v. BLH Equip., L.L.C., CIVIL ACTION NO. 16-124-SDD-RLB
| Decision Date | 24 October 2016 |
| Docket Number | CIVIL ACTION NO. 16-124-SDD-RLB |
| Parties | J.A.H. ENTERPRISES, INC. v. BLH EQUIPMENT, L.L.C., ET AL. |
| Court | U.S. District Court — Middle District of Louisiana |
Please take notice that the attached Magistrate Judge's Report has been filed with the Clerk of the United States District Court.
In accordance with 28 U.S.C. § 636(b)(1), you have fourteen (14) days after being served with the attached Report to file written objections to the proposed findings of fact, conclusions of law and recommendations therein. Failure to file written objections to the proposed findings, conclusions, and recommendations within 14 days after being served will bar you, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions of the Magistrate Judge which have been accepted by the District Court.
ABSOLUTELY NO EXTENSION OF TIME SHALL BE GRANTED TO FILE WRITTEN OBJECTIONS TO THE MAGISTRATE JUDGE'S REPORT.
Signed in Baton Rouge, Louisiana, on October 24, 2016.
/s/_________
RICHARD L. BOURGEOIS, JR.
UNITED STATES MAGISTRATE JUDGE
Before the Court is Defendant Nick Clark d/b/a Nick Clark Auctions' ("Nick Clark") Motion to Dismiss for lack of personal jurisdiction. (R. Doc. 56). The motion is opposed. (R. Doc. 65). Plaintiff filed a Reply. (R. Doc. 74).
On May 27, 2014, plaintiff J.A.H. Enterprises, Inc., which does business as "Henderson Auctions," initiated this action in the 21st Judicial District Court, Livingston Parish, Louisiana, naming as defendants BLH Equipment, L.L.C. ("BLH"), James Blake Everett ("Blake Everett"), Sam Everett, and ELA Mission, L.L.C. ("ELA") (collectively, "Defendants"). (R. Doc. 1-2, "Petition").
In the original Petition, Henderson Auctions alleges that it acquired a casino vessel for approximately $600,000, expended approximately $300,000 to maintain, moor, and prepare the vessel for resale, and that it partnered with Blake Everett to sell the vessel and split the profits equally. (Petition ¶¶ 5, 9-11). The Petition provides that Henderson Auctions reached an agreement with a Louisiana buyer to transfer title to the casino vessel for $350,000 in cash and title to a property in Kosiusko, Mississippi known as the "Ivey House." (Petition ¶ 12). The Petition further provides that Blake Everett then set up ELA, a Mississippi limited liability company to which only Blake Everett is a member, to take ownership of the Ivey House despite the parties' agreement to place ownership into the hands of a co-owned limited liability company. (Petition ¶¶ 13-14). The Petition further provides that Blake Everett scheduled an auction of the Ivey House and its contents without informing Henderson Auctions or its owners, Jeffrey Henderson and Janet Henderson Cagley. (Petition ¶ 17).
On May 31, 2016, Henderson Auctions filed an Amended Complaint. (R. Doc. 31, "Am. Compl."). In the Amended Complaint, Henderson Auction names as a defendant "Nick Clark Auctions, Inc., a Mississippi corporation doing business in the State of Louisiana as a member of the Louisiana Auctioneers Association, among other things." (Am. Compl. ¶ 5). Nick Clark asserts that he was wrongly identified as "Nick Clark Auctions, Inc." in the Amended Complaint. (R. Doc. 56 at 1).
Henderson Auctions alleges that in April of 2014, "Blake and Sam Everett scheduled an auction of all of the Ivey House's furniture, fixtures, and equipment, with Nick Clark Auctions to be followed by a sale or public auction of the Ivey House itself." (Am. Compl. ¶ 22). The parties to the instant motion have filed into the record a copy of an April 18, 2016 agreement between Nick Clark and ELA with regard to the sale of the Ivey House and its property. (R. Doc. 56-2; R. Doc. 65-2).
Henderson Auctions further alleges that after it learned of the sale of the Ivey House's furniture, fixtures, and equipment, it obtained "a temporary restraining order from a Mississippi state court requiring the escrow of any proceeds of the sale of the assets and an injunction against the sale of the Ivey House" and "obtained an agreement with Nick Clark . . . to retain the proceeds from the sale until further notice." (Am. Compl. ¶ 23). Nick Clark has submitted a copy of the May 16, 2014 temporary restraining order issued by the Chancery Court of Attala County, Mississippi, which states that it "shall expire, unless otherwise extended, on May 29, 2014." (R. Doc. 56-3 at 2).
Henderson Auctions further alleges that Nick Clark breached his agreement with Henderson Auctions, and allowed for the devaluation of the Ivey House, when Nick Clark subsequently released the sale proceeds to the other defendants. (Am. Compl. ¶¶ 23, 49, 61). Henderson Auctions seeks to recover damages and/or declaratory relief from Nick Clark in Count 1 for "breach of contract/bad faith breach of contract" and in Count 4 for "conversion/fraud/tort/misrepresentation." (Am. Compl. ¶¶ 49-51, 61-62).
On August 10, 2016, the Court granted Nick Clark an extension until August 30, 2016 to answer the Amended Complaint. (R. Doc. 52).
On August 26, 2016, Nick Clark filed the instant motion to dismiss pursuant to Rule 12(b)(2) for lack of personal jurisdiction. (R. Doc. 56).
Nick Clark argues that the allegations in the Amended Complaint do not establish that there is specific jurisdiction because (1) he did not direct any activities at the State of Louisiana; (2) all of the allegations raised against him arise from an auction of property in the State of Mississippi; and (3) it would be unfair to subject him to personal jurisdiction because there is no connection between him, the work he did at the auction, and the State of Louisiana. (R. Doc. 56-1 at 5). Nick Clark further argues that he did not enter into a contract with Henderson Auctions, and the conclusory allegation of such a contract, even if it did exist, is insufficient to satisfy the requirements for specific jurisdiction. (R. Doc. 56-1 at 5-6). Nick Clark further argues that there is no general jurisdiction over him because (1) having a license in Louisiana is not sufficient to establish general jurisdiction, and (2) the two auctions he has conducted in Louisiana do not constitute continuous and systematic contacts with the forum state. (R. Doc. 56-1 at 6-8).
In opposition, Henderson Auctions argues that the Court has specific jurisdiction over Nick Clark because he contracted with Henderson Auctions and knew that Henderson Auctions was a Louisiana company. (R. Doc. 65 at 7-8). Henderson Auctions further argues that the Court may exercise specific jurisdiction over Nick Clark because it has alleged claims in both contract and tort, as well as a derivative "oblique action," and Nick Clark's acts caused injuries in the forum state. (R. Doc. 65 at 8-9). Henderson Auctions claims that general jurisdiction exists because a print-out of Nick Clark's website (R. Doc. 65-4) suggests that Nick Clark has systematic and continuous contacts in the forum state. (R. Doc. 65 at 5).
In reply, Nick Clark further argues that the Court does not have specific jurisdiction over him regardless of whether Henderson Auctions alleged a contract claim or tort claim. (R. Doc. 74).
"Where a defendant challenges personal jurisdiction, the party seeking to invoke the power of the court bears the burden of proving that jurisdiction exists." Luv N'care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006) (citing Wyatt v. Kaplan, 686 F.2d 276, 280 (5th Cir. 1982)). The plaintiff bears the burden of making a prima facie showing that the Court has jurisdiction over a defendant. Doddy v. Oxy USA, Inc., 101 F.3d 448, 460 (5th Cir. 1996); Percle v. SFGL Foods, Inc., 356 F. Supp. 2d 629, 633 (M.D. La. 2004). "[U]ncontroverted allegations in the plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiff's favor for purposes of determining whether a prima facie case for personal jurisdiction exists. Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990). However, in assessing whether the plaintiff has presented a prima facie case of personal jurisdiction, the court "will not 'credit conclusory allegations, even if uncontroverted.'" Sealed Appellant 1 v. Sealed Appellee 1, 625 F. App'x. 628, 631 (5th Cir. 2015) (quoting Panda Brandy Wine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001)). The Court may consider "affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery." Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002) (quoting Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985)).
In a diversity action, a federal district court may exercise personal jurisdiction over a defendant to the extent permitted by the applicable state law. Panda Brandywine, 253 F.3d at 868. "A federal court . . . may exercise personal jurisdiction over a nonresident defendant (1) as allowed under the state's long-arm statute; and (2) to the extent permitted by the Due Process Clause of the Fourteenth Amendment." Mullins v. TestAmerica, Inc., 564 F.3d 386, 398 (5th Cir. 2009). It is well-established that Louisiana's long arm statute, La. R.S. § 13:3201, is coextensive with the limits of constitutional due process. Jackson v. Tanfoglio Giuseppe, SRL, 615 F.3d 579, 584 (5th Cir. 2010) (citing Walk Haydel & Assocs. v. Coastal Power Prod. Co., 517 F.3d 235, 242-43 (5th Cir. 2008)). Thus, the inquiry is whether the exercise of personal jurisdiction comports with federal constitutional due process guarantees. Id. "[T]he Fourteenth Amendment Due Process clause requires satisfaction of a two prong test in order for a federal court to properly exercise jurisdiction: (1) the nonresident must have minimum contacts with the forum state, and (2) subjecting the nonresident to jurisdiction must be...
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