N314MG, LLC v. Kitchens et al

Filing 21

ORDER GRANTING 17 Defendants' MOTION to Set Aside Clerk's Entry of Default and Dismiss Case, and DENYING, as Moot, 14 Plaintiff's MOTION for Default Judgment. Signed by District Judge Terrence G. Berg. (AChu)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

2:17-CV-13177-TGB

N314MG, LLC,
Plaintiff,
vs.
BENJAMIN D. KITCHENS,
LISA KITCHENS,

ORDER GRANTING
DEFENDANTS’ MOTION TO
SET ASIDE CLERK’S ENTRY OF
DEFAULT AND DISMISS CASE
(DKT. 17) AND DENYING, AS
MOOT, PLAINTIFF’S MOTION
FOR DEFAULT JUDGMENT
(DKT. 14)

Defendants.

This case concerns a mechanic’s lien that had been placed against
the title to an aircraft in Florida. Plaintiff N314MG, LLC is a Michigan
limited liability company and the registered owner of a 1978 Cessna 340A
airplane (the “Plane”) (Dkt. 1 ¶ 1, Compl.). According to the Federal Aviation Administration, Plaintiff resides in Au Gres, Michigan, Arenac
County.1

1

See http://registry.faa.gov/aircraftinquiry/ (last visited June 13, 2018)

Defendants Benjamin and Lisa Kitchens are husband and wife.
Benjamin Kitchens is an aircraft mechanic from Florida, conducting business as “CPR Aviation Window Repairs” (Dkt. 1, Ex. 1, Florida Fictitious
Name Registration, Pg IDs 9-11). It is not entirely clear why Defendant
Lisa Kitchens has been named as a Defendant in this lawsuit. Defendant
Benjamin Kitchens claims that he performed $41,245.94 in repair work
in Florida on the Plane when it was owned by a previous owner – Tilgent
Marine, LLC, a Florida limited liability company.2 Defendant Benjamin
Kitchens claims that he was never paid for this work, so he filed a lien on
the title of the Plane in Florida (Dkt. 1, Ex. 2, Lien, Pg ID 13-15).
On September 28, 2017, Plaintiff sued Defendants in this Court to
discharge the lien from the Plane, and for money damages for slander of
title (Dkt. 1).

Before that happened, however, Defendant Benjamin

Tilgent Marine was owned by John Scholtz, the owner and operator of Innovative
Payroll Services, a payroll processing company. While unrelated to the merits of this
case, the Court notes that media reports indicate that Scholtz pleaded guilty to embezzlement in the United States District Court for the District of New Jersey, and
was sentenced to five and a half years in prison. As part of his plea, Scholtz admitted
that from February 2012 to January 2016, he withdrew or had others withdraw funds
from client accounts. He then used the funds to pay operating expenses and his personal expenses, including a deposit on a $1.8 million house in Florida, credit card
payments, investments and payments for cars, boats and airplanes. One of Scholtz’s
airplanes appears to be the Plane at issue in this case.
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Kitchens sued Plaintiff in the Pinellas County Circuit Court in Florida
(Case No. 17-005666-CI). The Florida lawsuit was filed on September 15,
2018, and sought to foreclose (i.e., enforce) the lien on the Plane. The
named defendants in the Florida state lawsuit included Plaintiff, Tilgent
Marine, LLC, and the Plane.3 That litigation is ongoing (Dkt. 20).
Adding to the procedural complexity of this case, Defendants filed
for Chapter 7 Bankruptcy in the Middle District of Florida on December
8, 2017. Plaintiff in this case sought leave from the Bankruptcy Court in
Florida to lift the automatic stay. On February 13, 2018, the Bankruptcy
Court granted Plaintiff’s motion, but only permitted Plaintiff to attempt
to clear the lien from the Plane, and barred Plaintiff’s claim for money
damages against Defendants (Dkt. 9, Pg IDs 50-51). Thus, this litigation
was back on track, but Defendants never filed a responsive pleading to
the Complaint.4 Accordingly, Plaintiff filed requests for clerk’s entry of
default against Defendants on February 21, 2018 (eight days after the

The Florida lawsuit also involved a lien on a second airplane, not at issue in the
present case.

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Defendants were served with the Summons and Complaint on December 1, 2017
(Lisa Kitchens) and on December 4, 2017 (Benjamin Kitchens) (Dkt. 5).

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Bankruptcy Court lifted the stay) (Dkt. 11), which the clerk promptly
granted (Dkts. 12, 13).
Before the Court are Plaintiff’s motion for entry of a default judgment against Defendants (Dkt. 14) and Defendants’ motion to vacate the
clerk’s entry of default and motion to dismiss this case for lack of subject
matter jurisdiction, lack of personal jurisdiction, and Colorado River abstention (Dkt. 17). The Court has concluded that oral argument would
not be beneficial to the resolution of either of the pending motions. Accordingly, both motions will be decided solely on the basis of the parties’
written submissions. See E.D. Mich. LR 7.1(f).
For the reasons set forth below, Defendants’ motion to dismiss (Dkt.
17) will be GRANTED, and Plaintiff’s motion for default judgment will
be DENIED AS MOOT. Consequently, this case will be DISMISSED
WITHOUT PREJUDICE.
ANALYSIS
As noted above, Defendants raise three challenges to this Court’s
ability to preside over this case – (1) lack of subject matter jurisdiction;
(2) lack of personal jurisdiction; and (3) that Colorado River abstention
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bars Plaintiff’s claims. The Court finds Defendant’s second and third arguments are well-taken, and will dismiss the case on those grounds. As
such, the Court does not consider the merits of Defendants’ subject matter jurisdiction argument.
A. Personal Jurisdiction
Personal jurisdiction over a defendant is a threshold issue that
must be present to support any subsequent order of the district court,
including entry of a default judgment. See Kroger Co. v. Malease Foods
Corp., 437 F.3d 506, 510 (6th Cir. 2006). Subject matter jurisdiction in
this case is based upon diversity. To determine whether personal jurisdiction exists over an out-of-state defendant, the court must find: (1)
whether the forum state’s long-arm statute authorizes jurisdiction; and
(2) if so, whether exercising that jurisdiction comports with constitutional
due process. See Air Products & Controls, Inc. v. Safetech Int'l, Inc., 503
F.3d 544, 550 (6th Cir. 2007).
The relevant question under the Due Process Clause is whether the
nonresident defendant possessed such “minimum contacts” with the forum state that exercising jurisdiction would comport with “traditional
notions of fair play and substantial justice.” SFS Check, LLC v. First
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Bank of Delaware, 774 F.3d 351, 356 (6th Cir. 2014) (internal quotations
omitted). The Sixth Circuit has its own three-pronged test for assessing
the existence of “minimum contacts”:
First, the defendant must purposefully avail himself of the privilege
of acting in the forum state or causing a consequence in the forum
state. Second, the cause of action must arise from the defendant’s
activities there. Finally, the acts of the defendant or consequences
caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over
the defendant reasonable. Id.
“To survive a motion to dismiss for lack of personal jurisdiction under
Fed. R. Civ. P. 12(b)(2), a plaintiff must prove that jurisdiction is proper
over each defendant individually.” Id. In deciding such a motion, a court
may decide the motion “on the basis of affidavits alone; or it may permit
discovery in aid of the motion; or it may conduct an evidentiary hearing
on the merits of the motion.” Serras v. First Tenn., Bank Nat'l Ass'n, 875
F.2d 1212, 1214 (6th Cir. 1989) (internal quotation marks omitted).
Here, no party has requested further discovery or an evidentiary hearing,
and this Court finds that neither is necessary for it to determine the issue

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at hand. Thus, the Court will decide Defendants’ motion on the basis of
affidavits alone.5
The plaintiff bears the burden of establishing the existence of personal jurisdiction. Id. However, as in the present case, where a Rule
12(b)(2) motion is decided solely on written submissions and affidavits,
“the burden of the plaintiff is relatively slight,” Am. Greetings Corp. v.
Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988) (internal quotation marks
omitted), and “the plaintiff must make only a prima facie showing that
personal jurisdiction exists in order to defeat dismissal.” Theunissen v.
Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991).
Under the prima facie standard, although the plaintiff may not rest
on pleadings alone in the face of the movant’s evidence, the Court must
“consider the pleadings and affidavits in the light most favorable to the
plaintiff.” Serras v. First Tennessee Bank Nat. Ass'n, 875 F.2d 1212, 1214
(6th Cir. 1989). At the same time, however, a plaintiff’s pleadings must
still “have established with reasonable particularity those specific facts

Defendants’ motion to dismiss was filed as a “verified” motion, and Defendants individually signed declarations attesting to the truth of the statements contained in
their motion. As such, Defendants’ verified motion serves as an affidavit, or a sworn
statement.

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that support jurisdiction.” Palnik v. Westlake Entm't, Inc., 344 Fed.
App’x. 249, 251 (6th Cir. 2009).
Plaintiff argues that personal jurisdiction over Defendants exists
under Michigan’s “long-arm” statute, specifically Mich. Comp. Laws §
600.705(2). This provision provides for personal jurisdiction over nonresidents for claims “arising out of” acts that include “doing or causing an
act to be done, or consequences to occur, in the state resulting in an action
for tort.” Id. The primary evidence relied upon by Plaintiff to establish
personal jurisdiction over Defendant Benjamin Kitchens is a series of
text messages sent between Mr. Kitchens and Plaintiff’s sole member,
Carl Jennings (Dkt. 19, Exs. 1-2, 4-10, Text Messages). These text messages concern Defendant Kitchens attempts to enforce the lien, and also
offers of settlement. Plaintiff also points to a fax transmission (sending
a copy of the lien) from Mr. Kitchens to Mr. Jennings on April 13, 2017
(Dkt. 19, Ex 3). These communications, standing alone, are simply not
enough to subject Defendants to the personal jurisdiction of this Court.
All of the operative events in this case – the repair work on the Plane,
and the recording of the lien – occurred in Florida. The injury complained
of by Plaintiff – the recording of an allegedly slanderous lien – happened
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in Florida. The text messages and the fax, themselves, are simply not
the alleged root cause of Plaintiff’s injury. In SFS Check, the Sixth Circuit concluded that “[t]he injury that preceded the phone calls could not
have arisen from the phone calls.” SFS Check, LLC v. First Bank of Delaware, 774 F.3d 351, 357 (6th Cir. 2014). Here, we don’t have phone calls,
we have text messages. But, the result is the same. Again, Plaintiff’s
claimed injury arose from the recording of the lien on the Plane, which
indisputably happened in Florida. Plaintiff alleges no injury arising from
the fact that Defendant Benjamin Kitchens sent text messages and a fax
to Michigan. The messages therefore do not establish that Kitchens purposefully availed himself of Michigan’s jurisdiction.6 The record before
the Court demonstrates that there is no personal jurisdiction over Defendants in this case. Consequently, the Court will dismiss Plaintiff’s
Complaint without prejudice to Plaintiff’s ability to re-file this action in
a court that has personal jurisdiction over Defendants. Or, Plaintiff may
seek a discharge of the lien in response to the lawsuit already pending in

It should be noted that Plaintiff does not advance any argument as to how Defendant Lisa Kitchens – Benjamin’s wife – purposefully availed herself of acting in Michigan.
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Florida. Which brings us to the second reason why Plaintiff’s Complaint
must be dismissed.
B. Colorado River Abstention
Defendants also argue that this Court should dismiss Plaintiff’s
Complaint based on the Colorado River abstention doctrine. The Court
begins its analysis of those arguments by noting the Supreme Court’s and
Sixth Circuit’s warning that “abstention is an ‘extraordinary and narrow
exception to the duty of a District Court to adjudicate a controversy
properly before it,’” and that “‘only the clearest of justifications’ will warrant abstention.” Rouse v. DaimlerChrysler Corp., 300 F.3d 711, 715 (6th
Cir. 2002) (quoting Colorado River Water Conservation Dist. v. United
States, 424 U.S. 800, 813-819, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) ). The
Court further notes that because they are contesting jurisdiction, Defendants bear the burden of proving that abstention is proper. Answers in
Genesis of Ky., Inc. v. Creation Ministries Int'l, Ltd., 556 F.3d 459, 467
(6th Cir. 2009).
The abstention doctrine identified in Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d

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483 (1976) (“Colorado River”), permits a federal court to abstain from exercising jurisdiction over a matter “in deference to a parallel state-court
proceeding if abstention will best promote the values of efficient dispute
resolution and judicial economy.” Gentry v. Wayne Cty., No. 10-cv-11714,
2010 WL 4822749, at *2 (E.D. Mich. Nov. 22, 2010) (citing Colorado
River, 424 U.S. at 817-18, 96 S.Ct. 1236; Romine v. Compuserve Corp.,
160 F.3d 337, 339 (6th Cir. 1998)). The Sixth Circuit has identified two
prerequisites for abstention under this doctrine: First, the court must
determine that the concurrent state and federal actions are parallel. Romine, 160 F.3d at 339-40. Second, the court must consider the factors
outlined by the Colorado River Court: (i) whether the state court has assumed jurisdiction over any res or property; (ii) whether the federal forum is less convenient to the parties; (iii) avoidance of piecemeal litigation; and (iv) the order in which jurisdiction was obtained. Romine, 160
F.3d at 340-41 (citing Colorado River, 424 U.S. at 818-19, 96 S.Ct. 1236).
In this case, all factors but one point favorably toward the Court’s
abstaining from hearing this case. First, both this suit and the Florida
suit involve the propriety of a mechanic’s lien on the Plane which arose
in the other forum. Thus, the suits are parallel. Second, the Florida state
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court has assumed jurisdiction over the res of the airplane because the
Florida suit is against the Plane itself as a named Defendant. As for the
convenience of the parties, this factor is neutral because, while it is undoubtedly more convenient for Plaintiff to litigate at home in Michigan,
it is also more convenient for Defendants to litigate at home in Florida.
The need to avoid piecemeal litigation counsels toward dismissal because
maintaining this suit would allow two separate courts to preside over the
same controversy, running the risk of inconsistent results. Finally, the
order in which jurisdiction was obtained gives priority to the Florida lawsuit because it was filed first. All of the Colorado River factors militate
in favor of abstention with the exception of the convenience of the parties,
and the Court gives little weight to that factor because it is neutral.
Consequently, the Court finds that it should abstain from hearing
this lawsuit, in favor of the parties’ litigating this matter in the Florida
courts, where the issue was initially joined.

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CONCLUSION
For the reasons set forth above, Defendants’ motion to dismiss (Dkt.
17) is GRANTED, and Plaintiff’s motion for default judgment is DENIED AS MOOT. Consequently, this case will be DISMISSED WITHOUT PREJUDICE.
SO ORDERED.
BY THE COURT:
s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE
Dated: June 25, 2018

Certificate of Service
I hereby certify that this Order was electronically submitted on
June 25, 2018, using the CM/ECF system, which will send notification to
each party.
s/A. Chubb
Case Manager

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