Byrd v. Hishbach, LLC et al

Filing 50

MEMORANDUM OPINION Signed by Chief Judge Karon O Bowdre on 6/26/17. (SAC )

FILED
2017 Jun-26 PM 04:09
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
WILLIAM WOOD BYRD, JR.,
Plaintiff,
v.

HISHBACH, LLC, et al.,
Defendants.

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CASE NO.: 2:16-cv-01449-KOB

MEMORANDUM OPINION
Pro se Plaintiff William Wood Byrd, Jr. sued Hishbach, LLC; Hishbach Partners; Henry
M. Bostwick; Charles T. Clark, Jr.; Bruce B. Haltom; Robert E. Frankland, III; Frankland Carriage
Company, Inc.; Frankland Partnership No. 2; Phyllis F. Armstrong; Jacne LP; Jacne Partners;
Downtown Apartments, Inc.; and Donna Bostwick for claims related to the conversion of
Hishbach LLC to a general partnership. (Doc. 30). The Defendants have moved to dismiss the
complaint, arguing that the court lacks personal jurisdiction over all parties. (Doc. 43). Mr. Byrd
filed no response to the Defendants’ motion. Because the court agrees that it lacks personal
jurisdiction over the Defendants, it will grant the Defendants’ motion and dismiss this case without
prejudice.
I.

BACKGROUND
Plaintiff William Byrd has sued thirteen defendants—seven corporate entities, and six

individuals. The gist of Mr. Byrd’s complaint, from what the court can discern, is that the
Defendants improperly converted Hishbach, LLC, of which he was a member, to a general
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partnership. See (Doc. 30 at 31). Mr. Byrd claims this conversion was made without his knowledge
or permission. Id. This conversion, Mr. Byrd alleges, occurred in Tennessee. (Doc. 30 at 25).
Mr. Byrd further alleges that “The Defendants are now in collusion together in the planned
sell off of [his] assets of the Company in a ruse to remove all of the Company Assets of Plaintiff
and destroy his Membership Interest in Company.” (Doc. 30 at 25). By converting the entity from
a limited liability corporation to a general partnership, Mr. Byrd alleges the Defendants “made
available adverse allowances to third party creditors” and circumvented his limited liability
protections. Id. at 28. The Defendants, Mr. Byrd claims, have falsely claimed that he is a partner of
the converted Hishbach entity.
Related to these events, Mr. Byrd asserts claims for injunctive relief, breach of contract,
breach of fiduciary duty, fraud, violation of due process, recession of the conversion, recovery of
books and records, accounting, conspiracy, recovery of property, and trespass/slander of title.
The Defendants filed a motion to dismiss for lack of personal jurisdiction in response to
Mr. Byrd’s original complaint and Mr. Byrd filed a response. (Doc. 19, 22). Mr. Byrd has since
filed two amended complaints. (Docs. 24, 30). The Defendants filed another motion to dismiss for
lack of personal jurisdiction. (Doc. 43). The court set a briefing schedule on the motion, but Mr.
Byrd never filed a response.
A.

Hishbach LLC and Hishbach Partners

Hishbach LLC was a Tennessee limited liability company with its principal place of
business in Jackson, Tennessee. Around December 2006, Hishbach LLC took action to convert
from a LLC to a general partnership. Hishbach LLC became inactive on January 1, 2007. Hishbach
Partners maintains the same principal place of business as Hischbach LLC did.
Neither Hishbach LLC or Partners has ever maintained an office, owned property, applied
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for businesses license, paid taxes, employed agents, maintained a mailing or telephone listing, or
solicited business in Alabama. Hishbach only has two connections with Alabama: a depository
account at Compass Bank in Huntsville, Alabama, and a real estate loan secured by assets in
Tennessee closed in 1997. All income of Hishbach is derived from its Jackson, Tennessee real
estate holdings.
The managing agent of Hishbach Partners filed an affidavit stating that no representative of
Hishbach Partners or LLC traveled to Alabama for the events set forth in complaint. Further, the
agent says none of the communications set forth in complaint occurred in Alabama.
B.

Jacne, LP and Jacne Partners

Jacne LP was a Tennessee limited partnership and member of Hishbach LLC. After
Hishbach LLC converted to a general partnership, Jacne LP converted to a general partnership as
well. During the last 30 years, neither Jacne LP nor Jacne Partners has ever had agents, employees,
or bank accounts, maintained a mailing address or telephone listing, or had assets in Alabama.
Further, neither Jacne LP or Jacne Partners has advertised or solicited business in Alabama.
The managing agent of Jacne Partners filed an affidavit stating that no representative of
Jacne Partners or Jacne LP traveled to Alabama for the events set forth in complaint. Further, the
agent says none of the communications set forth in complaint occurred in Alabama.
C.

Charles T. Clark

Charles T. Clark is the managing agent of both Jacne Partners and Hishbach Partners. Mr.
Clark filed an affidavit stating that he does not own property, pay taxes, or otherwise conduct
business activities in Alabama. Mr. Clark also states he did not travel to Alabama for the events set
forth in complaint. Further, Mr. Clark says none of the communications set forth in complaint
occurred in Alabama.
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D.

Downtown Apartments, Inc.

Downtown Apartments, Inc. (“DAI”) is a Tennessee Corporation with its sole office in
Jackson, Tennessee. DAI has never had agents, employee, bank accounts, or other assets in
Alabama. Nor has DAI solicited business, maintained offices, or paid taxes in the state. The
president of DAI filed an affidavit stating that no representative of DAI traveled to Alabama for
the events set forth in complaint. Further, DAI says none of the communications set forth in
complaint occurred in Alabama.
E.

Bruce B. Haltom

Bruce B. Haltom is a Tennessee resident and president of Downton Apartments, Inc. Mr.
Haltom filed an affidavit stating that he does not own property, pay taxes, nor otherwise conduct
business activities in Alabama. Mr. Haltom also states he did not travel to Alabama for the events
set forth in complaint. Further, Mr. Haltom says none of the communications set forth in complaint
occurred in Alabama.
F.

Frankland Carriage Company, Inc. and Frankland Partnership No. 2

Frankland Carriage Company (“FCC) is a Tennessee corporation with its principal place of
business in Jackson, Tennessee. Frankland Partnership No. 2 (“FPN2”) is a Tennessee general
partnership. Neither FCC nor FPN2 has ever had agents, employees, bank accounts, or other assets
in Alabama. Nor has FCC or FPN2 solicited business, maintained offices, or paid taxes in the state.
The president of FCC and managing partner of FPN2 filed an affidavit stating that no
representative of FCC or FPN2 traveled to Alabama for the events set forth in complaint. Further,
the affidavit says none of the communications set forth in complaint occurred in Alabama.
G.

Robert Frankland

Robert Frankland is a Tennessee resident, President of Frankland Carriage Company, and
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managing general partner of Frankland Partnership No. 2. Mr. Frankland filed an affidavit stating
that he does not own property, pay taxes, nor otherwise conduct business activities in Alabama.
Mr. Frankland also states he did not travel to Alabama for the events set forth in complaint.
Further, Mr. Frankland says none of the communications set forth in complaint occurred in
Alabama.
H.

Phyllis Armstrong

Phyllis Armstrong is a Tennessee resident. She has never had an ownership interest in
Hishbach LLC or Partners. Ms. Armstrong filed an affidavit stating that she does not own
property, pay taxes, nor otherwise conduct business activities in Alabama. Ms. Armstrong also
states she did not travel to Alabama for the events set forth in complaint. Further, Ms. Armstrong
says none of the communications set forth in complaint occurred in Alabama.
I.

Henry M. Bostwick and Donna Bostwick

Henry and Donna Bostwick are Georgia residents. Until 2013, the Bostwicks resided in
Alabama. The Bostwicks owned property and business interests in Alabama prior to that time, but
they had no assets in Alabama following their move. The Bostwicks have not solicited business in
Alabama since their move to Georgia.
Mr. Bostwick had an ownership interest and was a member of Hishbach LLC. When
Hishbach converted to a general partnership, Mr. Bostwick became a general partner. In Janurary
of 2008, Mr. Bostwick transferred his partnership interest to his spouse, Ms. Bostwick.
The Bostwicks state they did not travel to or communicate from Alabama in connection
with the events set forth in the complaint with two exceptions. First, Mr. Bostwick signed loan
documents related to Hishbach LLC in 1997 or 1998 while in Alabama. Second, Mr. Bostwick
believes he was likely in Alabama when he signed the resolution authorizing Hishbach LLC’s
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conversion to a general partnership.
II.

STANDARD OF REVIEW
A Rule 12(b)(2) motion attacks the court’s jurisdiction over the defendant’s person. In

determining whether personal jurisdiction exists, a federal court sitting in diversity undertakes a
two-step inquiry: “the exercise of jurisdiction must (1) be appropriate under the state long-arm
statute and (2) not violate the Due Process Clause of the Fourteenth Amendment to the United
States Constitution.” United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009). “The
plaintiff bears the burden of establishing personal jurisdiction over the defendant [but] ‘need only
make a prima facie showing.’” S & Davis Intern., Inc. v. The Republic of Yemen, 218 F.3d 1292,
1303 (11th Cir. 2000) (quoting Taylor v. Phelan, 912 F.2d 429, 431 (10th Cir. 1990)). The court
must accept the allegations in the complaint as true. Id. “Where, as here, the defendant challenges
jurisdiction by submitting affidavit evidence in support of its position, ‘the burden traditionally
shifts back to the plaintiff to produce evidence supporting jurisdiction.’” Mazer, 556 F.3d at 1274
(quoting Meier ex rel. Meier v. sun Int’l Hotels, Ltd., 288 F.3d 1264, 1269 (11 th Cir. 2002)). If
“the plaintiff’s complaint and supporting evidence conflict with the defendant’s affidavits, the
court must construe all reasonable inferences in favor of the plaintiff.” Meier, 288 F.3d at 1269.
III.

DISCUSSION
Personal jurisdiction “represents a restriction on judicial power . . . as a matter of individual

liberty.” Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, (1982).
When personal jurisdiction is challenged by a defendant who files affidavits to support its position,
“[t]he plaintiff bears the burden of proving by affidavit the basis upon which jurisdiction may be
obtained.” Posner v. Essex Ins. Co., 178 F.3d 1209, 1214 (11th Cir. 1999) (internal citations
omitted).
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A.

General Jurisdiction

For the court to exercise general jurisdiction over the Defendants, Mr. Byrd must show that
the Defendants’ connection with Alabama, the forum state, are “continuous and systematic.”
Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 416 (1984). Such contacts need not
have a nexus to the litigation, but they must be so extensive that the Defendants may be regarded as
“essentially at home” in that forum. Daimler AG v. Bauman, 134 S. Ct. 746, 751 (2014) (quoting
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)).
Nothing in the record suggests this court has general jurisdiction over any of the
Defendants. While Mr. Byrd argued in briefing on a previous motion to dismiss his complaint
before it was amended that “Defendants have more than minimal contacts in . . . Alabama,” he has
provided neither evidence nor specific allegation to support jurisdiction over these Defendants.
(Doc. 22 at 8).
The corporate Defendants have sparse connections to Alabama. None of the Defendants
are incorporated nor have their principal place of business in Alabama. The only evidence of a
connection between the corporate Defendants and Alabama is the single bank account Hishbach
Partners maintained at Compass Bank in Huntsville. A single bank account can hardly be said to
render a defendant “essentially at home” in that forum. Daimler, 134 S. Ct. at 751 (2014).
Therefore, the court finds it lacks general jurisdiction over the corporate Defendants.
Similarly, the individual Defendants also lack substantial connections to Alabama. The
individuals are not residents of Alabama, do not own property in Alabama, nor do they conduct
business in Alabama. Charles Clark and Henry and Donna Bostwick previously had contacts with
Alabama, owning assets in the state, but they divested those assets more than four years ago. Given
those facts, the court concludes that the individual Defendants cannot be said to be “essentially at
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home” in Alabama. Daimler, 134 S. Ct. at 751 (2014). Therefore, the court lacks general
jurisdiction over the individual defendants.
B.

Specific Jurisdiction

Unlike general jurisdiction, specific jurisdiction is limited to “issues deriving from, or
connected with, the very controversy that establishes jurisdiction.” Goodyear, 564 U.S. at 919
(internal citations omitted). The burden is on the plaintiff to demonstrate a nexus between the
conduct forming the controversy and the forum. Id.
A three-factor test governs whether exercising jurisdiction would offend due process:
(1) whether the plaintiff's claims arise out of or relate to at least one
of the defendant's contacts with the forum; (2) whether the
nonresident defendant purposefully availed himself of the privilege
of conducting activities within the forum state, thus invoking the
benefit of the forum state's laws; and (3) whether the exercise of
personal jurisdiction comports with traditional notions of fair play
and substantial justice.
Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1355 (11th Cir. 2013) (internal
citations and quotations omitted).
A nexus between “the defendant, the forum, and the litigation is the essential foundation of
in personum jurisdiction . . ..” Helicopteros, 466 U.S. at 414. The factors are considered in turn.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985) (“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.’”). Here, however, Mr. Byrd has failed to
show that any of the Defendants’ established contacts with Alabama form the basis of the
litigation.
Although the Defendants’ affidavits clearly state they did not communicate from Alabama,
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they do not explicitly state that they did not communicate to Alabama. However, the affidavits do
say “none of the alleged transactions, communications or events set forth in the Complaint took
place in Alabama.” See, e.g. (Doc. 43 at 3–4) (emphasis added). Regardless, Mr. Byrd has not
offered either allegation nor evidence that would show a relevant communication by a Defendant
to Alabama.
The only potential connection between the facts alleged in the complaint and Alabama is
that Mr. Bostwick signed his copies of Hishbach conversion documents in Alabama. However, the
conversion of Hishbach occurred in Tennessee—Hishbach changed from a Tennessee LLC to a
Tennessee partnership. But even if signing the paperwork in Alabama meant that Mr. Byrd’s claim
against Mr. Bostwick arose out of a connection to the state, Mr. Bostwick’s act of signing the
paperwork in Alabama still does not evidence his purposeful availment of the state’s laws; it was a
fortuitous occurrence, not a substantial connection. See Burger King Corp., 471 U.S. at 475. Even
if Mr. Byrd surpassed the first prong of Mosseri, he would fail the second.
Because Mr. Byrd has not shown a connection between his claims about the defendant’s
conduct and Alabama, and the one possible connection was not purposeful, the court finds it lacks
personal jurisdiction over the Defendants.
IV.

CONCLUSION
The court will grant the Defendants’ motion to dismiss for lack of personal jurisdiction and

will dismiss this action without prejudice. The court will enter a separate order consistent with this
opinion.
DONE this the 26th day of June, 2017.

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___________________________________
KARON OWEN BOWDRE
CHIEF UNITED STATES DISTRICT JUDE

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