Cole v. Alton

• Decision Date: 06 July 1983
• Docket Number: Civ. A. No. WC 82-36-WK-P.
• Citation: 567 F. Supp. 1081
• Parties: William J. COLE and Etta Mae Cole, Individually, and as Natural Parents and as Next Friends of Elizabeth Dale Cole, Deceased; Michael Andrew Cole, Deceased; Richard Wilson Cole, Deceased; William Clifton Cole, Individually, and John Len Cole, Individually, Plaintiffs, v. Troy Lloyd ALTON, Individually, and Atlas Carriers, Inc., an Arkansas corporation; Lawrence A. Megel, Individually; Ernie Davis, Individually; Earl A. Pike, Sr., Individually; and G.R. Pike, Individually; Jointly and Severally, Defendants.
• Court: U.S. District Court — Northern District of Mississippi

567 F. Supp. 1081

William J. COLE and Etta Mae Cole, Individually, and as Natural Parents and as Next Friends of Elizabeth Dale Cole, Deceased; Michael Andrew Cole, Deceased; Richard Wilson Cole, Deceased; William Clifton Cole, Individually, and John Len Cole, Individually, Plaintiffs, v. Troy Lloyd ALTON, Individually, and Atlas Carriers, Inc., an Arkansas corporation; Lawrence A. Megel, Individually; Ernie Davis, Individually; Earl A. Pike, Sr., Individually; and G.R. Pike, Individually; Jointly and Severally, Defendants.

Civ. A. No. WC 82-36-WK-P.

United States District Court, N.D. Mississippi, W.D.

July 6, 1983.

Barrett J. Clisby, Oxford, Miss., Reed L. Malkin, Memphis, Tenn., for plaintiffs.

W. Scott Welch, III, Kenneth W. Barton, Butler, Snow, O'Mara, Stevens & Cannada, Jackson, Miss., for defendants.

MEMORANDUM ORDER

KEADY, District Judge.

In this diversity action, plaintiffs, William J. Cole and Etta Mae Cole, individually and as next friends of three deceased minor children, sue defendants, Troy Lloyd Alton, Atlas Carriers, Inc., Lawrence A. Megel, Ernie Davis, Earl A. Pike, Sr., and G.R. Pike for the wrongful death of their children and personal injuries sustained by Etta Mae Cole, and for related claims. The Court has before it the motion of the defendants Megel, Davis, Earl A. Pike, Sr., and G.R. Pike (movants) challenging this court's personal jurisdiction over them as well as the sufficiency of process. Defendants Alton and Atlas Carriers do not contest in personam jurisdiction.

This lawsuit arises out of a tragic automobile-truck collision which occurred near Red Banks, Mississippi, on October 28, 1981. The truck involved in the accident was leased and operated by Atlas Carriers, Inc., an Arkansas corporation, and was driven by Alton, an Arkansas resident.

The movants are also residents of Arkansas and, with the exception of Earl A. Pike, Sr., were all officers, directors, and shareholders of Atlas Carriers. Movant Earl A. Pike, Sr., an employee of Atlas Carriers, owned the truck involved in the collision, which he had leased to Atlas Carriers, and over which he had no right of control at the time of the accident. Each movant, sued in his individual capacity, asserts lack of in personam jurisdiction because of an absolute lack of personal contacts with the State of Mississippi. Although it is conceded that Atlas Carriers, the corporate employer, was "doing business" in Mississippi, the movants take issue with plaintiffs' allegation that any of them individually "was `doing business' and did commit a tort in whole or in part in the State of Mississippi." Movants' uncontested affidavits support the proposition that none of them had individual contacts of any nature with this state.

Despite our previous holding that "jurisdiction over individual officers and employees of a corporation cannot be predicated merely upon the jurisdiction over the corporation itself," Webb v. Culberson, Heller & Norton, Inc., 357 F.Supp. 923, 925 (N.D. Miss.1973), the precise issue now presented may not be disposed of so readily. Plaintiffs establish by the sworn affidavit of the Arkansas Secretary of State, that Atlas' Articles of Incorporation were revoked effective September 22, 1981, for failure to pay franchise taxes pursuant to Ark.Stat. Ann. § 84-1842, and that on the date of the accident, the corporation was without legal standing. The corporate charter was not reinstated until October 27, 1982.

Because of this corporate failure, plaintiffs argue that the movants both transacted business in Mississippi and committed a tort in this state in their individual capacities, so as to make them constitutionally subject to the in personam jurisdiction of this court and to service of process under Mississippi's long-arm statute, Miss.Code Ann. § 13-3-57 (Supp.1982).

It is plaintiffs' contention that the Arkansas courts would impose personal tort liability upon the movants since Atlas Carriers did not exist as a corporation at the moment of the collision. This proposition has not yet been passed upon or settled by the Arkansas Supreme Court. Plaintiffs further urge that imposition of individual tort liability under the Arkansas forfeiture statute would automatically invoke the personal jurisdiction of this court over the movants. Plaintiffs concede that movants did not independently have requisite "minimum contacts" with this state to validly subject them to in personam jurisdiction "if the corporate structure of the Defendant, Atlas Carriers, Inc., were intact at the time of the collision...." (Plaintiffs' Brief in Opposition, p. 2).

Acknowledging the corporate charter was temporarily forfeited at the time of the accident, movants vigorously assert, through the uncontested affidavit of Lawrence Megel, president of Atlas Carriers, that they had reason to believe the franchise taxes had been paid by the incorporating attorney; that they received no notice of the forfeiture until June 30, 1982, nine months after the revocation; that the delinquent $25.00 franchise tax was promptly paid, and the corporate charter reinstated; and that at no time during the period of statutory forfeiture did any of the officers or shareholders intend to carry on the business of Atlas Carriers as individuals, or partners, or in any form other than as a valid corporate entity.

The question thus presented on these facts is whether, under the familiar standards of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and its progeny, this federal district court may constitutionally exercise in personam jurisdiction over nonresident individuals whose only contacts with this jurisdiction derive from their participation in the ownership and management of a foreign corporation doing business in Mississippi, when that corporation's charter had been temporarily forfeited in the state of its domicile. To support our jurisdiction, plaintiffs would have the Court determine the substantive rights of the parties under an as yet unsettled point of Arkansas law. Since the jurisdictional issue can be resolved without forecasting law for which there is no precedent, we decline that invitation, and instead base our ruling upon the Mississippi Long-Arm Statute, Miss.Code Ann. § 13-3-57, and the constitutional tests which its application must satisfy.

Our analysis is necessarily twofold. The initial inquiry is whether the state's long-arm statute confers jurisdiction and if so, the next is whether exercise of jurisdiction thereunder comports with due process requirements of the Fourteenth Amendment. Familia De Boom v. Arosa Mercantil, S.A., 629 F.2d 1134, 1138 (5th Cir.1980), cert. denied, 451 U.S. 1008, 101 S.Ct. 2345, 68 L.Ed.2d 861 (1981); Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 489 (5th Cir.1974).

Mississippi's Long-Arm Statute provides that any nonresident person,...