Atchison v. IPC Indus., Inc. (Ex parte McNeese Title, LLC)

• Decision Date: 14 October 2011
• Docket Number: 1100764.
• Citation: 82 So.3d 670
• Parties: Ex parte McNEESE TITLE, LLC, et al.(In re James E. Atchison v. IPC Industries, Inc., et al.).
• Court: Alabama Supreme Court

82 So.3d 670

Ex parte McNEESE TITLE, LLC, et al.(In re James E. Atchison

v.IPC Industries, Inc., et al.).

1100764.

Supreme Court of Alabama.

Oct. 14, 2011.

Jeffrey L. Luther of Luther, Crowe & Rainey, P.C., Mobile for petitioners.

Donald G. Beebe of The Atchison Firm, PC, Mobile, for respondent.

WOODALL, Justice.

McNeese Title, LLC, a Florida limited liability company owned and operated by Richard McNeese, and Richard McNeese (hereinafter referred to collectively as “McNeese”), and Peggy S. Owens petition this Court for a writ of mandamus, directing the Mobile Circuit Court to vacate its order denying the motions of McNeese and Owens to dismiss the action filed against them by Mobile County resident James E. Atchison and to enter an order dismissing the action for lack of in personam jurisdiction. We grant the petition and issue the writ.

I. Factual and Procedural Background

This dispute arose out of Atchison's purchase of two residential lots in the Villa Lago subdivision (“the subdivision”), which was originally a 14–acre tract of land in the Golf and Beach Resort of Sandestin, Florida. On September 29, 2005, Atchison signed two documents entitled “Sandestin Villa Lago Subdivision Home Purchase and Sale Agreement” (“the agreements”) for the purchase of two lots, namely, lots 61 and 81. Each of the agreements required Atchison to pay to McNeese Title a “non-refundable deposit” of $15,000. The seller was identified as C–D Jones & Company, Inc. (“C–D Jones”), of Destin, Florida. The agreements stated, in pertinent part:

“3. Payment of Purchase Price. The purchase price specified above shall be paid as follows:

“(a) Deposit. Upon complete execution of this Agreement, [Atchison] shall deposit with Seller's escrow agent, McNeese Title, LLC, whose address is ... Destin, Florida ... (the ‘Agent’ ), that Deposit described above to be held until closing in a federally insured non-interest bearing account until closing.

“(b) Remainder. The remaining Purchase Price for the Lot along with [Atchison's] closing costs shall be paid by cashier's check or wire transfer of funds to Seller at the Closing described here.

“4. Closing. The closing of the Lot (the ‘Closing’) shall be held at the office of [McNeese Title], on such a date as the parties may hereafter agree, but in no event later than the Closing Date described above (unless extended pursuant to Paragraph 26 hereof), time being of the essence of this Agreement....

“....

“26. Contingencies to Close. This contract and the obligations of the parties herein are specifically contingent upon the following:

“....

“(b) The successful closing of all Lots within the subdivision on or before the Closing Date. In the event the closings of all Lots do not occur on or before the Closing Date, the Closing Date may be extended, at the option of Seller, for a period not to exceed sixty (60) days.”

(Emphasis added.)

According to Atchison, these agreements were sent to him by the “developers,” who, he says, “developed, marketed and sold the lots” in the subdivision. Atchison's brief, at 4. He identifies those developers as C–D Jones and 331 Partners, LLC.¹ In that connection, Atchison also signed a “compliance agreement limited power of attorney,” designating Richard McNeese or Owens as Atchison's “attorney in fact for [his] use and benefit, ... for the purpose of ... signing or initialing on [his] behalf, any and all documents affecting the closing or refinance of the [lots].” The closing was held on November 3, 2005, at which time Atchison allegedly paid McNeese “no less than $683,589.” At that time, however, many of the other lots in the subdivision had not closed, contrary to ¶ 26(b) of the agreements.

Eventually, Atchison sued a number of individuals and entities, including C–D Jones, 331 Partners, McNeese, and Owens, alleging that he had suffered damage as a result of activities conducted by C–D Jones and 331 Partners after the closing. Essentially, the counts against McNeese and Owens ² averred that McNeese knowingly misrepresented to Atchison just prior to closing that all the lots in the subdivision had sold and would close by the closing date for his lots as required by ¶ 26(b) of the agreements; that McNeese nevertheless accepted Atchison's payments on the date of closing and paid the amount over to the developers without ensuring compliance with ¶ 26(b) of the agreements, thus resulting in damage to Atchison because of the post-closing activities of C–D Jones and 331 Partners.

McNeese and Owens moved to dismiss the action for lack of personal jurisdiction. See Rule 12(b)(2), Ala. R. Civ. P. Their motions were accompanied by affidavits addressing the limited extent of their contacts with Alabama. The trial court denied the motions to dismiss; this mandamus petition followed.

II. Discussion

“[A] petition for a writ of mandamus is the proper device by which to challenge the denial of a motion to dismiss for lack of in personam jurisdiction.” Ex parte Dill, Dill, Carr, Stonbraker & Hutchings, P.C., 866 So.2d 519, 525 (Ala.2003). “A petitioner may be entitled to a writ of mandamus in such a case upon a showing of a clear legal right to an order dismissing the action against it.” Ex parte First Western Bank, 898 So.2d 701, 704 (Ala.2004). “ ‘The burden of establishing a clear legal right to the relief sought rests with the petitioner.’ ” Ex parte Dangerfield, 49 So.3d 675, 680 (Ala.2010) (quoting Ex parte Metropolitan Prop. & Cas. Ins. Co., 974 So.2d 967, 972 (Ala.2007)).

Jurisdiction over out-of-state defendants is acquired pursuant to Rule 4.2(b), Ala. R. Civ. P., which provides, in pertinent part:

“An appropriate basis exists for service of process outside of this state upon a person or entity in any action in this state when the person or entity has such contacts with this state that the prosecution of the action against the person or entity in this state is not inconsistent with the constitution of this state or the Constitution of the United States....”

In other words, “[t]his rule extends the personal jurisdiction of Alabama courts to the limit of due process under the United States and Alabama Constitutions.” Hiller Invs., Inc. v. Insultech Group, Inc., 957 So.2d 1111, 1115 (Ala.2006). Under this rule, the exercise of jurisdiction is appropriate so long as the out-of-state defendant has “ ‘some minimum contacts with this state [so that] ... it is fair and reasonable to require the person to come to this state to defend an action.’ ” Dillon Equities v. Palmer & Cay, Inc., 501 So.2d 459, 461 (Ala.1986) (quoting former Rule 4.2(a)(2)(I), Ala. R. Civ. P.).

According to McNeese and Owens, Atchison has failed to show that jurisdiction over them is proper in this case. Specifically, they argue:

“[I]n this case, [Atchison's] Complaint and Amended Complaint are completely devoid of any factual allegations that would establish personal jurisdiction over the [Petitioners]. Instead, the Complaint and Amended Complaint contain only generic allegations that the Petitioners are subject to personal jurisdiction in Alabama, with no supporting factual allegations. Indeed, the Complaint and Amended Complaint contain no factual allegations whatsoever as to any contacts between the Petitioners and the State of Alabama. Based on this fact alone, Petitioners believe [Atchison's] claims against them are due to be dismissed for want of personal jurisdiction, regardless of any other evidentiary submissions.”

Petition, at 9. We agree.

“This Court has explained the appropriate analysis and the parties' respective burdens on a personal-jurisdiction issue as follows. ‘The plaintiff has the burden of proving that the trial court has personal jurisdiction over the defendant. Ex parte Covington Pike Dodge, Inc., 904 So.2d 226 (Ala.2004).’ J.C. Duke & Assocs. Gen. Contractors, Inc. v. West, 991 So.2d 194, 196 (Ala.2008).

“ ‘ “ ‘In considering a Rule 12(b)(2), Ala. R. Civ. P., motion to dismiss for want of personal jurisdiction, a court must consider as true the allegations of the plaintiff's complaint not controverted by the defendant's affidavits, Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253 (11th Cir.1996), and Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829 (11th Cir.1990), and “where the plaintiff's complaint and the defendant's affidavits conflict, the ... court must construe all reasonable inferences in favor of the plaintiff.” Robinson, 74 F.3d at 255 (quoting Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir.1990)).’ ”

“ ‘ Wenger Tree Serv. v. Royal Truck & Equip., Inc., 853 So.2d 888, 894 (Ala.2002) (quoting Ex parte McInnis, 820 So.2d 795, 798 (Ala.2001)). However, if the defendant makes a prima facie evidentiary showing that the Court has no personal jurisdiction, “the plaintiff is then required to substantiate the jurisdictional allegations in the complaint by affidavits or other competent proof, and he may not merely reiterate the factual allegations in the complaint.” Mercantile Capital, LP v. Federal Transtel, Inc., 193 F.Supp.2d 1243, 1247 (N.D.Ala.2002) (citing Future Tech. Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1249 (11th Cir.2000)). See also Hansen v. Neumueller GmbH, 163 F.R.D. 471, 474–75 (D.Del.1995) (“When a defendant files a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2), and supports that motion with affidavits, plaintiff is required to controvert those affidavits with his own affidavits or other competent evidence in order to survive the motion.”) (citing Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 63 (3d Cir.1984)).’

“ Ex parte Covington Pike Dodge, Inc., 904 So.2d 226, 229–30 (Ala.2004) (emphasis added; footnote omitted).”

Ex parte Excelsior Fin., Inc., 42 So.3d 96, 103 (Ala.2010).

However, when the complaint fails to allege any jurisdictional basis, “there is nothing in the complaint ... that the court must consider as true and that therefore places [any] burden on [the defendant] to controvert...