Mark Doyle Constr., LLC v. Trihm Found., LLC
| Decision Date | 08 August 2018 |
| Docket Number | CIVIL ACTION NO. 17-0674 |
| Parties | MARK DOYLE CONSTRUCTION, LLC, ET AL. v. TRIHM FOUNDATION, LLC, ET AL. |
| Court | U.S. District Court — Western District of Louisiana |
Before the Court is Defendants, First Standard Asurety, LLP ("FSA") and David Harris' ("Harris") (collectively "Defendants") Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(2). See Record Document 89. For the reasons that follow, Defendants' Motion to Dismiss (Record Document 89) is DENIED.
The present lawsuit was initially filed in a Texas federal district court then subsequently transferred to this Court. Accordingly, it is necessary to discuss the factual and procedural history of both the Texas court and this Court.
Plaintiffs, Mark Doyle Construction, LLC ("MDC") and Woodrow Wilson1 ("Wilson") (collectively "Plaintiffs" in the Texas lawsuit) filed this lawsuit on March 21, 2016 in theUnited States District Court for the Western District of Texas, San Antonio Division. See Record Document 1. The President of MDC is Mark Doyle ("Doyle").2 MDC named as Defendants TriHM Foundation, LLC ("TriHM"), Dr. Jackqueline Cooper ("Dr. Cooper"), FSA, and Harris. See id. MDC voluntarily dismissed TriHM and Dr. Cooper from this lawsuit pursuant to Federal Rule of Civil Procedure 41(a)(1)(A) leaving only Defendants, FSA and Harris. See Record Document 20.
Plaintiffs' original Complaint is vague as to the parties involved and their roles in the alleged fraud and conspiracy. However, MDC's amended Complaint is more specific and will be further discussed infra. Nonetheless, Plaintiffs' original Complaint alleges that Defendants contacted Plaintiffs, in Louisiana, to solicit investments for a company in Texas. See Record Document 1 at pp. 1-4. Plaintiffs claim that they were fraudulently induced into investing $88,000 in TriHM. See id. at pp. 2-3, ¶ 11. MDC allegedly paid $30,000, $30,000, $3,000, and $3,000 for a total of $66,000. See id. at p. 3, ¶ 11. Wilson allegedly paid $20,000 and $2,000 for a total of $22,000. See id. Defendants allegedly refused to return MDC's $88,000. See id. at ¶ 13. Consequently, Plaintiffs asserted claims for fraud and conspiracy and sought to recover compensatory and punitive damages as well as attorney fees. See id. at pp. 3-4.
Defendants answered Plaintiffs' original Complaint on July 28, 2016. See Record Document 13. In their Answer, Defendants claim that the court lacked personal jurisdiction over them because Plaintiffs' original Complaint did not allege that Defendants committed any acts within the forum state of Texas. See id. at p. 1.
On February 28, 2017, Defendants moved to dismiss MDC's lawsuit for lack of personal jurisdiction. See Record Document 35. In their Motion to Dismiss, Defendants claim that there were no allegations in Plaintiffs' original Complaint that Defendants ever did business in Texas to establish personal jurisdiction. See id. at p. 5. Plaintiffs responded to Defendants' Motion requesting that as an alternative to dismissal, the Court grant it leave to file a motion to transfer venue to the Western District of Louisiana. See Record Document 43 at p. 8. In reply, Defendants stated that, "[w]hile it is up to the Court as to whether or not to transfer this matter to another jurisdiction, it is evident that much of the same arguments against jurisdiction in Texas would be relevant to an argument against jurisdiction in Louisiana." Record Document 48 at p. 9.
On April 26, 2017, Magistrate Judge Bemporad issued a Report and Recommendation. See Record Document 49. Judge Bemporad recommended that instead of granting Defendants' Motion to Dismiss for lack of personal jurisdiction that MDC's alternative request be granted transferring this lawsuit to this Court. See id. District Judge Biery adopted Judge Bemporad's Report and Recommendation on May 22, 2017. See Record Document 51. The case was transferred and assigned to this Court that same day.
On May 25, 2017, Magistrate Judge Hornsby issued a Memorandum Order requesting MDC3 file an amended Complaint setting forth each party's domicile and explain in a separate memorandum how the amount in controversy element has been met pursuant to 28 U.S.C § 1332. See Record Document 55. Defendants have raised the issue of this Court's subject matter jurisdiction over the lawsuit so this will be further discussed by the Court infra.
On August 10, 2017, MDC filed its amended Complaint that is currently before the Court. See Record Document 65. Again, MDC has asserted claims for fraud and conspiracy and seeks to recover compensatory and punitive damages as well as attorney fees. See id. at pp. 3-4.
MDC in its amended Complaint alleges that in or around November 2013, Defendants accepted the terms of a $400,000 payment from Dr. Cooper in return for helping her obtain investors. See id. at p. 3, ¶ 9. MDC alleges that Harris met with Dr. Cooper in Texas so that they could discuss procuring a T-Listed surety and combine their contacts to obtain assets for investment in TriHM. See id.; Record Document 47-2 at p. 12, Email Exchange.
MDC alleges that on February 6, 2014, at approximately 9:12 p.m., Doyle received a telephone call from Harris. See Record Document 65 at ¶ 10. Harris inquired into whether Doyle would be interested in investing in a mega-million dollar project that one of his clients, Dr. Cooper, was steering. See id. Doyle had no prior relationship with Dr.Cooper, but was a longtime client of Harris and FSA. See id. During the conversation, Harris explained further that the investment would be in a Texas foundation, which he described as a $5 billion business that would operate throughout the United States and some third world countries. See id. Harris allegedly requested Doyle to consider the investment since it was an investment that potentially provided an extremely high and quick return. See id. Initially, Doyle was skeptical of the opportunity. See id. However, after several minutes, Doyle alleges that Harris convinced him by promising that any money invested in TriHM, Harris would insure with a bond issued by FSA. See id.
Following the phone call, MDC alleges that Harris emailed Dr. Cooper to inform her that he procured a final investor for her project. See id. at ¶ 11. As a quid pro quo for obtaining MDC's investment, MDC alleges that Harris requested that Dr. Cooper pay him a fee of $1 million in addition to the $400,000 Dr. Cooper promised him for extending the bond issued by FSA. See id.
Approximately ten minutes after emailing Dr. Cooper, MDC alleges that Harris once again called Doyle, but this time it was a conference call with Dr. Cooper. See id. MDC alleges that Harris again ensured that FSA would bond the $30,000 that MDC had agreed to invest. See id. Moreover, MDC alleges during that call Harris instructed him to send the funds directly to Dr. Cooper in Texas so that she could put the money in a trust account. See id.
MDC alleges that numerous phone calls took place throughout the following weeks with both Harris and Dr. Cooper working to establish and confirm payment. See id.Furthermore, MDC alleges that documents were issued to the investors4that they believed to be valid indemnity bonds listing the investors as beneficiaries and TriHM as FSA's client. See id. Between February and March of 2014, MDC along with Wilson, Dunn, Smith, and Thomas allegedly paid Dr. Cooper a total of $161,130, of which $13,300 was intended for the premiums for the Financial Guarantee Indemnity Bonds issued by FSA. See Record Document 68 at p. 4, ¶ 12; Record Document 47. Doyle alleges that through MDC he invested $80,830. See Record Document 68 at p. 4, ¶ 12.
However, MDC along with the other investors allegedly never received membership certificates, investment certificates, bonds, etc., in, to or by TriHM or any other entity/person. See Record Document 65 at p. 4, ¶ 13. MDC alleges that the documents given to the investors purporting to be Financial Guarantee Indemnity Bonds issued by FSA at or before the time the investors gave Dr. Cooper their investment were fake. See id. at ¶ 13.
The parties' relationship soured when MDC demanded payment on the bonds. See id. MDC alleges that Defendants claimed that since Dr. Cooper never paid for the bonds, they never were in effect. See id. Nonetheless, MDC alleges that Defendants received some portion of funds from Dr. Cooper and TriHM, not only for the bonds, but as consideration of the $1.4 million promised to him as compensation for brining in the investors. See id.
MDC's amended Complaint does not invoke federal question jurisdiction under 28 U.S.C. § 1331. The sole basis for jurisdiction is an assertion of diversity jurisdiction pursuant to 28 U.S.C. § 1332, which places the burden on MDC, the party invoking federal jurisdiction, to plead particular facts that establish the requisite amount in controversy and complete diversity of citizenship between itself and Defendants. See St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998).
Although Defendants' Motion is titled "Defendants First Standard Asurety and David Harris' Motion to Dismiss for Lack of In Personam Jurisdiction and Brief to Support Motion", Defendants contend that MDC fails to meet the jurisdictional amount in controversy of Section 1332. See Record Document 89. Therefore, it is clear to the Court that Defendants are actually challenging this Court's subject matter jurisdiction pursuant to Rule 12(b)(1).
"A challenge to subject matter jurisdiction is non-waivable and may be challenged at any time." Martin ex rel. Martin v. Boh Bros. Constr. Co., Civil Action No. 14-508, 2014 WL 5465838, at *5 (E.D. La. Oct. 28, 2014). Courts may dismiss a lawsuit...
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