All Star Elec. v. Eagle Access, LLC
| Decision Date | 22 April 2020 |
| Docket Number | CIVIL ACTION NO. 19-1533-WBV-JCW SECTION D(2) |
| Parties | ALL STAR ELECTRIC, INC. v. EAGLE ACCESS, LLC, ET AL. |
| Court | U.S. District Court — Eastern District of Louisiana |
Before the Court is Defendant Eugene Sak's Motion to Dismiss for Lack of Personal Jurisdiction (R. Doc. 9), Plaintiff All Star Electric, Inc. ("ASE")'s Response in Opposition (R. Doc. 10), and Defendant's Reply (R. Doc. 15). After consideration of the parties' memoranda and the applicable law, the defendant's Motion to Dismiss for Lack of Personal Jurisdiction (R. Doc. 9) is GRANTED.
ASE entered into a contract with Woodward Design + Build LLC ("Woodward") on October 24, 2016, to perform the electrical work on the Standard, a development project, at South Market District in New Orleans, Louisiana (the "Project").1 Woodward entered into a contract with Domain Companies, LLC, to construct the Project.2 Woodward also entered into a Rental Agreement and a Subcontract with Defendant Eagle Access, LLC ("Eagle") to rent two hoist units and to erect, dismantle,engineer, maintain, and test the hoist units.3 On July 28, 2017, ASE employees and others were riding in the elevator car of one of the hoists provided by Eagle when the elevator car suddenly fell from the seventh story to the ground.4 ASE alleges that it has incurred damages, such as the cost of responding to and investigating the incident, general conditions, overtime, increased labor, inefficiencies because of stacking of trades, increased labor because of wait times and extra stairs climbed, delays, and decreased productivity.5 ASE claims that as a result of the incident, it was forced to accelerate other work to keep the Standard Project on schedule, causing further damages.6 ASE sued Eagle Access, LLC, Division Management, LLC, Burlington Insurance Company, Eugene Sak, and Eagle Scaffolding and Equipment Company, Inc. in Civil District Court for the Parish of Orleans.7 Defendant Burlington Insurance Company removed the action to this Court.8
Before leasing the commercial elevator hoist to Woodward in 2016, Defendant Division Management, LLC, purchased the assets of Defendant Eagle Access, and Eagle Access dissolved.9 Division Management operates out of Eagle Access' former office in Florence, Alabama, employs Eagle Access' former personnel, and has used the trade name and identifiers of "Eagle Access," which are known in the industry.10Both Eagle Access and Division Management are being defended in this action by Defendant Burlington Insurance Company under the same commercial general liability policy issued to both entities.11 Defendant Eugene Sak ("Sak") was the manager of Eagle Access.12 He signed the elevator hoist leasing and installation contracts in Florence, Alabama, in his capacity as manager.13
Defendant Sak moves to dismiss the action against him for lack of personal jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2).14 In support of his motion, Defendant Sak provided an Affidavit that states that he has been a resident of Alabama for 34 years and has never lived in, or owned property or assets in, Louisiana. The Affidavit asserts that Division Management, LLC, a Delaware limited liability corporation with its principal place of business in Alabama, was organized as a single-member LLC, effective December 31, 2015. Shortly after it was organized, Division Management purchased the assets of Eagle Access and, during the transitional period, continued to do business as Eagle Access. Mr. Sak's Affidavit states that it was during this period that Division Management began to negotiate with Woodward for the lease of the two commercial elevator hoists for the Standard project. Sak asserts that he executed the "Man/Material Hoist Rental" agreements delivered by Woodward for the hoists in Florence, Alabama. A subcontract agreement was also signed by Sak as managing member of Eagle Access, LLC, in the Florence,Alabama office. Mr. Sak advises that all documents were executed in his official capacity as managing member of Eagle Access/Division Management. He further advises that he never traveled to Louisiana to negotiate, execute, or perform these contracts or to conduct any business in Louisiana on behalf of Eagle Access. Sak asserts that he has only been in Louisiana twice in recent memory for social events—2014 for Mardi Gras and Fall of 2018 for a football game—and once last Spring in Baton Rouge in his capacity as a representative of a different company to negotiate a contract unrelated to this action.15 He contends that he has never conducted business in Louisiana in regard to the transactions for the Standard project.16 Sak does not contest this Court's jurisdiction over Defendants Eagle Access and Division Management. Instead, relying on his uncontested Affidavit, Defendant Sak claims that this Court lacks personal jurisdiction over him in this matter.
In its Opposition, Plaintiff argues that this Court has specific jurisdiction over the defendant since the defendant created a continuing obligation with Woodward, the general contractor.17 Further, Plaintiff argues that Eagle's "minimum contacts, including but not limited to performing a contract in Louisiana, can be imputed to its shareholder for jurisdictional purposes by 'piercing the corporate veil.'"18 In support of this argument, plaintiff alleges that Mr. Sak did not follow formalities when he signed the contract on behalf of Eagle Access when Eagle Access had been dissolved.19Plaintiff further alleges that Sak did not have any of his companies registered as a subcontractor with the Louisiana State Licensing Board for Contractors.20
When a nonresident moves to dismiss for lack of personal jurisdiction, the burden of establishing jurisdiction belongs to the plaintiff.21 The Court takes all uncontroverted allegations in the complaint as true and resolves conflicts in the plaintiff's favor.22 The Court may consider affidavits, interrogatories, depositions, or any combination of the recognized methods of discovery.23 The Court may exercise personal jurisdiction over a nonresident defendant only if two requirements are satisfied: (1) the forum state's long-arm statute confers personal jurisdiction; and (2) the exercise of jurisdiction does not exceed the boundaries of due process.24 The limits of Louisiana's long-arm statute are co-extensive with the limits of constitutional due process, so the inquiry is simply whether this Court's exercise of jurisdiction over the defendant would offend due process.25
This Court has held that International Shoe Co v. State of Washington, Office of Unemployment Compensation & Placement, 326 U.S. 310 (1945) is the "canonical opinion" governing personal jurisdiction.26 In International Shoe, the Supreme Courtheld that a "State may authorize its courts to exercise personal jurisdiction over an out-of-state defendant if the defendant has certain minimum contacts with [the State] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice."27 Two categories of personal jurisdiction exist within the International Shoe framework: specific jurisdiction and general jurisdiction.28 A court has specific jurisdiction over a defendant when the suit arises out of or relates to the defendant's contacts within the forum state.29 A court has general jurisdiction over a foreign corporation when its affiliations within the State are "so continuous and systematic as to render them essentially at home in the forum State."30 It does not appear that the plaintiff is arguing that the Court has general jurisdiction over the defendant.31 An inquiry as to specific jurisdiction requires the Court to consider the relationship among the defendant, the forum, and the litigation.32 "For a State to exercise jurisdiction consistent with due process, that relationship must arise out of contacts, that the 'defendant himself' creates with the forum State."33 "[T]he plaintiff cannot be the only link between the defendant and the forum."34
The Fifth Circuit applies a three-step analysis for specific jurisdiction:
(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.
Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 433 (5th Cir. 2014) (citing Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006)). If Plaintiff ASE successfully establishes the first two prongs, then the burden shifts to Defendant Eugene Sak to show that exercising jurisdiction would be unfair or unreasonable.35
The parties dispute the issue of specific jurisdiction over Defendant Sak—specifically whether Defendant Sak has sufficient minimum contacts with Louisiana. Defendant Sak contests that he has no personal involvement in any of the transactions or the incident at issue in this action.36 He submits that he has resided in Alabama for 34 years, owns no real or personal property or assets in Louisiana, and that he has visited Louisiana in the past: once37 in New Orleans for Mardi Gras; once38 in Baton Rouge for a college football game; and once39 last Spring in Baton Rouge in his capacity as a representative of a different company—to negotiate acontract unrelated to this action. Defendant Sak states that he never travelled to Louisiana on behalf of the defendants in action.40
Defendant Sak avers he signed the elevator hoist leasing and installation contracts in Florence, Alabama, in his capacity as manager of Eagle Access.41 He states that he did not sign any contracts in an individual capacity, he did not travel to Louisiana to negotiate, implement, or oversee...
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