Sheely et al v Gear/Tronics Industries Incorporated et al

Filing 17

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that defendant's motion to dismiss (ECF #11) is GRANTED. IT IS FURTHER ORDERED that plaintiffs' request for additional time to perfect service is DENIED as moot. Signed by District Judge Stephen N. Limbaugh, Jr on 8/19/2015. (JMC)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
SOUTHEASTERN DIVISION
KENNETH W. SHEELY and
DEBORAH SHEELY,
Plaintiffs,
vs.
GEAR/TRONICS INDUSTRIES
INCORPORATED and GEARTRONICS
INDUSTRIES INCORPORATED,
Defendants.

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Case No. 1:15-cv-00048 SNLJ

MEMORANDUM AND ORDER
This matter is before the Court on defendant’s motion to dismiss for insufficient
service of process or to quash service and to dismiss for lack of personal jurisdiction.
The motion has been fully briefed and the matter is ripe for disposition. For the
following reasons, the Court will grant the motion.
I.

Background
Plaintiffs Kenneth Sheely and Deborah Sheely filed this products liability cause of

action asserting claims arising out of an incident that occurred on March 30, 2010 at a
power plant in New Madrid, Missouri. On that day, plaintiff Kenneth Sheely was
performing work at the plant on behalf of his employer, and in the course of his work
borrowed a torque multiplier wrench from a sub-contractor at the work site. The tool Mr.
Sheely borrowed was manufactured, marketed, and distributed by defendant Gear/tronics
Industries Incorporated. While attempting to tighten a bolt, the torque multiplier broke

causing Mr. Sheely to lose his balance, fall, and sustain serious bodily injuries. Plaintiffs
allege that Mr. Sheely was injured as a direct and proximate result of a defect in the tool
and/or failure of the tool to perform when used in a reasonably anticipated manner.
This action is before the Court based on diversity jurisdiction. Plaintiffs are Ohio
citizens. Defendant Gear/tronics Industries Incorporated is a company incorporated
under the laws of Massachusetts, with its sole place of business in Massachusetts.
Defendant Gear/tronics Industries Incorporated ceased doing business as of March 1,
2015, but has not yet been dissolved. Defendant Geartronics Industries Incorporated is
not a legal entity or company separate from defendant Gear/tronics Industries
Incorporated but instead is a common misspelling of Gear/tronics Industries
Incorporated. In their response to the motion to dismiss, plaintiffs state their intention to
dismiss Geartronics Industries Incorporation and address the motion only as to defendant
Gear/tronics Industries Incorporated. As the parties acknowledge that the only defendant
is Gear/tronics Industries Incorporated, the Court will refer to “defendant” or “defendant
Gear/tronics” for purposes of this memorandum and order.
II.

Discussion
Defendant seeks dismissal of this action for lack of personal jurisdiction and

insufficient service of process pursuant to Rule 12(b)(2) and (5) of the Federal Rules of
Civil Procedure. Defendant contends that service was insufficient because the summons
was served upon a person, Marianne Richards, at a multi-tenant business address, 100
Chelmsford Road, North Billerica, MA, and that person was not authorized by
appointment or the law to accept service on behalf of defendant. Instead, Marianne
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Richards is employed by Gear/tronics, Inc., a wholly separate company from defendant.
Although defendant Gear/tronics quit doing business on March 1, 2015, it continues to
have a registered agent, Richard Duffy, appointed to accept service of process. Further,
defendant contends that this Court lacks personal jurisdiction over it because it does not
have sufficient minimum contacts with Missouri to satisfy due process requirements.
Plaintiffs argue that they have properly served defendant Gear/tronics by service at
its business office of public record according to the business records of the Secretary of
the Commonwealth of Massachusetts. Plaintiffs argue that because the summons and a
copy of the complaint were left by process server with a person identified as a manager
at the address of defendant Gear/tronics’s office, the requirements of the Federal Rules of
Civil Procedure, as well as both Missouri and Massachusetts Rules of Civil Procedure
governing service have been satisfied. Further, plaintiffs argue that defendant has
sufficient minimum contacts with Missouri for the exercise of specific personal
jurisdiction because defendant has sold its products to Missouri residents and defendant’s
products are sold by Snap-On Incorporated which has dealers and distributors in
Missouri.
A.

Service of Process

Federal Rule of Civil Procedure 12(b)(5) authorizes a motion to dismiss on
grounds of insufficiency of service of process. A Rule 12(b)(5) motion is the proper
vehicle for challenging the mode of delivery or the lack of delivery of the summons and
complaint, e.g., summons served upon someone not authorized by appointment or by law
to receive service of process. 5A C Charles Alan Wright & Arthur R. Miller, Federal
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Practice and Procedure § 1353 (2d ed.1990). Pursuant to Federal Rule of Civil
Procedure 4, service upon a corporation may be properly effectuated by one of two ways:
(1) by following the procedures prescribed for individuals under Federal Rule of Civil
Procedure 4(e)(1); or (2) “by delivering a copy of the summons and of the complaint to
an officer, a managing or general agent, or any other agent authorized by appointment or
by law to receive service of process and—if the agent is one authorized by statute and the
statute so requires—by also mailing a copy of each to the defendant.” See Fed. R. Civ. P.
4(h).
Here, defendant argues that it was not properly served because the individual who
received service from plaintiffs was not a registered agent of, and had no position with,
defendant. Rather, the person who received service was the employee of a wholly
separate entity not named in this suit. Plaintiffs allege that valid service was obtained
when the summons and a copy of the complaint were left at the business office of the
defendant – the address listed on the website for the Secretary of the Commonwealth of
Massachusetts as being defendant Gear/tronic’s principal office – with the person having
charge thereof. Plaintiff has offered no evidence to contradict the testimony that
Marianne Richards was not an employee or agent of defendant, was not a person having
charge of any office of defendant, and was not authorized to accept service on behalf of
the defendant. The undisputed facts before this Court show that neither the registered
agent or any employee or agent of Gear/tronics was served with process in this matter.
Instead, a person with no relation to defendant received the service. This Court finds,
therefore, that defendant has not been properly served with process.
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In order for this Court to assert personal jurisdiction over a defendant “the
procedural requirement of service of summons must be satisfied.” Omni Capital Int’l v.
Rudolf Wolff & Co., 484 U.S. 97, 104 (1987). “Service of summons is the procedure by
which a court having venue and jurisdiction of the subject matter of the suit asserts
jurisdiction over the person of the party served.” Omni Capital Int’l, 484 U.S. at 104. If
service of process is ineffective, “the district court has discretion to either dismiss the
action, or quash service but retain the case.” Marshall v. Warwick, 155 F.3d 1027, 1032–
33 (8th Cir. 1998) (citation omitted).
B.

Personal Jurisdiction

In light of plaintiffs’ request for additional time to perfect service, the Court will
address defendant’s motion to dismiss for lack of personal jurisdiction. “To survive a
motion to dismiss for lack of personal jurisdiction, a plaintiff must state sufficient facts in
the complaint to support a reasonable inference that the defendants can be subjected to
jurisdiction within the state.” Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th
Cir. 2004) (internal quotation marks and citations omitted). “Once jurisdiction ha[s] been
controverted or denied, [the plaintiff] ha[s] the burden of proving such facts.” Id. “The
plaintiff’s prima facie showing must be tested, not by the pleadings alone, but by the
affidavits and exhibits presented with the motions and in opposition thereto.” Id.
“Personal jurisdiction over a defendant represents the power of a court to enter a
valid judgment imposing a personal obligation or duty in favor of the plaintiff.”
Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., KG, 646 F.3d 589, 592 (8th
Cir. 2011) (internal quotation marks and citation omitted). “Personal jurisdiction can be
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specific or general.” Id. at 593. “Specific jurisdiction refers to jurisdiction over causes of
action arising from or related to a defendant’s actions within the forum state, while
general jurisdiction . . . refers to the power of a state to adjudicate any cause of action
involving a particular defendant, regardless of where the cause of action arose.” Id.
(internal quotation marks and citations omitted). “Specific personal jurisdiction can be
exercised by a federal court in a diversity suit only if authorized by the forum state’s
long-arm statute and permitted by the Due Process Clause of the Fourteenth
Amendment.” Id. The requirements of Missouri’s long-arm statute and the Due Process
Clause present two, independent inquiries that must be addressed separately, and failure
to satisfy either precludes the exercise of specific personal jurisdiction. Myers v. Casino
Queen, Inc., 689 F.3d 904, 909-10 (8th Cir. 2012).
It is not necessary to consider the application of Missouri’s long-arm statute in this
case because the exercise of personal jurisdiction is not permitted by the Due Process
Clause. To satisfy due process, a defendant must have sufficient minimum contacts with
the forum state such that the assertion of jurisdiction “does not offend traditional notions
of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310,
316 (1945). “The substantial connection between the defendant and the forum State
necessary for a finding of minimum contacts must come about by an action of the
defendant purposefully directed toward the forum State.” Myers, 689 F.3d at 911
(internal quotation marks and citations omitted).
The Eighth Circuit adopted “a five-factor test to evaluate whether a defendant’s
actions are sufficient to support personal jurisdiction: (1) the nature and quality of the
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contacts with the forum state; (2) the quantity of those contacts; (3) the relationship of
those contacts with the cause of action; (4) [the state’s] interest in providing a forum for
its residents; and (5) the convenience or inconvenience to the parties.” Myers, 689 F.3d
at 911. Once the Court has found the requisite minimum contacts, it must still determine
whether the exercise of jurisdiction conforms with “fair play and substantial justice.”
International Shoe, 326 U.S. at 320. “In judging minimum contacts, a court properly
focuses on the relationship among the defendant, the forum, and the litigation.” Calder v.
Jones, 465 U.S. 783, 788 (1984) (citations and internal quotations omitted). The
defendant’s contact with the forum state must be purposeful and such that defendant
“should reasonably anticipate being haled into court there.” World–Wide Volkswagen
Corp. v. Woodson, 444 U.S. 286, 297 (1980). “Specific jurisdiction is warranted when
the defendant purposefully directs its activities at the forum state and the litigation results
from injuries . . . relating [to the defendant’s] activities [in the forum state.]” Myers, 689
F.3d at 912-13 (internal quotation marks and citations omitted).
Here, plaintiffs argue that “defendant sold its products, including torque
multipliers like the one involved in this incident, in Missouri via its website and thru
Snap-On Inc. dealers and distributors, thereby establishing the minimum contacts
necessary for personal specific jurisdiction in this case.”1 Plaintiffs allege that defendant
has contacts with Missouri based on the sale of its products to Snap-On which has dealers
and distributors in Missouri. However, any contacts Snap-On may have with Missouri
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Plaintiffs do not argue that this Court has the power to exercise general personal
jurisdiction over defendant and, therefore, that issue is not discussed. In any event, based
on the pleadings and evidence, plaintiffs would not prevail on such a claim.
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are not imputed to defendant. Snap-On, and not defendant, determines where it will sell
the products it purchases from defendants. Plaintiffs have failed to prove that defendant
purposefully availed itself of the Missouri forum based on sales of its products to SnapOn.
Additionally, plaintiffs argue that defendant should not be permitted to avoid
personal jurisdiction in “the state where one of its customers was injured while using the
product.” It is undisputed that plaintiff Kenneth Sheely borrowed the tool in question
from a Kentucky sub-contractor company that had purchased the tool in Kentucky. This
particular tool only arrived in Missouri as a result of the unilateral action taken by the
Kentucky sub-contractor that brought it into Missouri prior to loaning it to plaintiff. “[A]
defendant’s random, fortuitous, or attenuated contacts or on the unilateral activity of a
plaintiff” is insufficient to establish specific personal jurisdiction. Walden v. Fiore, --U.S. ---, 134 S.Ct. 1115, 1123 (2014) (internal quotation marks and citation omitted).
Further, it is undisputed that at the time of plaintiff Kenneth Sheely’s injury to the
present, defendant has not had any offices in Missouri, has not had any employees or
independent contractors in Missouri, has not conducted any advertising in Missouri, and
has not been registered to do business in the state of Missouri. While defendant concedes
that from 2010 to the present, approximately 1.2% of its total sales were made in
Missouri, that figure does not include the sale of the tool in question, and those sales were
unsolicited requests to defendant’s Massachusetts warehouse. Also, while defendant
maintained a public website containing general information, no direct purchases could be
made through it. Plaintiffs’ claims do not arise out of those limited contacts.
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Defendant’s minimal sales to Missouri residents and maintenance of a general
information website that could be accessed by Missouri residents cannot be said to be
sufficient minimum contacts with Missouri necessary to comport with the Due Process
Clause as it relates to plaintiffs’ claims against defendant. Plaintiffs have failed to prove
that defendant purposefully availed itself of the Missouri forum. As a result, this Court
finds that it does not have personal jurisdiction over defendant Gear/tronics.
Accordingly,
IT IS HEREBY ORDERED that defendant’ motion to dismiss (ECF #11) is
GRANTED.
IT IS FURTHER ORDERED that plaintiffs’ request for additional time to
perfect service is DENIED as moot.
Dated this 19th day of August, 2015.

___________________________________
STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE

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