Jack W. Harang, APLC v. Alfaro

Filing 14

ORDER & REASONS granting 5 Motion to Dismiss for Lack of Jurisdiction and the plaintiff's claims are dismissed. Signed by Judge Martin L.C. Feldman on 8/7/2013. (caa, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JACK W. HARANG, APLC

CIVIL ACTION

v.

NO. 13-2454

DANIEL V. ALFARO

SECTION "F"
ORDER AND REASONS

Before the Court is Daniel V. Alfaro's motion to dismiss for
lack of personal jurisdiction, improper venue, or defective service
of process.

For the reasons that follow, the motion to dismiss is

GRANTED.
Background
This lawsuit arises from the conversion of legal fees in the
personal injury case of Samuel Gonzalez, et al. V. Verde 5700
International Parkway, L. P., et al, 206th judicial District Court
Cause No. C-3779-10-D, Hidalgo County, Texas.
In the early spring of 2011, Daniel V. Alfaro, a lawyer in
Texas, called Jack W. Harang, a lawyer in Louisiana to ask for his
assistance in the Gonzalez case. Alfaro, Harang, and Newton B.
Schwartz, Sr., another Texas attorney, executed a contingency fee
contract with their client, Samuel Gonzalez. On June 27, 2011,
Harang applied for admission pro hac vice in Texas to appear in
this case.

In the spring of 2013, the Gonzalez case settled for an

amount that generated a total fee of approximately $294,000.00.

1

Samuel and Veronica Gonzalez authorized Alfaro to distribute the
settlement funds in the underlying case. However, Alfaro sent
Harang’s portion of the attorneys’ fees to Schwartz.
On April 24, 2013, Harang sued Alfaro in this Court, alleging
conversion and breach of fiduciary duty. Harang submits that Alfaro
failed to properly distribute Harang’s portion of the attorneys’
fees, which was approximately $98,000.00.
Alfaro

now

seeks

dismissal

based

on

lack

of

personal

jurisdiction, improper venue, or defective service of process.
I.
A.
Rule 12(b)(2) of the Federal Rules of Civil Procedure allows
a

defendant

to

challenge

the

Court’s

exercise

of

personal

jurisdiction over it.
When a nonresident defendant like Alfaro seeks dismissal for
lack of personal jurisdiction under Rule 12(b)(2), the plaintiff
bears the burden of establishing the Court’s jurisdiction over the
defendant, but need only make a prima facie case if the Court rules
See Johnston v. Multidata Sys.

without an evidentiary hearing.

Int’l Corp., 523 F.3d 602, 609 (5th Cir. 2008); see also Luv N’ Care
v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir.), cert. denied, 548
U.S. 904 (2006). The Court is not restricted to pleadings, but may
consider affidavits, interrogatories, depositions, or any other
appropriate method of discovery. Wilson v. Belin, 20 F.3d 644, 648

2

(5th Cir. 1994); see Jobe v. ATR Mktg., Inc., 87 F.3d 751, 752 (5th
Cir. 1996).

"In determining whether a prima facie case exists,

this Court must accept as true [the plaintiffs'] uncontroverted
allegations, and resolve in [their] favor all conflicts between the
[jurisdictional] facts contained in the parties' affidavits and
other documentation."

Pervasive Software, Inc. v. Lexware GMBH &

Co. KG, 688 F.3d 214, 219-20 (5th Cir.

2012)(quoting Freudensprung

v. Offshore Technical Servs., Inc., 379 F.3d 327, 343 (5th Cir.
2004)(alterations in original)(quotation omitted)).
B.
The

Court

may

exercise

personal

jurisdiction

over

nonresident defendant only if two requirements are satisfied:

a
(1)

the forum state’s long-arm statute confers personal jurisdiction;
and (2) the exercise of jurisdiction comports with Due Process.
See Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 270 (5th
Cir. 2006). Because the limits of Louisiana’s long-arm statute are
co-extensive with the limits of constitutional due process, the
two-part inquiry merges into one: whether this Court’s exercise of
jurisdiction over the defendants would offend due process. See La.
R.S. 13:3201(B)(providing that a Louisiana court “may exercise
personal jurisdiction over a nonresident on any basis consistent
with . . . the Constitution of the United States”); Luv N’ Care,
438 F.3d at 469; see also Electrosource, Inc. v. Horizon Battery
Techs., Ltd., 176 F.3d 867, 871 (5th Cir. 1999).

3

“The Due Process Clause protects an individual’s liberty
interest in not being subject to the binding judgments of a forum
with which he has established no meaningful ‘contacts, ties, or
relations.’” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72
(1985)(citing Int’l Shoe Co. v. Washington, 326 U.S. 310, 319
(1945)); Helicopteros Nacionales de Colombia, S.A. v. Hall, 466
U.S. 408, 413-14 (1994)(The Due Process Clause limits the Court’s
power

to

assert

defendant.).

To

personal

jurisdiction

conclude

that

the

over

a

exercise

nonresident
of

personal

jurisdiction comports with Due Process it must be shown that (1)
the defendant has purposefully availed itself of the benefits and
protections of the forum state by establishing “minimum contacts”
with that state; and (2) the exercise of personal jurisdiction does
not offend “traditional notions of fair play and substantial
justice.” Choice Healthcare, Inc. v. Kaiser Foundation Health Plan
of Colorado, 615 F.3d 364, 367 (5th Cir. 2010)(citations omitted).
“The ‘minimum contacts’ inquiry is fact intensive and no one
element

is

decisive;

rather

the

touchstone

is

whether

the

defendant’s conduct shows that it ‘reasonably anticipates being
haled into court’” in the forum state. McFadin v. Gerber, 587 F.3d
753, 759 (5th Cir. 2009), cert. denied, 131 S.Ct. 68 (2010).
The

minimum

contacts

inquiry

takes

two

forms,

and

the

constitutional limitations on the exercise of personal jurisdiction
differ depending on whether a court is asked to exercise general or

4

specific jurisdiction over the defendant. Choice Healthcare, Inc.,
615 F.3d at 368 (“The ‘minimum contacts’ prong of the two-part test
may be further subdivided into contacts that give rise to ‘general’
personal jurisdiction and ‘specific’ personal jurisdiction.”).
Regardless of whether the lawsuit is related to the defendant’s
contacts with the forum, courts may exercise general jurisdiction
over any lawsuit brought against a defendant that has substantial,
continuous, and systematic general contacts with the forum state.
See Seiferth, 472 F.3d at 271 (citing Helicopteros Nactionales 466
at 413-14); Moncrief Oil Int’l Inc. v. OAO Gazprom, 481 F.3d 309,
312 (5th Cir. 2007)(“Random, fortuitous, or attenuated contacts are
not sufficient to establish jurisdiction.”). “If”, on the other
hand, “a defendant has relatively few contacts, a court may still
exercise specific jurisdiction ‘in a suit arising out of or related
to the defendant’s contacts with the forum.’”

Id.

General

jurisdiction focuses on incidents of continuous activity within the
disputed forum; specific jurisdiction is more constrained by virtue
of a very limited nexus with the forum.
If a plaintiff demonstrates minimum contacts between the
defendant and the forum state, then the Court may exercise personal
jurisdiction unless the defendant makes a “compelling case” that
the exercise of jurisdiction is unfair or unreasonable.

Burger

King Corp. V. Rudzewicz, 471 U.S. 462, 477 (1985); Wien Air Alaska,
Inc. v. Brandt, 195 F.3d 208, 215 (5th Cir. 1999).

5

In determining

whether the exercise of jurisdiction is fair and reasonable, the
Court considers certain fairness factors: (1) the burden on the
non-resident defendant; (2) the interests of the forum state; (3)
the plaintiff’s interest in obtaining relief; (4) the interstate
judicial system’s interest in the most efficient resolution of
controversies; and (5) the shared interests of the several states
in furthering fundamental social policies.

See Nuovo Pignone v.

Storman Asia M/V, 310 F.3d 374, 382 (5th Cir. 2002)(citation
omitted).
The defendant submits that the record establishes that he
lacks sufficient contacts with Louisiana for the Court to assert
personal jurisdiction over him.
II.
A.
The Court considers the plaintiff’s contention that juridical
factors support the exercise of specific jurisdiction over the
defendant.1 “In contrast to general, all-purpose jurisdiction,
specific

jurisdiction

deriving

from,

or

is

confined

connected

with,

to

adjudication

the

very

of

‘issues

controversy

that

establishes jurisdiction.’” Goodyear Dunlop Tires Operations, S.A.
v. Brown, 131 S.Ct. 2846, 2851 (2011).

The Fifth Circuit has

articulated a three-step specific personal jurisdiction inquiry:
(1)

Did the plaintiff’s cause of action arise

1

The plaintiff is not contending that the Court may
exercise general jurisdiction over the defendant.
6

out of or result from the defendant’s
forum-related contacts?
(2)

Did the defendant purposefully direct its
activities toward the forum state or
purposefully
avail
itself
of
the
privilege
of
conducting
activities
therein; and

(3)

Would
the
exercise
jurisdiction over the
reasonable and fair?

of
personal
defendant be

Pervasive Software, Inc. v. Lexware GMBH & Co. KG, 688 F.3d 214,
227 (5th Cir.

2012).2

“[T]he defendant’s contacts [with the forum]

must be more than ‘random, fortuitous, or attenuated, or of the
unilateral activity of another party or third person,’”; however,
the Fifth Circuit observes that, unlike general jurisdiction,
“specific jurisdiction may exist where there are only isolated or
sporadic contacts’ ...so long as the plaintiff’s claim relates to
or arises out of those contacts.”

ITL, Int’l, Inc. v. Constenla,

S.A., 669 F.3d 493, 498-99 (5th Cir. 2012)(citations omitted).
Specific personal jurisdiction is claim-specific; that is, if
a plaintiff’s claims relate to different forum contacts of the
defendant, then specific jurisdiction must be established for each
claim. Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 27475 (5th Cir. 2006); McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir.
2009), cert. denied, 131 S.Ct. 68 (2010).

2

If the plaintiff establishes (1) and (2), then
the
burden shifts to the defendant, who must show that it would be
unfair or unreasonable to exercise jurisdiction. Id.
7

It is well settled that a single act directed toward a forum
state that gives rise to a cause of action can support a finding of
minimum contacts as long as the defendant reasonably anticipates
being haled into a court in the forum state. ICEE Distributors Inc.
V. J&J Snack Foods Corp., 325 F.3d 586, 591 (5th Cir. 2003) (citing
Stripling v. Jordan Prod. Co., LLC, 234 F.3d 863, 871 (5th Cir.
2000)). In addition, “[w]hen the actual content of communications
with a forum gives rise to intentional tort causes of action, this
alone constitutes purposeful availment.” Wien Air Alaska, Inc, 195
F.3d at 213.
For example, if a defendant makes false statements during a
phone call to the forum, the purposeful availment inquiry is
satisfied. See Lewis v. Fresne, 252 F.3d 352, 359 (5th Cir. 2001).
In Lewis, a defendant testified that his partner, Rosenfeld, had
failed to correct allegedly false statements made during a phone
call to the plaintiff. Id. at 358. The Fifth Circuit reversed the
district

court’s

dismissal

for

lack

of

personal

jurisdiction

finding that the defendant purposefully availed himself to the
forum state. Id. at 359. The Fifth circuit reasoned that the
‘actual content’ of the communications between Rosenfeld and the
plaintiff

showed

a

purposeful

availment

of

the

benefits

and

protections of the forum state since it gave rise to an intentional
tort. Id. (quoting

Wien Air Alaska, Inc, 195 F.3d at 213).

8

B.
Harang alleges that Alfaro converted legal fees owed to Harang
by transferring Harang’s share of the attorneys’ fees from the
Gonzalez case to Schwartz, the attorney involved in the underlying
case. Harang alleges that the Court has personal jurisdiction over
Alfaro because Alfaro has transacted business in this District, and
this

claim

arises

out

of

his

contacts

and

business

in

this

District. The Court disagrees. The three-step specific personal
jurisdiction inquiry articulated by the Fifth Circuit illustrates
that this Court lacks jurisdiction over Alfaro.
Harang brings conversion and breach of fiduciary duty claims
based on not getting compensated for working on the Gonzalez case.
These claims do not directly arise out of Alfaro’s contacts with
Louisiana. In the early spring of 2011, Alfaro contacted Harang,
who apparently was in his Louisiana law office. In his affidavit,
Harang claims that Alfaro asked if Harang would be interested in
assisting Alfaro and Schwartz in the Gonzalez case in Texas. The
contingency fee contract, which forms the basis of the conversion
and breach of fiduciary duty claims, was executed later, after
Harang’s discussions and review of the case. This initial contact
ultimately led to an agreement to share fees and work on a case,
but did not itself establish the contractual duties that Alfaro
allegedly

breached.

The

purposeful

availment

inquiry

further

supports this finding that Alfaro did not have sufficient contacts

9

to establish specific jurisdiction.
In Lewis, the Fifth Circuit highlighted that a single phone
call can satisfy the purposeful availment inquiry as long as the
‘actual content’ of the communications gives rise to intentional
tort causes of action. 252 F.3d at 359. The ‘actual content’ of
Alfaro’s initial phone call to Harang in Louisiana, as discussed
above, merely involved Alfaro asking for Harang for his assistance.
No intentional tort is alleged to have been committed during this
phone call. Unlike Lewis, where the claims specifically arose out
of the content of the defendant’s phone call, the basis for
Alfaro’s alleged conversion and fiduciary duty occurred after the
initial

phone

conversation.

Harang’s

claims

are

based

on

a

contingency fee contract, which suggests that the money at issue
was not available at the time of the initial phone contact. After
all, Harang’s claims are based on what Alfaro did with the fee, not
Alfaro’s conduct in asking for help on the underlying case. Harang
has not shown that Alfaro purposefully directed his conduct, in
failing to remit Harang’s fee, toward Louisiana.
In his opposition, Harang contends that Alfaro knew that the
plaintiff

was

a

Louisiana

Professional

Law

Corporation

and,

therefore, Alfaro knew that his actions in converting the funds
would cause harm in the State of Louisiana. But, “the plaintiff’s
residence in the forum, and suffering of harm there, will not alone
support [personal] jurisdiction.” Mullins v. TestAmerica, Inc., 564

10

F.3d 386, 401 (5th Cir. 2009) (citing Revell v. Lidov, 317 F.3d 467,
473 (5th Cir. 2002). Specific jurisdiction requires specific acts
toward the forum and foreseeable injury alone is not sufficient.
See e.g., Wien Air Alaska, Inc., 195 F.3d at 212; Jobe v. ATR
Marketing Inc., 87 F.3d 751, 753-54 (5th Cir. 1996); Southmark Corp.
v. Life Investors, Inc., 851 F.2d 763 (5th Cir. 1988). Where a nonresident defendant acts outside of the forum in a manner that
causes injury in the forum, the Court may apply the “effects test.”
See Calder v. Jones, 465 U.S. 783, 789 (1984). Under the “effects
test,” a court may exercise specific jurisdiction over a nonresident who has “expressly aimed” his tortious conduct at the
forum state knowing that the injury would be felt there. Id. But
the effects test is limited.
Harang’s location and suffering of harm in Louisiana cannot
independently support personal jurisdiction. Harang’s contact with
the forum state is not relevant to the purposeful availment
inquiry.

The

fortuity

of

the

plaintiff’s

residence

does

not

establish that Alfaro purposefully availed himself of the benefits
and protections of Louisiana.

Harang also submits the medical

correspondence for the Gonzalez case, typed on Harang’s letterhead,
as an example of Alfaro’s contacts with the forum state. The
correspondence,

however,

establishes

Harang’s

contacts

with

Louisiana but not Alfaro’s.
Consider Holt Oil & Gas Corp. v. Harvey, 801 F.2d 773 (5th Cir.

11

1983), cert. denied, 481 U.S. 1015 (1987), in which a Texas oil and
gas corporation sued an Oklahoma oil and gas investor to recover
its unpaid share of operating expenses for an oil and gas drilling
venture.

Id. (communication by defendant with plaintiff in forum

state in course or contract negotiation and performance motivated
by fortuity by plaintiff's location there does not support exercise
of specific jurisdiction).

The Fifth Circuit has instructed that

"merely

a

contracting

insufficient

to

jurisdiction."

with

subject

resident
the

Id. at 778.

of

the

nonresident

forum
to

state

the

is

forum's

Indeed, in Holt, the Fifth Circuit

observed:
Although the contractual relationship between Holt and
Harvey may have been cemented in Texas, the significance
of this fact is diminished by the contract provision
specifying
that
Oklahoma
law
would
govern
the
agreement.... Our conclusion is further bolstered by the
fact that performance of the contract was centered in
Oklahoma, not Texas....
Finally, the exchange of
communications between Texas and Oklahoma in the course
of developing and carrying out the contract was in itself
also insufficient to constitute purposeful availment of
the benefits and protections of Texas law.
These
communications to Texas rested on nothing but 'the mere
fortuity that [Holt] happens to be a resident of the
forum.
Id.

These same circumstances are present here. The contractual

relationship

may

have

begun

when

Alfaro

contacted

Harang

in

Louisiana. Nevertheless, the contingency fee contract specifies
that Texas law would govern the agreement. Like Holt, performance
of the contract was centered in the defendant’s state, which in
this case was Texas. Thus, the communications to Louisiana rested
12

on the mere fortuity that Harang happens to be a resident of the
forum. The specific jurisdictional inquiry demands focus on the
defendant’s contacts with the forum, not the plaintiff’s.
Ultimately, Alfaro is a Texas attorney, who was working on a
Texas case in Texas. The fact that Harang is a Louisiana-licensed
attorney, who worked together with two Texas attorneys on a Texas
case, does not establish specific jurisdiction over Alfaro in
Louisiana. Harang fails to show that Alfaro purposefully availed
himself of the benefits and protections of Louisiana; thus, he
could not have reasonably anticipated being haled into this Court.
Accordingly, the Court lacks specific jurisdiction over Alfaro.3
Accordingly, the defendant's motion to dismiss for lack of

3

Harang also contends that Alfaro waived his personal
jurisdiction defense by making a general appearance when Alfaro
allegedly invoked the jurisdiction of the Court to file a
Conditional Motion for Sanctions. (The motion was denied because
Alfaro failed to comply with the procedure mandated by Rule
11(c)(2) of the Federal Rules of Civil Procedure.) The Fifth
Circuit articulated that the “Federal Rules of Civil Procedure
abolished the technical distinction between general and special
appearances.” Product Promotions, Inc. V. Cousteau, 495 F.2d 483,
490 (5th Cir. 1974) (overruled on other grounds as recognized in
Hester Int’l Corp. V. Fed. Republic of Nigeria, 879 F.2d 170, 181
(5th Cir. 1989)). However, “[a]n appearance may ... arise by
implication from a defendant’s seeking, taking, or agreeing to some
step or proceeding in the cause beneficial to himself or
detrimental to plaintiff other than one contesting only the
jurisdiction or by reason of some act or proceeding recognizing the
case as in court.” Cactus Pipe & Supply Co., Inc. V. M/V
Montmartre, 756 F.2d 1103, 1108 (5th Cir. 1985) (citing 6 C.J.S.
Appearances § 18 at 22 (1975)). An appearance may result from the
filing of an answer without raising juridical defects. Id. Here, it
is clear that Alfaro’s motion for sanctions was conditional upon
his jurisdictional challenge. Alfaro did not waive his personal
jurisdiction defense.
13

personal jurisdiction is GRANTED and the plaintiff's claims are
dismissed.4

New Orleans, Louisiana, August 7, 2013

______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

4

Because the Court has determined that it lacks personal
jurisdiction over the defendants, it need not reach the defendant's
alternative requests that the Court dismiss the plaintiff’s claims
for improper venue and/or defects in service.
14