Packard v. Temenos Advisory, Inc. et al
Filing
37
ORDER Dismissing in part and denying in part Taylor's 5 Motion to Dismiss; the Motion is DISMISSED as moot as it relates to the sufficiency of service of process, and it is DENIED as to its request for dismissal on personal - jurisdiction grounds. Additionally, Plaintiff's 25 Motion to Remand is DENIED. Signed by Chief Judge Lisa G. Wood on 1/29/2016. (csr)
3 the Sniteb OtateoAtarta Court
for the boutbern flitrtct of deorgia
36runoWk fltbiton
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CHARLES PACKARD,
Plaintiff,
V
.
TEMENOS ADVISORY, INC. and
GEORGE L. TAYLOR,
Defendants.
CV 215-087
ORDER
This matter comes before the Court on two fully briefed
motions: a Motion to Dismiss (dkt. no. 5) filed by Defendant
George L. Taylor ("Taylor") and a Motion to Remand (dkt. no. 25)
by Plaintiff Charles Packard ("Plaintiff") . Upon due
consideration, Taylor's Motion to Dismiss (dkt. no. 5) is
DISMISSED in part and DENIED in part: the Motion is DISMISSED as
moot as it relates to the sufficiency of service of process, and
it is DENIED as to its request for dismissal on personaljurisdiction grounds. Additionally, Plaintiff's Motion to
Remand (dkt. no. 25) is DENIED.
FACTUAL BACKGROUND
Plaintiff is a resident of Glynn County, Georgia. Dkt. No.
1, pp. 7-10 ("Compl."), ¶ 1. Defendant Temenos Advisory, Inc.
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("Tmenos") is a Connecticut corporation that is licensed to do
business in the State of Georgia, with Taylor listed as its
registered agent for service of process at an address in Glynn
County, Georgia. See id. at ¶91 2, 4. Although Taylor resides
in Connecticut, Temenos and Taylor (collectively, "Defendants")
have maintained aprincipal office at the Glynn County, Georgia,
address since at least July 2010. See id. at 9191 3-5.
According to Plaintiff, Defendants entered into a verbal
employment contract with him in July 2010. Id. at ¶ 5.
Pursuant to the alleged contract, Plaintiff worked for
Defendants as a financial advisor, and Defendants compensated
him with allowances for his expenses, club memberships, health
insurance, and a percentage of the revenue from clients that he
obtained for them. Id. at 9191 6-7. Specifically, Plaintiff
states that the contract obligated Defendants to pay him the
following: "100% of Temenos' [s] finder's fees for all amounts
generated by Plaintiff related to the Mutualink Round B
offering"; "40% of Defendants' fees from all client accounts he
generated for Defendants' business"; and "50% of all commissions
paid to Defendants for Life Insurance Policies and/or Annuities
sourced by Plaintiff." See id. at ¶91 8, 11-12.
Plaintiff asserts that Defendants have nevertheless failed
to pay him $18,175 in finder's fees, $40,000 of the fees on
client accounts, and the commissions for the sales of multiple
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life-insurance policies and two annuities. See id. at 191 8, 11,
13. According to Plaintiff, "Defendants have recognized their
obligation to pay Plaintiff these monies but have refused to do
so," id. at ¶ 9, "instead unilaterally claiming to have changed
the terms of the contract they entered into with Plaintiff," id.
at ¶ 15.
PROCEDURAL BACKGROUND
On May 1, 2015, Plaintiff filed suit against Defendants in
the State Court of Glynn County. See generally Id. In the
Complaint, Plaintiff claims that Defendants breached the alleged
verbal employment contract, breached their duties of good faith
and fair dealing, and acted willfully and maliciously and
without justification in doing so. See id. at 191 15-17.
Plaintiff seeks damages from Defendants in the amount of
$108,175, plus commissions for the life-insurance policies and
annuities, as well as punitive damages, attorney's fees, costs,
and expenses of this action. Id. at 191 a-d.
Plaintiff attempted to effect service of the Complaint and
Summons upon Temenos through Its registered agent, Taylor, at
the Temenos office in Georgia; however, a Return of Service
dated May 14, 2015, shows that Temenos was not served, because
Taylor could not be found within the State of Georgia after a
diligent search. Dkt. No. 5, Ex. B. Plaintiff attempted to
serve Taylor on June 11, 2015, by leaving copies of the
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Complaint and Summons at his residence in Connecticut. Id. at
Ex. C. However, according to Taylor, he has both a home and an
office on his property, and Plaintiff left the requisite
materials in the crack of the office door. Id. at Ex. A
("Taylor Aff."), ¶I 5-6.
On July 13, 2015, Taylor filed a Notice of Removal of the
state-court action to this Court, on the basis of diversity
jurisdiction. Dkt. No.1, pp. 1-4 ("Notice of Removal"), pt. B.
Along with the Notice of Removal, Taylor filed the Motion to
Dismiss that is now pending before the Court. Dkt. No. 5. As
discussed more fully below, Taylor challenges Plaintiff's
service of process and this Court's jurisdiction over him. Id.
The next day—July 14, 2015—Plaintiff sought to serve
Temenos through Georgia's Secretary of State, and Temenos
received such service on July 20, 2015. Dkt. No. 25, Ex. A.
Temenos then filed an Answer in this Court on August 4, 2015.
Dkt. No. 12. On August 8, 2015, Plaintiff re-served Taylor by
delivering the Complaint and Summons to him personally at his
home in Connecticut. Dkt. No. 15. Plaintiff then filed the
instant Motion to Remand on September 10, 2015, seeking to have
this case returned to the State Court of Glynn County on the
basis of improper removal. Dkt. No. 25.
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DISCUSSION
Although Taylor's Motion to Dismiss (dkt. no. 5) predates
the filing of Plaintiff's Motion to Remand (dkt. no. 25), the
Court's ruling on the issue of remand will dictate whether the
Court should decide Taylor's pending dispositive Motion or leave
it for resolution in state court. The Court thus addresses
Plaintiff's Motion to Remand before turning to Taylor's Motion
to Dismiss.
I.
Plaintiff's Motion to Remand (Dkt. No. 25)
Plaintiff moves to remand this case to state court on the
basis that Temenos never joined in or consented to Taylor's
Notice of Removal, as required by statute. Dkt. No. 25 (citing
28 U.S.C. § 1446(b)). Defendants oppose Plaintiff's Motion on
the grounds that it is untimely and lacks merit. Dkt. No. 28,
pp. 2-7. Specifically, Defendants argue that Taylor's removal
of the state action to this Court was proper for three
alternative reasons: (1) the statutory consent rule on which
Plaintiff relies is inapplicable in diversity actions; (2) even
if the rule does apply, it did not require that the later-served
Temenos consent to removal after the fact; and (3) Temenos
effectively consented to removal by filing an Answer in this
Court. Id. at pp. 3-7.
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A. Timeliness of Plaintiff's Motion
Pursuant to 28 U.S.C. § 1447 ("Section 1447"), a party
seeking to remand a case based on any defect other than a lack
of subject-matter jurisdiction must file a motion within thirty
days after the filing of the removal notice.
In the case at bar, Taylor filed a Notice of Removal on
July 13, 2015. See Notice of Removal. Accordingly, Section
1447 required that Plaintiff file any motion to remand on the
basis of a procedural infirmity, such as a lack of consent,
within the subsequent thirty-day period ending on August 12,
2015. Because Plaintiff waited to do so until September 10,
2015—fifty-nine days after the filing of the Notice of Removal—
Plaintiff's Motion is untimely and must be denied.
Plaintiff maintains, however, that the statutory thirty-day
deadline should not apply in cases involving a defendant served
after removal, and that the rule should instead provide "that
later served defendants must consent to removal once served and
that once the time for them to do so has expired, [the]
[p]laintiff may move to remand." Dkt. No. 30, p. 3. Notably,
Plaintiff does not cite any authority for extending the thirtyday period set forth in Section 1447. Nor can Plaintiff do so,
because "[f]ederal courts strictly observe the thirty-day
deadline for filing motions to remand." Alter v. Bell
I
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Helicopter Textron, Inc., 944 F. Supp. 531, 535 (S.D. Tex. 1996)
1.1
(citing In re Shell Oil Co., 932 F.2d 1518, 1522-23 (5th Cir.
1991)); See,. e.g., DeWeese v. JPMorgan Chase Bank, N.A., No.
2:13-CV-00059-RWS, 2013 WL 6178546, at *3 (N.D. Ga. Nov. 25,
2013) ("Plaintiff moved for remand on April 22, 2013, 33 days
after [Defendant's] March 20 removal. Therefore, Plaintiff's
motion was untimely and is due to be denied.")
Moreover, Plaintiff's proposition that this deadline should
be extended in cases involving later-served defendants runs
directly contrary to the balance struck by the removal statutes:
[28 U.S.C. § 14481 contemplates that after removal
process or service may be completed on defendants who
had not been served in the state proceeding. The
right which the statute gives to such a defendant to
move to remand the case confers no rights upon a
plaintiff. 28 U.S.C. § 1448.
In Hutchins v. Priddy, 103 F. Supp. 601 (W.D. Mo.
1952), the court stated: "When the case removed under
[28 U.S.C. § 14481 reaches the federal court, process
and service thereof may be completed against those
defendants not before the court. Any defendant so
subsequently served may move to remand the case to the
state court, but a plaintiff may not do so if
jurisdiction of the United States District Court is
established over the action." 103 F. Supp. at 607;
see 1A Moore's Federal Practice ¶ 0.168 [3.-5-5] in
which the author concludes that "[t]his case reaches a
sound result."
Lewis v. Rego Co., 757 F.2d 66, 69 & n.3 (3d Cir. 1985)
(footnote omitted)
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As such; Plaintiff was bound to comply with the statutory
thirty-day window for filing his remand Motion. Because
Plaintiff's Motion comes significantly after that timeframe, it
is untimely and must be denied.
B. Propriety of Removal
Even if it had been timely, Plaintiff's Motion would be due
to be denied, because Taylor's removal of this action was
procedurally proper.
28 U.S.C. § 1441(a) ("Section 1441(a)") provides that an
action filed in state court may be removed to federal district
court if the case could have been brought in federal district
court originally. See 28 U.S.C. § 1441(a) (requiring that the
case be one "of which the district courts of the United States
have original jurisdiction") . A federal district court has
original jurisdiction "over all civil actions where the amount
in controversy exceeds $[75,000] and the action is between the
citizens of different states." Triggs v. John Crump Toyota,
Inc., 154 F.3d 1284, 1287 (11th Cir. 1998) (citing 28 U.S.C. §
1332 (a) (1) ) . Importantly, " [d] iversity jurisdiction requires
complete diversity; every plaintiff must be diverse from every
v.
defendant." Id. (citing Tapscott
MS Dealer Serv. Corp., 77
F.3d 13- 53, 1355 (11th cir. 1996)).
A defendant seeking to remove an action on the basis of
diversity must satisfy certain procedural requirements. For
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example, the "forum-defendant rule" set forth in 28 U.S.C. §
1441(b) ("Section 1441(b)") states that an action otherwise
removable on diversity grounds "is not removable if any of the
'parties in interest properly joined and served as defendants is
a citizen of the State in which such action is brought.'"
Goodwin v. Reynolds, 757 F.3d 1216, 1218 (11th cir. 2014)
(emphasis in original) (quoting 28 U.S.C. § 1441(b)).
Additionally, the so-called "unanimous consent rule" under 28
U.S.C. § 1446(b) (2) (A) mandates that "all defendants who have
been properly joined and served must join in or consent to the
removal of the action."
Upon the removal of an action to federal district court, 28
U.S.C. § 1447(c) "implicitly recognizes two bases upon which a
district court may . . . order a remand: when there is (1) a
lack of subject matter jurisdiction or (2) a defect other than a
lack of subject matter jurisdiction." Hernandez v. Seminole
Cty., 334 F.3d 1233, 1236-37 (11th cir. 2003) (quoting Snapper,
Inc. v. Redan, 171 F.3d 1249, 1252-53 (11th cir. 1999)).' A
1
This statute states, in relevant part:
A motion to remand the case on the basis of any defect
other than lack of subject matter jurisdiction must be made
within 30 days after the filing of the notice of removal
under section 1446(a) . If at any time before final
judgment it appears that the district court lacks subject
matter jurisdiction, the case shall be remanded. An order
remanding the case may require payment of just costs and
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"defect other than a lack of subject matter jurisdiction" might
include noncompliance with one of the aforementioned procedural
requirements for removal. See id. (quoting Snapper, Inc., 171
F.3d at 1252-53) . The removing party bears the burden of
establishing that the case was properly removed. Thalacker v.
Concessions Int'l, LLC, No. 1:06CV2685 WSD, 2007 WL 521902, at
*2 (N.D. Ga. Feb. 15, 2007) (citing Lampkin v. Media Gen., Inc.,
302 F. Supp. 2d 1293, 1294 (M.D. Ala. 2004)).
Here, there is no dispute that this case falls within the
Court's diversity jurisdiction. See generally Dkt. Nos. 25, 28.
The parties agree that Plaintiff is a citizen of Georgia,
Defendants are citizens of Connecticut, and the amount in
controversy is in excess of $108,175. Notice of Removal, pt. B;
Compi., 191 1-3, a. Rather, at issue is whether a procedural
defect in removal owing to a lack of unanimous consent warrants
remand.
Contrary to Defendants' argument, the unanimous consent
rule applies in this case. Defendants emphasize that the
unanimous consent rule purports to apply only to actions removed
pursuant to Section 1441(a), not actions removed on the basis of
diversity jurisdiction under Section 1441(b). Dkt. No. 28, p.
any actual expenses, including attorney fees, incurred as a
result of the removal.
28 U.S.C. § 1447(c).
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4. Defendants err in viewing Section 1441(b) as a separate
statutory ground for removal. Section 1441(a) contains the
general rule that cases within the original jurisdiction of a
district court (i.e., cases involving a federal question or
diversity) are removable, while Section 1441(b) merely sets
forth additional requirements applicable when it is a diversity
case that is removed pursuant to Section 1441(a). See 28 U.S.C.
§ 1441 (a)- (b)
As a result, "[t]his 'rule of unanimity' applies regardless
of whether federal subject matter jurisdiction is based on
diversity or federal question." Novick v. Bankers Life Ins. Co
of N.Y., 410 F. Supp. 2d 98, 100 (E.D.N.Y. 2006) (citing Eli v.
S E.T. Landscape Design, Inc., 34 F. Supp. 2d 188, 193 (S.D.N.Y.
.
1999)), vacated on other grounds, 450 F. Supp. 2d 196 (E.D.N.Y.
2006); accord Fienev. Standard Ins. Co., No. CIV.A. 01-2313GTV, 2001 WL 1224144, at *1 (D. Kan. Oct. 9, 2001) (citing
McShares, Inc.. v. Barry, 979 F. Supp. 1338, 1342 (D. Kan.
1997)); see also DeWeese, 2013 WL 6178546, at *6 (applying the
unanimous consent rule where removal was based on diversity)
Thus, the unanimous consent rule applies to Taylor's removal of
this case on diversity grounds.
Nevertheless, Defendants show that the unanimity
requirement was satisfied here. The unanimous consent rule
states that all defendants that have been properly joined and
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served in an action must join in or consent to the removal of
that action to federal court. 28 U.S.C. § 1446(b) (2) (A) . The
parties agree that when Taylor filed the Notice of Removal on
July 13, 2015, Temenos had not been properly joined and served
in the state-court action. See Dkt. No. 25, pp. 1, 6; Dkt. No.
28, p. 3. As a result—and as Plaintiff does not appear to
dispute—the unanimity rule was not frustrated by Temenos's
failure to join in the removal petition at that time.
Nor did the rule require that Temenos take any action upon
receiving service on July 20, 2015, as Plaintiff contends, see
dkt. no. 25. Under the statutory heading "Procedure for Removal
of civil Actions," the unanimous consent rule focuses on "[w]hen
a civil action is removed" and requires the joinder or consent
of "all defendants who have been properly joined and served" as
of that time. See 28 U.S.C. § 1446(b) (2) (A). The rule
addresses neither procedure nor service on a defendant after
removal, as these matters are instead covered in 28 U.S.C. §
1447 and 1448, respectively. In fact, 28 U.S.C. § 1448
specifically provides that a defendant that receives service
after removal may move to remand the case, but makes no mention
of any affirmative filing obligation in the event that the
defendant does not wish to obtain a remand.
Moreover, the purpose of the unanimous consent rule "is to
promote unanimity among the served defendants 'without placing
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undue hardships on subsequently served defendants.'" Hooper v.
Albany Int'l Corp., 149 F. Supp. 2d 1315, 1319 n.2 (M.D. Ala.
2001) (emphasis in original) (quoting Getty Oil v. Ins. Co. of
N. Am., 841 F.2d 1254, 1263 (5th Cir. 1988)). Accordingly,
"[s]ubsequently served defendants may either 'accept the removal
or exercise their right to choose the state forum by making a
motion to remand.'" Id. (quoting Getty Oil, 841 F.2d at 1263).
A later-served defendant that accepts the removal, however, need
not do so by expressly joining in or giving its consent after
the fact. See, e.g., Shaw v. Dow Brands, Inc., 994 F.2d 364,
369 (7th Cir. 1993)
("[Defendant] was not served until January
21, 1992, or nearly a month after the removal petition was filed
on December 23, 1991, so that its consent was not needed."
(citing Richards v. Harper, 864 F.2d 85, 87 (9thCir. 1988), and
P.P. Farmers' Elevator Co. v. Farmers Elevator Mut. Ins. Co.,
395 F.2d 546, 547-48 (7th Cir. 1968))), abrogated on other
grounds by Carroll v. Stryker Corp., 658 F.3d 675 (7th Cir.
2011); Lewis v. Rego Co., 757 F.2d 66, 69 (3d Cir. 1985) ("[T]he
removal statute contemplates that once a case has been properly
removed the subsequent service of additional defendants who do
not specifically consent to removal does not require or permit
remand on a plaintiff's motion."); McArthur v. Wong, No. 070234-M, 2007 WL 4570327, at *1 n.3 (S.D. Ala. Dec. 20, 2007)
("[Defendant] had not been served at the time that this action
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was removed, so it was unnecessary for him to join in the
removal."); Cramer v. Devera Mgmt. Corp., No. 04-2012-JWL, 2004
WL 1179375, at *1_2 (D. Kan. May 27, 2004) (denying the
plaintiff's motion to remand grounded in the unanimity rule,
because the defendant, who was served after removal and never
filed any notice consenting to removal, was not required to join
in or consent to the removal)
Because Temenos was served after Taylor removed the case to
this Court, it was under no obligation to consent to the removal
at any time. Defendants succeed in demonstrating that the
removal of this action was in keeping with the unanimous consent
rule and thus was procedurally proper. Consequently,
Plaintiff's Motion to Remand is DENIED.
II. Taylor's Motion to Dismiss (Dkt. No. 5)
Taylor moves to dismiss Plaintiff's claims against him,
arguing that Plaintiff's attempt to serve him with process on
June 11, 2015, did not comport with Georgia law. Dkt. No. 5,
pp. 2, 7-8 (citing O.C.G.A. §§ 9-10-94, 9-11-4 (e) (7)). Taylor
emphasizes that as of the filing of his Reply brief on August 7,
2015, "Plaintiff ha[d] not made any additional service attempt."
Dkt. No. 13, pp. 2-3. As further grounds for dismissal, Taylor
contends that Plaintiff's Complaint fails to plead facts
establishing this Court's personal jurisdiction over him as a
nonresident, because "[t]here is no allegation that . . . Taylor
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personally took part in the breach" or "personally participated
in any wrongdoing." Dkt. No. 5, p. 5. Taylor further asserts
that he does not have sufficient contacts with the State of
Georgia to invoke the Court's nonresident jurisdiction. Id. at
pp. 3-6.
In support of his Motion, Taylor submits an affidavit
stating, in relevant part:
1.
. . . I am a resident of the [S]tate of Connecticut.
8.
Temenos . . . is a Connecticut corporation
licensed to do business in Georgia.
9.
I am . . . the Chief Executive Officer of
Temenos . .
10.
Upon information and belief, I negotiated the
terms of [Plaintiff's] employment with
Temenos . . . in 2010. All negotiations and
discussion occurred in the [S]tate of New
Hampshire. Any employment agreement between
[Plaintiff] and Temenos . . . would have been
entered into in the [S]tate of New Hampshire.
11.
I do not personally own any real property in
Georgia.
12.
I did not personally enter into a verbal
employment agreement with [Plaintiff]
Taylor Aff., 191 1, 8-12.
Plaintiff counters Taylor's contentions regarding service
by stating that he served Taylor on June 11, 2015, in the proper
manner under Connecticut law. Dkt. No. 8,
p. 3 (citing Conn.
Gen. Stat. § 52-57(a)). Nevertheless, Plaintiff argues that, at
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the time of briefing this issue, he could still perfect service
on Taylor in accordance with the Federal Rules of Civil
Procedure, and requests the opportunity to do so. Id. at pp. 23 (quoting Fed. R. Civ. P. 4 (m)) . As to personal jurisdiction,
Plaintiff asserts that the Complaint sets forth allegations of
wrongdoing against both Defendants, and that Taylor's denial of
personal involvement bears on the issue of liability and thus is
a matter for summary judgment. Id. at pp. 7-10. Plaintiff
further contends that Taylor has sufficient contacts with the
State of Georgia to bring him within this Court's jurisdiction,
based on his "long course of dealing and business activities" in
Georgia that directly gives rise to this lawsuit. Id. at pp. 37.
Plaintiff attaches to his Response a copy of Temenos's
filing with the Georgia Secretary of State listing Taylor as its
registered agent in the State. Id. at Ex. B. Plaintiff also
puts forth an affidavit, in which he attests to the following:
3.
4.
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While the bulk of negotiations
between . . . Taylor and myself regarding the
terms of the agreement took place while we were
on vacation in New Hampshire, my employment was
in the State of Georgia. Although I had business
prospects in other states, all of my work for
Temenos was from the Georgia office or from my
home in Georgia.
Temenos has maintained an office in St. Simons
Island, [Glynn County,] GA[,] continuously for
the last 5 years. . . . Taylor typically spent at
least two months out of each year that I was
16
working at Temenos on St. Simons Island working
out of the St. Simons Island office.
6.
In addition to the time . . . Taylor spent
physically doing business in the St. Simons
Island office, he spoke to me via telephone,
e-mailed me and otherwise supervised and directed
my work at Temenos on a daily basis.
7.
. . . Taylor personally ran Temenos . . . in both
Connecticut and Georgia as its CEO and made all
significant business decisions for both
offices. . . . Taylor was the only person with
authority to make personnel decisions regarding
myself and he unilaterally made the decision to
refuse to pay me my earned commissions and stated
that he had decided to change my pay structure
after those commissions had already been earned.
Id. at Ex. C ("Pl.'s Aff."), ¶I 3-7.
A. Legal Standards
A plaintiff's complaint must set forth "a short and plain
statement of the grounds for the court's jurisdiction," Fed. R.
Civ. P. 8(a) (1), and be properly served along with a summons
upon the defendant, Fed. R. Civ. P. 4(c) . As such, the
defendant may respond to the Complaint by moving for its
dismissal based on a lack of personal jurisdiction or
insufficient service of process. Fed. R. Civ. P. 12(b) (2), (5)
These grounds for dismissal share the same standards of
proof, as proper service of process is a component of personal
jurisdiction. Kammona v. Onteco Corp., 587 F. App'x 575, 578
(11th Cir. 2014) (citing Lowdon PTY Ltd. v. Westminster
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Ceramics, LLC, 534 F. Supp. 2d 1354, 1360 (N.D. Ga. 2008), and
Baragona v. Kuwait Gulf Link Transp. Co., 594 F.3d 852, 855
(11th Cir. 2010)) . When a district court does not conduct an
evidentiary hearing, the plaintiff need only allege sufficient
facts in the complaint to establish a prima facie case of
personal jurisdiction over a nonresident defendant. Cable/Home
Commc'n Corp. v. Network Prods., Inc., 902 F.2d 829, 855 (11th
Cir. 1990) (citing Morris v. SSE, Inc., 843 F.2d 489, 492 (11th
Cir. 1988), and Delong Equip. Co. v. Wash. Mills Abrasive Co.,
840 F.2d 843, 845 (11th Cir. 1988)).
However, if the defendant challenges personal jurisdiction
with affidavit evidence in support of his position, "the burden
traditionally shifts back to the plaintiff to produce evidence
supporting jurisdiction." Diamond Crystal Brands, Inc. v. Food
Movers Int'l, Inc., 593 F.3d 1249, 1257 (11th Cir. 2010)
(quoting United Techs. Corp. v. Mazer, 556 F.3d1260, 1274 (11th
Cir. 2009)). The plaintiff must "substantiate the
jurisdictional allegations in the complaint by affidavits or
other competent proof, and not merely reiterate the factual
allegations in the complaint." Polski Linie Oceaniczne v.
Seasafe Transp. A/S, 795 F.2d 968, 972 (11th Cir. 1986) (quoting
Bloom v. A.H. Pond Co., 519 F. Supp. 1162, 1168 (S.D. Fla.
1981) )
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The court, in turn, must accept the facts in the
plaintiff's complaint as true, to the extent that they remain
uncontroverted by the defendant's affidavits. Cable/Home
Commc'n Corp., 902 F.2d at 855. In addition, "[w]here 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." Diamond Crystal Brands,
Inc., 593 F.3dat 1257 (quoting Meier ex rel. Meier v. Sun Int'l
Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir. 2002)).
B. Sufficiency of Service of Process
Federal Rule of Civil Procedure 4(m) provides, in part, as
follows:
If a defendant is not served within 120 days after the
complaint is filed, the court—on motion or on its own
after notice to the plaintiff—must dismiss the action
without prejudice against that defendant or order that
service be made within a specified time. But if the
plaintiff shows good cause for the failure, the court
must extend the time for service for an appropriate
period. 2
Here, Taylor moves for dismissal based on Plaintiff's
allegedly insufficient service on June 11, 2015, see dkt. no. 5,
p. 2, and failure to make any further attempt to perfect the
same, dkt. no. 13, pp. 2-3. While these averments may have been
true at the time that Taylor filed his Reply in support of this
2
A recent amendment to this rule shortened the 120-day period for
service to only 90 days; however, this amendment went into effect on
Decerrtberl, 2015, and thus does not apply here. See Fed. R. Civ. P. 4
advisory committee's note.
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Motion on August 7, 2015, see dkt. no. 13, Plaintiff filed the
Complaint on May 1, 2015, see compi., and thus had until the
expiration of the 120-day period on August 29, 2015, to perfect
service on Taylor. The docket of this case reflects that
Plaintiff did, in fact, re-serve Taylor on August 8, 2015. Dkt.
No. 15 (Return of Service showing personal service upon Taylor
at his home in Connecticut). Significantly, Taylor made no
effort to amend or supplement his briefing on the issue of
service, and has not otherwise contested the validity of the
August 8, 2015, service. As a result, it appears that the
portion of Taylor's Motion seeking dismissal on this basis must
be DISMISSED as moot.
C. Personal Jurisdiction
"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."
United Techs. Corp., 556 F.3d at 1274 (citing Horizon Aggressive
Growth, L.P.v. Rothstein-Kass, P.A., 421F.3d 1162, 1166 (11th
Cir. 2005)).
1. Georoia's Lona-Arm Statute
In construing a state long-arm statute in a personal
jurisdiction analysis, the court must interpret the statute as
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would the state's Supreme Court. See id. The relevant portions
of Georgia's long-arm statute state:
A court of this state may exercise personal
jurisdiction over any nonresident or his or her
executor or administrator, as to a cause of action
arising from any of the acts, omissions, ownership,
use, or possession enumerated in this Code section, in
the same manner as if he or she were a resident of
this state, if in person or through an agent, he or
she:
(1) Transacts any business within this state .
O.C.G.A. § 9-10-91.
To exercise personal jurisdiction over a nonresident who
transacts business within Georgia, the following requirements
must be met:
first, the nonresident must have purposefully done an
act or consummated a transaction in Georgia; second,
the cause of action must arise from or be connected
with such act or transaction; and third, the exercise
of jurisdiction by the courts of this state must not
offend traditional fairness and substantial justice.
Gateway Atlanta Apartments, Inc. v. Harris, 660 S.E.2d
7500, 757
(Ga. Ct. App. 2008) (citing Robertson v. CR1, Inc., 601 S.E.2d
163, 163 (Ga. Ct. App. 2004)).
Significantly, Georgia courts broadly interpret the first
prong—a purposeful act or consummation of a transaction in
Georgia—as neither requiring the nonresident defendant's
physical presence in Georgia nor minimizing the importance of
his intangible contacts with this State. Innovative Clinical &
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Consulting Servs., LLC v. First Nat'l Bank of Ames, 620 S.E.2d
352, 355 (Ga. 2005) . As such, a court must consider the
nonresident defendant's "mail, telephone calls, and other
'intangible' acts, though occurring while the defendant is
physically outside of Georgia." Diamond Crystal Brands, Inc.,
593 F.3d at 1264 (citing Innovative Clinical & Consulting
Servs., LLC, 620 S.E.2d at 355-56); see also Burger King Corp.
v. Rudzewicz, 471 U.S. 462, 476 (1985) ("[I]t is an inescapable
fact of modern commercial life that a substantial amount of
business is transacted solely by mail and wire communications
across state lines, thus obviating the need for physical
presence within a State in which business is conducted."); Aero
Toy Store, LLC v. Grieves, 631 S.E.2d 734, 739 (Ga. Ct. App.
2006) ("[A] single event may be a sufficient basis for the
exercise of long arm jurisdiction if its effects within the
forum are substantial enough even though the nonresident has
never been physically present in the state." (citing
Shellenberger v. Tanner, 227 S.E.2d 266, 266 (Ga. Ct. App.
1976) )
The second prong of the personal-jurisdiction analysis adds
that the act or transaction must give rise or have some
connection to the cause of action. Gateway Atlanta Apartments
Inc., 660 S.E.2d at 757. The first and second prongs thus
determine whether the nonresident has established minimum
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..,
contacts with the State. Id. By contrast, the "due process"
prong "requires that the nonresident have performed purposeful
acts to tie itself to Georgia, and these minimum contacts 'may
not be merely random, fortuitous, or attenuated.'" Id. (quoting
Home Depot Supply v. Hunter Mgmt., 656 S.E.2d 898, 898 (Ga. Ct.
App. 2008)). .
In the present matter, Plaintiff adequately pleads a prima
facie case of personal jurisdiction over Taylor in the Complaint
and substantiates the same through affidavit. See Compl.,. 191 46, 15; Pl.'s Aff., 9191 3-4, 6. The Complaint alleges that both
Defendants have maintained an office in Glynn County, Georgia;
entered into an employment contract with Plaintiff, pursuant to
which Plaintiff worked as a financial advisor; refused to make
payments owed to Plaintiff; and unilaterally claimed to have
changed the contract terms. Compl., 191 4-6, 15. Although
Taylor submits affidavit evidence denying having personally
entered into any employment contract with Plaintiff on which he
could be liable for breach, Taylor aff., ¶ 12, the Court must
give greater weight, at this stage, to Plaintiff's sworn
statements that Taylor personally ran the company, made all
personnel and other substantial business decisions in both
offices, and unilaterally made the decision to withhold payments
to Plaintiff that gives rise to the instant breach claims, see
Pl.'s aff., ¶ 7. See Delong Equip. Co., 840 F.2d at 845
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I
("'[W]hen there is a battle of affidavits placing different
constructions on the facts, the court is inclined to give
greater weight,, in the context of a motion to dismiss, to the
plaintiff's version' particularly when 'the jurisdictional
questions are apparently intertwined with the merits of the
case.'" (alteration omitted) (quoting Psychological Res. Support
Sys'., Inc. v. Gerleman, 624 F. Supp 483, 486-87 (N.D. Ga.
1985) )
Furthermore, while Taylor's affidavit claims that the
negotiating and contracting process took place in New Hampshire,
Taylor, aff., ¶ 10—and Plaintiff concedes this fact, see Pl.'s
aff., ¶ 3—Plaintiff's affidavit shows that the contract was for
employment at the Temenos office in Georgia, id. at ¶ 3.
Importantly, Taylor affies that he personally does not own real
property in Georgia, but does not discuss the extent of his
business activities at the Temenos office in Georgia or his
communications with the employees there. See Taylor Aff., ¶ 11.
On the other hand, Plaintiff's affidavit states that while he
was working at the Georgia office, Taylor was also at that
office doing business for approximately two months of each year
and otherwise spoke with Plaintiff via telephone and e-mail,
supervised, him, and directed his work on a daily basis. Pl.'s
Aff., ¶I 4,-6.
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This evidence supports a finding that Taylor committed
purposeful acts in Georgia by serving as the sole decision maker
and supervisor of Temenos's Georgia office—both while physically
present at that office for extended periods of time and through
electronic correspondence with that office from out of State.
Aside from their initial negotiations in New Hampshire, nothing
suggests that Taylor communicated with Plaintiff other than
while working alongside him at the Georgia office and calling
and e-mailing him on a daily basis. As a result, there is a
sufficient basis upon which to conclude that the present cause
of action—alleging that Defendants have refused to make payments
to Plaintiff and claimed to have modified the contract terms,
see compl., ¶ 15—directly arises from and is connected to
Taylor's purposeful acts in this State.
Far from "merely random, fortuitous, or attenuated," these
purposeful acts occurred regularly—even daily—over the course of
five years. See Gateway Atlanta Apartments, Inc., 660 S.E.2d at
757 (quoting Home Depot Supply, 656 S.E.2d at 898)
Consequently, Taylor's ties with the State of Georgia are such
that the exercise of personal jurisdiction over him in this case
will not offend traditional notions of fairness and substantial
justice under Georgia law. Thus, Plaintiff has sustained his
burden of proving that all three prongs of the Georgia Long-Arm
Statute are satisfied in this case.
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2. Due Process Under the Fourteenth Amendment
Federal case law requires that a federal court sitting in
diversity undertake a Fourteenth Amendment analysis in addition
to applying the forum state's long-arm statute. United Techs.
Corp., 556 F.3d at 1274. Although Georgia already requires a
due process analysis in applying its long-arm statute, see
Gateway Atlanta Apartments, Inc., 660 S.E.2d at 757, these two
inquiries are not "one and the same," Diamond Crystal Brands,
593 F.3d at 1261-63. Thus, a court must conduct a
constitutional analysis independent of the statutory long-arm
assessment to determine whether personal jurisdiction over a
nonresident defendant is appropriate. See Diamond Crystal
Brands, 593 F.3d at 1263.
As the Eleventh Circuit has observed,
The Due Process Clause protects an individual's
liberty interest in not being subject to binding
judgments imposed by foreign sovereigns. The heart of
this protection is fair warning—the Due Process Clause
requires "that the defendant's conduct and connection
with the forum State [be] such that he should
reasonably anticipate being haled into court there."
Therefore, states may exercise jurisdiction over only
those who have established "certain minimum contacts
with [the forum] such that the maintenance of the suit
does not offend traditional notions of fair play and
substantial justice."
Id. at 1267 (alterations in original) (citations omitted)
(citing Burger King Corp., 471 U.S. at 471-72; then quoting id.
at 474; then quoting Helicopteros Nacionales de ColombiaS.A. v.
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Hall, 466 U.S. 408, 414 (1984)). Thus, personal jurisdiction
comports with federal due process when the nonresident defendant
(1) has purposefully established minimum contacts with the forum
state, and (2) the exercise of jurisdiction will not offend
traditional notions of fair play and substantial justice.
Delong Equip. Co., 840 F.2d at 853.
i. Minimum Contacts with the State of Georgia
Three inquiries inform the minimum contacts analysis:
First, the plaintiff's cause of action must arise out
of, or relate to, the nonresident defendant's contacts
with the forum state. Second, the contacts must show
that the nonresident defendant purposefully availed
itself of the privilege of conducting activities
within the forum state. Third, the defendant's
contacts must demonstrate that the nonresident could
reasonably anticipate being haled into court in the
forum.
Paul, Hastings, Janofsky & Walker, LLP v. City of Tulsa, 245 F.
Supp. 2d 1248, 1255 (N.D. Ga. 2002) (citations omitted) (citing
Vermeulen v. Renault, U.S.A., Inc., 985 F.2d 1534, 1546 (11th
Cir. 1993)
In this case, Taylor's contacts with the State of Georgia
meet the threshold of minimum contacts required under the
Fourteenth Amendment. First, as discussed above, Plaintiff's
cause of action arises out of or relates to Taylor's contacts
with Georgia. Plaintiff claims that Defendants have breached
their employment contract by refusing to make payments due
thereunder and purporting to have changed the contract terms.
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See Compi., ¶ 15. Plaintiff's affidavit further alleges that
Taylor was the decision maker at Temenos, and that Taylor
communicated with him either in person at the Georgia office or
by calling or sending e-mails to him at that office. Pl.'s
Aff., 9191 4, 6.
Plaintiff's claim of breach thus appears to be
grounded in or otherwise relating to Taylor's actions or
communications with him in Georgia.
Second, Plaintiff's Complaint and supporting affidavit
suggest. that Taylor purposefully availed himself of the
privilege to conduct business activities in the State of Georgia
on a continuing basis. The Complaint states that Taylor and
Temenos maintained an office in Georgia, compl., ¶ 4, and the
affidavit alleges that Taylor intentionally and consistently did
business out of that office for two-month periods each year and
contacted Plaintiff or otherwise directed his work at that
office on a daily basis, Pl.'saff.,
191 4, 6.
If true, Taylor
would have purposefully taken advantage of the opportunity to do
business Georgia.
Third, Taylor's contacts with the State of Georgia are such
that he should have anticipated being haled into court in
Georgia. While jurisdiction is not proper when it is the result
of "'random,' 'fortuitous,' or 'attenuated' contacts" or the
"unilateral activity of another party or a third person,"
personal jurisdiction arises "where the contacts proximately
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result from actions by the defendant himself that create a
'substantial connection' with the forum State." Burger King
Corp., 471 U.S. at 475-76 (emphasis in original) (first quoting
Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984), and
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 299
(1980); then quoting Helicopteros Nacionales de Colombia, S.A.,
466 U.S. at 417; then quoting McGee v. Int'l Life Ins. Co., 355
U.S. 220, 223 (1957)). Taylor worked out of Temenos's Georgia
office for approximately two months each year and contacted and
supervised that office on a daily basis, thereby establishing a
substantial personal connection with Georgia. Because Taylor
availed himself of the opportunity to engage in business through
a Georgia-based office, and thereby enjoy the benefits and
protections of Georgia's laws, it is thus "presumptively not
unreasonable to require him to submit to the burdens of
litigation in [Georgia] as well." See Id. at 476.
ii. Fair Play and Substantial Justice
Once it is shown that the defendant has purposefully
established minimum contacts in the forum state, the defendant
"must make a 'compelling case' that the exercise of jurisdiction
would violate traditional notions of fair play and substantial
justice." Diamond Crystal Brands, Inc., 593 F.3d at 1267
(quoting Burger King, 471 U.S. at 477) . The analysis requires
that a court look to "the burden on the defendant, the forum
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am
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 1274 (quoting Burger King, 471 U.S. at
477)
In relying on only his status as a Connecticut resident and
his denial of personal involvement in the contract and breach at
issue, see dkt. no. 5, pp. 5-6, Taylor fails to suggest—much
less make a compelling case—that exercising jurisdiction would
be contrary to traditional notions of fair play and substantial
justice. While perhaps Taylor shows that it would be burdensome
on him, as a Connecticut resident, to litigate in this Court,
see Taylor aff., ¶ 1, Plaintiff's affidavit alleges that Taylor
nevertheless spends a significant amount of time in Georgia,
Pl.'s aff., ¶ 4, and thereby demonstrates that traveling to
Georgia to litigate this case will not inconvenience Taylor as
much as he suggests.
Moreover, as Plaintiff is a Georgia resident and suffered
the alleged injuries in this State, Georgia has an interest in
overseeing the resolution of this case and it would be in
Plaintiff's interest for it to do so. Finally, it is in the
interest of justice that Plaintiff's claims against Taylor be
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resolved in an efficient manner alongside those against Temenos
involving the same underlying events that are alleged to have
occurred.
On balance, the slight inconvenience to Taylor in
litigating in Georgia does not outweigh these considerations.
This Court's exercise of personal jurisdiction over Taylor will
be consistent with traditional notions of fair play and
substantial justice and thus will not implicate Taylor's
Fourteenth Amendment due process rights. Because the
requirements of both the Georgia Long-Arm Statute and Fourteenth
Amendment Due Process Clause are met, personal jurisdiction over
Taylor is appropriate in this case. Taylor's Motion to Dismiss
is, therefore, DENIED to the extent that it is based on
Jurisdictional grounds.
CONCLUSION
In light of the foregoing, Plaintiff's Motion to Remand
(dkt. no. 25) is hereby DENIED.
Additionally, Taylor's Motion
to Dismiss (dkt. no. 5) is DISMISSED in part and DENIED in part
as follows: it is DISMISSED as moot insofar as it seeks a
dismissal of Plaintiff's Complaint for insufficient service
process, and it is DENIED to the extent that it requests
dismissal for lack of personal jurisdiction.
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SO ORDERED, this 29 " day of January, 2016.
LISA GODBEY WOOD, CHIEF JUDGE
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
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