of the State where the action is filed. Gilman v. Wheat, First Sec., Inc. , 345 Md. 361 , 378-79, 692 A.2d 454 (1997) (cataloging federal court decisions applying ³³ the same standard as well as decisions in accord from the state courts of Illinois, Kansas, and New Jersey). "The prevailing view in this country is that forum-selection clauses are presumptively enforceable." Secure Fin. Serv., Inc. v. Popular Leasing USA, Inc. , 391 Md. 274 , 282-83, 892 A.2d 571 (2006) (collecting cases). 2.

The Closely Related Doctrine Courts throughout the United States have held that a non-signatory to a contract may nonetheless be bound by that contract's forum-selection clause if the non-signatory is so " 'closely related' to the dispute such that it becomes 'foreseeable' that it will be bound." Hugel , 999 F.2d at 209 (citing Manetti-Farrow, Inc. v. Gucci Am., Inc. , 858 F.2d 509 , 514 n.5 (9th Cir. 1988) (other citation omitted) ); see also Synthes, Inc. v. Emerge Med., Inc. , 887 F.Supp.2d 598 , 607 (E.D. Pa. 2012) (" 'It is widely accepted that non-signatory third-parties who are closely related to [a] contractual relationship are bound by forum selection clauses contained in contracts underlying the relevant contractual relationship.' " (citations omitted) ). The United States District Court for the Eastern District of Pennsylvania collected over a dozen cases from various federal courts that applied the closely related doctrine and distilled the following principle of law: "[T]he close business relationships between the signatories and non-signatories to the pertinent agreements, together with ²²⁹ the fact that the dispute among the parties centered on the interpretation of the agreements, provided a sufficient basis on which to apply the forum selection clauses to the nonsignatory." Synthes , 887 F.Supp.2d at 610 . One rationale for the closely related doctrine, as articulated by the Seventh Circuit, is that "[w]ere it not for judicial willingness in appropriate circumstances to enforce forum selection clauses against affiliates of signatories, such clauses often could easily be evaded." Adams v. Raintree Vacation Exch., LLC , 702 F.3d 436 , 441 (7th Cir. 2012). For example, "a signatory of a contract containing such a clause might shift the business to which the contract pertained to a corporate affiliate-perhaps one created for the very purpose ³⁴ of providing a new home for the business-thereby nullifying the clause." Id.

The closely related doctrine developed in the federal courts as a matter of federal common law. In re: Howmedica Osteonics Corp. , 867 F.3d 390 , 407 n.11 (3d Cir. 2017). The United States Court of Appeals for the Seventh Circuit was one of the first courts to employ the "closely related" nomenclature. In Hugel , the court of appeals held that two companies, GCM and OMI, were closely related to a dispute arising out of a member agreement between Lloyd's of London and Dieter Hugel, who was the President and Chairman of GCM and OMI and owned 99% of GCM and 100% of OMI. 999 F.2d at 209 -10 .

Hugel was an individual underwriting investor in Lloyd's insurance market, and Lloyd's had suspected that Hugel violated his member agreement through criminal misconduct in concert with GCM and OMI. Id. at 207 . After an investigation uncovered no wrongdoing, Hugel, GCM, and OMI sued Lloyd's in a federal district court seated in Illinois, alleging that Lloyd's disclosed confidential information from its investigation to the detriment of GCM and OMI's businesses. Id.

The district court dismissed the suit based on a forum-selection clause in Hugel's member agreement, which provided that " 'the courts of England shall have exclusive jurisdiction to settle any dispute and/or controversy of whatsoever nature arising out of or relating to the Member's membership of, and/or underwriting of insurance business at, Lloyd's[.]' " Id. at 208 (emphasis omitted). After concluding that the claims arose out of the membership agreement, the Seventh Circuit affirmed. Id. at 209-11 . That court reasoned, "[a]lthough GCM and OMI were not members of Lloyd's, in the course of a dispute between Hugel and Lloyd's, Hugel alone involved his two controlled corporations and supplied information allegedly belonging to those corporations." Id. at 210 .

Based on this, the Seventh Circuit saw no error in concluding "that the corporations owned and controlled by Hugel are so closely related to the dispute that they are equally bound by the forum selection ³⁵ clause and must sue in the same court in which Hugel agreed to sue." 12 Id. ²³⁰ The Second Circuit adopted the closely related doctrine in Magi XXI, Inc. v. Stato della Citta del Vaticano , 714 F.3d 714 , 722-23 (2d Cir. 2013). Magi XXI, Inc., a New York corporation, was a sublicensee to a merchandise licensing agreement between Second Renaissance, LLC, a California company, and the Vatican Office of Publications, an agent for the Vatican State (the territory over which the Holy See of the Roman Catholic Church exercises sovereignty). Id. at 718 . The Vatican Office of Publications has authority to license the right to make reproductions and adaptations of the artwork and artifacts in the Vatican Library collection.

Id. at 718-19 . Under ³⁶ the master license agreement, the Vatican granted Second Renaissance the rights to produce and market specific lines of products. Id. Magi sued Second Renaissance, the President of Second Renaissance, and the Vatican State in a federal district court seated in New York.

Id. at 719 . Magi alleged that Second Renaissance did not allow access to Vatican artwork as their sublicense agreement represented, that the Vatican State was aware of this, and that Second Renaissance and its president acted as agents for the Vatican State. Id. Both the master agreement and the sublicensing agreement between Magi and Second Renaissance included forum-selection clauses selecting the State of Vatican City as the forum in which to resolve any disputes arising out of the agreements.

Id. at 718 . The district court granted the Vatican State's motion to dismiss based on the forum-selection clause in the Vatican's sublicense agreements, finding that the Vatican State was a closely related party and that it was foreseeable that the Vatican State would enforce the forum-selection clause against Magi. Id. at 720 . Magi appealed to the Second Circuit, which began its analysis by stating that a party's status as a non-signatory to an agreement does not automatically preclude it from enforcing a forum-selection clause in an agreement.

Id. at 722 . Relying on Seventh Circuit precedent, the Court reasoned that " '[a] literal approach to interpreting forum selection clauses-an approach that always ignored affiliates of the signatories-could ... undermine the contribution that such clauses have been praised for making to certainty in commercial transactions.' " Id. (quoting Adams , 702 F.3d at 441 ). Because forum-selection clauses further judicial economy and promote uniform results, the court opined that " 'where the alleged conduct of the nonparties is closely related to the contractual relationship, a range of transaction participants, parties and nonparties, should benefit from and be subject to forum selection clauses.' " Id.

(quoting Holland Am. Line Inc. v. Wärtsilä N. Am., Inc. , 485 F.3d 450 , 456 (9th Cir. 2007) ). Thus, the Second ²³¹ Circuit ruled, "a non-signatory to a contract containing a forum selection clause may enforce the forum ³⁷ selection clause against a signatory when the non-signatory is 'closely related' to another signatory[,]" so long as the relationship between the signatory and non-signatory is such that the enforcement of the forum-selection clause is " 'foreseeable.' " Id. at 723 (quoting Hugel , 999 F.2d at 209 ). The court went on to affirm the district court's dismissal of the Vatican State, reasoning that it was a closely related party: "[T]he Vatican State was known by Magi as the source of the contractual authority granted to Magi by the Sublicense Agreements.

The Sublicense Agreements also specifically provided for the extensive and continuing involvement of the Vatican State in the execution of Magi's obligations and authority under the Sublicense Agreements." Id. at 724. In Maryland, the federal district court has applied the closely related doctrine in two reported decisions. In Belfiore v. Summit Federal Credit Union , the court held that a debt collection agency that acted as an agent for its co-defendant, the credit union, was "unquestionably covered by the choice of forum clause in the contract of the principal." 452 F.Supp.2d 629 , 633 (D. Md. 2006). Then, in TECH USA, Inc. v. Evans , the court held that a company, PSI, was closely related to an agreement between its sole shareholder (Evans) and TECH USA and thereby bound by the forum-selection clause in that agreement. 592 F.Supp.2d 852 , 858 (D. Md. 2009).

TECH USA had sought to purchase Evans's staffing agency, PSI, but instead hired Evans as a Vice President based on the explicit understanding that he would use PSI's contacts to grow the staffing portion of TECH USA's business. Id. at 854-55 . After TECH USA fired Evans, it sued Evans and PSI for violating Evans's non-compete agreement. Id. at 855 .

The district court applied the forum-selection clause against both defendants, reasoning that it was foreseeable that PSI was so closely related that it would also be bound by the terms of Evans's agreement with TECH USA. Id. at 858 . 13 ^{232 39} In Magi and Hugel , the courts applied the closely related doctrine to impute the non-signatory plaintiffs' consent to venue under the forum-selection clauses at issue in those cases. Magi , 714 F.3d at 722 , Hugel , 999 F.2d at 206 . However, the doctrine applies equally to non-signatory, non-residents in the context of motions to dismiss for lack of personal jurisdiction.

See, e.g. , Prospect Funding Holdings, LLC v. Vinson , 256 F.Supp.3d 318 , 323-24 (S.D.N.Y. 2017) (addressing a motion to dismiss for lack of personal jurisdiction and citing Magi for the principle that, in the Second Circuit, "[i]t is well established ... that a non-signatory may enforce a forum selection clause against a signatory where the non-signatory is 'closely related' to a signatory[,]" but holding that the non-signatory was not closely related); Discover Prop. & Cas. Ins. Co. v. TETCO, Inc. , 932 F.Supp.2d 304 , 309-10 (D. Conn. 2013) (relying on Magi to find TETCO, the defendant, was closely related and subject to personal jurisdiction based on a forum-selection clause because "it should have been foreseeable to TETCO that Discover ... might seek to enforce the clauses [against it] ); Int'l Private Satellite Partners, L.P. v. Lucky Cat Ltd. , 975 F.Supp. 483 , 485-86 (W.D.N.Y. 1997) (relying on Hugel and Manetti-Farrow to find personal jurisdiction over a non-signatory defendant). ⁴⁰ The Illinois Appellate Court, for instance, asserted personal jurisdiction over closely related defendants in ²³³ Solargenix Energy LLC v. Acciona SA , 384 Ill.Dec. 598 , 17 N.E.3d 171 (App. Ct. 2014). Solargenix, a North Carolina LLC, entered into a joint venture with Acciona North America ("ANA"), a Delaware corporation located principally in Illinois, which was the wholly-owned subsidiary of a Spanish corporation, which, in turn, was the wholly-owned subsidiary of a second Spanish corporation.

Id. , 384 Ill.Dec. 598 , 17 N.E.3d at 174 . The joint venture agreement included a forum-selection clause through which Solargenix and ANA "consent[ed] to the exclusive jurisdiction of any state or federal court" in Chicago and "waive[d] any objection based on lack of personal jurisdiction, improper venue or forum non conveniens [.]" Id. 384 Ill.Dec. 598 , 17 N.E.3d at 177 . When a dispute arose out of the agreement, Solargenix sued ANA as well as the two Spanish parent-companies in Illinois state court. Id. 384 Ill.Dec. 598 , 17 N.E.3d at 175 .

The non-signatory parent-companies moved to dismiss for lack of personal jurisdiction. Id. 384 Ill.Dec. 598 , 17 N.E.3d at 178 . After analyzing several decisions that applied the closely related doctrine to exercise personal jurisdiction over non-signatories, the Appellate Court announced: The touchstone illustrated by these cases is that a court may exercise personal jurisdiction over a defendant by enforcing a forum selection clause against it, even though it was not a signatory to the contract containing the clause, where it was closely related to the dispute such that it became foreseeable that the non-signatory would be bound, regardless of whether the non-signatory is a defendant or plaintiff in the subject litigation. Id. 384 Ill.Dec. 598 , 17 N.E.3d at 185 .

It reasoned that when "there is a sufficiently close relationship between the nonsignatory and the dispute and the parties, it does not defy the non-signatory's reasonable expectations that it would be bound by the clause, just as the signatory parties are." Id. Thus, based on the forum-selection clause, the Appellate Court concluded that "the present dispute f[ell] within its scope[,]" ⁴¹ and held that "the parties consented to jurisdiction in Illinois." Id. ; see also Recurrent Capital Bridge Fund I, LLC v. ISR Sys. & Sensors Corp. , 875 F.Supp.2d 297 , 306 (S.D.N.Y. 2012) (finding personal jurisdiction existed based on the closely related doctrine and opining that "[c]ontractual consent to jurisdiction, through forum selection clauses, ' obviates the need for a separate analysis of the constitutional propriety of exercising personal jurisdiction .' "