Bacik v. Peek
| Decision Date | 14 May 1993 |
| Docket Number | No. 1:93 CV 0312.,1:93 CV 0312. |
| Citation | 888 F. Supp. 1405 |
| Parties | Brian BACIK, et al., Plaintiffs, v. Gregory PEEK, et al., Defendants. |
| Court | U.S. District Court — Northern District of Ohio |
Bernard H. Niehaus, Richard Rieth, Cleveland, OH, for plaintiffs.
John Stephen Kluznik, Sr., Katherine A. Vierkorn, Weston, Hurd, Fallon, Paisley & Howley, Cleveland, OH, for defendants.
Currently before the court is defendants' motion to dismiss or in the alternative, to transfer the above captioned matter, Docket #4. The plaintiffs have responded to this motion, to which defendants have replied. As is necessary with motions of this sort, we begin with a summary of plaintiffs' complaint.
The complaint, removed from the Cuyahoga County Court of Common Pleas, is brought by Ohio citizens Brian Bacik and Emil Bacik. The defendants are Gregory Peek, Michael Peek, Clayton Harris and the Safety & Performance Systems Corporation, all residents of Colorado. The complaint alleges that plaintiff Bacik, with the "coaching" of defendant Harris, purchased "a certain dragster" owned by Rick Holcomb at a price of $45,000.00. (Complaint at ¶¶ 9-10). During the period of time that plaintiffs were negotiating for the purchase of the dragster, they and Harris engaged in many phone conversation in which Harris referred to plaintiffs as "his partners". (Complaint at ¶ 13) Plaintiffs arranged for the car to be shipped to a carpet mill in Dalton, Georgia, where it was "picked up" by Harris and Michael Peek and taken to defendant Safety & Performance System's place of business in Colorado. (Complaint at ¶ 11) Shortly thereafter, the plaintiff received a check from defendant Peek in the amount of $22,500.00 to pay for their half of the dragster. The plaintiffs, in addition to their share of the purchase price purchased parts and equipment for the dragster at a cost of approximately $48,000.00. (Complaint at ¶ 14)
Plaintiffs and defendants never entered into a written agreement outlining the terms of their relationship. (Complaint at ¶ 14). On the 19th day of May, 1992, the three defendants:
The plaintiffs allege that they were not permitted to act as members of the pit crew at the races in the 1992 season, and were largely ignored by the defendants at the races which they did attend. (Complaint at ¶ 18) As a result, a dispute arose between plaintiffs and defendants regarding the plaintiffs' rights in this alleged business venture. The plaintiffs allege that defendants have failed to account for any earnings or expenses for the 1992 season and have denied plaintiffs any ownership interest in the drag racing car. (Complaint at ¶¶ 19-20)
On the basis of these facts, the plaintiff seek a declaration of the rights and legal relations between the parties.
The motion to dismiss filed by the defendants is based upon Federal Rule of Civil Procedure 12(b)(2). The rule provides, in pertinent part, as follows:
(b) How Presented. Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: ... (2) lack of jurisdiction over the person ....
It is noted at the outset that when a defendant makes a personal jurisdiction challenge under Rule 12(b)(2), the plaintiff carries the burden of establishing that jurisdiction exists. Serras v. First Tennessee Bank Nat'l Association, 875 F.2d 1212, 1214 (6th Cir.1989); American Greetings Corp. v. Cohn, 839 F.2d 1164, 1168 (6th Cir.1988). The magnitude of this burden varies, however, depending upon whether the trial court exercises its discretion to decide the issue on the motions or after a hearing. On this issue, the Sixth Circuit has provided the following guidance:
The case law establishes a settled procedural scheme to guide trial courts in the exercise of this discretion. If it decides that a motion can be ruled on before the trial, the court "may determine the motion on the basis of the affidavits alone; or it may permit discovery in aid of the motion; or it may conduct an evidentiary hearing on the merits of the motion." Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir.1981). However the court handles the motion, the plaintiff always bears the burden of establishing that jurisdiction exists. McNutt v. Gen'l Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936); Weller v. Cromwell Oil Co., 504 F.2d 927, 929 (6th Cir.1974). The weight of the plaintiff's burden, however, depends on whether the trial court chooses to rule on written submissions or to hear evidence on the personal jurisdiction issue (either pretrial or during trial). If the court rules on written submissions alone, the plaintiff may not rest on his pleadings to answer the movant's affidavits, but must set forth, "by affidavit or otherwise, ... specific facts showing that the trial court has jurisdiction." Id. at 930. When the trial court has determined that the motion to dismiss for lack of personal jurisdiction can be decided upon these submissions, it "must consider the pleadings and affidavits in the light most favorable to the plaintiff." Welsh v. Gibbs, 631 F.2d 436, 439 (6th Cir.1980), cert. denied, 450 U.S. 981, 101 S.Ct. 1517, 67 L.Ed.2d 816 (1981) (quoting Poston v. American President Lines, Ltd., 452 F.Supp. 568, 571 (S.D.Fla.1978). Thus, her burden is merely that of making a prima facie showing that personal jurisdiction exists. Id. at 438. If she meets that burden the motion to dismiss should be denied, "not withstanding any controverting presentation by the moving party." Marine Midland Bank, 664 F.2d at 904.
Serras, 875 F.2d at 1214. See also American Greetings Corp., 839 F.2d at 1168-69. Restated:
although a motion for summary judgment and a Rule 12(b)(2) motion are similar in some respects, "in sharp contrast to summary judgment procedure, ... the court disposing of a 12(b)(2) motion does not weigh the controverting assertions of the party seeking dismissal." ... Dismissal is warranted only if all of the facts the plaintiff asserts "collectively fail to state prima facie case for jurisdiction...." Therefore, we must determine whether, basing its decision solely on the pleadings and affidavits and ignoring contrary assertions by the defendants, the district court in the instant case can properly grant the defendants' 12(b)(2) motion.
Market/Media Research, Inc. v. Union-Tribune Publishing Co., 951 F.2d 102, 105 (6th Cir.1991), cert. denied, ___ U.S. ___, 113 S.Ct. 79, 121 L.Ed.2d 43 (1992). In the instant case, the court is of the opinion that an evidentiary hearing is unwarranted, and so will resolve the issued based upon the parties' submissions. The issue, then, is whether plaintiffs have satisfied their burden of establishing a prima facie case for personal jurisdiction by setting forth specific facts in support thereof.
District courts sitting in diversity must apply the law of the forum state to determine whether it may exercise jurisdiction over the person of non-resident defendants. Theunissen v. Matthews, 935 F.2d 1454, 1459 (6th Cir.1991). Thus, in this case, we look to Ohio's long-arm statute, Ohio Revised Code § 2307.382. This statute enumerates nine ways in which a non-resident defendant can subject himself to the in personam (territorial) jurisdiction of Ohio courts. Of specific concern here is subsection (A)(1) of the statute, which provides that:
Ohio Rev.Code § 2307.381(A)(1).
The Ohio statute is considered to "extend to the outer reaches of due process...." R.L. Lipton Distributing v. Dribeck Importers, Inc., 811 F.2d 967, 969 (6th Cir.1987). When this determination has been made, "the question in a particular case is whether the jurisdictional reach of the forum state's courts can be extended to non-residents consistently with due process." American Greetings Corp. v. Cohn, 839 F.2d 1164, 1167 (6th Cir.1988). "Thus, an Ohio personal jurisdiction analysis becomes an examination of constitutional limitations." R.L. Lipton Distributing, 811 F.2d at 969.
The starting point for any territorial jurisdiction analysis is the Supreme Court's opinion in Int'l Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), wherein the Court stated that:
due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice."
Int'l Shoe, 326 U.S. at 316, 66 S.Ct. at 158 (quoting Milliken v. Meyer, 311 U.S. 457,...
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