BREWTON v. LIBERTY MUTUAL HOLDING COMPANY INC et al

Filing 24

ORDER GRANTING 10 Motion to Dismiss for Failure to State a Claim and GRANTING 12 Motion to Dismiss for Lack of Jurisdiction. The dismissals are without prejudice. The Court declines to allow jurisdictional discovery. Ordered by US DISTRICT JUDGE MARC THOMAS TREADWELL on 2/2/2016. (tlh)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
MACON DIVISION
CHANDRA H. BREWTON,

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Plaintiff,
v.
LIBERTY MUTUAL HOLDING
COMPANY, INC., et al.,
Defendants.

CIVIL ACTION NO. 5:14-CV-436(MTT)

ORDER
Defendants Liberty Mutual Group, Inc. (“LMGI”) and Liberty Mutual Insurance Co.
(“LMIC”) have moved to dismiss the claims against them for failure to state a claim
(Doc. 10), and Defendant Liberty Mutual Holding Company, Inc.(“LMHC”) has moved to
dismiss the claims against it for lack of personal jurisdiction or, alternatively, for failure
to state a claim (Doc. 12).1 For the following reasons, the motions are GRANTED.
I.

BACKGROUND2

Plaintiff Chandra Brewton seeks relief on behalf of herself and others similarly
situated for the Defendants’ alleged refusal to assess and pay damages for diminution
in value when claims are made under their homeowners insurance policies. Brewton
alleges she “timely reported a claim for direct physical loss to her home resulting from

1

The allegations of the complaint now at issue were not changed by the Plaintiff’s recently-filed amended
complaint. (Docs. 1; 23). Rather, the amended complaint only changed the allegations in Count 2, which
the Court dismissed in an Order entered January 19, 2016. (Doc. 22). Because the amended complaint
does not change the allegations of the complaint relevant to these pending motions, this Order cites to
the original complaint.

2

The facts are taken from the allegations in the complaint (Doc. 1) and accepted as true for purposes of
this motion.

water damage,” but “in violation of Georgia law and in breach of their insurance
contract” with Brewton, the Defendants failed to assess and pay damages for diminution
in value of her property. (Doc. 1, ¶ 2).
Brewton’s insurance policy was issued by Defendant First Liberty Insurance
Corporation (“First Liberty”),3 but Brewton seeks to hold Defendants LMGI, LMIC, and
LMHC liable based on an alter ego, agency, and/or joint venture theory. LMGI and
LMIC have moved to dismiss for failure to state a claim upon which relief can be
granted, contending the complaint does not sufficiently allege a basis for holding them
liable, and LMHC has moved to dismiss for lack of personal jurisdiction. Brewton
asserts this Court has personal jurisdiction over LMHC for the same reasons she
contends liability is proper—alter ego, agency, and/or joint venture.
The allegations relating to alter ego, agency, and joint venture are:
11. LMHC operates primarily through four business units: (1) Commercial
Insurance; (2) Personal Insurance; (3) Global Specialty; and (4) Liberty
International. These business units utilize various trade names and
trademarks, such as “Liberty Mutual Insurance” and “LibertyGuard.” Each of
these business units market and underwrite insurance policies issued by the
numerous insurance entities owned or controlled by LMHC. LMHC, its
various business units, and the various insurance entities it owns and/or
operates are hereinafter sometimes referred to collectively as “Liberty
Mutual.”
12. LMGI is a subsidiary of LMHC.
3

First Liberty filed a separate motion to dismiss Brewton’s request for a declaratory judgment (Count 2).
(Doc. 7).

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13. LMIC is a member company and subsidiary of LMHC and LMGI.
14. LMHC is the ultimate parent company of FLIC.4
15. FLIC is controlled by LMHC.
16. FLIC is a subsidiary or affiliated insurer of LMGI.
17. FLIC is controlled by LMGI.
18. FLIC markets and underwrites insurance policies issued by certain LMGI
stock insurance companies and affiliated insurers, including LMIC.
19. FLIC is controlled by LMIC.
20. Upon information and belief, at all relevant times herein, each Defendant
acted in all aspects as agent, apparent agent, and alter ego for each other
Defendant and as agent, apparent agent, and alter ego of their ultimate
parent company, LMHC.
21. Upon information and belief, at all relevant times herein, each Defendant
was engaged in a joint venture with each other Defendant.
22. Defendants share and have in common several officers and directors. For
example, David H. Long is the chief executive officer of each Defendant.
23. Defendants have a common administrative or principal place of business
located at 175 Berkeley Street, Boston, Massachusetts 02166.
24. Defendants coordinate and commingle financial and other resources by
making financial transactions between each other, by filing consolidated
federal income tax returns, by issuing consolidated financial statements, and
by other means. The consolidated financial statements issued by Defendant

4

FLIC stands for First Liberty Insurance Corporation.

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Liberty Mutual Holding Company, Inc. include affiliated entities over which it
exercises control, including LMIC, LMGI, and FLIC.
25. Defendants all operate and trade under the common name of Liberty Mutual
and use the same logo to identify and promote their business. Every page of
the Policy issued to Plaintiff displays the Liberty Mutual logo and name.
26. The Policy states “Thank you for insuring with Liberty Mutual.”
27. The Policy states that questions about the Policy can be directed to
LibertyMutual.com.
28. The instructions about how to obtain information about the Policy are signed
by “Your Liberty Mutual Service Team.”
29. The Policy directs that claims under the Policy can be reported to
LibertyMutual.com/Claims.
30. The Policy is titled “LibertyGuard Deluxe Homeowners Policy.”
“LibertyGuard” is a registered trademark owned by LMHC.
31. Plaintiff’s premium payments under the Policy are automatically withdrawn
from her checking account. Plaintiff’s records reflect that these payments are
made to “Liberty Mutual.”
32. Defendants’ actions are sufficient to find that there is an amalgamation of
each of the Defendants.
(Id. ¶¶ 11-32).

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II.

DISCUSSION

A. LMGI and LMIC’s Motion
1. Legal Standard
To avoid dismissal pursuant to Fed. R. Civ. P. 12(b)(6), a complaint must contain
sufficient factual matter to “‘state a claim to relief that is plausible on its face.’” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). “At the motion to dismiss stage, all well-pleaded facts are accepted as
true, and the reasonable inferences therefrom are construed in the light most favorable
to the plaintiff.” Garfield v. NDC Health Corp., 466 F.3d 1255, 1261 (11th Cir. 2006)
(internal quotation marks and citation omitted). However, “where the well-pleaded facts
do not permit the court to infer more than the mere possibility of misconduct, the
complaint has alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’”
Iqbal, 556 U.S. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). “[C]onclusory allegations,
unwarranted deductions of facts or legal conclusions masquerading as facts will not
prevent dismissal.” Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir.
2002). The complaint must “give the defendant fair notice of what the ... claim is and
the grounds upon which it rests.” Twombly, 550 U.S. at 555 (internal quotation marks
and citation omitted). Where there are dispositive issues of law, a court may dismiss a
claim regardless of the alleged facts. Marshall Cty. Bd. of Educ. v. Marshall Cty. Gas
Dist., 992 F.2d 1171, 1174 (11th Cir. 1993).
2. Alter Ego
Brewton contends LMGI and LMIC are liable for First Liberty’s alleged breach of
contract on an alter ego theory. “Under the alter ego doctrine, equitable principles are

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used to disregard the separate and distinct legal existence possessed by a corporation
where it is established that the corporation served as a mere alter ego or business
conduit of another.” Kissun v. Humana, Inc., 267 Ga. 419, 419-20, 479 S.E.2d 751, 752
(1997). “[G]reat caution should be exercised by the court,” however. Amason v.
Whitehead, 186 Ga. App. 320, 321, 367 S.E.2d 107, 108 (1988).
In order to disregard the corporate entity because a corporation is a mere
alter ego or business conduit of a person, it should have been used as a
subterfuge so that to observe it would work an injustice. To prevail based
upon this theory it is necessary to show that the shareholders disregarded
the corporate entity and made it a mere instrumentality for the transaction
of their own affairs; that there is such unity of interest and ownership that
the separate personalities of the corporation and the owners no longer
exist. The concept of piercing the corporate veil is applied in Georgia to
remedy injustices which arise where a party has over extended his
privilege in the use of a corporate entity in order to defeat justice,
perpetuate fraud or to evade contractual or tort responsibility.
Baillie Lumber Co. v. Thompson, 279 Ga. 288, 289-90, 612 S.E.2d 296, 299 (2005)
(citation omitted). Thus, Georgia courts disregard the corporate form if: (1) the
corporation is a “mere instrumentality” of the parent company or the shareholders, and
(2) to observe the corporate form would “work an injustice.” See Ralls Corp. v.
Huerfano River Wind, LLC, 27 F. Supp. 3d 1303, 1328 (N.D. Ga. 2014); Fla. Shade
Tobacco Growers, Inc. v. Duncan, 150 Ga. App. 34, 34, 256 S.E.2d 644, 644 (1979).
Because it is an equitable doctrine, piercing the corporate veil to hold a parent
company or shareholder liable “is appropriate[ ] … only in the absence of adequate
remedies at law.” Baillie Lumber Co., 279 Ga. at 290, 612 S.E.2d at 299. Thus, the
Georgia Supreme Court has held it is required, “as a precondition to a plaintiff’s piercing
the corporate veil and holding individual shareholders liable on a corporate claim, that
there be insolvency on the part of the corporation in the sense that there are insufficient

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corporate assets to satisfy the plaintiff’s claim.” Johnson v. Lipton, 254 Ga. 326, 327,
328 S.E.2d 533, 535 (1985). Following that holding, federal courts applying Georgia
law have concluded a corporate defendant must be insolvent or have insufficient assets
to satisfy the plaintiff’s claim before the plaintiff can pierce the corporate veil to hold a
parent company or shareholder liable. See B & F Sys., Inc. v. LeBlanc, 2011 WL
4103576, at *34 (M.D. Ga.); Friedman’s, Inc. v. Morgan Schiff & Co. (In re Friedman’s),
385 B.R. 381, 414-15 (S.D. Ga.), vacated in part by 396 B.R. 623 (S.D. Ga. 2008);
Adams v. Unum Life Ins. Co. of Am., 508 F. Supp. 2d 1302, 1315 (N.D. Ga. 2007);
Perry v. Unum Life Ins. Co. of Am., 353 F. Supp. 2d 1237, 1240 (N.D. Ga. 2005).
LMGI and LMCI contend the allegations of their control over First Liberty are
conclusory, and thus, First Liberty cannot meet the first prong of the alter ego test.
Though Brewton does allege in conclusory fashion that LMGI and LMIC exert control
over First Liberty, she has alleged additional supporting facts. For example, she has
alleged that the Defendants issue consolidated financial statements; file consolidated
federal income tax returns; have in common several officers and directors; share a
common office; operate and trade under the common name of “Liberty Mutual” and use
the same logo to identify and promote their business; that she made payments under
the policy to “Liberty Mutual” and was told to file claims at “LibertyMutual.com/Claims”;
that a letter with instructions on where to find Policy information was signed by “your
Liberty Mutual Service Team”; communications regarding the policy say “Thank you for
insuring with Liberty Mutual”; “LibertyGuard,” included in the policy title, is a registered
trademark owned by LMIC; and that First Liberty markets and underwrites insurance
policies for LMIC and other LMGI affiliated insurers. The Court cannot say Brewton’s

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allegations are insufficient to show Brewton is a “mere instrumentality” of LMGI and
LMIC. Cf. Najran Co. for Gen. Contracting & Trading v. Fleetwood Enters., Inc., 659 F.
Supp. 1081, 1096-97 (S.D. Ga. 1986) (describing factors the court considered in
deciding whether plaintiff met burden to show corporate veil should be pierced as to
parent corporation).5
LMGI and LMIC further argue Brewton has failed to allege First Liberty is
insolvent or that the Defendants’ corporate structure will allow First Liberty to evade its
contractual responsibilities. Thus, they contend the allegations are insufficient to satisfy
the second prong of the alter ego test. Brewton argues that “the class-action nature of
this case indicates, taking all reasonable inferences in favor of Plaintiff, that First Liberty
may not be able to satisfy an eventual judgment against it.” (Doc. 14 at 11). There is
no allegation First Liberty is insolvent, which, as discussed above, is a requirement
under Georgia law. Even assuming the inability to satisfy an eventual class-action
judgment would be sufficient, there is also no such allegation in the complaint.
The only allegation in the complaint Brewton cites in support of the second prong
of the alter ego analysis is that Brewton was required to make its payments under the
policy to “Liberty Mutual.” (Doc. 1, ¶ 31). Thus, Brewton contends the Liberty Mutual
Defendants benefitted from First Liberty’s contract with Brewton and should share in the
alleged liability. However, the allegation that Brewton made her payments to “Liberty
Mutual” does not plausibly suggest that adhering to the corporate form would somehow

5

The Defendants distinguish Najran because the court considered many other factors, not alleged in the
present case, in deciding whether subsidiaries’ corporate veils should be pierced to hold the parent
company liable. While this is true, the court was deciding whether to grant summary judgment to the
plaintiff on its claim of alter ego (rather than deciding whether the plaintiff’s allegations of alter ego were
sufficient to survive a motion to dismiss). Najran, 659 F. Supp. at 1096.

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“defeat justice, perpetuate fraud or [allow First Liberty] to evade contractual or tort
responsibility.”
Najran, cited by Brewton in support, is distinguishable. In that case, the district
court found the second prong of the alter ego test satisfied based on a parent
corporation’s profiting from “substantial favorable publicity” following the consummation
of a contract between two of the parent company’s subsidiaries and the plaintiff. 659 F.
Supp. at 1097. Specifically, the court pointed to several articles “mak[ing] glowing
reference” to the parent corporation with no mention of the subsidiaries with whom the
plaintiff actually contracted.” Id. The court also noted that the corporate veil was
“diaphanous (if not transparent)” and that it was “truly offensive” for the parent company
“to accept the general applause of the business community directed toward [its]
prowess in ‘landing’ this contract” but to subsequently “disclaim[ ] … interest in the
transaction.” Id. at 1097-98. Pretermitting whether this is sufficient in light of the
Georgia Supreme Court’s holding that insolvency is a “precondition” to piercing the
corporate veil,6 Brewton has not alleged facts comparable to those in Najran suggesting
an equitable reason to pierce the corporate veil and hold LMGI and LMIC liable.
It may be that as Brewton investigates her claims against First Liberty, Brewton
can allege facts to support her alter ego theory. But the allegations Brewton now makes
are insufficient.
3. Actual or Apparent Agency
The existence of a parent/subsidiary relationship does not in and of itself
establish an agency relationship under Georgia law. Matson v. Noble Inv. Grp., LLC,
288 Ga. App. 650, 659, 655 S.E.2d 275, 282 (2007). “The relation of principal and
6

The court in Najran did not address this case.

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agent arises wherever one person, expressly or by implication, authorizes another to act
for him or subsequently ratifies the acts of another in his behalf.” O.C.G.A. § 10-6-1.
To prove actual agency, the purported principal must have assumed the
right to control the method, manner, and time of the purported agent’s
work, as distinguished from the right merely to require certain definite
results in conformity to the contract. The right to control the purported
agent’s time means the right to control the hours of work. The right to
control the method and manner of work means the right to tell the
purported agent how to perform all details of the job, including the tools he
should use and the procedures he should follow.
Satisfaction & Serv. Hous., Inc. v. SouthTrust Bank, Inc., 283 Ga. App. 711, 713, 642
S.E.2d 364, 365 (2007) (internal quotation marks and footnotes omitted).
Though Brewton alleges First Liberty markets and underwrites insurance policies
issued by LMIC and LMGI, she alleges no facts regarding the level of control LMIC and
LMGI exert over First Liberty in this regard. Brewton does allege First Liberty was
“controlled by” both LMGI and LMIC but does not elaborate on the nature of this
“control.” (Doc. 1, ¶¶ 17, 19). There are also no allegations about any express agency
agreement or other facts to suggest First Liberty was LMIC’s and/or LMGI’s agent,
beyond a conclusory allegation that “at all relevant times herein, each Defendant acted
in all respects as agent, apparent agent, and alter ego for each other Defendant and as
agent, apparent agent, and alter ego of their ultimate parent company, LMHC.” (Id. ¶
20). Therefore, the Court concludes Brewton has not sufficiently alleged an actual
agency relationship between First Liberty and either LMGI or LMIC.
Brewton also asserts a theory of apparent agency in her complaint.
In order to recover under a theory of apparent or ostensible agency, a
plaintiff must establish three elements: (1) that the alleged principal held
out another as its agent; (2) that the plaintiff justifiably relied on the care or
skill of the alleged agent based upon the alleged principal’s
representation; and (3) that this justifiable reliance led to the injury.

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Bright v. Sandstone Hospitality, LLC, 327 Ga. App. 157, 158, 755 S.E.2d 899, 902
(2014) (citation omitted).
Brewton contends she has sufficiently alleged these elements because (1) First
Liberty uses the “Liberty Mutual” logo and a trademark owned by First Liberty, (2)
“letters accompanying the Policy state that it is issued by ‘Liberty Mutual,’” (3) First
Liberty markets and underwrites policies issued by LMIC and LMGI, and (4) Brewton
makes payments under the policy to “Liberty Mutual.” (Doc. 14 at 13). However, as the
Defendants point out, there are no allegations that LMIC and/or LMGI made out any
representations to Brewton and thus no allegations that they held First Liberty out as
their agent. See Kids R Kids Int’l, Inc., v. Cope, 330 Ga. App. 891, 895, 769 S.E.2d
616, 619 (2015) (“To establish the required elements of apparent agency, it is not
enough that the plaintiff believe that an agency relationship exists. Neither is it sufficient
that the agent represent his status as agent. It must be established that the principal
held out the agent as its agent.” (internal quotation marks and footnote omitted)). There
are three Defendants in this case with “Liberty Mutual” as part of their name, and
Brewton only alleges that her premium payments were automatically withdrawn from
her checking account and made to “Liberty Mutual.” (Doc. 1, ¶ 31). There is no
mention of which Defendant authorizes this automatic withdrawal. Brewton only alleges
that the policy “displays the Liberty Mutual logo and name” and says “Thank you for
insuring with Liberty Mutual,” that questions and claims under the policy can be reported
to LibertyMutual.com and LibertyMutual.com/claims, and that “instructions about how to
obtain information about the Policy are signed by ‘Your Liberty Mutual Service Team.’”
(Doc. 1, ¶¶ 25-29). However, the Georgia Court of Appeals has held that mere use of

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logos/trademarks is insufficient to show apparent agency. See Kids R Kids Int’l, Inc.,
330 Ga. App at 895, 769 S.E.2d at 619. Finally, the fact that First Liberty directs
policyholders to the LibertyMutual.com website or the fact that First Liberty markets and
underwrites policies for LMIC and LMGI likewise does not show that either LMIC or
LMGI held First Liberty out as its agent.
Even if these allegations were sufficient to show LMIC and/or LMGI held First
Liberty out as its agent, they do not plausibly suggest Brewton “justifiably relied on the
care or skill of the alleged agent based upon the alleged principal’s representation.”
Though Brewton argues in her response that she entered into a contract with First
Liberty based on “these representations,”7 there is no such allegation in the complaint.
(Doc. 14 at 13).
4. Joint Venture
Finally, Brewton seeks to hold LMIC and LMGI liable on the theory that they were
part of a joint venture with First Liberty.
The theory of joint venturers arises where two or more parties combine
their property or labor, or both, in a joint undertaking for profit, with rights
of mutual control (provided the arrangement does not establish a
partnership), so as to render all joint venturers liable for the negligence of
the other.
Kissun, 267 Ga. at 420, 479 S.E.2d at 752. Brewton has not alleged each party
exercises mutual control over any joint undertaking but has instead specifically alleged
LMIC and LMGI exercise control over First Liberty. (Doc. 1, ¶¶ 17, 19). No other
allegations in the complaint suggest mutual control. See Williams v. Chick-fil-A, Inc.,
274 Ga. App. 169, 170, 617 S.E.2d 153, 155 (2005) (“The right to exercise mutual
control is a crucial part of a joint venture.”).
7

The Court is unaware of what representations Brewton is referring to.

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B. LMHC’s Motion
1. Legal Standard
“A plaintiff seeking the exercise of personal jurisdiction over a nonresident
defendant bears the initial burden of alleging in the complaint sufficient facts to make
out a prima facie case of jurisdiction.” Diamond Crystal Brands, Inc. v. Food Movers
Int’l, Inc., 593 F.3d 1249, 1257 (11th Cir. 2010) (internal quotation marks and citation
omitted). “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.” Id. (internal quotation marks and citation
omitted). “‘Where 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.’” Id. (citation omitted).
“A federal court sitting in diversity undertakes a two-step inquiry in determining
whether personal jurisdiction exists: 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.” Id. at 1257-58 (internal
quotation marks and citation omitted). This two-step inquiry is necessary because the
long-arm statute does not provide jurisdiction to federal courts in Georgia that is
coextensive with procedural due process.8 Id. at 1259. Rather, the statute “imposes

8

The Court acknowledges the apparent tension between Diamond Crystal and Georgia courts’
interpretation of the Georgia long-arm statute following Innovative Clinical & Consulting Services., LLC v.
First National Bank of Ames, 279 Ga. 672, 620 S.E.2d 352 (2005). According to Diamond Crystal,
Innovative Clinical holds that O.C.G.A. § 9-10-91(1) is not coextensive with due process limitations and
must be analyzed independently therefrom. Yet state courts do not appear to read Innovative Clinical the
same way. See, e.g., Vibratech, Inc. v. Frost, 291 Ga. App. 133, 137, 661 S.E.2d 185, 188 (2008) (citing
Innovative Clinical for the proposition that “the language of O.C.G.A. § 9-10-91(1) must be construed as
reaching ‘to the maximum extent permitted by procedural due process’”). Moreover, prior to Diamond
Crystal at least one federal district court read Innovative Clinical to extend § 9-10-91(1) to the limits of the

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independent obligations that a plaintiff must establish for the exercise of personal
jurisdiction that are distinct from the demands of procedural due process.” Id. In short,
jurisdiction that might appear to be conferred by statute may be negated by due process
concerns, and vice versa. See id. at 1261.
2. Analysis
LMHC contends this Court lacks personal jurisdiction over it because (1) LMHC
did not transact business or own real property in Georgia so as to subject it to
jurisdiction under Georgia’s long-arm statute; (2) jurisdiction over LMHC would violate
the Due Process Clause of the Fourteenth Amendment; and (3) personal jurisdiction
cannot be imputed to LMHC. In support of its motion, LMHC submitted the declaration
of James. R. Pugh, an Assistant Secretary of LMHC, who explains LMHC’s lack of
contacts with the state of Georgia and further states LMHC “does not directly offer
insurance products or insurance services to the public, nor does it enter into any agency
contracts pursuant to which third parties or agents offer insurance products or insurance
services on behalf of [LMHC].” (Doc. 12-2, ¶ 3).
In response, Brewton argues jurisdiction over LMHC is appropriate based on an
alter ego, agency, and/or joint venture theory. Brewton makes it clear that she is not
asserting LMHC itself has any contacts that would subject it to personal jurisdiction in
Georgia.9

Due Process Clause. See, e.g., Global Payments Direct, Inc. v. Am. Bank of Commerce, 2006 WL
269967, at *2 n.2 (N.D. Ga.).
9

Brewton does not go through the two-part analysis in arguing personal jurisdiction over LMHC is proper.
Rather, she assumes that if LMHC is the alter ego of, principal of, or joint venture with First Liberty under
Georgia law, personal jurisdiction exists over LMHC.

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a. Alter Ego
A nonresident parent corporation may be subject to personal jurisdiction on an
alter ego theory based on the Court’s personal jurisdiction over a subsidiary. See Patin
v. Thoroughbred Power Boats Inc., 294 F.3d 640, 653 (5th Cir. 2002); RMS Titanic, Inc.
v. Zaller, 978 F. Supp. 2d 1275, 1301-02 (N.D. Ga. 2013); Vogt v. Greenmarine
Holding, LLC, 2002 WL 534542, at *4-7 (N.D. Ga.). Because this case is premised on
diversity jurisdiction, the Court looks to Georgia law to determine whether the exercise
of personal jurisdiction on an alter ego theory is appropriate. See Estate of Thomson ex
rel. Estate of Rakestraw v. Toyota Motor Corp. Worldwide, 545 F.3d 357, 362 (6th Cir.
2008) (looking to Ohio law in diversity case to see if alter ego theory of personal
jurisdiction was appropriate); Meier ex rel. Meier v. Sun Int’l Hotels, Ltd., 288 F.3d 1264,
1270-74 (11th Cir. 2002) (looking to Florida law in diversity case to determine whether
personal jurisdiction over parent based on subsidiary’s contacts was appropriate).
As discussed above, Brewton has failed to allege sufficient facts to meet the
second prong of the alter ego test and show a basis for disregarding the corporate form
of First Liberty to hold LMGI and LMIC liable on an alter ego theory under Georgia law.
For the same reasons, Brewton has failed to allege sufficient facts to justify disregarding
First Liberty’s corporate form to hold LMHC liable for First Liberty’s alleged breach of
contract. See Yukon Partners, Inc. v. Lodge Keeper Grp., Inc., 258 Ga. App. 1, 6, 572
S.E.2d 647, 652 (2002) (plaintiff must show incorporation of the subsidiary “was a sham
or that it was used to defeat a public convenience, to justify wrong, protect fraud, defend
crime, or any other reason which in equity and good conscience would justify the
disregard of the corporate entities” to impute contacts for personal jurisdiction on an

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alter ego theory (internal quotation marks and citation omitted)). Therefore, Brewton
has failed to allege a prima facie case of jurisdiction on an alter ego theory.
Though, as discussed below, the Court declines to defer ruling on the motion to
allow Brewton to engage in jurisdictional discovery, the Court recognizes that as
Brewton investigates her claims against First Liberty, Brewton may be able to allege
facts to support an alter ego theory of personal jurisdiction.
b. Actual or Apparent Agency
Brewton has failed to allege a prima facie case of personal jurisdiction as to
LMHC based on a theory of actual or apparent agency for the same reasons she has
failed to state a claim based on actual or apparent agency against LMGI and LMIC.
There are no additional allegations in the complaint pertaining specifically to LMHC that
would suggest First Liberty was its agent. Cf. Burgess v. Religious Tech. Ctr., Inc., 600
F. App’x 657, 660-61 (11th Cir. 2015) (holding plaintiff failed to establish agency
relationship under Georgia law and thus failed to establish personal jurisdiction under
Georgia long-arm statute).
c. Joint Venture
Brewton has also failed to allege a prima facie case of jurisdiction based on a
theory of joint venture as to LMHC for the same reasons, discussed above, that she has
failed to allege a theory of joint venture as to LMGI and LMIC. There are no allegations
of a joint undertaking or mutual control with respect to any of LMHC’s subsidiaries.
Further, under Georgia law it appears that the existence of a joint venture in and of itself
is not sufficient to impute jurisdictional contacts. Cf. Catholic Stewardship Consultants,

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Inc. v. Ruotolo Assocs., Inc., 270 Ga. App. 751, 756-57, 756 n.1, 608 S.E.2d, 1, 4-5, 4
n.1 (2004).
3. Jurisdictional Discovery
In her response brief, Brewton requests that, should the Court deem her
jurisdictional allegations insufficient, she be allowed to conduct jurisdictional discovery.
However, the Court declines to allow jurisdictional discovery because Brewton has
failed to allege a prima facie case of personal jurisdiction over LMHC. See Cent.
States, Se. & Sw. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934,
946-47 (7th Cir. 2000); McCarthy v. Yamaha Motor Mfg. Corp., 994 F. Supp. 2d 1318,
1328 (N.D. Ga. 2014) (“The McCarthys’ failure to establish a prima facie case for
personal jurisdiction and to provide examples of discovery requests they would
propound means that they have essentially asked for a jurisdictional fishing expedition,
and the Court is not required to allow such an expedition.”); Melech v. Life Ins. Co. of N.
Am., 2011 WL 1047716, at *7 (S.D. Ala.) (“Plaintiff fails to offer proof that the CIGNA
Defendants exercised an unusually high degree of control over its subsidiary, or that the
subsidiary acted merely as an agent. Rather, Plaintiff merely hopes to prove CIGNA
Defendants’ control with discovery.”); cf. Butler v. Sukhoi Co., 579 F.3d 1307, 1313-14
(11th Cir. 2009) (holding district court abused its discretion in allowing subject matter
jurisdictional discovery when plaintiff failed to allege prima facie case for subject matter
jurisdiction pursuant to an exception to the Foreign Sovereign Immunities Act in
complaint).10

10

In Majd-Pour v. Georgiana Community Hospital, Inc., cited by Brewton in support of her request for
jurisdictional discovery, the Eleventh Circuit held it was an abuse of discretion for the district court to
dismiss the case for lack of subject matter jurisdiction without allowing for jurisdictional discovery and
noted the plaintiff’s attorney “protested that with discovery he could show the existence of jurisdiction.”

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III.

CONCLUSION

For the foregoing reasons, LMIC and LMGI’s motion to dismiss (Doc. 10) is
GRANTED, and LMHC’s motion to dismiss (Doc. 12) is GRANTED. The dismissals are
without prejudice. The Court declines to allow jurisdictional discovery.
SO ORDERED, this 2nd day of February, 2016.
S/ Marc T. Treadwell
MARC T. TREADWELL, JUDGE
UNITED STATES DISTRICT COURT

724 F.2d 901, 903 (11th Cir. 1984). The district court dismissed the case based on the plaintiff’s failure to
sufficiently establish subject matter jurisdiction at a hearing on a motion for a temporary restraining order
(“TRO”). Id. at 902-03. The Eleventh Circuit held that, while this correctly resulted in the denial of the
TRO, the dismissal of the entire case was premature. Notably, the Eleventh Circuit clarified that the
district court’s dismissal was not based on any potential deficiencies in the allegations of the complaint
but, rather, only on the plaintiff’s failure to prove jurisdictional facts at the TRO hearing. Id. at 903 n.1.

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