Meadows v. Hartford Life Ins. Co.
| Decision Date | 27 April 2006 |
| Docket Number | No. CIV.A.H-05-2209.,CIV.A.H-05-2209. |
| Citation | 429 F.Supp.2d 853 |
| Parties | David MEADOWS, Plaintiff, v. HARTFORD LIFE INSURANCE COMPANY, Hartford Life Private Placement, L.L.C., the Newport Group, Inc., Henry F. McCamish, Jr., McCamish Group, L.P., McCamish Systems, L.L.C., Integrated Administration Services, Inc., and IAS Development Corporation, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
Scott Monroe Clearman, Brian Dean Walsh, Michael D. Myers, Robert Henry Espey, II, McClanahan & Clearman LLP, Houston, TX, for Plaintiff.
Barry A. Chasnoff, Daniel McNeel Lane, Jr., Akin Gump et al., San Antonio, TX, Toni Scott Reed, Strasburger and Price, Dallas, TX, Jack O'Neill, Stephen D. Libowsky, Mark Allen White, Howery LLP, Houston, TX, for Defendants.
Pending are Defendants Henry F. McCamish, Jr., McCamish Group, L.P., McCamish Systems, L.L.C., Integrated Administration Services, Inc., and IAS Development Corporation's Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue (Document No. 11) and Defendants Hartford Life Insurance Company, Hartford Private Placement, L.L.C., The Newport Group, Inc., Henry F. McCamish, Jr., McCamish Group, L.P., McCamish Systems, L.L.C., Integrated Administration Services, Inc., and IAS Development Corporation's Motion to Dismiss (Document No. 13). After having carefully considered the motions, responses, replies, and " the applicable law, the Court concludes as follows:
I. Background
In this diversity suit, Plaintiff David Meadows ("Plaintiff') sues Defendants Hartford Life Insurance Company ("Hartford"), Hartford Private Placement, L.L.C. (collectively, the "Hartford Defendants"), The Newport Group, Inc. ("Newport"), Henry F. McCamish, Jr. ("McCamish"), McCamish Group, L.P. ("MG"), McCamish Systems, L.L.C. ("MS"), Integrated Administration Services, Inc. ("IAS"), and IAS Development Corporation ("IASD") (collectively, "Defendants"), who are the insurance companies, insurance brokers and policy administrators involved in the issuance and maintenance of a corporate owned life insurance ("COLI") policy that was purchased on Plaintiffs life by Plaintiffs former employer, Camelot Music, Inc. ("Camelot"), without Plaintiffs knowledge or consent. Plaintiff alleges that Defendants have wrongfully appropriated his personality and right to insure, knowingly participated in Camelot's breach of fiduciary duty to Plaintiff, and violated the Texas Theft Liability Act.
Plaintiff worked for Camelot from December, 1987, to April, 1995.1 In 1990, Camelot bought COLI policies on over one thousand of its "rank and file" employees, including Plaintiff, and named itself as beneficiary of those policies. To purchase the policies, Camelot disclosed to its insurers and brokers the personal information of its employees, including the employee's name, sex, date of birth, Social Security number, state of residence, and a confirmation that the employee was generally in good health by virtue of being actively at work—all without the employee's knowledge or consent.2 See Document No. 1 ¶¶ 22, 33. Camelot purchased the COLI policies from Mutual Benefit Life Insurance Company ("Mutual Benefit"), which then transferred its business to Defendant Hartford. Plaintiff alleges that Defendant Newport was "primarily responsible for marketing COLI sales to Camelot," and "benefited from commissions and administrative service fees it received." Id. ¶¶ 21, 24. Defendants McCamish, MG, MS, IAS, and IASD (collectively, the "McCamish Defendants") developed and administered the COLI insurance policy at issue.3
Plaintiff alleges that he did not consent to Camelot's purchase of the policy or to Camelot's designation of itself as policy beneficiary, nor did he consent to Defendants' use of his personal information to create and maintain the COLI policy on his life. He alleges that all or some Defendants have used Plaintiffs name, Social Security number, and date of birth to conduct "death sweeps" of national and state computerized records "to learn when [Plaintiff] dies." Id. ¶ 36. If Plaintiff had died, and his death had been confirmed from these records, his personal information would have been included in a "death claim register" for Hartford to pay Camelot. Id. Plaintiff alleges that Defendants have used Plaintiffs personal information on "a variety of forms," including minimum payment statements, policy value statements, and cash flow reports. Id. ¶ 37. Plaintiff further alleges that Defendants have conveyed Plaintiffs personal information to Id. As a result, Plaintiff alleges that (1) Defendants have misappropriated and "conver[ted]" his "identity," which he defines as his "name, Social Security Number and date of birth," and his "right to insure his life," by establishing a COLI policy on his life, conducting death sweeps, preparing reports, and administering a COLI policy on his life to generate profits; (2) Defendants are liable for knowing participation in Camelot's alleged breach of fiduciary duty toward Plaintiff; and (3) Defendants violated the Texas Theft Liability Act by appropriating Plaintiff's "intangible personal property right ... to insure and control who insures his life." Id. ¶¶ 47-50, 55, 58-59. Plaintiff seeks nominal, punitive, and actual damages; disgorgement; restitution of the benefits tortiously acquired by Defendants; a permanent injunction; and attorneys' fees, costs, and pre judgment and post-judgment interest.
The McCamish Defendants now move to dismiss all claims against them on the grounds that (1) the Court lacks personal jurisdiction over the McCamish Defendants; and (2) venue is not proper in the Southern District of Texas. In addition, all Defendants move pursuant to Fed. R.Civ.P. 12(b)(6) to dismiss all claims asserted against them for failure to state a claim.
II. Discussion
A federal court may exercise personal jurisdiction over a nonresident defendant if: (1) the long-arm statute of the forum state confers personal jurisdiction over that defendant; and (2) the exercise of such jurisdiction comports with due process under the United States Constitution. See Electrosource, Inc. v. Horizon Battery Techs., Ltd., 176 F.3d 867, 871 (5th Cir. 1999). Because the Texas long-arm statute has been interpreted to extend as far as due process permits, the sole inquiry is whether the exercise of personal jurisdiction over a nonresident defendant comports with federal constitutional due process requirements. Id.
Due process requirements for exercising personal jurisdiction over a nonresident have been defined by the United States Supreme Court in a familiar body of case law. Stuart v. Spademan, 772 F.2d 1185, 1189 (5th Cir.1985). The due process inquiry focuses upon whether the nonresident defendant has "certain minimum contacts with [the forum] 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, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). "A defendant establishes minimum contacts with a state if the defendant's conduct and connection with the forum state are such that [the defendant] should reasonably anticipate being haled into court there.'" Nuovo Pignone, SpA v. Storman Asia M/V, 310 F.3d 374, 379 (5th Cir.2002) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985)). "There must be some act whereby the [nonresident] defendant `purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.'" Id.
Two types of personal jurisdiction are recognized: (1) specific; and (2) general. Specific jurisdiction exists when the cause of action relates to or arises out of the defendant's contacts with the forum. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 1872 n. 8, 80 L.Ed.2d 404 (1984). "[T]he `minimum contacts' requirement is satisfied, and `specific' jurisdiction is proper, so long as that contact resulted from the defendant's purposeful conduct and not the unilateral activity of the plaintiff." Bearry v. Beech Aircraft Corp., 818 F.2d 370, 374 (5th Cir.1987) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 567-68, 62 L.Ed.2d 490 (1980)). "The contacts with the forum State must be such that it is foreseeable that the defendant `should reasonably anticipate being haled into court there.'" Electrosource, 176 F.3d at 872 (quoting World-Wide Volkswagen, 100 S.Ct. at 567, 100 S.Ct. 559). "Even where a [nonresident] defendant has no physical presence in the forum state, a single purposeful contact is sufficient to confer personal jurisdiction if the cause of action arises from the contact." Nuovo Pignone, 310 F.3d at 379. See Ruston Gas Turbines, Inc. v. Donaldson Co., Inc., 9 F.3d 415, 419 (5th Cir. 1993). When the issue is one of specific jurisdiction, a court must examine the relationship among the defendant, the forum, and the litigation. See Helicopteros, 104 S.Ct. at 1872.
Alternatively, "when the act or transaction being sued upon is unrelated to the defendant's contacts with the forum state, personal jurisdiction does not exist unless the defendant has sufficient `continuous and systematic contacts' with the forum state to support an exercise of `general jurisdiction.'" Ruston, 9 F.3d at 419 (quoting Ham v. La Cienega Music Co., 4 F.3d 413, 416 n. 10 (5th Cir.1993)). See Helicopteros, 104 S.Ct. at 1872-73; Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir.2000). To make a...
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