Kloeber v. Montie's Resources, LLC et al

Filing 78

MEMORANDUM OPINION & ORDER: 1) The Court's 72 Order requiring Pla to show cause is DISCHARGED; 2) Upon the Court's own motion, the portion of the Court's 72 Order which denied Pla's 71 Motion for entry of default judgment as to Dft Bella Luca Properties, LLC is STRICKEN AND HELD FOR NAUGHT; 3) Pla's 71 Motion for Default Judgment as to Dft Bella Luca Properties, LLC is GRANTED; 4) Pla's 77 Motions for Extension of Time and Motion for Warning Order Attorne y with respect to Dft Bella Luca Properties, LLC are DENIED AS MOOT; and 5) Pla shall FILE A STATUS REPORT within 10 days (a) advising the Court of what, if any, further proceedings are necessary to effectuate judgment with respect to Dft, Bella Luca Properties, LLC and (b) setting forth a proposed schedule for same. Signed by Judge Joseph M. Hood on 1/15/2013. (KLB) cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
DAVID N. KLOEBER, JR.,

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Plaintiff,
v.
MONTIE’S RESOURCES, LLC, et al.,
Defendants.
**
This

matter

is

**

**

before

**

the

Civil Action No.
5:11-cv-313-JMH
MEMORANDUM OPINION &
ORDER

**

Court

upon

Plaintiff’s

response [DE 76] to the Court’s December 20, 2012, Order
[DE

72]

to

Complaint

show

against

cause

why

Defendant

Plaintiff’s
Bella

Luca

Second

Amended

Properties,

LLC

(“Bella Luca”), a limited liability company organized in
Minnesota, should not be dismissed without prejudice for
failure to timely serve said defendant.

The Court also has

before it Plaintiff’s Motions for Extension of Time for
Service and for Appointment of a Warning Order Attorney.
[DE 77.]
Plaintiff

argues

that

the

Court

must

“deem”

the

Kentucky Secretary of State “to be the statutory agent” of
Bella

Luca

for

service

of

process

by

operation

of

KRS

454.210(3)(a) because personal jurisdiction over Bella Luca
would be authorized under Kentucky’s long-arm statute, KRS
454.210(2).

Plaintiff argues that, on the facts alleged,

Bella Luca “caus[ed] tortious injury by an act or omission
in this Commonwealth.”

Alternatively, he argues that Bella

Luca “caus[ed] tortious injury in this Commonwealth by an
act

or

omission

outside

the

Commonwealth”

because

it

derived substantial revenue from goods used or consumed or
services

rendered

in

this

Commonwealth

as

provided

to

justify the exercise of personal jurisdiction over Bella
Luca under the terms of KRS 454.210(2).
Kentucky’s

long

arm

statute

extends

as

far

as

the

federal due process clause and, thus, the Court may conduct
its inquiry by considering whether an assertion of personal
jurisdiction
concerns.

would

violate

Aristech

constitutional

Chemical

Intern.

due

Ltd.

process

v.

Acrylic

Fabricators Ltd., 138 F.3d 624, 627 (6th Cir. 1998) (citing
Nationwide Mut. Ins. Co. v. Tryg Int’l Ins. Co., 91 F.3d
790, 793 (6th Cir. 1996) and Wright v. Sullivan Payne Co.,
839 S.W.2d 250, 253 (Ky. 1992)).
In order to be subject to specific jurisdiction, a
defendant must purposefully avail itself of the privilege
of acting in the forum state or causing a consequence in
the forum state.
F.

Supp.2d

1077,

Santa Escolastica, Inc. v. Pavlovsky, 636
1085-86

(E.D.

Ky.

2010)

(citing

Air

Products and Controls, Inc. v. Safetech Intern., Inc., 503
F.3d

544,

550

(6th

Cir.

2007)).
2

Second,

the

cause

of

action must arise from the defendant's activities there.
Id.

Finally,

caused

by

the

the

acts

of

defendant

the

must

defendant
have

a

or

consequences

substantial

enough

connection with the forum state to make the exercise of
jurisdiction over the defendant reasonable.
With

respect

to

purposeful

Id.

availment,

a

singular

contact alone may not suffice, for example, but an on-going
relationship,

indicating

repeated

intentional

activities

directed toward the forum, meets this criterion.

Here,

Plaintiff avers that Bella Luca purposefully availed itself
of

the

privilege

Commonwealth

of

Kentucky

bank

of

causing

Kentucky

account

number of occasions.

(the

a

and

consequence

removal

sourced

of

from

funds

in

the

from

Kentucky)

on

a
a

In that vein, Plaintiff avers that

Bella Luca received funds whose origins lie in Kentucky
because (1) they were generated by Defendants Emlyn and
Montie’s

Resources’

sale

of

coal

which

was

produced

in

Kentucky and (2) they were transferred from a bank account
within

the

Commonwealth.

Bella

Luca

allegedly

received

those funds by means of a fraudulent transfer effected by
Defendant

Bart

principals

of

Bella Luca.

Montanari.
Defendants

Bart
Emlyn,

Montanari
Montie’s

is

one

the

Resources,

and

The funds were wired from Emlyn’s account at

BB&T to Bella Luca’s account at Central Bank, which has an
3

address listed in Stillwater, Minnesota on the statement
provided as an exhibit to Plaintiff’s response.
at 6.]

[DE 76-3

The address provided on the bank statement from

BB&T for “Emlyn Coal Processing of Minnesota, LLC,” also
attached as an exhibit to Plaintiff’s response, which the
Court presumes to be the same entity as Defendant Emlyn, is
“517 Parkside Rd., London, KY 40744-7320.”

[DE 76-3 at

10.]
Plaintiff’s
allegedly

action—for

fraudulent

damages

as

transfers—clearly

a

result

arises

from

Luca’s contact with the Commonwealth of Kentucky.
the

Court

connected

is

persuaded

to

the

that

forum

that

the

action

the

is

exercise

of

the

Bella

Finally,

sufficiently
of

personal

jurisdiction is reasonable.
Having
allegations
service,

the

considered

Plaintiff’s

upon

Plaintiff

which

Court

concludes

that

arguments
bases

personal

the

theory

its

and

of

jurisdiction

over Bella Luca would be warranted under the Kentucky longarm

statute

and

the

U.S.

Constitution.

The

Court

is

persuaded that the allegation that the assets, including
these receivables, that were received by Bella Luca but
otherwise due to Plaintiff were sourced from Kentucky and
transferred from a Kentucky bank account is sufficient to
confer

personal

jurisdiction

over
4

Bella

Luca

and,

thus,

make the Secretary of State Bella Luca’s agent for service
of process if the other requirements for service by this
method have been met.
Plaintiff “follow[ed] state law for serving a summons
in an action brought in courts of general jurisdiction in
the state where the district court is located or where
service is made.”

Fed. R. Civ. P. 4(e)(1).

The rules for

service in the Commonwealth provide, among other things,
that “[s]ervice shall be made upon a corporation by serving
an officer or managing agent thereof, or the chief agent in
the county wherein the action is brought,
agent

authorized

by

appointment

or

by

or any other

law

to

receive

service on its behalf.” Ky. R. Civ. P. 4.04(5) (emphasis
added).

Thus, service was complete no later than October

29, 2012, when Plaintiff served the Office of the Secretary
of State for the Commonwealth of Kentucky with the summons
and accompanying documents.

[See DE 66.]

This was within

the time limits for service set forth in Fed. R. Civ. P.
4(m).

Accordingly,

Plaintiff

has

shown

cause

why

the

Second Amended Complaint should not be dismissed without
prejudice as to Bella Luca, and the Court’s order to show
cause shall be discharged.
Further, the Court, on its own motion, reconsiders its
decision to deny Plaintiff’s Motion for Default Judgment
5

with respect to Defendant Bella Luca.

[DE 71.]

Service

has been made, and no responsive pleading has been filed by
Defendant Bella Luca even though the time for making a
response

has

expired.

See

Fed.

R.

Civ.

P.

12(a).

Accordingly, entry of default judgment is appropriate.

See

Fed. R. Civ. P. 55(b)(2).
Finally, Plaintiff’s Motions for Extension of Time for
Service and for Appointment of a Warning Order Attorney
with respect to Defendant Bella Luca are now moot and shall
be denied.
Accordingly, IT IS ORDERED:
(1)

that the Court’s December 20, 2012, Order [DE 72]

requiring Plaintiff to show cause is DISCHARGED;
(2)

that, upon the Court’s own motion, the portion of

the Court’s December 20, 2012, Order [DE 72] which denied
Plaintiff’s motion for entry of default judgment [DE 71] as
to Defendant Bella Luca Properties, LLC, is STRICKEN AND
HELD FOR NAUGHT;
(3)

that Plaintiff’s Motion for Default Judgment as

to Defendant Bella Luca Properties, LLC [DE 71] is GRANTED;
(4)

that Plaintiff’s Motions for Extension of Time

for Service and for Appointment of a Warning Order Attorney
with respect to Defendant Bella Luca Properties, LLC [DE
77], are DENIED AS MOOT; and
6

(5)

that Plaintiff shall FILE A STATUS REPORT within

ten (10) days of entry of this order (a) advising the Court
of what, if any, further proceedings are necessary under
Fed. R. Civ. P. 55(b)(2) to enter or effectuate judgment
with respect to Defendant Bella Luca Properties, LLC, and
(b) setting forth a proposed schedule for same.
This the 15th day of January, 2013.

7