Pastiche, LLC v. Sipp et al

Filing 19

ORDER & REASONS that John and Nancy Sipp's 5 Motion to Dismiss for lack of personal jurisdiction is GRANTED. Signed by Judge Ivan L. R. Lemelle on 7/31/09. (dno, )

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

PASTICHE, LLC VERSUS JOHN SIPP AND NANCY SIPP

CIVIL ACTION NO. 09-2829 SECTION: "B"(5)

ORDER AND REASONS Before the Court is Defendants John and Nancy Sipp's, Motion to Dismiss for Lack of Personal Jurisdiction

pursuant to Federal Rule of Civil Procedure 12(b)(2). (Rec. Doc. No. 5). After review of the pleadings and applicable

law, and for the reasons that follow, IT IS ORDERED that Defendants' Motion to Dismiss for Lack of Personal Jurisdiction (Rec. Doc. No. 5) is GRANTED. BACKGROUND For approximately 20 years Ned Marshall individually performed interior design services for Defendants in New York. At the time Ned Marshall was living and doing

business in the state of New York.

During the course of

the parties' business relationship, Ned Marshall relocated to New Orleans, Louisiana and formed the Plaintiff's After the

business entity Pastiche, LLC on March 14, 2005.

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move,

Marshall

and

Defendants

continued

their

business

relationship, and as a result of the parties' pre-existing business relationship, Defendants continued to employ him to perform services in connection with two residences owned by Defendants in New York. whether LLC. Marshall was hired However, it is disputed as to individually or as Pastiche,

No formal written contract was executed. Over several months the parties' business relationship

began to deteriorate. Plaintiff, Plaintiff Defendants in 2008.

Displeased with services provided by filed suit in New York against the

Subsequently,

Plaintiff

filed

present suit in the Civil District Court for the Parish of Orleans in January 2009 to recover on unpaid invoices. case was subsequently removed to this Court based The on

diversity jurisdiction.

Defendants now request that the

Court dismiss this action pursuant to Rule 12(b)(2). DISSCUSION When a nonresident defendant, like the Sipps, moves to dismiss for lack of personal jurisdiction, the plaintiff seeking to invoke the jurisdiction of this Court bears the burden of establishing it. Luv N' Care v. Insta-Mix, Inc., In order to establish

438 F.3d 465, 469 (5th Cir. 2006).

personal jurisdiction, the plaintiff need only present a prima facie showing that the defendant has sufficient

2

contacts with Louisiana. Id. all allegations in the

The Court must accept as true complaint, resolving factual

conflicts in favor of the plaintiff. Id. A federal court may exercise jurisdiction over a

nonresident defendant only if (1) the long-arm statute of the forum state and confers the personal exercise jurisdiction of over by the the

defendant;

(2)

jurisdiction

forum state is consistent with due process under the U.S. Constitution. Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 270 (5th Cir. 2006). long-arm statute is co-extensive Given that Louisiana's with the limits of

constitutional due process, this Court must decide whether this Court's exercise of jurisdiction over Defendants would offend the Due Process Clause of the Fourteenth Amendment. Seatrepid Louisiana, LLC v. Richard Phillips Marine, Inc., 2009 U.S. Dist. LEXIS 46274, at *9 (E.D. La. May. 14,

2009). The Due Process Clause limits the Court's power to assert personal jurisdiction over a nonresident defendant. Id. The "constitutional touchtone for the exercise of

personal jurisdiction is whether the defendant purposefully established minimum contacts with the forum state." Asahi

Metal Indus. Co., Ltd v. Super Ct. of Cal., Solano County, 480 U.S. 102, 108-09 (1987). Thus, due process will not be

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offended if the nonresident defendant has "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Personal jurisdiction over a nonresident defendant can be general or specific. In order for the Court to exercise specific jurisdiction, among the the court must the examine forum and the the

relationship

defendant,

litigation. Holt Oil & Gas Corp. v. Harvey, 801 F.2d 773, 777 (5th Cir. 1986). This allows the court to determine

whether the defendant has purposefully availed himself of the forum state's benefits and protections. Burger King

Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985). the Court may exercise on general any

Conversely, over a

jurisdiction if the

nonresident contacts

defendant the

claim,

defendant's and

with

forum

state

are

"continuous

systematic." Helecopteros Nacionales de Columbia v. Hall, 466 U.S. 408, 413-14 (1984). However, the continuous and

systematic test is difficult to meet because it requires that a defendant have extensive contacts between him/her and the forum. Kenneth W. Andrieu v. Countrywide Home

Loans, Inc., Et Al., 2006 U.S. Dist. LEXIS 51449, at *9 (E.D. La. Jul. 26, 2006).

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In the present case, there is nothing to suggest that Defendants have the type of systematic and continuous

contacts with the State of Louisiana necessary to meet the requirements of general personal jurisdiction. Defendants are private citizens of New York who had a previous

existing business relationship with Plaintiff's principal, Ned Marshall. (Rec. Doc. No. 15-4 at 4). It is undisputed

that but for about the last four years of their twenty year business relationship, Plaintiff's principal, Mr. Marshall was not a Louisiana resident and the ongoing relationship began when the principals for each side were nonresidents of Louisiana. Defendants did not seek out a Louisiana

company to perform work on their properties. (Rec. Doc. No. 5-2 at 6). Additionally, Defendants assert that they have

never traveled to Louisiana to conduct any business with Plaintiff or any other Louisiana resident. Id. at 3.

Defendants' assertions are uncontradicted.

Therefore, the

Court's ability to exercise jurisdiction solely depends on whether the requirements of specific jurisdiction are met. Specific Jurisdiction The Fifth Circuit has outlined a three-step test for determining whether specific jurisdiction exists: (1)

whether the defendant has minimum contacts with the forum

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state, forum;

purposefully (2) whether

directing

his

activities claim

toward out

the of

plaintiff's

arises and (3)

defendant's

forum-related

activities;

whether

exercising personal jurisdiction would be reasonable and fair. Burger King Corp., 471 U.S. at 474. In order for the Court to exercise jurisdiction over a nonresident Defendants privileges defendant, have of the Court must analyze whether to the thus

purposefully conducting

availed

themselves in

activities

Louisiana,

invoking the benefits and protections of Louisiana laws. Seatrepid Louisiana, 2009 U.S. Dist at 12-13. contracting with a resident of the forum The mere state is

insufficient to establish minimum contacts such that the forum state may exercise personal jurisdiction over the

defendants. Burger King Corp., 471 U.S. at 479.

Rather,

the Fifth Circuit in regards to contract cases has "looked to the place the of contractual of a performance with a to determine is

whether

making to 2009

contract minimum at 14

resident

purposeful Louisiana,

satisfy U.S.

contacts." (citing

Seatrepid v.

Dist

Barnstone

Cogregation Am. Echad, 574 F.2d 286, 288 (5th Cir. 1978); accord St. Martin & Mahoney, APLC v. Diversified Aircraft Holdings, Ltd., 934 F. Supp. 200, 205 (E.D. La. 1996)

(Fallon, J.) ("One of the most pivotal considerations in

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determining whether there has been `purposeful availment' is where the material performance of the contract was

centered."). In this case, all of the material performance was done outside entered contract of in Louisiana. New York. The The in alleged oral of contract the was

performance New York.

alleged was

was

centered

Plaintiff

contractually obligated to provide workers to the two job sites located in New York, and made several trips to New York to satisfy his obligations. (Rec. Doc. No. 15-4 at 3). Defendants' sole obligation was to pay Plaintiff for its services. Accordingly, no part of the contract was

performed in Louisiana. Conversely, Plaintiff contends that work was done both in Louisiana that and the in New design were York. Specifically, were from Plaintiff in sub-

asserts

services ordered

performed

Louisiana;

materials

Louisiana;

contractors were coordinated through Louisiana; bills were issued from Louisiana; in ¶ done to New 14). in and only on-site A supervision to was

performed Opposition,

York.

(Exhibit such by

Plaintiff's and

However, Louisiana of from

preparation are

coordination incidental" contract and

Plaintiff the the New

"merely

performance only

York-centered that

"resulted

coincidence

7

[Plaintiff] Brammer

is

now,

since Inc. Fed.

2005, v.

a

Louisiana Wright 848

resident." Ltd. Cir.

Engineering, 307

East

Mountain (5th

Partnership,

Appx.

845,

2009)(finding that defendant's did not purposefully avail themselves of the benefits of Louisiana Law where the

performance of the contract was centered in another state). Additionally, the fact that Defendants are parties to an alleged oral contract with Plaintiff, now a Louisiana resident, does not give rise to jurisdiction. The Fifth Circuit has continuously held that personal jurisdiction does not exist if the defendant's contacts result from "the mere fortuity that the plaintiff happens to be a resident of the forum." Patterson v. Dietze, Inc., 764 F.2d 1145, 1147 (5th Cir. 1985). The mere factors that Defendants

mailed payments to Louisiana, along with the exchange of email correspondence Ned between are Defendants and to Plaintiff's constitute

principal,

Marshall,

insufficient

purposeful availment. fortuitous jurisdiction. contacts

Such interactions are the type of that cannot support personal

This alleged ongoing business relationship

initially arose from an oral agreement between nonresident principals/parties to perform ultimate services to

properties in New York.

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Because Defendants do not have the requisite minimum contacts with Louisiana necessary to support the exercise of jurisdiction over them, the Court need not extensively address the reasonableness and fairness tier of the due process inquiry. parties We note, however, that it appear from the that most of material and breach evidence in of

submission quality

workmanship,

performance

general

would be found in New York, along with most witnesses. None support benefits a of Defendants' of contacts with Louisiana invoking can the

finding and

purposeful of

activity

protections

Louisiana.

Additionally,

because Defendants' contacts with Louisiana do not rise to the level of specific jurisdiction, no reasonable case can be made that Defendants' contacts can reach the higher

threshold of "continuous and systematic" contacts required for general jurisdiction. Furthermore, even if the Court had jurisdiction, venue would be improper. 1 Accordingly,

IT IS ORDERED that Defendants' Motion to Dismiss for

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American Bankers Life Assurance Co. of Fla. v. Overton, 128 Fed.Appx. 399, 403 (5th Cir.2005)(finding that when related cases are pending,the first-to-file rule instructs the court with the later-filed action to transfer it to the first-filed forum).

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Lack of Personal Jurisdiction (Rec. Doc. No. 5) is GRANTED. New Orleans, Louisiana, this 31st day of July, 2009.

IVAN L.R. LEMELLE UNITED STATES DISTRICT JUDGE

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