Lumen Techs. Serv. Grp. v. CEC Grp.
| Docket Number | Civil Action 23-cv-00253-NYW-KAS |
| Decision Date | 08 September 2023 |
| Parties | LUMEN TECHNOLOGIES SERVICE GROUP, LLC f/k/a CENTURYTEL SERVICE GROUP, LLC, Plaintiff, v. CEC GROUP, LLC f/k/a COMMUNICATIONS ENGINEERING CONSULTANT, LLC, Defendant/Third-Party Plaintiff, v. PAUL J. FORD & COMPANY, Third-Party Defendant. |
| Court | U.S. District Court — District of Colorado |
ORDER ON MOTION TO DISMISS
This matter is before the Court on Third-Party Defendant's Motion to Dismiss for Lack of Personal Jurisdiction (the “Motion” or “Motion to Dismiss”) [Doc. 23]. The Court has reviewed the Motion and the related briefing, the applicable case law, and the entire case file and concludes oral argument would not materially assist in the resolution of this matter. For the reasons set forth below, the Motion to Dismiss is respectfully GRANTED.
Plaintiff Lumen Technologies Service Group, LLC (“Lumen”) entered into a contract with Defendant CEC Group, LLC (“CEC”), under which CEC was to evaluate the structural capacity of a building, located in Florida, that Lumen intended to purchase. [Doc. 8 at ¶¶ 1-2, 16]. Lumen alleges that CEC negligently performed the structural evaluation and incorrectly concluded that the building had the structural capacity to handle Lumen's intended uses for the building. [Id. at ¶¶ 3, 21-23]. After Lumen purchased the building and began renovations, the building's second-floor concrete slab partially collapsed. [Id. at ¶¶ 4-5, 26]. Further analysis revealed that the building did not have sufficient structural capacity to support Lumen's intended use of the building. [Id. at ¶ 28].
Lumen sued CEC in federal court on January 27, 2023, [Doc. 1], and filed an Amended Complaint on February 14, 2023. [Doc. 8]. Lumen asserts claims for breach of contract, breach of warranty, and breach of express indemnity against CEC. [Id. at ¶¶ 30-47]. CEC answered and filed a Third-Party Complaint against Third-Party Defendant Paul J Ford & Company (“PJF”), alleging that CEC contracted with PJF to provide the structural engineering services referenced in Lumen's Amended Complaint and that “[i]n the event Lumen's allegations regarding structural engineering services are true, which CEC denies PJF is responsible therefor.” [Doc. 14 at ¶¶ 12]; see also [Doc. 8 at ¶ 19 (Lumen alleging that “CEC, which does not perform structural engineering services, retained [P]F] as a subcontractor to perform the structural analysis.”)]. CEC asserts three third-party claims against PJF: breach of contract; negligence; and a claim for indemnity. [Doc. 14 at ¶¶ 3-19]. The Clerk of the Court issued a Summons on a Third-Party Complaint to Paul J. Ford & Co., c/o Registered Agent, 36 S. 18th Avenue, Suite D, Brighton, Colorado 80601. [Doc. 15]. Although there is no return of service filed on the docket, PJF admits that its registered agent was served on March 7, 2023. [Doc. 19 at ¶ 1].
On April 5, 2023, PJF filed its Motion to Dismiss, arguing that CEC's claims should be dismissed because this Court lacks personal jurisdiction over PJF. [Doc. 23 at 2]. In support, PJF notes that it is an Ohio corporation with a principal place of business in Ohio; that it has no offices, property, bank accounts, or investments in Colorado; and that the building at the center of this lawsuit is located in Florida. [Id. at ¶¶ 1-3]. It follows, according to PJF, that this Court has neither general personal jurisdiction nor specific personal jurisdiction over PJF. [Id. at 4-8]. CEC responds that the Court has personal jurisdiction over PJF because PJF has consented to be sued in the state of Colorado, [Doc. 33 at 1], and in its Reply, PJF disputes that it has consented to the personal jurisdiction of Colorado courts. See generally [Doc. 45]. On July 20, 2023, the Honorable Kristen L. Mix granted PJF's Motion to Stay Discovery and stayed all discovery in this case with respect to PJF. [Doc. 58].[1]The Court addresses the arguments in the Motion to Dismiss and related briefing below.
Rule 12(b)(2) of the Federal Rules of Civil Procedure allows a defendant to challenge a court's exercise of personal jurisdiction over it. Fed.R.Civ.P. 12(b)(2). The plaintiff bears the burden of demonstrating that a court has personal jurisdiction over the defendant. Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1069 (10th Cir. 2008). When the court decides a Rule 12(b)(2) motion to dismiss without holding an evidentiary hearing, “the plaintiff need only make a prima facie showing of personal jurisdiction to defeat the motion.” AST Sports Sci., Inc. v. CLF Distrib. Ltd., 514 F.3d 1054, 1057 (10th Cir. 2008).
“To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment.” Benton v. Cameco Corp., 375 F.3d 1070, 1075 (10th Cir. 2004) (quoting Soma Med. Int'l v. Standard Chartered Bank, 196 F.3d 1292, 1295 (10th Cir. 1999)). “[T]o exercise jurisdiction in harmony with due process, defendants must have ‘minimum contacts' with the forum state, such that having to defend a lawsuit there would not ‘offend traditional notions of fair play and substantial justice.'” Dudnikov, 514 F.3d at 1070 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). In Colorado, only one inquiry is necessary, as the Colorado long-arm statute “confer[s] the maximum jurisdiction permitted by the due process clauses of the United States and Colorado constitutions,” and its requirements are necessarily addressed under a due process analysis. Archangel Diamond Corp. v. Lukoil, 123 P.3d 1187, 1193 (Colo. 2005); see also Colo. Rev. Stat. § 13-1-124(1).
A court may exercise general personal jurisdiction (or “all-purpose” jurisdiction) or specific personal jurisdiction (or “conduct-linked” jurisdiction) over a defendant. Bristol-Myers Squibb Co. v. Superior Ct. of Cal., 582 U.S. 255, 262 (2017); Daimler AG v. Bauman, 571 U.S. 117, 122 (2014). Specific jurisdiction is available where the lawsuit arises out of or relates to the defendant's contacts with the forum state. Bristol-Myers Squibb, 582 U.S. at 262. In other words, “specific jurisdiction is proper if there is ‘an affiliation between the forum and the underlying controversy, principally, an activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation.'” Hood v. Am. Auto Care, LLC, 21 F.4th 1216, 1221 (10th Cir. 2021) (quoting Bristol-Myers Squibb, 582 U.S. at 262). On the other hand, general jurisdiction “permits a court to adjudicate any cause of action against” the defendant, “wherever arising, and whoever the plaintiff.” Brown v. Lockheed Martin Corp., 814 F.3d 619, 624 (2d Cir. 2016). Typically, a forum state may exercise general jurisdiction over a defendant if the defendant's affiliations with the forum state are “so continuous and systematic” that it is “essentially at home” in the state. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). “For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.” Id. at 924.
However, unlike subject matter jurisdiction, parties can consent to the personal jurisdiction of a particular forum or court. Mallory v. Norfolk S. Ry. Co., 600 U.S. __, 143 S.Ct. 2028, 2039 (2023). This consent may be express or implied. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14 (1985); see also Butler v. Daimler Trucks N. Am., LLC, 433 F.Supp.3d 1216, 1235 (D. Kan. 2020) (collecting cases in support of the proposition that a defendant “may consent to personal jurisdiction explicitly, such as through a forum selection clause or some other agreement, or implicitly through its actions, for example, by appearing in court and arguing the merits of the case”) (footnote and quotations omitted)). If a party consents to the exercise of a particular state's personal jurisdiction, the Court need not determine whether the defendant's contacts with the forum state are sufficient to meet minimum due process requirements. Waite v. All Acquisition Corp., 901 F.3d 1307, 1312 (11th Cir. 2018); see also Mallory, 143 S.Ct. at 2039.
In its Motion to Dismiss, PJF argues that the Court lacks personal jurisdiction over the company, raising arguments as to both general jurisdiction and specific jurisdiction. [Doc. 23 at 5-8]. In its Response, CEC's sole contention is that this Court has general jurisdiction over PJF because PJF has consented to the personal jurisdiction of Colorado courts. [Doc. 36 at 1]. CEC notes that PJF has registered to do business in the state of Colorado and has designated a registered agent for service of process in the state. [Id. at 5]; see also [Doc. 36-2; Doc 36-3]. Based on these activities, CEC concludes, without substantial supporting argument, that PJF has consented to the personal jurisdiction of Colorado courts. [Doc. 36 at 5].[2]
CEC primarily relies on Pennsylvania Fire Insurance Co. v Gold Issue Mining & Milling Co., 243 U.S. 93 (1917), asserting that “[t]he United States Supreme Court has long recognized that a corporate defendant like PJF may consent to general jurisdiction by registering to do business in a foreign state.” [Doc. 36 at 4]. In Pennsylvania Fire, a Pennsylvania insurance provider issued an insurance policy to an Arizona company; the insurance policy covered buildings located in Colorado. 243 U.S. at 94. To recover for losses sustained on the Colorado property, the Arizona company sued the...
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