Diemel v. Tolley
| Docket Number | 21-C-931 |
| Decision Date | 08 June 2022 |
| Parties | BRANDON DIEMEL and BRANDON DIEMEL LIVESTOCK, LLC, Plaintiffs, v. MEGHAN TOLLEY, as personal representative of the estate of Samuel Ryan Tolley, Defendant. |
| Court | U.S. District Court — Eastern District of Wisconsin |
DECISION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS FOR LACK OF JURISDICTION
Plaintiffs Brandon Diemel and Brandon Diemel Livestock, LLC (collectively Diemel), filed this lawsuit against Defendant Meghan Tolley, as personal representative of the estate of Samuel Ryan Tolley, asserting eight state law claims for relief arising out of Tolley's alleged failure to remit payment for shipments of livestock. The case arises under the Court's diversity jurisdiction, 28 U.S.C. § 1332 and is before the Court on Tolley's motion to dismiss for lack of jurisdiction. In the course of briefing on the motion to dismiss for lack of personal jurisdiction, Tolley also raised the issue of whether Diemel's tort claims are barred by the economic loss doctrine. Although the Court requested supplemental briefing on the application of the economic loss doctrine, it now concludes that it need not address that issue in order to decide Tolley's motion. For the reasons set forth below, Tolley's motion to dismiss for lack of personal jurisdiction will be denied.
Brandon Diemel is a Wisconsin resident and the sole member and proprietor of Brandon Diemel Livestock, LLC, which is located in Pulaski, a village just west of Green Bay, Wisconsin. Compl. ¶ 1, Dkt. No. 1. Brandon Diemel Livestock, LLC is the successor in interest to Diemel Livestock, LLC, which was operated by Brandon's brothers Nick and Justin, until they were murdered by the owner of a Missouri farm where their bodies were eventually recovered. Diemel Decl ¶¶ 3-9, Dkt. No. 9-1.
Prior to his passing, Samuel Ryan Tolley (Mr. Tolley) was an Indiana resident who ran a livestock-shipping business in Butler, Indiana. Compl. ¶ 3. Mr. Tolley was a customer of Diemel Livestock, LLC, for many years. Diemel Decl. ¶ 6. He contacted Brandon Diemel after the murder of his brothers and offered to continue the business he had conducted with the family. Id. at ¶¶ 1620.
According to the complaint, Mr. Tolley purchased livestock from Brandon Diemel Livestock on multiple occasions, typically by calling Brandon Diemel and requesting that a certain number of livestock be shipped directly to his place of business. Compl. ¶¶ 25-27. After the parties agreed on pricing, Diemel would prepare the commercial lot of livestock, and the parties would arrange for the shipment to Mr. Tolley. Id. at ¶ 28; Diemel Decl. ¶ 27. Upon receipt of the livestock, Mr. Tolley and the shipping company were to inspect the livestock and notify Diemel of any non-conforming livestock that had either died or been injured in transit, with the remainder being accepted. Compl. ¶¶ 29-31. Once accepted, Diemel would revise the invoices to conform with the accepted livestock and would send the revised invoices to Mr. Tolley, who would typically wire transfer the corresponding amount owed to Brandon Diemel Livestock. Id. at ¶¶ 32-33. Invoices attached to the complaint show that Mr. Tolley ordered cattle from Brandon Diemel Livestock on 31 separate occasions between July 2019 to early September 2019 totaling $817, 715.00. Dkt. No. 1-3 at 2. Beginning in August 2019, however, Mr. Tolley's wire transfers were insufficient to cover the revised amounts. Compl. ¶¶ 37-39. After reviewing the invoices and Tolley's wire transfers, Diemel concluded that Mr. Tolley was in arrears in the amount of $298, 270.00. Id. at ¶ 41; see also Dkt. No. 1-5.
Diemel inquired into Mr. Tolley's intention to pay the outstanding amount on several occasions via text message. See Dkt. No. 1-6. Sometime in December 2020, Diemel asked Mr. Tolley if he planned on sending payment via wire transfer, to which Mr. Tolley responded that he would and that he was “tuning the bank now trying to get a loan.” Id. at 2. When asked again sometime in January, Mr. Tolley said that he was waiting on his bank and did not know how long it would take but that he was working hard to make something happen. Id. at 4. On January 6, 2020, Mr. Tolley told Diemel that he would “wire [him] a thousand a week until something comes [through].” Id. at 5. Throughout February, March, and April 2020, Mr. Tolley continued to tell Diemel that he was working on things with his bank and repeatedly told Diemel that he was working hard to get things resolved. Id. at 14-19.
Then, on May 18, 2020, Mr. Tolley changed tack and told Diemel that he was “current on all bills” and that any outstanding bill was “due to not the right cattle and deads.” Id. at 23. In other words, Mr. Tolley asserted that any outstanding bill was due to livestock that were nonconforming. Compl. ¶ 51. Mr. Tolley told Diemel that he “sent [the] wrong cattle and weak cattle and cattle of the wrong breed, ” and that Mr. Tolley was not responsible for Diemel's error in that regard. Dkt. No. 1-6 at 26. On June 18, 2021, Mr. Tolley passed away unexpectedly. Tolley Decl. ¶ 5, Dkt. No. 8-1. To date, Diemel has not received payment for the amounts allegedly owed. Compl. ¶ 54.
Diemel thereafter filed this action asserting eight state law claims for relief. The claims asserted by Diemel include breach of contract, unjust enrichment, promissory estoppel, fraudulent misrepresentation, strict liability misrepresentation, negligent misrepresentation, conversion, and civil theft.
Rule 12(b)(2) of the Federal Rules of Civil Procedure governs motions to dismiss for lack of personal jurisdiction. Though the plaintiff has the burden of proving personal jurisdiction, the burden is not a heavy one. Advanced Tactical Ordnance Sys., LLC v. Real Action Paintball Inc., 751 F.3d 796, 799-800 (7th Cir. 2014). “The plaintiff need not include facts alleging personal jurisdiction in the complaint, but ‘once the defendant moves to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating the existence of jurisdiction.'” Curry v. Revolution Labs., LLC, 949 F.3d 385, 392 (7th Cir. 2020) (quoting Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003)). In deciding whether personal jurisdiction exists, the court may rely on the complaint, affidavits, deposition testimony, exhibits, or other evidence in the record. See Purdue, 338 F.3d at 782. The court must draw all inferences from the record in the plaintiff's favor. See Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010). “When the district court bases its determination solely on written materials and not an evidentiary hearing, plaintiffs must only make a prima facie showing of personal jurisdiction over the defendants to survive a motion to dismiss.” Matlin v. Spin Master Corp., 921 F.3d 701, 705 (7th Cir. 2019).
“A district court sitting in diversity has personal jurisdiction over a nonresident defendant only if a court of the state in which it sits would have jurisdiction.” Purdue, 338 F.3d at 779 (citation omitted). Under Wisconsin law, a court must employ a two-step inquiry to determine whether personal jurisdiction may be exercised over a nonresident defendant. First, the court determines whether the defendant meets any of the criteria for personal jurisdiction under Wisconsin's long-arm statute, Wis.Stat. § 801.05. Kopke v. A. Hartrodt, S.R.L., 2001 WI 99, ¶ 8, 245 Wis.2d 396, 629 N.W.2d 662. If the statutory requirements are satisfied, the court considers whether the exercise of jurisdiction comports with the requirements of due process. Id. The plaintiff bears “the minimal burden of establishing a prima facie threshold showing” that the statutory and constitutional requirements are satisfied. Id. (citation omitted).
The parties do not dispute that Wisconsin's long-arm statute, by its terms, extends personal jurisdiction over Tolley. See Dkt. No. 8 at 2. Section 801.05(5)(d) of the Wisconsin Statutes provides that the state's courts have jurisdiction over the defendant in any action which “relates to goods, documents of title, or other things of value shipped from this state by the plaintiff to the defendant on the defendant's order or direction.” Diemel's action against Tolley arises out of Diemel's shipment of goods (cattle) from this state to Mr. Tolley on Mr. Tolley's order or direction. And pursuant to § 801.05(12), the personal representative for the estate of a person who is deceased stands in his or her shoes. Thus, the only issue is whether exercising personal jurisdiction over Tolley would comport with the Due Process Clause of the Fourteenth Amendment.
The Due Process Clause of the Fourteenth Amendment allows a court to exercise personal jurisdiction over an out-of-state defendant only if that defendant has “minimum contacts” with the forum State, “such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v Washington, 326 U.S. 310, 316 (1945). The concept of minimum contacts protects a defendant from having to litigate in a distant forum and allows the defendant to reasonably anticipate where he may be haled into court. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). The primary focus of the personal jurisdiction analysis “is the defendant's relationship to the forum State.” Bristol-Myers Squibb Co. v. Superior Court of Cal., San. Fran. Cty., 137 S.Ct. 1773, 1797 (2017). Personal jurisdiction may either be general or specific, “depending on the extent of the defendant's contacts with the forum state.” uBid, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 425 (7th Cir. ...
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