NALPAC, LTD. v. Flynt

Filing 8

OPINION and ORDER Granting Defendant Jimmy Flynt's 3 Motion to Dismiss. Signed by District Judge Linda V. Parker. (RLou)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
NALPAC, LTD.,
Plaintiff,
v.

Civil Case No. 16-11217
Honorable Linda V. Parker

HUSTLER CINCINNATI, INC. and
JIMMY FLYNT,
Defendants.
______________________________/
OPINION AND ORDER GRANTING DEFENDANT JIMMY FLYNT’S
MOTION TO DISMISS
This is a breach of contract action arising from the alleged failure of
Defendants Hustler Cincinnati, Inc. (“Hustler”) and Jimmy Flynt (“Flynt”) to pay
Plaintiff Nalpac, Ltd. (“Nalpac”) for certain goods. Presently before the Court is
Flynt’s motion to dismiss for lack of personal jurisdiction, filed pursuant to Federal
Rule of Civil Procedure 12(b)(2) on April 8, 2016. (ECF No. 3.) The motion has
been fully briefed. (ECF Nos. 5, 7.) Finding the facts and legal arguments
sufficiently presented in the parties’ briefs, the Court is dispensing with oral argument
pursuant to Eastern District of Michigan Local Rule 7.1(f). For the reasons that
follow, the Court is granting Flynt’s motion.

Background
Nalpac is a Michigan corporation, with its principal place of business in
Ferndale, Michigan. (Notice of Removal ¶ 3, ECF No. 1; Compl. ¶ 1, ECF No. 1-1.)
Hustler is an Ohio corporation, with its principal place of business in Cincinnati,
Ohio. (Notice of Removal ¶ 3; Compl. ¶ 2.) Flynt is a citizen of Kentucky. (Notice
of Removal ¶ 3.)
In the Complaint, Nalpac alleges that Hustler and Flynt applied for and
received a credit line to obtain goods from Nalpac. (Compl. ¶ 7.) The credit
application, dated March 1, 2010, is signed by Flynt as “owner” of Hustler. (Compl.,
Ex. A.) Nalpac claims that Hustler and Flynt thereafter ordered goods, but failed to
pay the principal sum due of $52,186.75. (Id. ¶¶ 8-9, 11.) Pursuant to the terms of
the credit application, Nalpac also claims interest on that amount at a rate of 18% per
annum.
On February 17, 2016, Nalpac initiated this lawsuit in Michigan state court to
collect the unpaid amount. (ECF No. 1-1.) Flynt removed the action to federal court
based on diversity jurisdiction on April 4, 2016. (ECF No. 1.)
Applicable Standard
The plaintiff bears the burden of establishing the existence of personal
jurisdiction. Air Prods. & Controls, Inc. v. Safetech Int’l, Inc., 503 F.3d 544, 549 (6th
Cir. 2007) (citing Serras v. First Tenn. Bank Nat’l Ass’n, 875 F.2d 1212, 1214 (6th
Cir. 1989)). The district court may address a Rule 12(b)(2) motion on the parties’

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submissions or permit limited discovery and hold an evidentiary hearing. Id. Where,
as here, the court does not conduct an evidentiary hearing and relies only on written
submissions and affidavits to resolve the motion, “ ‘the plaintiff need only make a
prima facie showing of jurisdiction. In this situation, [the court] will not consider
facts proffered by the defendant that conflict with those offered by the plaintiff, and
[it] will construe the facts in a light most favorable to the nonmoving party.’ ” Indah
v. SEC, 661 F.3d 914, 920 (6th Cir. 2011) (quoting Bird v. Parsons, 289 F.3d 865,
871 (6th Cir. 2002)). Additionally, in this situation, the burden on the plaintiff is
“relatively slight.” Air Prods. & Controls, 503 F.3d at 549 (citing Am. Greetings
Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988)).
Law & Analysis
Federal courts may exercise personal jurisdiction in diversity cases only if such
jurisdiction is (1) authorized by the law of the state in which the court sits; and (2) is
consistent with the Due Process Clause of the Fourteenth Amendment. Youn v. Track,
Inc., 324 F.3d 409, 417 (6th Cir. 2003); see also Calphalon Corp. v. Rowlette, 228
F.3d 718, 721 (6th Cir. 2000) (“The exercise of personal jurisdiction is valid only if it
meets both the state long-arm statute and constitutional due process requirements.”).
When the state’s long-arm statute has been interpreted to be “coterminous with the
limits on personal jurisdiction imposed by the due process clause[,]” the two inquiries
merge and the court need only determine whether the assertion of personal jurisdiction
comports with due process. Intera Corp. v. Henderson, 428 F.3d 605, 616 (6th Cir.

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2005) (internal quotation marks and citations omitted). “Under Michigan’s long-arm
statute, the state’s jurisdiction extends to the limits imposed by federal constitutional
due process requirements and thus, the two questions become one. Mich. Coalition of
Radioactive Material Users v. Griepentrog, 954 F.2d 1174, 1176 (6th Cir. 1992)
(citing Chandler v. Barclays Bank PLC, 898 F.2d 1148, 1150 (6th Cir. 1990))
“Due process requires that a defendant have ‘minimum contacts . . . with the
forum State . . . such that he should reasonably anticipate being haled into court
there.’ ” Schneider v. Hardesty, 669 F.3d 693, 701 (6th Cir. 2012) (quoting WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980)). This requirement
ensures that the exercise of jurisdiction does not “offend traditional notions of fair
play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945);
Neal v. Jannsen, 270 F.3d 328, 331 (6th Cir. 2001). “Depending on the type of
minimum contacts in a case, personal jurisdiction can either be specific or general.”
Air Products & Controls, 503 F.3d at 549-50 (citing Reynolds v. Int’l Amateur
Athletic Fed’n, 23 F.3d 1110, 1116 (6th Cir. 1994)).
General jurisdiction requires the defendant to have “continuous, substantial,
and systematic” contacts with the forum State. Daimler AG v. Bauman, -- U.S. --, 134
S. Ct. 746, 769 (2014). As the Supreme Court has articulated, the defendant’s
“affiliations with the State [must be] so ‘continuous and systematic’ as to render [the
defendant] essentially at home in the forum State.” Goodyear Dunlop Tires
Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). Contacts in the forum resulting

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from the “unilateral activity” of another party or person are insufficient to support the
exercise of general personal jurisdiction over a defendant. Burger King Corp. v.
Rudzewicz, 471 US. 462, 475 (1985) (“The purposeful availment requirement ensures
that a defendant will not be haled into a jurisdiction solely as a result of random,
fortuitous, or attenuated contacts, or of the unilateral activity of another party or a
third person.”).
“ ‘[S]pecific jurisdiction is confined to adjudication of issues deriving from, or
connected with, the very controversy that establishes jurisdiction.’ ” Indah, 661 F.3d
at 920 (quoting Goodyear, 564 U.S. at 919). In other words, “[w]hen the cause of
action at issue ‘arises out of or relates to’ [the defendant’s] contacts [with the forum],
a court may properly assert personal jurisdiction, even if those contacts are ‘isolated
and sporadic.’ ” Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F3d 1355,
1359 (Fed. Cir. 1998) (quoting Burger King, 471 U.S. at 472-73). The Sixth Circuit
has identified three requirements which must be satisfied to exercise specific
jurisdiction:
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.

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Beydoun v. Wataniya Rest. Holding, Q.S.C., 768 F.3d 499, 505 (6th Cir. 2014)
(quoting Southern Machine Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir.
1968)).
Nalpac does not argue that Flynt has sufficient contacts with Michigan to
support general jurisdiction over him. (See Resp. Br., ECF No. 5.) Relying on the
credit application Flynt signed, however, Nalpac contends that Flynt is subject to
specific jurisdiction. (Id.) Nalpac specifically relies on the following statement above
Flynt’s signature on the application
I hereby guarantee the timely payment of all invoices billed
to our account … I agreed to pay a finance charge of 1%
per month on all past due amounts and to pay any and all
past due amounts and to pay any and all collection costs,
legal fees, and any other cost associated with the collection
of our account.
(See Resp., Ex. A, ECF No. 5 at Pg ID 125, capitalization removed.) Nalpac contends
that this constitutes Flynt’s personal guarantee to pay the amount owed and sought in
this lawsuit.
Under Michigan law, however, Flynt’s signature on the application as owner of
Hustler is not a personal guarantee. Lexon Ins. Co. v. Naser, 781 F.3d 335, 340-41
(6th Cir. 2015); Livonia Bldg. Materials Co. v. Harrison Constr. Co., 742 N.W.2d
140, 146 (Mich. Ct. App. 2007). “As a general rule, an individual stockholder or
officer is not liable for his corporation’s engagements unless he signs individually,
and where individual responsibility is demanded the nearly universal practice is that

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the officer signs twice-- once as an officer and again as an individual.” Lexon Ins.,
781 F.3d at 340-41 (quoting Livonia Bldg. Materials, 742 N.W.2d at 146). Flynt
signed the application once. Nalpac offers no other evidence to suggest that he
personally guaranteed the payments now at issue. Nor does Nalpac offer any other
evidence suggesting that Flynt “purposefully avail[ed] himself of the privilege of
acting in the forum state or causing a consequence in the forum state.” Beydoun, 768
F.3d at 505.
In short, while Nalpac’s burden to establish the Court’s jurisdiction over Flynt
is not a heavy one, it has not satisfied its burden.
Accordingly,
IT IS ORDERED that Defendant Flynt’s motion to dismiss (ECF No. 3) is
GRANTED;
IT IS FURTHER ORDERED that Plaintiff Nalpac, Ltd.’s claim against Flynt
is DISMISSED WITHOUT PREJUDICE and Defendant Flynt is DISMISSED AS
A PARTY to this action.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: November 1, 2016
I hereby certify that a copy of the foregoing document was mailed to counsel of
record and/or pro se parties on this date, November 1, 2016, by electronic and/or U.S.
First Class mail.
s/ Richard Loury
Case Manager

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