Elmore v. Acre Beyond the Rye, LLC, CIVIL NO. 3:16cv296-HSO-JCG

• Decision Date: 29 August 2017
• Docket Number: CIVIL NO. 3:16cv296-HSO-JCG
• Parties: ROBERT ELMORE, et al. PLAINTIFFS v. ACRE BEYOND THE RYE, LLC, et al. DEFENDANTS
• Court: U.S. District Court — Southern District of Mississippi

ROBERT ELMORE, et al. PLAINTIFFS v. ACRE BEYOND THE RYE, LLC, et al. DEFENDANTS

CIVIL NO. 3:16cv296-HSO-JCG

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF MISSISSIPPI NORTHERN DIVISION

August 29, 2017

MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT BARRY BERNSTEIN'S MOTION TO DISMISS [28]

THIS MATTER IS BEFORE THE COURT on Defendant Barry Bernstein's Motion to Dismiss [28] filed January 30, 2017. Plaintiffs Robert Elmore, Jeremy Christopher, Ted Dibiase, Jr., Nicholas Coughlin, and Dofflin, LLC d/b/a Dofflin Media Group, Dofflin Management, LLC, and Dofflin Strategies filed a Response [31] on February 27, 2017. The time for Defendant Barry Bernstein to file a reply has passed. After review of the Motion, the record, and relevant legal authority, the Court finds that it lacks personal jurisdiction over Defendant Barry Bernstein and his Motion to Dismiss should be granted.

I. BACKGROUND

A. Facts and Procedural History

This matter arises out of a financial dispute between Plaintiffs Robert Elmore, Jeremy Christopher, Ted Dibiase, Jr., Nicholas Coughlin, and Dofflin, LLC d/b/a Dofflin Media Group, Dofflin Management, LLC, and Dofflin Strategies ("Plaintiffs") and Defendants Acre Beyond The Rye, LLC, Lyle Howry, Richard Craig Manley, Barry Bernstein, and Andre Gordon, Individually, and as Owners of Acre Beyond The Rye, LLC, Skinfly Entertainment, Lyle Howry, Individually, and as the Owner of Skinfly Entertainment, Cineview 3d Studios, LLC, Chris Dotson, Individually, and as the Manager of Cineview 3d Studios, LLC, and John Does 1-10 ("Defendants") over an attempt to produce a motion picture titled "Acre Beyond the Rye" (the "Movie"), in Mississippi in 2015. Compl. [1] at 2-3.¹

Plaintiffs' Complaint alleges that on July 26, 2015, actor James Caan and Defendants Andre Gordon ("Gordon") and Richard Manly ("Manly") met with Plaintiff Ted DiBiase, Jr. ("DiBiase") to discuss the Movie and to request that DiBiase introduce them to "residents of Mississippi who could provide short term loans to allow [t]he Movie to begin production and/or filming, as one of the original investors, Defendant Barry Bernstein, was wavering in his commitment to fund [t]he Movie." Id. at 8. On July 27, 2015, a meeting was held at the office of Plaintiff Dofflin, LLC d/b/a Dofflin Media Group, Dofflin Management, LLC, and Dofflin Strategies ("Dofflin") between Plaintiffs Nicholas Coughlin ("Coughlin") and DiBiase, and Defendants Lyle Howry ("Howry"), Gordon, Manley, and Chris Dotson ("Dotson), who participated via telephone. Jeff Ross, the producer of the Movie, also attended the meeting. Id. at 8-9.

The Complaint alleges that during this July 27, 2015, meeting Defendants provided DiBiase, Coughlin, and Dofflin with the following:

(a) written and/or oral assurances, promises, and/or guarantees that Defendant Barry Bernstein had previously provided a written guarantee for funding of The Movie up to $3,000,000.00;

(b) written and/or oral assurances, promises, and/or guarantees that Defendant Chris Dotson would fund The Movie up to $5,000,000.00;

(c) production of a letter from Wells Fargo Bank of the ability of Defendant Dotson "to procure funds up to $5,000,000 for the purpose to fund the film - Acre Beyond the Rye." (Please see Wells Fargo Letter, attached as Exhibit 1);

(d) documentation of The Movie's status as a project approved to move forward in the State of Mississippi, which would entitle The Movie and its producers to rebates up to $545,000.00 for money spent in Mississippi on The Movie (Please see Certificate, attached as Exhibit 2);

(e) that The Movie was fully insured; and

(f) other documentation concerning The Movie, its producers, the Movie's investor(s), and other business records demonstrating that the Movie was a legitimate, viable, and secure venture (Please see the Louisiana Secretary of State Documents and Articles of Organization regarding Acre Beyond the Rye, LLC, attached as Exhibit 3).

Id. at 9-10.

Based upon these alleged "written and oral assurances," Elmore and Christopher, neither of whom attended the meeting, allege that they each provided a short-term loan from July 27, 2015, to August 5, 2015, in the amount of $140,000.00 for a total of $280,000.00,² and further that DiBiase, Coughlin, andDofflin each supplied services to Acre Beyond the Rye, LLC. Id. at 10-14. Plaintiffs' investment of time and money allowed the production and filming of the Movie to commence on July 29, 2015, in Madison County, Mississippi. Id. At some point the funds ran out and production and filming were halted.

The Complaint alleges that Defendant Acre Beyond the Rye, LLC, a Louisiana limited liability company, "was and remains to be the company responsible for the approval, funding, production, management, operation, and filming of the motion picture Acre Beyond the Rye."³ Compl. [1] at 2-3 (emphasis in original). The members of Acre Beyond the Rye, LLC, are identified as Defendant Howry (Manager, Member), Defendant Manley (Member), and Defendant Barry Bernstein (Member). Compl. Ex. 3 [1-3] at 4-5. Plaintiffs claim that all Defendants were "were owners, managers, masters and servants, principals and agents and/or employers and employees for the motion picture Acre Beyond the Rye." Compl. [1] at 7 (emphasis in original).

The Complaint further asserts that all Defendants breached oral and written contracts because they failed to compensate DiBiase, Coughlin, and Dofflin for their services and failed to fully repay the short-term loans made by Elmore andChristopher. Id. at 14-15. Plaintiffs maintain that their collective damages are "in excess of $500,000.00 as a result of the Defendants' actions." Id. at 14.

Plaintiffs advance claims against Defendants, jointly and severally, for: (1) Breach of Contract as to Plaintiffs Elmore and Christopher; (2) Breach of Contract as to Plaintiffs DiBiase, Coughlin, and Dofflin; (3) Bad Faith and Tortious Breach of Contract as to Plaintiffs Elmore and Christopher; (4) Bad Faith and Tortious Breach of Contract as to Plaintiffs DiBiase, Coughlin, and Dofflin; (5) Breach of Duties of Good Faith and Fair Dealing; (6) Negligent Misrepresentation; (7) Fraudulent Misrepresentation; (8) Promissory Estoppel; (9) Equitable Estoppel; (10) Negligence; (11) Negligent Infliction of Emotional Distress; (12) Outrage; (13) Tortious Interference with Business Relations; (14) Unjust Enrichment; and (15) Punitive Damages. Id. at 14-24.

B. Defendant Barry Bernstein's Motion to Dismiss [28]

On January 30, 2017, Defendant Barry Bernstein ("Bernstein") filed a Motion to Dismiss [28] pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction or, alternatively, pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Mot. [28] at 1-2. Bernstein contends that the Complaint fails to identify a factual basis "which would support any Court in Mississippi exercising in personam jurisdiction over Bernstein," and that as an individual member of Acre Beyond the Rye, LLC, he is not a proper party to an action against Acre Beyond the Rye, LLC. Id.

Plaintiffs' Response [31] maintains that Bernstein is a proper party because he "may be held liable for the acts of his agents and employees, including the acts or omissions committed by Defendants Howry, Manley, and Gordon." Resp. in Opp'n [31] at 1. Plaintiffs posit that Bernstein is subject to jurisdiction in the State of Mississippi pursuant to Mississippi's long-arm statute, Mississippi Code Annotated §13-3-57, because "Bernstein, his agents, partners, employees, and/or his company" entered into contracts, committed torts, and conducted business in the State of Mississippi. Mem. in Opp'n [32] at 6.

II. DISCUSSION

A. Legal Standard

"Where a court finds it lacks personal jurisdiction, it may dismiss the action pursuant to Federal Rule of Civil Procedure 12(b)(2)." Herman v. Cataphora, Inc., 730 F.3d 460, 466 (5th Cir. 2013). "[T]he party seeking to invoke the power of the court . . . bears the burden of establishing jurisdiction but is required to present only prima facie evidence." Pervasive Software, Inc. v. Lexware GMBH & Co. KG, 688 F.3d 214, 219 (5th Cir. 2012) (quotation omitted). "In determining whether a prima facie case exists, this Court must accept as true [the Plaintiff's] uncontroverted allegations, and resolve in [its] favor all conflicts between the [jurisdictional] facts contained in the parties' affidavits and other documentation." Id. at 219-20. In cases arising under diversity of citizenship jurisdiction, the exercise of personal jurisdiction over a non-resident defendant is limited by the forum state's long-arm statute and the Due Process Clause of the FourteenthAmendment. Mullins v. TestAmerica, Inc., 564 F.3d 386, 398 (5th Cir. 2009). If Mississippi law does not support the exercise of personal jurisdiction, the Court need not reach the due process issue. Cycles, Ltd. v. W.J. Digby, Inc., 889 F.2d 612, 621 (5th Cir. 1989).

B. The Mississippi Long-Arm Statute

Federal Rule of Civil Procedure 4(k)(1)(A) confers personal jurisdiction over any defendant who would be subject to personal jurisdiction under the long-arm statute of the state in which the district court sits. The Mississippi long-arm statute provides, in relevant part, as follows:

Any nonresident person, firm, general or limited partnership, or any foreign or other corporation not qualified under the Constitution and laws of this state as to doing business herein, who shall make a contract with a resident of this state to be performed in whole or in part by any party in this state, or who shall commit a tort in whole or in part in this state against a resident or nonresident of this state, or who shall do any business or perform any character of work or service in this state, shall by such act or acts be deemed to be doing business in Mississippi and shall thereby be subjected to the jurisdiction of the courts of this state.

Miss. Code Ann. § 13-3-57....