Lillie v. Guerra
| Decision Date | 09 September 2021 |
| Docket Number | 1:20CV905 |
| Parties | Brian LILLIE, Tracy Lillie, Enterprise Holdings Group, LLC, d/b/a Colubris Ventures, eCreative Group, Inc., and Three Wide Media, LLC, Plaintiffs, v. Luis Alberto GUERRA and Alan John Hanke, Defendants. |
| Court | U.S. District Court — Middle District of North Carolina |
Austin Dutch Entwistle, III, E. Garrison White, Hartsell & Williams, P.A., Concord, NC, James J. DeCristofaro, New York, NY, Robert Henry Jessup, IV, Howard, Stallings, from, Atkins, Angell & Davis, P.A., Raleigh, NC, for Plaintiffs.
Nancy S. Litwak, Ryan M. Arnold, Rosenwood, Rose & Litwak, PLLC, Charlotte, NC, for Defendants.
This matter comes before the court on Defendants’ Motion to Dismiss, (Doc. 13), for lack of personal jurisdiction. Defendants also filed a brief in support of their motion, (Doc. 14); Plaintiffs filed a response in opposition, (Doc. 16); and Defendants filed a reply, (Doc. 17).
For the reasons stated herein, this court will deny Defendants’ motion.
A majority of the facts are described here, but additional relevant facts will be addressed as necessary throughout the opinion. According to the Complaint, Plaintiffs are all residents of North Carolina. (Complaint ("Compl.") (Doc. 9) ¶¶ 1-4.) Plaintiffs Brian and Tracy Lillie are residents of Cabarrus County, North Carolina; Plaintiff Enterprise Holdings Group, LLC ("EHG") is a North Carolina Limited Liability Company; Plaintiff eCreative Group, Inc., is an Iowa Corporation with its principal place of business in Cabarrus County; and Plaintiff Three Wide Media, LLC, is an Iowa Limited Liability Company with its principal place of business in Cabarrus County. (Id. ) Defendant Alan John Hanke ("Hanke") is a resident of McHenry County, Illinois, and Defendant Luis Alberto Guerra ("Guerra" or collectively "Defendants") is a resident of Broward County, Florida. (Id. ¶¶ 5-6.)
Plaintiffs allege that EHG and a third party, World Cryptocurrency Exchange Incorporation ("WCE"), executed an investment agreement wherein WCE would provide EHG an initial investment of funds, and EHG would invest those funds. (Id. ¶ 7.) EHG also executed a profit share agreement which sets forth compensation for consultants, who are responsible for bringing investors in the business venture between WCE and EHG. (Id. ¶ 8.) Defendants were consultants in this business venture. (Id. ¶ 10.) Plaintiffs allege that through no fault of their own, the goal of this business venture never came to fruition. (Id. ¶ 20.)
Plaintiffs contend that after the business venture failed, Defendants engaged in a variety of extortion tactics to attempt to recover money Defendants believed Plaintiffs owed them. (Id. ¶¶ 21-22.) According to the Complaint, Defendants filed a false police report with the Kannapolis Police Department. (Id. ¶ 23.) Defendants also created websites to publish defamatory statements about Plaintiffs and their businesses, in addition to posting on other websites similar statements. (Id. ¶¶ 26-28, 41.) Additionally, Defendants sent Plaintiffs emails throughout the summer 2019 and fall 2019 wherein Defendants accused Plaintiffs of fraudulent business practices and threatened Plaintiffs to pay Defendants. (Id. ¶¶ 29-40.) Moreover, Defendants sent pictures via text message implying Defendants were on their way to Plaintiffs, (id. ¶ 52), and sent threatening text messages to Plaintiffs, (id. ¶¶ 46-53).
Plaintiffs assert claims of libel per se, libel per quod, invasion of privacy – appropriation of likeness, intentional infliction of emotional distress, unfair and deceptive trade practices, and unjust enrichment. (Id. ¶¶ 58-96.) Plaintiffs also seek punitive damages. (Id. ¶¶ 97-102.)
Plaintiffs originally filed their Complaint on August 31, 2020, in Cabarrus County Superior Court. (Compl. (Doc. 9).) On October 2, 2020, Defendants filed a Petition for Removal with this court. (Doc. 1.) This court has jurisdiction pursuant to 28 U.S.C. § 1332. On October 9, 2020, Defendants filed their Motion to Dismiss for lack of personal jurisdiction. (Doc. 13.) Plaintiffs responded, (Doc. 16); and Defendants replied, (Doc. 17). This matter is ripe for adjudication.
"Under Rule 12(b)(2), a defendant ‘must affirmatively raise a personal jurisdiction challenge, but the plaintiff bears the burden of demonstrating personal jurisdiction at every stage following such a challenge.’ " UMG Recordings, Inc. v. Kurbanov, 963 F.3d 344, 350 (4th Cir. 2020), cert. denied, ––– U.S. ––––, 141 S. Ct. 1057, 208 L.Ed.2d 525 (2021) (quoting Grayson v. Anderson, 816 F.3d 262, 267 (4th Cir. 2016) ). At the motion to dismiss stage, all that is required to survive a motion to dismiss is for the plaintiff to make a prima facie showing in support of this court asserting personal jurisdiction. Universal Leather v. Koro AR, S.A., 773 F.3d 553, 561 (4th Cir. 2014). This court construes the complaint "in the light most favorable to the plaintiff, assume[s] credibility, and draw[s] the most favorable inferences for the existence of jurisdiction." New Wellington Fin. Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290, 294 (4th Cir. 2005) (internal quotation marks omitted) (quoting Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989) ).
A federal district court may assert personal jurisdiction over a non-resident defendant when two conditions are met: (1) the applicable state's long-arm statute provides a statutory basis for asserting personal jurisdiction; and (2) the exercise of personal jurisdiction complies with Fourteenth Amendment due process requirements. See Christian Sci. Bd. of Dirs. of the First Church of Christ, Scientist v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001).
North Carolina's long-arm statute, N.C. Gen. Stat. § 1-75.4(1) d, extends "jurisdiction over nonresident defendants to the full extent permitted by the Due Process Clause." Id. (citation omitted). Defendants do not challenge personal jurisdiction under North Carolina's long-arm statute. (Defs.’ Mem. of Law in Supp. of Mot. to Dismiss ( ) (Doc. 14) at 3-4.) Thus, this court's sole inquiry is whether personal jurisdiction is proper under the Due Process Clause. Christian Sci. Bd. of Dirs., 259 F.3d at 215.
The Due Process Clause allows a court to exercise general or specific jurisdiction over a defendant. General jurisdiction exists "only when a defendant is ‘essentially at home’ in the State." Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., ––– U.S. ––––, 141 S. Ct. 1017, 1024, 209 L.Ed.2d 225 (2021) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011) ). An individual is subject to general jurisdiction in his place of domicile. Id. (citing Daimler AG v. Bauman, 571 U.S. 117, 137, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) ). Here, general jurisdiction is inappropriate because Defendant Hanke is domiciled in Illinois, and Defendant Guerra is domiciled in Florida. (Compl. (Doc. 9) ¶¶ 5, 6.)
On the other hand, specific jurisdiction exists when the plaintiff's claim arises from the defendant's contacts with the forum. See Bristol-Myers Squibb Co. v. Super. Ct. of Cal., 582 U.S. ––––, ––––, 137 S. Ct. 1773, 1780, 198 L.Ed.2d 395 (2017) (quoting Daimler, 571 U.S. at 127, 134 S.Ct. 746 ). Courts use a three-part test to determine whether the exercise of personal jurisdiction comports with due process: "(1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the State; (2) whether the plaintiffs’ claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable." ALS Scan, Inc. v. Digit. Serv. Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002) (internal quotation marks omitted). This court will consider each part in turn.
First, the defendant must have purposefully availed himself of the forum. To determine whether Defendants purposefully availed themselves of North Carolina, this court asks whether "the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) (internal citations omitted). "This ‘purposeful availment’ requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Keeton v. Hustler Mag., Inc., 465 U.S. 770, 774, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984) ).
When an out-of-state defendant has acted outside the forum in a manner that injures a plaintiff within the forum, courts examine whether "the defendant has intentionally directed his tortious conduct toward the forum state, knowing that that conduct would cause harm to a forum resident." Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 398 (2003) (citing Calder v. Jones, 465 U.S. 783, 789-90, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984) ).
Defendants argue they have not purposefully availed themselves of North Carolina because their online activity, emails and text messages sent to Plaintiffs, as well as the Kannapolis police report, were not directed at North Carolina or a North Carolina audience. (See Defs.’ Br. (Doc. 14) at 2, 6.) This court disagrees.
First, Defendants purposefully availed themselves of North Carolina through their electronic activity. In ALS Scan, the Fourth Circuit addressed "when electronic contacts with a State are sufficient" to exercise personal jurisdiction. 293 F.3d at 713. The Fourth Circuit "adopt[ed] and...
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