Hunt v. Calhoun Cnty. Bank, Inc.
| Decision Date | 25 March 2014 |
| Docket Number | No. 1:13cv952 (JCC/TCB).,1:13cv952 (JCC/TCB). |
| Citation | 8 F.Supp.3d 720 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | William H.G. HUNT, Sr., Plaintiff, v. CALHOUN COUNTY BANK, INC., and James L. Bennett, Defendants. |
OPINION TEXT STARTS HERE
Stephanie Swanson Ryan, Ryan Law PLLC, Cross Junction, VA, for Plaintiff.
Kevin Bryan Bedell, Greenberg Traurig LLP, McLean, VA, for Defendants.
This matter is before the Court on Defendants Calhoun County Bank, Inc. (“Calhoun County Bank”) and James L. Bennett's (“Bennett”; together “Defendants”) Joint Motion to Dismiss (“Motion”). [Dkt. 7.] For the following reasons the Court will grant Defendants' Motion to Dismiss.
This case arises out of an alleged breach of the contractual relationship between Plaintiff William H.G. Hunt, Sr. (“Hunt”) and Defendants and the alleged fraudulent misrepresentation by Defendant Bennett.
Calhoun County Bank is a West Virginia Corporation, which Plaintiff alleges conducts business and has depositors in Virginia. (Compl. [Dkt. 1] ¶ 2.) Defendant Bennettis the President of Calhoun County Bank and a member of its Board of Directors. (Compl. ¶ 3.) Plaintiff is a citizen and a resident of Virginia. (Compl. ¶ 1.)
According to the Complaint, on or about June 1, 2007, Hunt entered into a contract with Calhoun County Bank through its agent Bennett. Pursuant to this contract, Calhoun County Bank agreed to sell to Hunt certain royalty interests that were in the custody of Calhoun County Bank for the sum of $40,000.00. (Compl. ¶ 8.) Hunt alleges that in June 2007, he transferred $40,000.00 to an agent of Calhoun County Bank. (Compl. ¶ 9.) Calhoun County Bank, however, refused to transfer ownership of the royalty interests, in contravention of the contract. (Compl. ¶ 9.) Plaintiff avers that he has suffered damages in excess of $180,000.00 and seeks specific performance of the contract, or in the alternative, compensatory damages. (Compl. ¶ 11.) Plaintiff further alleges that Bennett fraudulently misrepresented his intention to transfer the royalty interests to Hunt. (Compl. ¶ 13.)
On October 11, 2007, Plaintiff filed a complaint in the Circuit Court of Loudoun County alleging breach of contract and constructive fraud with the same factual basis as this action. (Def. Mem. [Dkt. 8–3] Ex. C.) On February 11, 2013, the Circuit Court of Loudoun County granted Plaintiff's Motion for Nonsuit pursuant to § 8.01–380 of the Code of Virginia. (Def. Mem. [Dkt. 8–4] Ex. D.)
On August 6, 2013, Plaintiff filed his Complaint against Defendants Calhoun County Bank and Bennett seeking damages based on theories of breach of contract and fraud. [Dkt. 1.] On December 23, 2013, Defendants filed their Motion to Dismiss and accompanying memorandum of law. [Dkts. 7–8.] Plaintiff filed his opposition on December 27, 2013. [Dkt. 10.] On January 2, 2014, Defendants filed their reply. [Dkt. 11.] The Court held a hearing on Defendants' Motion to Dismiss on February 25, 2014. [Dkt. 16.] During the hearing, Plaintiff submitted an exhibit regarding the electronic services offered on Calhoun County Bank's website. This exhibit consists of a screenshot of Calhoun County Bank's website dated February 20, 2014. [Dkt. 17–1.] The Court ordered Defendant to file a response regarding Plaintiff's exhibit within one week. On March 5, 2014, Defendants filed their Supplemental Memorandum in Support of Their Joint Motion to Dismiss the Complaint. [Dkt. 17.] On March 10, 2014, Plaintiff filed his Supplemental Memorandum in Opposition to Defendants' Motion to Dismiss. [Dkt. 18.]
Defendants' Motion to Dismiss is before the Court.
Federal Rule of Civil Procedure 12(b)(2) permits dismissal of an action where the Court lacks personal jurisdiction over the parties. The plaintiff bears the burden of demonstrating personal jurisdiction by a preponderance of the evidence once its existence is questioned by the defendant. Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.1989). When a district court decides a pretrial personal jurisdiction dismissal motion without an evidentiary hearing, however, the plaintiff need only prove a prima facie case of personal jurisdiction. Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir.1993); Combs, 886 F.2d at 676. In deciding whether the plaintiff has proved a prima facie case, the district court must draw all reasonable inferences arising from the proof, and resolve all factual disputes in the plaintiff's favor. Combs, 886 F.2d at 676; Wolf v. Richmond Cnty. Hosp. Auth., 745 F.2d 904, 908 (4th Cir.1984), cert. denied,474 U.S. 826, 106 S.Ct. 83, 88 L.Ed.2d 68 (1985).
Rule 12(b)(6) allows a court to dismiss those allegations which fail “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A 12(b)(6) motion tests the legal sufficiency of the complaint. Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir.2008). A court reviewing a complaint on a 12(b)(6) motion must accept well-pleaded allegations as true and must construe factual allegations in favor of the plaintiff. See Randall v. United States, 30 F.3d 518, 522 (4th Cir.1994).
A court must also be mindful of the liberal pleading standards under Rule 8, which require only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8. While Rule 8 does not require “detailed factual allegations,” a plaintiff must still provide “more than labels and conclusions” because “a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citation omitted).
To survive a 12(b)(6) motion, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. However, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice” to meet this standard, id., and a plaintiff's “[f]actual allegations must be enough to raise a right to relief above the speculative level....” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Moreover, a court “is not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.
Rule 9(b) imposes a heightened pleading standard for fraud claims. Fed.R.Civ.P. 9(b). Fed.R.Civ.P. 9(b). To satisfy the heightened pleading standard of Rule 9(b), a plaintiff must state with particularity “the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.” In re Mut. Funds Inv. Litig., 566 F.3d 111, 120 (4th Cir.2009) (quoting Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir.1999)), rev'd sub nom. on other grounds, Janus Capital Grp., Inc. v. First Derivative Traders, ––– U.S. ––––, 131 S.Ct. 2296, 180 L.Ed.2d 166 (2011).
Defendants argue that Plaintiff's Complaint should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(2), Federal Rule of Civil Procedure 12(b)(6), Federal Rule of Civil Procedure 9(b) and Local Rule 7. The Court will consider each in turn.
To establish jurisdiction over a non-resident, this Court must consider first whether jurisdiction is authorized by Virginia law, and then whether the exerciseof jurisdiction comports with the due process requirements of the Fourteenth Amendment to the United States Constitution. Consulting Eng'rs Corp. v. Geometric, Ltd., 561 F.3d 273, 277 (4th Cir.2009); Fed.R.Civ.P. 4(e)-(f). As Virginia's general long-arm statute extends personal jurisdiction to the fullest extent permitted by due process, “the statutory inquiry merges with the constitutional inquiry.” English & Smith v. Metzger, 901 F.2d 36, 38 (4th Cir.1990); Va.Code Ann. § 8.01–328.1. As a result the Court need only undertake one inquiry to determine whether the exercise of jurisdiction here comports with the Fourteenth Amendment's due process requirements.1
There are two types of personal jurisdiction that meet the requirements of due process. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). First, specific jurisdiction exists when a defendant has sufficient “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, 66 S.Ct. 154, 90 L.Ed. 95 (1945). To meet this minimum contacts test, the plaintiff must show that a defendant “ ‘purposefully directed his activities at the residents of the forum’ and that the litigation results from alleged injuries that ‘arise out of’ those activities.” Burger King, 471 U.S. at 472, 105 S.Ct. 2174 (citations omitted). Second, general jurisdiction exists for claims entirely distinct from the defendant's in-state activities when a defendant's activities in the state have been “continuous and systematic.” Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 & n. 9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).
As an initial matter, the Court rejects Plaintiff's argument that Defendants failed to make a special appearance and therefore submitted to the...
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