Santoro v. Doe

• Decision Date: 11 October 2016
• Docket Number: Case No. 6:15-cv-00399-AA
• Parties: STEPHEN A. SANTORO Plaintiff, v. ALTISOURCE SOLUTIONS, S.à.r.l, ALTISOURCE PORTFOLIO SOLUTIONS, SA, and JOHN DOE ALTISOURCE CO., Defendants.
• Court: U.S. District Court — District of Oregon

STEPHEN A. SANTORO Plaintiff, v. ALTISOURCE SOLUTIONS, S.à.r.l, ALTISOURCE PORTFOLIO SOLUTIONS, SA,and JOHN DOE ALTISOURCE CO., Defendants.

Case No. 6:15-cv-00399-AA

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON EUGENE DIVISION

October 11, 2016

OPINION AND ORDER

Manuel C. Hernandez

Hernandez & Associates, LLC

P.O. Box 979

Bandon, Oregon 97411

Bonner C. Walsh

Walsh, LLC

P.O. Box 7

Bly, Oregon 97622

Attorneys for plaintiff

Sara A.H. Sayles

Emilie K. Edling

Houser & Allison, APC

9600 S.W. Oak Street Suite 570

Portland, Oregon 97223

Attorneys for Defendants

AIKEN, Judge:

Plaintiff Stephen A. Santoro resided with his family at a property in Bandon, Oregon. In January 2013, Ocwen Loan Servicing, LLC filed a judicial foreclosure action against plaintiff on behalf of GMAC Mortgage LLC.¹ Before the foreclosure was complete, plaintiff alleges that Ocwen ordered defendants Altisource, SA and Altisource, S.à.r.l. or their agents to forcibly enter plaintiff's home and perform certain pre-foreclosure property preservation services, including changing the locks and winterizing the property. Compl. ¶¶ 7-8 (doc. 1). Plaintiff also alleges that defendants removed several items of personal property from his home. Id. ¶ 10.

In this action, plaintiff asserts claims of conversion, negligence, negligent hiring, and violations of the Oregon Fair Trade Practices Act. Defendants filed this motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2).² For the reasons setforth below, I find that this Court has personal jurisdiction over the S.à.r.l. and the motion to dismiss is denied.³

STANDARDS

Where the court lacks personal jurisdiction, the action must be dismissed. Fed. R. Civ. P. 12(b)(2). When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing that such jurisdiction is appropriate. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (citation omitted). Where the court makes its jurisdictional finding based on pleadings and affidavits rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts. Id. "Although the plaintiff cannot rest solely on the allegations of the complaint to establish that jurisdiction is proper, the complaint's uncontroverted factual allegations must be accepted as true and any factual conflicts in the parties' declarations must be resolved in the plaintiff's favor." Ukrvaktsina v. Olden Grp., LLC, 2011 WL 5244697, *2 (D. Or. Oct. 30, 2011) (citations omitted).

DISCUSSION

In order for a court to have the power to render judgment against a non-resident defendant, the plaintiff must show that the nature and quality of the non-resident's contacts are sufficient to establish either "general" or "specific" personal jurisdiction. Helicopteros Nacionales de Columbia,S.A. v. Hall, 466 U.S. 408, 414-15 (1984). Plaintiff argued that this court has both general and specific jurisdiction over the S.à.r.l. While I am not persuaded that general jurisdiction exists over the S.à.r.l., the record supports the exercise of specific jurisdiction.

I. General Jurisdiction

General jurisdiction exists when a non-resident defendant has enough contacts with the forum that are "so continuous and systematic as to render [it] essentially at home in the forum State." Daimler AG v. Bauman, 134 S. Ct. 746, 755 (2014). In the instant case, plaintiff alleges the S.à.r.l. has contacts with Oregon through its contract with Kitsap, a Washington corporation. Plaintiff points to the fact that Kitsap conducts property preservation services on the S.à.r.l.'s behalf at over one hundred Oregon properties. Walsh Decl. Ex 1 at 6 (doc. 50). Plaintiff argues this Court has general jurisdiction over the S.à.r.l. because Kitsap's contacts with Oregon in managing those properties may be imputed to the S.à.r.l. That arguments is squarely foreclosed by Ninth Circuit precedent. See Ranza v. Nike, 793 F.3d 1059, 1071 (9th Cir. 2015) (concluding that, after Daimler, "[t]he agency test is . . . no longer available" to establish general jurisdiction).

Plaintiff also argues there is general jurisdiction over the S.à.r.l. because all the Altisource entities, including the S.à.r.l., are part of a multi-layered "shell game" designed to evade personal jurisdiction. Pl.'s Supplemental Resp. Mot. Dismiss 2-3.1 agree there is some evidence in the record to support this assertion. In order to exercise general jurisdiction on this theory, however, I would have to conclude both (1) that it is appropriate to pierce the corporate veil and disregard the usual rules of "corporate separateness," Ranza, 793 F.3d at 1070, and (2) that the Altisource entities are "essentially at home" in Oregon, Daimler, 134 S. Ct. at 755.1 need not reach those questions because I conclude this Court has specific jurisdiction over the S.à.r.l.

II. Specific Jurisdiction

The Ninth Circuit has established a three-prong test for analyzing a claim of specific jurisdiction.

1. The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;

2. the claim must be one which arises out of or relates to the defendant's forum-related activities; and

3. the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.

Fred Martin Motor Co., 374 F.3d at 802. A non-resident principal may purposefully direct its activities toward a forum through the actions of its agents. Daimler, 134 S. Ct. at 759 n.13. The S.à.r.l., a foreign corporation based in Lichtenstein, contracted with Kitsap to perform pre-foreclosure inspections and other related services. Def. Mot. to Dismiss at 10 n.2 (doc. 30). If Kitsap acted as the S.à.r.l.'s agent when it entered plaintiff's home and performed the property preservation services, the first prong of the specific jurisdiction test will be satisfied. For reasons listed below, I find that the S.à.r.l. exerts enough control over the day to day actions of Kitsap to create a master/servant agency relationship.⁴

A. Kitsap as an Agent of the S.à.r.l.

Oregon follows the Restatement (Second) of Agency test to determine when a servant/master agency relationship exists. Schaff v. Ray's Land & Sea Food Co., Inc., 45 P.3d 936, 945 (Or. 2002). This test asks the court to weigh ten different factors:

• The extent of control which the master may exercise over the details of the work;

• Whether the one employed is engaged in a distinct occupation or business;

• Whether the occupation is usually performed by an employee or by a specialist;

• The level of skill or specialization required;

• Who supplies the tools and/or materials for the work;

• The duration of employment;

• The method of payment;

• Whether the work is part of the regular business of the employer;

• The belief of the parties regarding whether they are entering into a master/servant relationship; and

• Whether the principal is or is not in business.

Id.

Under Oregon law, the greatest emphasis is placed upon the first factor, the extent of control a principal has over its potential agent. Miller v. McDonald's Corp., 945 P.2d 1107, 1110 (Or. App. 1997). In Miller, the Oregon Court of Appeals noted a distinction between "standards" and "methods" in a potential principal-agent relationship. To demonstrate this distinction, the Miller court cited Wood v. Shell Oil Co., 495 So.2d 1034 (Ala. 1986), and Billops v. Magness Const. Co.,391 A.2d 196 (Del. 1978). Miller, 945 P.2d at 1110. In Wood, the parties were under a franchise agreement which required a Shell gasoline dealer "to maintain the station premises, including the appearance [of the premises]. . . in accordance with Shell's specifications or recommendations," and "to perform all mechanical work in a workmanlike manner." Miller, at 1110-1111. The Alabama court decided that there was no actual agency relationship because the franchise agreement "did not control how the dealer complied with the requirements." Id. By contrast, the Billops case involved a franchise agreement which incorporated a "detailed" operations manual governing a variety of areas including advertising, cleaning and inspection service, accounting, insurance, and maintenance. Id. at 1111. The Billops court held that the evidence was sufficient to support a finding of an agency relationship because the manual "described the methods by which the franchisee was to carry out its responsibilities in considerable detail." Id. (emphasis added).

In Miller, a woman sued the McDonald's corporation after biting into a heart-shaped sapphire in her Big Mac. 945 P.2d at 1108. McDonald's argued it could not be held liable for the plaintiff's injuries because the restaurant where the injury took place was operated by a franchise owner and not the corporation. Id. The Oregon Court of Appeals held a jury could hold McDonald's vicariously liable by finding an agency relationship existed between McDonald's and the franchise owner. This was because the jury permissibly could interpret the franchise agreement to "require . . . [the franchise owner] to use the precise methods that [McDonald's] established, both in the Agreement and in the detailed manuals that the Agreement incorporated." Miller, 945 P.2d at 1111 (emphasis added). Those methods included procedures for preparing food, deviation from which led to the plaintiff's injuries. Id. A jury could find that McDonald's "had the right to control [the franchise owner] in the precise part of its business that allegedly resulted in the plaintiff's injuries."

Plaintiff has produced extensive evidence to show that the S.à.r.l. exercised a great deal of control over the methods used by Kitsap in performing property management services. The relationship...