Thermal Components Company v. Griffith

• Decision Date: 17 April 2000
• Docket Number: No. 00-2103-JWL.,00-2103-JWL.
• Citation: 98 F.Supp.2d 1224
• Parties: THERMAL COMPONENTS COMPANY, Plaintiff, v. Steve GRIFFITH, Mike Redus, Joshua Blakey, Bill Wilson, and Thermotech, Inc., Defendants.
• Court: U.S. District Court — District of Kansas

98 F.Supp.2d 1224

THERMAL COMPONENTS COMPANY, Plaintiff, v. Steve GRIFFITH, Mike Redus, Joshua Blakey, Bill Wilson, and Thermotech, Inc., Defendants.

No. 00-2103-JWL.

United States District Court, D. Kansas.

April 17, 2000.

COPYRIGHT MATERIAL OMITTED

Steven D. Ruse, Shughart, Thomson & Kilroy, Overland Park, KS, for plaintiff.

Steven F. Coronado, Sherman, Taff & Bangert, P.C., Kansas City, KS, for defendants.

MEMORANDUM AND ORDER

LUNGSTRUM, District Judge.

Plaintiff Thermal Components Company ("Thermal Components") filed this action against defendants Steve Griffith, Mike Redus, Joshua Blakey, Bill Wilson, and Thermotech, Inc. ("Thermotech") in the District Court of Johnson County, Kansas, alleging various state law causes of action including tortious interference with contract, breach of fiduciary duty, misappropriation of trade secrets, unjust enrichment, conversion, and replevin. Defendants removed the action to this court on the basis of diversity jurisdiction. Presently before the court is defendants' motion to dismiss for lack of personal jurisdiction, or, alternatively, for transfer of venue to the United States District Court for the Western District of Missouri, Southern Division and defendant Thermotech's separate motion to dismiss for insufficient service of process (doc. 4). For the reasons set forth below, defendants' motion is denied in its entirety.

I. Background

Plaintiff Thermal Components is a corporation organized under the law of Kansas with its principal place business in Lenexa, Kansas. Defendants Griffith, Redus, Blakey, and Wilson, all former employees of plaintiff Thermal Components, are residents of Missouri. Defendant Thermotech is a Missouri corporation with its principal place of business in Springfield, Missouri.

After entering into a written employment contract¹ with plaintiff in December 1989, defendant Griffith worked in plaintiff's Kansas office until June 1992, at which time he was assigned to manage plaintiff's Springfield, Missouri office. Following his transfer to the Springfield office, defendant Griffith traveled into Kansas, at plaintiff's behest, an average of once per year. Defendant Redus was hired by plaintiff in September 1992, and after completing his job training in the state of Kansas, began working out of plaintiff's Springfield office. Redus also occasionally traveled to Kansas at plaintiff's direction. Defendants Wilson and Blakey were hired to work in plaintiff's Springfield location in 1993 and 1998, respectively. Like Redus, defendant Blakey completed two weeks of job training in the state of Kansas. During his tenure as a Thermal Components employee, defendant Wilson traveled to Kansas at plaintiff's request on at least four occasions. While working for plaintiff from the Springfield office location, each of the individual defendants, as part of their job duties, maintained contact with plaintiff's Kansas office via facsimile, mail and telephonic communications. Defendants Griffith and Redus' contacts with plaintiff's Kansas office were fairly frequent — i.e., several times a week; defendants Blakey and Wilson's also communicated with their employer's Kansas office, albeit less often than their codefendants. All payroll and employee benefit information with respect to Thermal Components' employees is maintained and processed in Thermal Components' Kansas office.

According to plaintiff's complaint, defendants Griffith, Redus, Wilson, and Blakey resigned from Thermal Components in early January 2000. Following their respective resignations from plaintiff's employ, the individual defendants then became affiliated in various professional capacities with defendant Thermotech, a corporation formed under Missouri law on January 4, 2000.

On February 17, 2000, plaintiff Thermal Components filed an action in the District Court of Johnson County, Kansas, seeking damages and injunctive relief arising from defendants' alleged breach of fiduciary duty of loyalty, tortious interference with contractual relations and business expectancies, misappropriation of trade secrets, and conversion of plaintiff's property. On March 1, 2000, defendants removed the action to this court on the basis of diversity jurisdiction. Defendants move to dismiss the action for lack of personal jurisdiction and improper venue; alternatively, defendants request the court to transfer the case to the United States District Court for the Western District of Missouri, Southern Division. Defendant Thermotech separately moves to dismiss on the basis of insufficient service of process.

II. Personal Jurisdiction

A plaintiff opposing a motion to dismiss for lack of personal jurisdiction bears the burden of establishing that the exercise of personal jurisdiction over the defendant is proper. See Kuenzle v. HTM Sport-Und Freizeitgerate AG, 102 F.3d 453, 456 (10th Cir.1996). If the motion to dismiss is submitted prior to trial on the basis of affidavits and other written materials, the plaintiff need only make a prima facie showing to avoid dismissal for lack of personal jurisdiction. Id. Although the plaintiff will be required to prove the factual basis for jurisdiction by a preponderance of the evidence at trial, on a pre-trial motion to dismiss, all factual disputes are resolved in favor of the plaintiff. Id. If the plaintiff makes the required prima facie showing that personal jurisdiction exists, "a defendant must present a compelling case demonstrating `that the presence of some other considerations would render jurisdiction unreasonable.'" OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir.1998) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)).

There is no dispute that this court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1332: the parties are citizens of different states, and the amount in controversy exceeds $75,000. In diversity actions, personal jurisdiction over a nonresident defendant is determined by the law of the forum state. Federated Rural Elec. Ins. Corp. v. Kootenai Elec. Coop., 17 F.3d 1302, 1304 (10th Cir. 1994). To exercise personal jurisdiction over a nonresident defendant, the court must ensure that "the exercise of jurisdiction is sanctioned by the long-arm statute of the forum state," and that the due process requirements of the Constitution are satisfied. Id. at 1304-05. The Kansas long arm statute has been interpreted by Kansas courts "to allow jurisdiction to the full extent permitted by due process," such that these inquiries are, for all practical purposes, duplicative. Id. at 1305.²

A. The Kansas Long-Arm Statute

Plaintiff asserts that jurisdiction over individual defendants Griffith, Redus, Blakey, and Wilson is proper under K.S.A. § 60-308(b)(2), the "tortious act" provision of the Kansas long-arm statute. Pursuant to that subsection of the Kansas long-arm statute, a party submits to the jurisdiction of courts in this state if that party, or its agent or instrumentality, commits "a tortious act within this state[.]" K.S.A. § 60-308(b)(2). "[A]n injury which occurs in Kansas as a result of a tortious act outside the state amounts to a `tortious act within the state,' thus falling within subsection (2) of the long-arm statute." Taylor v. Phelan, 912 F.2d 429, 432 (10th Cir.1990) (citing Ling v. Jan's Liquors, 237 Kan. 629, 633, 703 P.2d 731, 734 (1985)). Thus, if the injury attributable to the tortious activity is felt by a Kansas complainant, the nonresident defendant's physical presence within the forum state is not required for purposes of K.S.A. § 60-308(b)(2). See Ling, 237 Kan. at 633, 703 P.2d at 734; see also Ammon v. Kaplow, 468 F.Supp. 1304, 1309 (D.Kan.1979) (New York defendants' allegedly false advertisement in a national publication causing financial injury to Kansas resident satisfies tortious act provision); J.E.M. Corp. v. McClellan, 462 F.Supp. 1246, 1248-54 (D.Kan.1978) (Illinois defendant's phone call to Kansas resident during which fraudulent representations were made falls within K.S.A. § 60-308(b)(2)).

Additionally, plaintiff contends that jurisdiction may be exercised over corporate defendant Thermotech pursuant to the "agent or instrumentality" provision of the Kansas long-arm statute. The "agent or instrumentality" language of K.S.A. § 60-308(b) has been broadly interpreted to encompass nonresident defendants who (1) control or direct the instrumentality's acts from which the claim arises, or (2) "purposefully seek[ ] and foreseeably benefit[ ] from [an] active relationship with another entity that has transacted business in the forum that gives rise to [the] claim." Energy Reserves Group, Inc. v. Superior Oil Co., 460 F.Supp. 483, 514 (D.Kan.1978) (subjecting a nonresident subsidiary corporation to the long-arm statute because it benefitted from its Kansas parent corporation's contract negotiations); accord Triple A Partnership v. MPL Communications, Inc., 629 F.Supp. 1520, 1523 (D.Kan.1986) (subjecting a nonresident to the long-arm statute because of the in-state activities of independent licensees who transacted business that inured to the defendant's benefit).

Plaintiff claims that the defendants' tortious activities, including misappropriation of trade secrets, interference with business expectancies, breach of fiduciary duty and conversion, subject them to jurisdiction under the tortious act provision of the Kansas long-arm statute. The court agrees. Indeed, the injuries for which plaintiff seeks redress, allegedly caused by the defendants' conduct, occurred in Kansas for purposes of the "tortious act" provision of the long-arm statute. See Dazey Corp. v. Wolfman, 948 F.Supp. 969, 973 (D.Kan. 1996) (financial loss due to defendant's fraudulent conduct occurred in Kansas); Corinthian Mortgage Corp. v. First Sec. Mortgage Co., 716 F.Supp. 527, 529 (D.Kan.1989) (alleged financial injury caused by defendant's...