Religious Technology Center v. Liebreich
| Decision Date | 22 July 2003 |
| Docket Number | No. 02-40964.,No. 02-40783.,No. 02-40786.,02-40783.,02-40786.,02-40964. |
| Parties | Religious Technology Center, Plaintiff-Appellee, v. Dell Liebreich, Individually and as personal representative of the Estate of Lisa McPherson, Defendant-Appellant, Thomas J. Dandar; Kennan G. Dandar, Appellants. Religious Technology Center, Plaintiff-Appellant, v. Dell Liebreich, as personal representative of the Estate of Lisa McPherson, Defendant-Appellee. Religious Technology Center, Plaintiff-Appellee, v. Dell Liebreich, as personal representative of the Estate of Lisa McPherson, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Charles A. Gall, Jenkens & Gilchrist, Dallas, TX, Samuel D. Rosen (argued) Paul, Hastings, Janofsky & Walker, New York City, for Plaintiff-Appellee.
Thomas John Dandar (argued), Dandar & Dandar, Tampa, FL, for Defendant-Appellant.
Appeals from the United States District Court for the Eastern District of Texas.
Before KING, Chief Judge, and DAVIS and BENAVIDES, Circuit Judges.
This consolidated appeal arises from a breach of contract suit instigated by Plaintiff-Appellee-Cross-Appellant Religious Technologies Center (RTC) against the estate of Lisa McPherson (the Estate).1 We find the district court lacked personal jurisdiction over the Estate, and we herein vacate the judgment of the district court.2
In 1997, the Estate of Lisa McPherson filed a wrongful death action in state court in Tampa, Florida against various corporations and individuals affiliated with the Church of Scientology. Among those named in the complaint were the Church of Scientology, Flag Service Organization, Inc. (a corporation associated/affiliated with the Church of Scientology), and several individual Scientologists. Upon being served with the complaint, and ostensibly as a cost-saving measure, Defendant Flag Service Organization (Flag) proposed to the Estate that they enter into an agreement to limit the number of Scientology-related corporate entities and individuals that would be named in the suit. The Estate and Flag consequently entered into a contract in which the Estate agreed to forego adding certain enumerated corporate defendants, and Flag agreed to forego encumbering its assets.
In 1999, the Estate moved the Florida court to add David Miscavige (the "worldwide ecclesiastical leader of Scientology") to the list of named defendants in its wrongful death action. Miscavige is the Chairman of the Board of RTC, a Scientology corporation, and while RTC was listed among the parties which the Estate was contractually bound to exclude from its action, the Estate sought to add Miscavige under the theory that it was not contractually precluded from adding Miscavige in his personal capacity. The Florida court was presented with the defendant-limiting contract between the Estate and Flag, and entered an interlocutory ruling that the contract did not prohibit the Estate from adding Miscavige as a defendant in his personal capacity.3
No appeal from the order in which the court permitted the Estate to add Miscavige in his personal capacity was attempted, nor was an appeal necessary in that on June 16, 2000, the Florida court granted Miscavige's motion to dismiss the complaint with respect to him due to insufficient service of process. Miscavige also sought attorneys' fees, and the Florida court denied Miscavige's motion with respect to fees. Miscavige appealed the fee issue to the Florida appellate court. The Florida appellate court affirmed the trial court's ruling on the issue of attorneys' fees.
While Miscavige's appeal of the attorneys' fee issue was still pending, RTC filed suit against the Estate for breach of the Estate-Flag defendant-limiting contract, and against Liebreich personally for tortiously interfering with the contract between the Estate and Flag. RTC filed in United States District Court in the Eastern District of Texas under a diversity of citizenship jurisdictional theory. RTC claimed standing as a third-party beneficiary of the Estate-Flag contract.
On the Estate's motion, the district court dismissed the tortious interference count against Liebreich for failing to state a claim. However, the district court denied the Estate's motion to dismiss RTC's breach of contract claim.4
The district court next entertained the parties' dispositive motions. The district court denied the Estate's motion for summary judgment, finding that it embodied only points of law which had already been addressed and rejected by the district court in passing upon the Estate's motion to dismiss. The district court also denied RTC's motion for partial summary judgment on the issue of liability, finding that the contract was ambiguous on the question of whether the contract precluded suit against Miscavige in his personal capacity, and consequently material facts were in dispute concerning liability.
RTC moved the district court to reconsider its motion for partial summary judgment. In support of its motion to reconsider, RTC attached extrinsic evidence which purported to demonstrate that the contracting parties intended Miscavige to be protected from suit in his personal capacity. In light of this evidence, the district court reconsidered its previous ruling and granted summary judgment in favor of RTC on the issue of liability.
The case then proceeded to trial on the issue of damages. The Estate proposed to offer the testimony of Liebreich to dispute the foreseeability of the damages incurred by RTC, under the theory that prior to adding Miscavige — the sole act of breach — Liebreich reasonably relied on the Florida court's order permitting Liebreich to add Miscavige, but the district court determined the evidence to be irrelevant and excluded it. RTC, on the other hand, was permitted by the district court to provide testimony concerning attorneys' fees incurred by RTC in moving to have Miscavige dismissed for want of service of process, and in aiding Miscavige in his quest to recover attorneys' fees from the Florida trial and appellate courts.
At the close of testimony, the Estate moved for a directed verdict asserting that RTC had failed to meet its burden at trial. The district court denied the motion from the bench. The Estate offered a proposed jury instruction regarding the prevailing market rate for attorneys' fees in Tampa but the district court rejected the instruction. The jury returned a verdict for $258,697.10.
Upon completion of the trial the Estate filed a Rule 59 motion for a new trial, asserting, again, that the district court erred in failing to dismiss the action prior to trial and reasserting its previously adjudicated arguments that the district court lacked both personal and subject matter jurisdiction, that venue was improper, that the Estate enjoyed a litigation privilege immunity, that RTC lacked standing, and so forth. The Estate also chose to use its Rule 59 motion for a new trial to reassert its opposition to the district court's previous evidentiary rulings, jury instruction rulings, and the ruling denying a directed verdict. The district court summarily denied the Rule 59 motion. The Estate filed a notice of appeal.
RTC, on the other hand, moved to recover its costs and fees as a prevailing party pursuant to the Estate-Flag contract. RTC petitioned the district court for an award of $549, 015.84 in costs and fees for the litigation of this single-issue breach of contract case. The district court reduced the award to $327,654.00.
RTC also moved the district court to impose sanctions pursuant to 28 U.S.C. § 1927 on the Estate's counsel, citing vexatiously repetitive motions and filings on the part of the Estate. The Estate responded with its own § 1927 motion for sanctions. The district court declined to sanction RTC's counsel, but the court did impose sanctions against the Estate's counsel for 30% of the attorneys' fees awarded, which totaled $98, 296.00. The Estate's counsel, Thomas and Kennan Dandar, (the Dandars) filed a second, separate, appeal of the imposition of § 1927 sanctions against them.
Finally, RTC filed a cross-appeal challenging the district court's decision to grant Liebreich's 12(b)(6) motion to dismiss the tortious interference claim. The three appeals have been consolidated and are pending now before this Court.
This Court reviews de novo the district court's determination regarding personal jurisdiction. Central Freight Lines Inc. v. APA Transport Corp., 322 F.3d 376, 380 (5th Cir.2003). To determine whether a federal district court sitting in diversity has personal jurisdiction over a nonresident defendant, the district court considers first whether exercising jurisdiction over the defendant comports with due process, and if due process is met, the district court turns to the extra-territorial jurisdictional rules of the state in which it sits to determine whether personal jurisdiction is conferred. Interfirst Bank Clifton v. Fernandez, 844 F.2d 279, 282 (5th Cir.1988); Schlobohm v. Schapiro, 784 S.W.2d 355, 356 (Tex.1990). Because the Texas Long Arm Statute is coextensive with the confines of due process, questions of personal jurisdiction in Texas are generally analyzed entirely within the framework of the Constitutional constraints of Due Process. See Texas Long Arm Statute, Tex.Civ.Prac. & Rem.Code Ann. § 17.041 (Vernon 2001) et seq.; Gessmann v. Stephens, 51 S.W.3d 329, 335 (Tex.App. 2001); Fernandez, 844 F.2d at 282.
However, exercising personal jurisdiction over an estate which is probated in a foreign district presents particular jurisdictional problems. Usually when a court exercises jurisdiction over either a foreign or domestic estate the jurisdiction is in rem that is, the court has jurisdiction over the property itself. Here, however, there is no question that the district court la...
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Table of Cases
...748, 750 Reitman v. Mulkey, 387 U.S. 369, 87 S.Ct. 1627, 18 L.Ed.2d 830 (1967), 320, 928, 1117 Religious Technology Center v. Liebreich, 339 F.3d 369 (5th Cir. 2003), 598 Rendell-Baker v. Kohn, 457 U.S. 830, 102 S.Ct. 2764, 73 L.Ed.2d 418 (1982), 350 Renne v. Geary, 501 U.S. 312, 111 S.Ct. ......