Stone v. Twiddy & Company of Duck, Inc. et al

Filing 32

ORDER granting 16 Motion to Dismiss for Failure to State a Claim; granting 17 Motion to Dismiss for Lack of Jurisdiction; granting 17 Motion to Change Venue; this matter is transferred to the United States District Court for the Eastern District of North Carolina, Northern Division. Signed by Judge Michael R. Barrett on 7/27/12. (ba1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

Kathryn Stone,
Plaintiff,
v.

Case No. 1:10cv591

Twiddy & Company of Duck, Inc., et al.,

Judge Michael R. Barrett

Defendants.
ORDER
This matter is before the Court upon Defendant Estate of William J. Fields’ Motion
to Dismiss, or in the Alternative, to Transfer Venue (Doc. 16) and Defendant Twiddy &
Company of Duck, Inc.’s Motion to Dismiss and, in the Alternative, to Transfer Venue (Doc.
17). Plaintiff filed a consolidated memorandum in opposition to Defendants’ Motions.
(Doc. 24.) Defendants each filed a filed a Reply. (Docs. 29, 30.)
I.

BACKGROUND
This is a personal injury action. Plaintiff Kathryn Stone, a resident of Cincinnati,

Ohio, broke her leg when she stepped off an unlit step at a vacation home located in the
Outer Banks area of North Carolina. (Doc. 3, ¶ 17.) Stone was staying in the home with
her extended family for a one-week period. (Id., ¶ 14.) Co-Defendant, Estate of William
J. Fields (“the Estate”), is the owner of the vacation home and is domiciled in Virginia. (Id.,
¶ 4.) The Estate engaged Co-Defendant Twiddy & Company of Duck (“Twiddy”), a North
Carolina corporation, to serve as rental agent for the vacation home. (Id., ¶ 9.)
Twiddy has entered into annual property management and rental agency contracts

with a number of Ohio residents. (Doc. 25.) Twiddy contacts the owners of the vacation
homes on a regular basis through emails. (See id.) These emails contain information
about services offered by Twiddy, newsletters, as well as local information which may
effect homeowners, such as hurricane evacuations. (Id.) Twiddy has also acted as a sales
agent on a number of occasions for homes owned by Ohio residents. (Id.) Twiddy earned
commissions as a result of these sales. (Id.)
Since 2006, Twiddy has signed over 5,000 rental agreements with Ohio residents.
(Doc. 24-9, at 4.)

Twiddy markets houses to former guests from Ohio by mailing

information and sending emails to them. (Doc. 24-10, at 8.) Twiddy also maintains a
website to advertise the vacation homes they represent. (Id.) Vacation rental agreements
are either mailed or emailed. (Id. at 9.)
Twiddy rented the vacation home owned by the Estate to Plaintiff's sister, Mary
Holter, a Cincinnati, Ohio resident. (Doc. 3, ¶ 14; Doc. 24-1, ¶ 1.) At the time of the
contract, Holter disclosed the names of the eleven members of Plaintiff's extended family
who would be staying at the house. (Doc. 24-7, Kathryn Stone Aff., ¶ 11.) Seven of those
extended family members, including the Plaintiff and Holter, resided in Cincinnati, Ohio.
(Id., ¶ 4.)
II.

ANALYSIS
In their Motions to Dismiss, Defendants argue that Plaintiff’s claims should be

dismissed for lack of personal jurisdiction and improper venue, or in the alternative, should
be transferred to another venue. In addition, the Estate argues that the claims against it
should be dismissed for the failure to state a claim.

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A.

Motion to Dismiss Standard

The plaintiff bears the burden of proving personal jurisdiction exists. CompuServe
Inc. v. Patterson, 89 F.3d 1257, 1262-63 (6th Cir. 1996). In the face of a supported motion
to dismiss, the plaintiff may not rest on his pleadings, but must, by affidavit or otherwise,
set forth specific evidence supporting jurisdiction. Theunissen v. Matthews, 935 F.2d
1454, 1458 (6th Cir. 1991) (citing Weller v. Cromwell Oil Co., 504 F.2d 927, 930 (6th Cir.
1974)). When the Court considers a motion to dismiss pursuant to Rule 12(b)(2) without
an evidentiary hearing, the plaintiff “‘need only make a prima facie showing of jurisdiction.’”
Bird v. Parsons, 289 F.3d 865, 871 (6th Cir. 2002) (quoting Neogen Corp. v. Neo Gen
Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002)) (internal citation omitted). The plaintiff
can make this prima facie showing by “‘establishing with reasonable particularity sufficient
contacts between [the Defendant] and the forum state to support jurisdiction.’” Neogen
Corp., 282 F.3d at 887 (quoting Provident Nat'l Bank v. California Savings Loan Ass’n, 819
F.2d 434, 437 (3d Cir. 1987)). However, “where, as here, ‘the plaintiff has received all of
the discovery it sought with respect to personal jurisdiction and there does not appear to
be any real dispute over the facts relating to jurisdiction,’ the prima facie ‘proposition loses
some of its significance.’” Conn v. Zakharov, 667 F.3d 705, 711 (6th Cir. 2012) (quoting
Int'l Techs. Consultants v. Euroglas S.A., 107 F.3d 386, 391 (6th Cir. 1997)).
In reviewing a motion to dismiss for failure to state a claim, this Court must “construe
the complaint in the light most favorable to the plaintiff, accept its allegations as true, and
draw all reasonable inferences in favor of the plaintiff.” Bassett v. National Collegiate
Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008) (quoting Directv, Inc. v. Treesh, 487 F.3d

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471, 476 (6th Cir. 2007)). “[T]o survive a motion to dismiss a complaint must contain (1)
‘enough facts to state a claim to relief that is plausible,’ (2) more than ‘a formulaic recitation
of a cause of action's elements,’ and (3) allegations that suggest a ‘right to relief above a
speculative level.’” Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir.
2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)). “A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 129 S.Ct. 1937, 1949-950 (2009). Although the plausibility standard is not equivalent
to a “‘probability requirement,’ . . . it asks for more than a sheer possibility that a defendant
has acted unlawfully.” Id. at 1949 (quoting Twombly, 550 U.S. at 556).
B.

Personal Jurisdiction

The Sixth Circuit has established a two-step inquiry to determine whether a federal
district court sitting in a diversity-of-citizenship case can exercise personal jurisdiction over
a defendant: (1) whether the law of the state in which the district court sits authorizes
jurisdiction, and (2) whether the exercise of jurisdiction comports with the Due Process
Clause. CompuServe, 89 F.3d at 1262.
The Sixth Circuit has explained that there are two kinds of personal jurisdiction:
general and specific jurisdiction. Nationwide Mut. Ins. Co. v. Tryg Int'l Ins. Co., 91 F.3d
790, 793 (6th Cir. 1996) (“Jurisdiction may be found to exist either generally, in cases in
which a defendant’s “continuous and systematic” conduct within the forum state renders
that defendant amenable to suit in any lawsuit brought against it in the forum state . . . or
specifically, in cases in which the subject matter of the lawsuit arises out of or is related to

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the defendant's contacts with the forum.”). Plaintiff argues that both general and specific
jurisdiction exist in this case. However, Plaintiff also recognizes that there has been some
debate as to whether Ohio courts recognize general jurisdiction. See Indus Trade &
Technology, LLC v. Stone Mart Corp., 2011 WL 6256937, *2, n.1 (S.D.Ohio Dec.14, 2011)
(describing split on whether general personal jurisdiction is available under Ohio law). The
Sixth Circuit has recently stated that “under Ohio law, a court may exercise personal
jurisdiction over a non-resident defendant only if specific jurisdiction can be found under
one of the enumerated bases in Ohio’s long-arm statute.” Conn, 667 F.3d at 718.
Accordingly, this Court will only analyze whether specific jurisdiction over Defendants
exists.
1.

Ohio’s long-arm statute

In arguing that specific jurisdiction exists, Plaintiff relies on two provisions of Ohio’s
long-arm statute to establish personal jurisdiction:
A court may exercise personal jurisdiction over a person who acts directly or
by an agent, as to a cause of action arising from the person’s:
(1) Transacting any business in this state;
...
(4) Causing tortious injury in this state by an act or omission outside this
state if he regularly does or solicits business, or engages in any other
persistent course of conduct, or derives substantial revenue from goods used
or consumed or services rendered in this state;
Ohio Rev. Code § 2307.382(A). Plaintiff acknowledges that the Estate did not directly act
or transact business in Ohio. Instead, Plaintiff argues that the Estate acted through
Twiddy, who acted as an agent for the Estate. Because a lack of personal jurisdiction over

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Twiddy will necessarily mean a lack of personal jurisdiction over the Estate, the Court will
only focus its analysis on Twiddy.1
The Court finds that personal jurisdiction is not proper under Section 2307.382
(A)(4). As one Ohio court has explained: “The fact that plaintiffs have continued to suffer
the effects of the accident on their return to Ohio, or have received medical treatment for
their injuries in Ohio, does not give rise to jurisdiction.” Hunter v. Mendoza, 197 F. Supp.
2d 964, 968 (N.D. Ohio 2002). Here, even though Plaintiff continued to suffer the effects
of the accident after she returned to Ohio, Plaintiff’s injury occurred in North Carolina.
Turning to Section 2307.382(A)(1), the Ohio Supreme Court has explained that this
provision “is very broadly worded and permit[s] jurisdiction over nonresident defendants
who are transacting any business in Ohio.” Kentucky Oaks Mall Co. v. Mitchell's Formal
Wear, Inc., 559 N.E.2d 477, 481 (1990); see also Brunner v. Hampson, 441 F.3d 457, 464
(6th Cir. 2006) (“[t]he term ‘transacting any business’ as used in . . . the statute . . . will be
given broad interpretation.”) (quoting Ricker v. Fraza/Forklifts of Detroit, 828 N.E.2d 205,
209 (Ohio Ct. App. 2005)). However, mere solicitation of business does not constitute
transacting business in Ohio for purposes of establishing jurisdiction under Section
2307.382(A)(1). U.S. Sprint Comm. Co., Ltd. P'ship v. Mr. K's Food, Inc., 624 N.E.2d
1048, 1052 (Ohio 1994).
Ohio courts have found that the use of the internet to “transact business” in Ohio
can result in application of Ohio’s long-arm statute. Ashton Park Apts., Ltd. v. Carlton-

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As this Court has explained, where a principal ratifies the agent’s conduct, “[a]n agent's
contacts with a forum may be imputed to the principal for purposes of establishing personal
jurisdiction.” Stolle Mach. Co., LLC v. RAM Precision Indus., 2011 WL 6293323, *8 (S.D. Ohio
Dec. 15, 2011) (citing McFadin v. Gerber, 587 F.3d 753, 761 (5th Cir. 2009)).

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Naumann Constr., Inc., 2009 WL 4446934, *4 (Ohio Ct. App. Dec. 4, 2009) (citing Parshall
v. PAID, Inc., 2008 WL 2553098, *3 (Ohio Ct. App. June 26, 2008) and Malone v. Berry,
881 N.E.2d 283, 287 (Ohio Ct. App. 2007)). To determine whether internet activity
establishes jurisdiction, courts have used the Zippo test, developed in Zippo Mfg. Co. v.
Zippo Dot Com, Inc., 952 F.Supp. 1119, 1124 (W.D.Pa.1997). Kauffman Racing Equip.,
L.L.C. v. Roberts, 930 N.E.2d 784, 790 (Ohio 2010), cert. denied, 131 S. Ct. 3089 (2011).
The Zippo test:
established a “sliding scale” approach to Internet-based jurisdiction whereby
the level of interactivity of the website is examined to determine whether the
exercise of personal jurisdiction is proper. At one end of the scale are
“situations where a defendant clearly does business over the Internet.” . . .
At the other end of the Zippo scale are informational websites.
Id. (quoting Zippo, 952 F.Supp. 1124). Accordingly, Ohio courts have held that a passive
Internet website “that does little more than make information available to those who are
interested in it is not grounds for the exercise [of] personal jurisdiction.” Edwards v. Erdey,
770 N.E.2d 672, 678 (Ohio Ct. Com. Pl. 2001).
The Court takes judicial notice that the current version of Twiddy’s website allows
visitors to browse for homes, check prices and availability, sign a rental agreement, and
pay for the rental for a home. The parties have not specifically provided evidence of the
level of interactivity of Twiddy’s website in August of 2010 when this action was filed.
However, Stone’s sister, Holter, explains in her affidavit that she has entered into
approximately seven rental contracts for vacation homes with Twiddy. (Doc. 24-1, ¶ 8.)
Holter explains that each year Twiddy sent her a catalog which showed the homes
available for rental. (Id., ¶¶ 3, 9) Holter explains that once she found a property in which

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she was interested, she would log onto the Twiddy website to rent the property. (Id., ¶ 10.)
Holter explains that Twiddy would then email the agreement to her, and after Holter
completed the necessary information, she would email the contract back to Twiddy. (Id.,
¶¶ 10-12.)
The Court finds that in terms of interactivity, the Twiddy website lies somewhere in
the middle of the Zippo sliding scale. The website is primarily a source for information, but
it does allow Twiddy to do business over the internet in that it allows visitors to the site to
rent homes. This contact through the website results in a rental contract.
“Where a non-resident defendant contracts with an Ohio resident to create an
ongoing business relationship, such defendant is ‘transacting any business’ in Ohio
pursuant to the plain meaning of R.C. 2307.382(A)(1).” Total Quality Logistics v. Best
Plastics, L.L.C., 930 N.E.2d 882, 887 (Ohio Ct. App. 2010) (citing Buflod v. Von
Wilhendorf, LLC, 2007 WL 210790 (Ohio Com. Pl. Apr. 30, 2010)). However, the rental
agreements between Twiddy and its customers are for short-term rentals. While Twiddy
may have repeat customers, like Holter, there is no evidence that Twiddy has an “ongoing
business relationship” with Ohio residents through its website. Therefore, the Court finds
that Twiddy’s website and the short-term rental contracts do not create personal jurisdiction
under Section 2307.382(A)(1).
The same could be said regarding the transactions in which Twiddy acts as a sales
agent. While the owners of the homes are Ohio residents, the sale of the home does not
create an ongoing business relationship. Therefore, these transactions do not create
personal jurisdiction under Section 2307.382(A)(1).
However, Twiddly has also entered into annual property management and rental
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agency contracts with Ohio residents. These contracts create a year-long obligation. Ohio
courts have identified two factors to help determine whether such contracts constitute
transacting business with the meaning of the long-arm statute:
The first factor is whether the non-resident defendant initiated the business
dealing. Logically, if the foreign corporation reached out to the Ohio
corporation to create the business relationship, that is one factor that would
go toward finding that the nonresident transacted business in Ohio. The
balance of the evidence must be considered to determine in which
jurisdiction the parties undertook their discussions and communications and
on what terms. The second factor to be considered is whether the parties
conducted their negotiations or discussions in Ohio or with terms affecting
Ohio. There must additionally be some continuing obligation that connects
the nonresident defendant to the state or some terms of the agreement that
affect the state.
Total Quality Logistics, 930 N.E.2d at 887 (citations omitted). Based on Twiddy’s website,
it appears that Twiddy has reached out to potential customers in Ohio. The current website
includes information about Twiddy’s property management service and allows visitors to
request a rental management package by telephone or by filling out a request form on the
website. However, the website does not specifically target Ohio residents. Also, it appears
that the property management and rental agency contracts are boilerplate and can be
signed electronically. Therefore, there is minimal, if any, negotiations or discussions
conducted in Ohio. While Twiddy maintains contact with home owners through email
during the year, it does not appear that there are any terms of the contracts which affect
Ohio. Any obligations that Twiddy has under the property management and rental
contracts would be necessarily be carried out in North Carolina where the home is located.
Therefore, the Court concludes that the property management and rental contracts do not
create personal jurisdiction under Section 2307.382(A)(1).

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2.

Due Process

In the alternative, the Court finds that Plaintiff has not met the necessary due
process requirements. To comport with due process, an exercise of personal jurisdiction
requires that a defendant “have certain minimum contacts 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). The Sixth Circuit has set
forth a three-part analysis to determine whether jurisdiction accords with due process:
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.
Calphalon Corp. v. Rowlette, 228 F.3d 718, 721 (6th Cir. 2000) (quoting Southern Mach.
Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968)).
“The ‘purposeful availment’ requirement is satisfied when the defendant's contacts
with the forum state ‘proximately result from actions by the defendant himself that create
a ‘substantial connection’ with the forum State,’ and when the defendant’s conduct and
connection with the forum are such that he ‘should reasonably anticipate being haled into
court there.’ CompuServe, 89 F.3d at 1263 (quoting Burger King Corp. v. Rudzewicz, 471
U.S. 462, 474-75 (1985)). The contacts in this case consist of Twiddy’s website, emails
sent by Twiddy, and a printed catalogue sent by Twiddy. Twiddy does not maintain an
office in Ohio or send representatives to Ohio to negotiate contracts.
The Sixth Circuit has explained that the operation of a website may constitute the
purposeful availment of the privilege of acting in a forum state “if the website is interactive
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to a degree that reveals specifically intended interaction with residents of the state.”
Neogen, 282 F.3d at 890. There is nothing about the Twiddy website which demonstrates
that it is specifically intended to interact with residents of Ohio. The mere availability of a
website falls short of purposeful availment. Id.
Similarly, email and telephone communications alone do not establish jurisdiction.
Barnabus Consulting Ltd. v. Riverside Health Sys., Inc., 2008 WL 2588579, *5 (Ohio Ct.
App. June 30, 2008) (citing Joffe v. Cable Tech, 163 Ohio App.3d 479 (Ohio Ct. App.
2005)); Epic Communications v. ANS Connect, 2008 WL 2766285, *2 (Ohio Ct. App. July
17, 2008) (communications via e-mail, mail, and facsimile do not establish minimum
contacts with Ohio). Courts have also held that the act of mailing a single payment to Ohio
does not create a significant enough connection to Ohio to constitute a minimum contact
with Ohio. National Court Reporters, Inc. v. Rebecca N. Strandberg & Assoc., 2009 WL
1346641, *3 (Ohio Ct. App. May 14, 2009) (citing Communications Exhibits, Inc. v.
Windstone Med. Packaging, Inc., 2006 WL 2771718, *2 (Ohio Ct. App. Sept. 26, 2006)).
Finally, “courts have rejected the argument that placing a product in a nationally
distributed catalog, without more, establishes purposeful availment.”

Static Control

Components, Inc. v. Lexmark Int'l, Inc., 2005 WL 2009273, *5 (E.D. Ky. Aug. 19, 2005)
(citing Boit v. Gar-Tec Products, Inc., 967 F.2d 671 (1st Cir. 1992); Federal Ins. Co. v. Lake
Shore Inc., 886 F.2d 654, 659 (4th Cir. 1989)).
Based on the foregoing, the Court concludes that it does not have personal
jurisdiction over Defendants.

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C.

Motion to Transfer Venue

Defendants move to transfer venue to North Carolina pursuant to 28 U.S.C. § 1404,
which provides that “[f]or the convenience of the parties and witnesses, in the interest of
justice, a district court may transfer any civil action to any other district court where it might
have been brought.” However, this Court may not transfer under section 1404(a) where
personal jurisdiction over the defendants does not exist. Pittock v. Otis Elevator Co., 8
F.3d 325, 329 (6th Cir. 1993) (citing Martin v. Stokes, 623 F.2d 469, 474 (6th Cir. 1980)).
Instead, 28 U.S.C. § 1406(a) “provides the basis for any transfer made for the purpose of
avoiding an obstacle to adjudication on the merits in the district court where the action was
originally brought.” Martin, 623 F.2d at 474; see also Taylor v. Love, 415 F.2d 1118 (6th
Cir. 1969) (district court has power to transfer complaint to another district even if it did not
have personal jurisdiction), cert. denied, 397 U.S. 1023 (1970). While Defendants brought
their motions to transfer in the alternative in the event the motions to dismiss were denied,
this Court may sua sponte order that a case be transferred, rather than dismissed pursuant
to Section 1406. Thornton v. Walter, 1985 WL 13711, *2 (6th Cir. Sept. 17, 1985) (per
curiam).
Section 1406(a) provides that a district court with a case “laying venue in the wrong
division or district shall dismiss, or if it be in the interest of justice, transfer such case to any
district or division in which it could have been brought.” There appears to be no dispute
that this case could have been brought in North Carolina. Twiddy is a North Carolina
corporation, and was acting as the agent for the Estate, which is domiciled in Virginia, but
owns the home in North Carolina where the injury occurred. In addition, the Court finds

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that the interests of justice favor transfer. In this case, process has been served, some
preliminary discovery has been completed, and a settlement conference has been held.
To dismiss this case would only result in the unnecessary duplication of fees and costs.
In addition, dismissal may effectively bar Plaintiff’s claims as a result of the applicable
statute of limitations. Finally, Defendants will suffer no prejudice from the transfer.
Defendants themselves sought transfer in the event that the Court did not dismiss
Plaintiff’s claims. Therefore, the Court concludes that transfer, as opposed to dismissal
is the proper course of action.
III.

CONCLUSION
Based on the foregoing, Defendant Estate of William J. Fields’ Motion to Dismiss

(Doc. 16) is GRANTED and Defendant Twiddy & Company of Duck, Inc.’s Motion to
Dismiss is GRANTED (Doc. 17) on grounds that this Court lacks personal jurisdiction over
Defendants. In the interest of justice, this matter is hereby TRANSFERRED to United
States District Court for the Eastern District of North Carolina, Northern Division.
IT IS SO ORDERED.
/s/ Michael R. Barrett
Michael R. Barrett
United States District Judge

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