Altec Capital Services LLC v. Premier Equipment Rental & Sales, LLC et al
MEMORANDUM OPINION and ORDER-re: Motion to Dismiss for Lack of Jurisdiction 15 . The motion is DENIED WITHOUT PREJUDICE. Signed by Judge Virginia Emerson Hopkins on 1/9/2014. (AVC)
2014 Jan-09 PM 01:41
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
ALTEC CAPITAL SERVICES,
LLC d/b/a Equipment Finance
) Case No.: 2:13-CV-1540-VEH
PREMIER EQUIPMENT RENTAL )
& SALES, LLC, et al,
MEMORANDUM OPINION AND ORDER
The defendants have filed a motion to dismiss this case for lack of personal
jurisdiction or, alternatively, to transfer venue. Docs. 8, 15. They have also filed an
accompanying legal memorandum. Doc. 9. The plaintiff (Altec) has filed a responsive
opposition. Doc. 10. For the following reasons, the court will DENY the defendants’
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12 allows a party to assert the defense of lack
of personal jurisdiction by motion. Fed. R. Civ. P. 12(b)(2). “As a general rule, courts
should address issues relating to personal jurisdiction before reaching the merits of
a plaintiff's claims. A defendant that is not subject to the jurisdiction of the court
cannot be bound by its rulings.” Republic of Pan. v. BCCI Holdings (Luxembourg)
S.A., 119 F.3d 935, 940 (11th Cir. 1997) (citations omitted).
The plaintiff “has the burden of establishing a prima facie case of personal
jurisdiction.” Stubbs v. Wyndham Nassau Resort & Crystal Palace Casino, 447 F.3d
1357, 1360 (11th Cir. 2006) (citation omitted). The plaintiff meets this burden if it
“presents enough evidence to withstand a motion for directed verdict.” Id. (quotation
omitted). That is, the plaintiff must present “legally sufficient evidence . . . to create
a genuine issue of material fact” on the jurisdictional issue. Turner v. Regions Bank,
770 F. Supp. 2d 1244, 1247 (M.D. Ala. 2011) (citations omitted).
When a “defendant submits affidavits contrary to the allegations in the
complaint, the burden shifts back to the plaintiff to produce evidence supporting
personal jurisdiction, unless the defendant's affidavits contain only conclusory
assertions that the defendant is not subject to jurisdiction.” Stubbs, 447 F.3d at 1360
(citation omitted). When a plaintiff's “complaint and supporting affidavits and
documents conflict with the Defendants' affidavits,” the court “must construe all
reasonable inferences in favor of the plaintiff . . .” Id (citation omitted).
STATEMENT OF THE CASE
With this standard in mind, the court summarizes the following basic facts
regarding the case. Altec is a limited liability company that has its principal place of
business in Birmingham, Alabama. Doc. 1 ¶ 1. Its sole member is Altec, Inc., an
Alabama corporation with its principal place of business in Birmingham, Alabama.
Id. One of the defendants, Premier Equipment Rental & Sales, LLC (Premier), is a
Mississippi limited liability company that has its principal place of business in
Mississippi. Id. ¶ 2. Its sole member is another defendant, Wayne Borries, who is a
Mississippi citizen and resident. Id. ¶ 3. The final defendant, Southern Contractors,
Inc. (Southern), is a Mississippi corporation that has its principal place of business
in Mississippi. Id. ¶ 4.
Between early 2007 and late 2008, Altec and Premier entered into seven
contracts under which Altec agreed to lease certain equipment to Premier. Id. ¶ 8;
Doc. 1-1. The leases’ terms ranged from three to four years in duration. Doc. 1 ¶ 8.
To secure these leases, Mr. Borries executed an “Individual Personal Guaranty”
agreement on or about January 30, 2007. Id. ¶ 9. Additionally, Mr. Borries and
Southern together executed a “Continuing Guaranty Agreement” on or about January
31, 2007. Id. Under these guarantees, Mr. Borries and Southern “jointly and severally
guaranteed payment of all present and future debts of Premier including, without
limitation, the Lease Payments and all other obligations of Premier.” Id. The
guarantees also obligated Mr. Borries and Southern to send their payments to Altec’s
office in Birmingham, Alabama. Id. ¶ 10. Moreover, Altec executed the
aforementioned leases at its Birmingham office after Mr. Borries sent them there.
Doc. 10 at 6-7 (citing Docs. 10-1, 10-2).1 The leases each included a choice-of-law
provision stating that the substantive law of Altec’s principal place of business – i.e.
Alabama – would govern their interpretation. E.g., Doc. 1-1 at 4. The “Continuing
Guaranty Agreement” (although apparently not the “Individual Personal Guaranty”)
contained a similar clause. Doc. 1-2 at 2-3.
Between August 2009 and October 2010, Mr. Borries, on behalf of Premier and
Southern, contacted Altec at their Birmingham office on several occasions. Doc. 10
at 7. These communications included phone calls and e-mails. Id. They mainly
The defendants dispute this point. In a sworn affidavit accompanying their motion, Mr.
Borries claims that “One or more of the financing and/or lease agreements was executed by the
Altec representative at my office in Mississippi.” Doc. 9-1 ¶ 11. In its response, Altec “disputes
that it ever executed any of the Leases or the Guarantees . . . in Mississippi based on the
affidavits of Ralph B. Griswold and Paul Hinson attached hereto . . . and all Lease Documents
were first executed by Borries prior to execution by Altec.” Doc. 10 at 6-7 (citing Docs. 10-1, 102). Given that the court must construe all reasonable inferences in the plaintiff’s favor when the
Complaint and its supporting affidavits conflict with the defendants’, the court credits the
plaintiff’s rendition here. More importantly – as will be shown below – the question of where the
contracts were technically executed is immaterial to the court’s conclusion that personal
concerned the defendants’ efforts to meet their lease and guarantee payments, some
of which were overdue. Id. The parties’ business relationship eventually deteriorated.
By a letter dated July 26, 2013, Altec made final demand on the defendants’
outstanding obligations. Doc. 1 ¶ 16; Doc. 1-4.
On August 21, 2013, Altec commenced this action by filing a Complaint. Doc.
1. The Complaint alleged that the defendants breached the lease and guarantee
agreements and that they owed Altec on account stated. Id. ¶¶ 18-28. The defendants
filed their first motion to dismiss for lack of jurisdiction (or for venue transfer) on
September 19, 2013. Doc. 8. Altec responded in opposition on October 3, 2013. Doc.
10. The defendants filed an amended motion to correct their dismissal motion on
October 10, 2013 (doc. 11), and simultaneously filed their reply to Altec (doc. 12).
Altec filed an amended Complaint on the same day. Doc. 13. On October 24, 2013,
the defendants re-filed their dismissal motion – i.e. the one presently before the court.
Doc. 15. On the same day, the court mooted the defendants’ first dismissal motion
and their amended motion to correct it.2
On January 3, 2014, Altec filed an unopposed motion asking this court for leave to
amend its complaint (doc. 18), which the court granted by margin order entered on January 6,
2014. On January 7, 2014, Altec filed its Second Amended Complaint. Doc. 19. None of the
allegations in the Second Amended Complaint alter the court’s jurisdictional analysis.
This court has specific personal jurisdiction over the defendants. The
defendants’ interactions with Altec support this conclusion in several respects. First,
the defendants voluntarily agreed to contracts containing Alabama choice-of-law
clauses. Second, they made repeated payments under these contracts to Altec’s office
in Birmingham, Alabama. Third, they initiated communications with Altec’s
Birmingham office on several occasions. Last – in a broader sense – they formed a
long-term contractual relationship with an Alabama company. This relationship was
broad, ongoing, and without monetary limits. Altogether, these facts persuade this
court that the defendants had sufficient contact with Alabama to establish personal
jurisdiction. Further, exercising such jurisdiction would not be fundamentally unfair.
Finally, venue is proper in this district because the events directly causing Altec to
file this action occurred here.
Personal Jurisdiction Generally
In reviewing a challenge to personal jurisdiction, the court must undertake a
two-part analysis. The court must:
first, assess its jurisdiction under the state long-arm statute; and then
determine whether jurisdiction comports with the Due Process Clause
of the Fourteenth Amendment.
Cable/Home Commc’n Corp. v. Network Prods., Inc., 902 F.2d 829, 855–56 (11th
Cir. 1990) (citations omitted). Alabama’s long-arm statute aligns with federal
constitutional due process. Ala. R. Civ. P. 4.2(b); Sieber v. Campbell, 810 So. 2d 641,
644 (Ala. 2001) (citations omitted) (“Rule 4.2 extends the personal jurisdiction of
Alabama courts to the limits of due process under the federal constitution and the
Alabama constitution.”). The court must thus only undertake one analysis, the dueprocess inquiry. That inquiry itself requires the court to find that two conditions have
The defendant must have sufficient minimum contacts with the forum
the exercise of jurisdiction over the defendant must not offend
“traditional notions of fair play and substantial justice.”
Int’l Shoe Co. v. State of Wash., 326 U.S. 310, 316 (1945) (citations omitted).
Two Types of Personal Jurisdiction
There are two types of personal jurisdiction: “general” and “specific.” There
is general personal jurisdiction over a party when “the cause of action does not arise
out of . . . the [party's] activities in the forum State,” but there are “continuous and
systematic” contacts between the two. Helicopteros Nacionales de Colombia, S.A. v.
Hall, 466 U.S. 408, 414–15 (1984) (footnote and quotation omitted). Specific
jurisdiction is based on the party's contacts with the forum State that are related to the
cause of action. Id. at 414 n.8 (citation omitted). In this case, Altec does not maintain
that the defendants have had general contacts with Alabama unrelated to this lawsuit.
Rather, it asserts that – in the course of their business relationship – the defendants
have had sufficient contacts with Alabama to justify specific personal jurisdiction.
Doc. 10 at 8-12. Thus, the only issue the court will consider is whether asserting
specific personal jurisdiction over the defendants comports with due process.
For specific personal jurisdiction, the contacts at issue must satisfy the
“minimum contacts” test. This test involves three criteria:
First, the contacts must be related to the plaintiff's cause of action or
have given rise to it.
Second, the contacts must involve some purposeful availment of the
privilege of conducting activities within the forum, thereby invoking the
benefits and protections of its laws.
Finally, the defendant's contacts within the forum state must be such that
it should reasonably anticipate being haled into court there.
Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 631 (11th Cir. 1996) (citation
Fair Play and Substantial Justice
“Once it has been decided that a defendant purposefully established minimum
contacts within the forum State, these contacts may be considered in light of other
factors to determine whether the assertion of personal jurisdiction would comport
with ‘fair play and substantial justice.’” Burger King Corp. v. Rudzewicz, 471 U.S.
462, 476 (1985) (quoting Int’l Shoe, 326 U.S. at 320). Under this analysis, a court
may consider the following relevant factors:
the burden on the defendant;
the forum State's interest in adjudicating the dispute;
the plaintiff's interest in obtaining convenient and effective relief;
the interstate judicial system's interest in obtaining the most efficient
resolution of controversies; and
the shared interest of the several States in furthering fundamental
substantive social policies.
Id. at 477 (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292
(1980)). Sometimes these considerations may establish personal jurisdiction when
the defendant’s “minimum contacts” with the forum State are relatively weak. Id.
(citations omitted). Conversely, “where a defendant who purposefully has directed
his activities at forum residents seeks to defeat jurisdiction, he must present a
compelling case that the presence of some other considerations would render
jurisdiction unreasonable.” Id.
This Court Has Specific Personal Jurisdiction Over the Defendants.
The defendants had “minimum contacts” with Alabama because they
purposely directed their Altec dealings toward Alabama.
In their motion to dismiss, the defendants argue that this court lacks specific
personal jurisdiction over them because they never “purposefully directed” their
actions toward Alabama in their dealings with Altec. Doc. 9 at 7-12; see also Burger
King, 471 U.S. at 472 (“Where a forum seeks to assert specific jurisdiction over an
out-of-state defendant who has not consented to suit there, this ‘fair warning’
requirement is satisfied if the defendant has ‘purposefully directed’ his activities at
residents of the forum . . .”) (footnote and quotation omitted). In support, the
defendants file an affidavit sworn by Mr. Borries that states the following:
Altec initiated the business relationship by approaching Mr. Borries at
a trade show in Las Vegas, Nevada.
After Mr. Borries returned to Misssissippi, Altec contacted him and later
visited him (in Mississippi) to solicit business.
The parties agreed that all paperwork, contracts, etc. would be either
sent or hand delivered to Mississippi for Mr. Borries to execute.
Altec executed one or more of the financing and/or lease agreements at
Mr. Borries’s Mississippi office.
Neither Mr. Borries, nor any Premier or Southern representative, has
ever traveled to Alabama in furtherance of the agreements formed with
Altec (or in furtherance of any general business of theirs).
Each piece of equipment that was the subject of the agreements was
purchased outside of Alabama, was delivered to Premier in Mississippi,
and was used for projects outside of Alabama.
Doc. 9-1 ¶¶ 10-16. Given these facts, the defendants maintain that Altec has not
illustrated sufficient “minimum contacts” between the defendants and Alabama.
This is incorrect. First (and foremost), the defendants signed contracts with
Altec containing provisions explicitly selecting Alabama law as controlling in any
interpretive dispute. This fact greatly supports the existence of “minimum contacts.”
At the very least, the defendants’ consent to the provisions qualifies as “purposeful
availment of the privilege of conducting activities within [Alabama], thereby
invoking the benefits and protections of its laws.” Sculptchair, 94 F.3d at 631; see
also Burger King, 471 U.S. at 482 (“Nothing in our cases, however, suggests that a
choice-of-law provision should be ignored in considering whether a defendant has
purposefully invoked the benefits and protections of a State's laws for jurisdictional
purposes.”) (emphasis in original) (internal quotation marks omitted). And,
importantly, the defendants should have foreseen that this clause might result in them
being sued in Alabama.3
The defendants’ other material contacts with Alabama reinforce this
conclusion. First, they formed a contractual relationship with an Alabama company
Notably, the defendants do not devote any part of their motion to addressing what, if any,
relevance the Alabama choice-of-law provisions in their agreements with Altec bear on their
whose sole member was an Alabama corporation. This relationship was – as Altec
aptly characterizes it – continuous in nature, without monetary limits, broad in its
terms, and suggestive of an ongoing relationship. Doc. 10 at 12. That is, it did not
involve a one-time transaction. Along with the choice-of-law clauses cited above, the
defendants could have reasonably predicted that they might be haled into an Alabama
court over any dispute.
Further, the defendants agreed to – and did – send their lease and guaranty
payments to Altec’s Birmingham office. See Daily Access Corp. v. Gaedeke
Holdings, Ltd., CIV.A. 12-00217-KD-B, 2012 WL 6728051, at *5 (S.D. Ala. Dec. 7,
2012), report and recommendation adopted, CIV.A. 12-0217-KD-B, 2012 WL
6728061 (S.D. Ala. Dec. 28, 2012) (finding lack of jurisdiction in Alabama because,
among other reasons, parties’ agreement selected Texas law as governing and because
plaintiff mailed contract payments to defendant in Texas). Last, Mr. Borries –
representing all defendants – directed several communications to Altec’s Birmingham
office from August 2009 to October 2010 in which he discussed various facets of
their ongoing contractual relationship. See Doc. 10-3 (sworn affidavit by Rivers
communications).While none of these facts might be individually determinative,
together they show that the defendants purposely directed their business activities
with Altec toward Alabama. This is sufficient to establish minimum contacts.4
Exercising jurisdiction over the defendants would not offend
“traditional notions of fair play and substantial justice.”
The court has determined that the defendants purposely directed their business
activities toward Alabama. In order to defeat personal jurisdiction despite this
finding, the defendants must make a “compelling case that the presence of some other
considerations would render jurisdiction unreasonable.” Burger King, 471 U.S. at
They have not done so here. In fact, they do not even claim in their motion that
litigation in this district would significantly burden them. While forcing any party to
travel to another state to defend themselves is an inconvenience, “modern methods
of transportation and communication have significantly ameliorated its burden.”
Sculptchair, 94 F.3d at 632 (citing McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223
(1957)). This insight applies even more so in this case, as Mississippi (where the
The defendants heavily emphasize that (1) they were never physically present in
Alabama during the duration of their business relationship with Altec, and (2) Altec initiated the
relationship. E.g., Doc 9 at 3-4, 8, 11; Doc. 9-1 ¶¶ 4-11, 13. Neither fact alters this court’s
conclusion that personal jurisdiction exists. First,“[a] physical presence in Alabama is not a
prerequisite to personal jurisdiction over a nonresident.” Sieber, 810 So. 2d at 644 (citation
omitted). Second, which party initiated the business relationship, while relevant, is not
dispositive. See Corporate Waste Alternatives, Inc. v. McLane Cumberland, Inc., 896 So. 2d 410,
415 n.2 (Ala. 2004) (“[W]hile it is true that it is ‘[o]f particular relevance . . . whether the
plaintiff initiated the sale or contact’ . . . ‘that fact is not controlling.’”) (emphasis in original)
defendants reside) abuts Alabama. Cf. Turner, 770 F. Supp. 2d at 1252 (“As [the
defendant] is located in nearby Florida, it is not a heavy burden for its representatives
to travel to Alabama, especially since modern methods of communication have
greatly reduced the expense and amount of actual travel require of out-of-state
defendants.”) (citation omitted). Finally, Alabama has a distinct interest in
adjudicating a dispute involving one of its residents who claims it has been wronged.
And Altec, as the plaintiff, has such an interest in “obtaining convenient and effective
relief.” In short, the court finds that exercising personal jurisdiction over the
defendants would not offend “traditional notions of fair play and substantial justice.”
Venue Is Proper in the Northern District of Alabama.
The defendants alternatively argue that venue is improper in this district. Under
28 U.S.C. § 1406(a) and § 1391(b), they ask this court to transfer the action to the
U.S. District Court for the Southern District of Mississippi. Section 1406(a) states:
The district court of a district in which is filed a case laying venue in
the wrong division or district shall dismiss, or if it be in the interest of
justice, transfer such case to any district or division in which it could
have been brought.
28 U.S.C. § 1406(a). Under § 1391(b), venue is proper in:
a judicial district in which any defendant resides, if all defendants are
residents of the State in which the district is located;
a judicial district in which a substantial part of the events or omissions
giving rise to the claim occurred, or a substantial part of property that is
the subject of the action is situated; or
if there is no district in which an action may otherwise be brought as
provided in this section, any judicial district in which any defendant is
subject to the court's personal jurisdiction with respect to such action.
28 U.S.C. § 1391(b). Under § 1391(b)(1), the defendants argue that the Southern
District of Mississippi is the only proper venue. Doc. 8 ¶ 7.
This assertion is wrong because “a substantial part of the events or omissions
giving rise” to Altec’s claims occurred in the Northern District of Alabama. 28 U.S.C.
§ 1391(b)(2). In determining whether events or omissions support venue under this
provision,“[o]nly the events that directly give rise to a claim are relevant.” Jenkins
Brick Co. v. Bremer, 321 F.3d 1366, 1371 (11th Cir. 2003). More specifically, a court
assessing proper venue should consider “only those acts and omissions that have a
close nexus to the wrong.” Id.
This language narrows which of this case’s facts are relevant (and irrelevant)
for venue purposes. As shown above, in the course of performing under the contracts,
the defendants sent their payments to Altec’s Birmingham office. The defendants
concede this fact – although they attempt to downplay it by emphasizing that the
contracts were “presented” in Mississippi, executed in Mississippi, and were
otherwise performed (via delivery of the cranes) in Mississippi . Doc. 9 at 16. All of
these facts may be true. However, they are not the wrongful “events or omissions”
giving rise to Altec’s claims – those would be the contract breach and the events
leading up to it.
Altec claims that the defendants breached the contracts by failing to send the
necessary payments to their Birmingham office. In other words, the defendants’
alleged failure to pay Altec the prescribed contractual amounts in Birmingham has
the “close[st] nexus to the wrong” in this action. Jenkins Brick, 321 F.3d at 1372.
Given this fact, venue is also proper in the Northern District of Alabama. See id. at
1371 (observing that the venue statute “contemplates some cases in which venue will
be proper in two or more districts”).
Accordingly, the defendants’ Motion is DENIED WITHOUT PREJUDICE.5
DONE and ORDERED this 9th day of January, 2014.
VIRGINIA EMERSON HOPKINS
United States District Judge
All parties should note the following: “[A] denial of a . . . motion to dismiss for want of
personal jurisdiction is interlocutory and preliminary only.” Ex parte Reindel, 963 So. 2d 614,
624 (Ala. 2007) (quoting Ex parte McInnis, 820 So. 2d 795, 798 (Ala. 2001)). “After such a
denial, the continuation of personal jurisdiction over a defendant who appropriately persists in
challenging it in [an] answer to the complaint and by motion for summary judgment or at trial
depends on the introduction of substantial evidence to prove the . . . jurisdictional allegations in
the . . . complaint.” Id.
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