Boatright Family LLC v. Reservation Center Inc et al

Filing 11

ORDER denying 7 Motion to Dismiss. Signed by Honorable Timothy D. DeGiusti on 7/11/2013. (mb)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
)
BOATRIGHT FAMILY, LLC, an Oklahoma )
limited liability company,
)
)
Plaintiff,
)
)
vs.
)
)
RESERVATION CENTER, INC., a
)
California corporation; CCRA
)
INTERNATIONAL, INC., a Delaware
)
corporation; OURLINK, LLC, a Texas
)
limited liability company; and JOHN DOES )
1 THROUGH 21,
)
)
Defendants.
)

NO. CIV-13-192-D

ORDER
Before the Court is the motion [Doc. No.7] of Defendants Reservation Center, Inc. (“RCI”),
CCRA International, Inc. (“CCRA”), and Ourlink, LLC (“Ourlink”) to dismiss this action for lack
of personal jurisdiction, pursuant to Fed. R. Civ. P. 12(b)(2). The movants argue that they do not
have sufficient contacts with Oklahoma to permit the Court to exercise jurisdiction over them.
Plaintiff Boatright Family, LLC (“Boatright”) timely responded to the motion, and the movants filed
a reply.
I. Background:
Boatright initially filed this action in the District Court of Oklahoma County, and Defendants
removed it to this Court, asserting federal subject matter jurisdiction on the basis of diversity of
citizenship. Boatright alleges that, on March 1, 20111, it obtained a judgment on its counterclaim
against RCI in an action brought by RCI and Ourlink in the District Court of Oklahoma County,

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Although the petition states the judgment was entered on March 1, 2012, this is apparently a
typographical error because the judgment, submitted as Exhibit 2 to Boatright’s response brief, is file-stamped
March 1, 2011.

Case No. CJ-2007-3876, against Boatright and others. Boatright was awarded judgment against RCI
for amounts due on a promissory note in the principal amount of $500,000.00 (“Oklahoma
Judgment”). See Oklahoma Judgment, Ex. 2 to Boatright response brief. Boatright alleges that RCI
has fraudulently transferred its assets and property to CCRA, Ourlink and/or one or more of the John
Doe defendants. Boatright alleges that RCI did so with the intent of preventing Boatright from
collecting the Oklahoma Judgment. Boatright also argues, and the movants do not dispute, that RCI,
CCRA and Ourlink are affiliated companies, as all are owned and controlled by the same
individuals.
It is undisputed that Boatright is an Oklahoma limited liability company, RCI is a California
corporation, CCRA is incorporated in Delaware, and Ourlink is a Texas corporation. The parties
also agree that RCI, CCRA, and Ourlink currently have their principal places of business in Texas.2
It is also not disputed that, in 2007, RCI and Ourlink filed a lawsuit in the District Court of
Oklahoma County against Boatright and others, asserting claims based on alleged tortious conduct
in connection with several loan agreements and security agreements including, inter alia, a
promissory note and related agreements evidencing a $500,000.00 loan to RCI from Boatright.
Boatright then asserted a counterclaim against RCI on the promissory note. RCI did not dispute that
it owed an outstanding obligation on the promissory note, but claimed an offset. According to the
Judgment entered by the Oklahoma County District Court, “[a]t trial, the parties agreed that RCI
owes on the Promissory Note the sum of $500,000, subject only to the claimed offset for partial
failure of consideration.” Oklahoma Judgment, Response Ex. 2, p. 4. RCI’s claim of an offset was

2

Prior to the transfers of interest described herein, infra, RCI previously had its principal place of
business in California. However, the Notice of Removal filed in this action reflects the principal places of
business of RCI, CCRA, and Ourlink are now located in Texas. Notice of Removal [Doc. No. 1] at ¶¶ 5-7.

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submitted to the jury, and a verdict was returned in favor of Boatright and against RCI, thus resulting
in the $500,000.00 Oklahoma Judgment against RCI. Id. at p. 5.
Boatright began efforts to collect the judgment, including domesticating the judgment in the
District Court of Tarrant County, Texas. Boatright conducted discovery in that proceeding,
including written interrogatories and depositions. See Boatright response Exs. 3, 4, and 6.
According to Boatright, discovery revealed that RCI had transferred, or was in the process of
transferring, all of its assets to other entities or individuals. Boatright now contends in this lawsuit
that such conduct constitutes a fraudulent and intentional effort to prevent Boatright from collecting
the Oklahoma Judgment. RCI, CCRA, and Ourlink seek dismissal, arguing that this Court cannot
exercise personal jurisdiction over them.
II. Standards governing Rule 12(b)(2) motions:
When considering a Rule 12(b)(2) motion, a court has discretion to conduct an evidentiary
hearing or adjudicate the motion on the basis of briefs and evidentiary materials. Dudnikov v. Chalk
& Vermilion Fine Arts, Inc., 514 F.3d 1063, 1069 (10th Cir. 2008). In this case, the parties have
submitted evidentiary material and legal argument sufficient to allow the Court to rule on the motion
without the necessity of a hearing.
It is well established that, to be subject to personal jurisdiction, a nonresident defendant
must have sufficient contacts with the forum state to satisfy the requirements of due process. WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980). “To obtain personal jurisdiction
over a nonresident defendant in a diversity action, a plaintiff must show both that jurisdiction is
proper under the laws of the forum state and that the exercise of jurisdiction would not offend due
process.” Intercon, Inc. v. Bell Atlantic Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir. 2000).
In Oklahoma that test becomes a single inquiry because Oklahoma’s long-arm statute reaches to the
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full extent of due process. Rambo v. American Southern Ins. Co., 839 F. 2d 1415, 1416 (10th Cir.
1988).
The minimum contacts required to satisfy due process and confer personal jurisdiction may
be established through a showing of general or specific jurisdiction. Fireman’s Fund Ins. Co. v.
Thyssen Mining Construction of Canada, Ltd., 703 F.3d 488, 493 (10th Cir. 2012); Benton v. Cameco
Corp., 375 F.3d 1070, 1075 (10th Cir. 2004). Specific jurisdiction3 exists where a defendant does
not have continuous contacts with the forum state, but the plaintiff shows that 1) the defendant has
purposefully directed its activities at residents of the forum state, and 2) the plaintiff’s alleged
injuries “arise out of or relate to” those activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462,
473 (1998).
Specific jurisdiction requires that the defendant’s contacts with the forum reflect that “‘the
defendant purposefully avail[ed] itself of the privilege of conducting activities within the forum
State.’” Fireman’s Fund, 703 F.3d at 493 (quoting Asahi Metal Indus. Co., Ltd. v. Superior Court
of California, 480 U.S. 102, 113 (1987)). “The contacts with the forum must make being sued there
foreseeable so that the defendant could ‘reasonably anticipate’” being subjected to litigation there.
Id. (quoting World–Wide Volkswagen, 444 U.S. at 297). If such contacts are established, the Court
must then determine whether the exercise of jurisdiction would “offend traditional notions of fair
play and substantial justice.” Dudnikov, 514 F.3d at 1080.
“The plaintiff has the burden of establishing jurisdiction when the defendant contests the
court’s jurisdictional authority.” Cudd Pressure Control, Inc. v. Cornelius,1996 WL 122018, at *2

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Boatright does not contend that RCI, CCRI, and Ourlink have the “continuous and systematic”
general business contacts with Oklahoma required to establish general personal jurisdiction. See Fireman’s
Fund, 703 F.3d at 493. Accordingly, the Court need not discuss the standards governing general personal
jurisdiction.

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(10th Cir. Mar. 20, 1996) (unpublished) (citing Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th
Cir.1995)). Where the Court does not hold an evidentiary hearing, the plaintiff must only make a
prima facie showing of personal jurisdiction by demonstrating, via affidavit or other written
materials, facts that, if true, would support jurisdiction over the defendant. AST Sports Science, Inc.
v. CLF Distribution Ltd., 514 F.3d 1054, 1057 (10th Cir. 2008); Melea, Ltd. v. Jawer SA, 511 F.3d
1060, 1065 (10th Cir. 2007). In assessing the sufficiency of the plaintiff’s showing, the Court must
assume the truth of its allegations if they are “plausible, non-conclusory, and non-speculative.”
Dudnikov, 514 F.3d at 1070. Disputed factual contentions must be resolved in the plaintiff’s favor.
Id.
III. Application:
RCI, CCRA, and Ourlink argue that Boatright cannot establish the requirements of specific
personal jurisdiction because the conduct underlying Boatright’s allegations did not occur in
Oklahoma. They admit that, subsequent to the entry of Boatright’s Oklahoma Judgment against
RCI, certain transfers of ownership occurred between RCI, CCRA, and Ourlink. However, they
argue that these transfers did not occur in Oklahoma, the conduct was confined to Texas, and the
transfers were not directed at Boatright in Oklahoma. They contend that Boatright cannot show that
they purposefully availed themselves of the privilege of doing business here on the basis of these
actions.
In response, Boatright argues that the movants’ conduct was directed at Boatright because
it was allegedly designed to prevent Boatright from collecting the Oklahoma Judgment. Boatright
further argues that the Oklahoma Judgment resulted from the lawsuit filed by Ourlink and RCI in
Oklahoma to assert claims based on prior business agreements with Boatright and others, and
Ourlink and RCI sought to enforce rights in Oklahoma courts under Oklahoma law.
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According to the evidence submitted by Boatright, when Ourlink and RCI filed the
Oklahoma lawsuit, Ourlink was owned by the individuals who are named herein as the John Doe
defendants. At that time, Ourlink also owned all of the stock of RCI, and RCI owned all of the stock
of CCRA. Response Ex. 3. Subsequent to the entry of the Oklahoma Judgment, RCI transferred
all of the existing stock of CCRA to Ourlink, and Ourlink transferred its RCI stock to CCRA.
Response Ex. 4. According to Boatright, as a result of these transfers, the John Doe defendants
currently own all of the stock of CCRA, and CCRA owns all of RCI’s stock. Thus, while RCI was
originally the parent corporation of CCRA, the transfers resulted in it becoming a subsidiary of
CCRA. According to Boatright, RCI is now a “non-operating entity,” and CCRA operates the
business formerly handled by RCI.4
RCI, CCRA, and Ourlink do not dispute Boatright’s evidence and argument regarding the
result of these transfers. They deny that the transfers were intended to prevent Boatright from
collecting the Oklahoma judgment against RCI. However, whether Boatright can prove that
contention is not the issue now before the Court. Instead, the only question raised by the motion to
dismiss is whether the conduct of RCI, CCRA, and Ourlink evidences sufficient contacts with
Oklahoma to allow this Court to exercise personal jurisdiction over them.
Boatright argues in part the Court may properly exercise jurisdiction over RCI, CCRA, and
Ourlink because RCI and Ourlink availed themselves of the benefits of the Oklahoma courts when
they filed the lawsuit which resulted in the Oklahoma Judgment. Although Boatright does not cite
legal authority for this contention, the Court has determined several courts have held that, where a

4

According to information included on CCRA’s web site and submitted as Response Ex. 5, the
business operated by CCRA, and formerly by RCI, consists of a “call center” for travel agents and a hotel
catalogue which provide information to member travel agents and hotels, including online booking of hotel
reservations and related matters.

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party files a lawsuit in the forum state, it is subject to that state’s personal jurisdiction in a
subsequent suit involving a related transaction.
“Courts have found personal jurisdiction where a non-resident party has previously filed
litigation in the forum state involving the same transaction at issue.” George Mason University
Foundation, Inc. v. Morris, 2012 WL 1222589, at *5 (E.D. Va. April 11, 2012) (unpublished) (citing
General Contracting & Trade Co. v. Interpole, Inc., 940 F.2d 20 (1st Cir.1991) (party which elects
to avail itself of the benefits of a state court's jurisdiction surrenders any objections to claims arising
out of the same nucleus of operative facts in a subsequent action in the state); Thompson v.
Thompson, 798 F.2d 1547, 1549 (9th Cir.1986), aff'd, 484 U.S. 174 (1988) (defendant “purposefully
availed herself of the privilege of conducting her activities in California when she invoked the
benefits and protections afforded by California law by initiating an action”); and Threlkeld v.
Tucker, 496 F.2d 1101 (9th Cir.1974) (husband's prior use of California courts against his ex-wife
subjected him to long-arm jurisdiction in California in a suit filed by wife fourteen months later).
The Tenth Circuit Court of Appeals is in agreement. “It is well established that the act of
filing a lawsuit in a particular state is sufficient to establish jurisdiction over the plaintiff in the
courts of that state in a subsequent action for abuse of process or similar torts.” Rusakiewicz v. Lowe,
556 F.3d 1095, 1101 (10th Cir. 2009) (citing Neuralstem, Inc. v. StemCells, Inc., 573 F.Supp. 2d 888,
897-98 (D.Md. 2008), (collecting cases in which a party “essentially consents” to jurisdiction in the
forum state through the “act of filing a previous suit where the second suit arises from the ‘same
transaction’ ”). Furthermore, the Tenth Circuit has held that this rule also extends to individuals or
entities who, although not parties to the original lawsuit, had a close connection to the plaintiff or
were involved in the decision to pursue that lawsuit. Rusakiewicz, 556 F.3d at 1101; Cricket

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Communications, Inc. v. Pace, 2012 WL 1119414, at *3 (D. Utah April 3, 2012) (unpublished)
(citing Rusakiewicz, 556 F. 3d at 1101).
In this case, Ourlink and RCI filed suit in the District Court of Oklahoma County to assert
claims related to their business transactions with Boatright and others, and that lawsuit resulted in
the Oklahoma Judgment which forms the underlying basis for Boatright’s claims against them in
this case.

The only argument asserted by RCI, Ourlink and CCRA in this regard is their

statement that RCI and Ourlink filed the 2007 lawsuit in Oklahoma only because the parties’
contractual agreement “at the heart of that matter” included a provision that the Oklahoma courts
would have jurisdiction of litigation involving the agreement. Reply brief at page 2. The movants
state that, but for the wrongful conduct of Boatright and others, no lawsuit would have been
necessary. Thus, they suggest that submitting their dispute to the Oklahoma court should not
constitute purposeful availment.
RCI, Ourlink and CCRA do not submit legal authority to support the contention that
purposeful availment cannot be based on their prior Oklahoma lawsuit litigating claims based on
Oklahoma law and arising from their business agreements with Boatright. Nor does their argument
alter the fact that RCI admittedly was in default on its loan obligation to Boatright, an Oklahoma
limited liability company, or that it sought an offset to that obligation under Oklahoma law, and that
it did so in an Oklahoma court.
Even if the Court accepted the movants’ argument, however, it finds evidence is sufficient
to show that the movants purposely availed themselves of the privilege of doing business in
Oklahoma through their business relationship with Boatright, and the claims asserted in this action
stem from that relationship. RCI, Ourlink and CCRA argue that the transfers of ownership were not
directed at Oklahoma because they were negotiated and consummated in Texas. The Court finds
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this argument unpersuasive because the Court’s jurisdictional analysis requires an examination of
not only the movants’ conduct following the Oklahoma Judgment, but their previous course of
dealing with Boatright. “The court must examine the parties’ ‘prior negotiations and contemplated
future consequences, along with the terms of the contract and the parties’ actual course of dealing.”
Marcus Food Co. v. DiPanfilo, 671 F.3d 1159, 1166-67 (10th Cir. 2011)(quoting TH Agriculture &
Nutrition, LLC v. Ace European Group Ltd., 488 F.3d 1282, 1288 (10th Cir. 2007) (internal
quotation marks omitted)).
Based on the evidence before the Court, the relationship between Boatright and RCI began
as a business transaction involving a series of agreements, including Boatright’s loan to RCI, and
the promissory note and related agreements which led to the Oklahoma Judgment. “Although
agreements alone are likely to be insufficient to establish minimum contacts, ‘parties who reach out
beyond one state and create continuing relationships and obligations with citizens of another state
are subject to regulation and sanctions in the other state for the consequences of their activities.’”
Marcus Food, 671 F.3d at 1166 (quoting TH Agriculture, 488 F. 3d at 1287-88 (internal citation
omitted)). The evidence of the parties’ actual course of dealing in this case establishes contacts with
Oklahoma sufficient to authorize the Court’s exercise of personal jurisdiction over RCI.
The record reflects RCI entered into a business transaction with Boatright, an Oklahoma
limited liability company, whereby RCI received a loan from Boatright. The undisputed evidence
also shows that RCI admittedly defaulted on the loan, although it unsuccessfully argued that there
was a partial failure of consideration. Oklahoma Judgment, Response Ex. 2. According to the
evidence, RCI benefitted from its business relationship with Boatright and, as a result of the
Oklahoma Judgment, is obligated to pay the full amount owed to Boatright on the promissory note.
By their admitted common ownership with RCI, CCRA and Ourlink also engaged in business
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transactions in Oklahoma and, as a result of the 2007 lawsuit, RCI and Ourlink obtained partial relief
from Boatright and the other defendants in that lawsuit. Id.
As a result of the loan transaction with Boatright, whereby RCI affirmatively states it agreed
to submit to the jurisdiction of Oklahoma courts and be governed by Oklahoma law, RCI cannot
now contend that it was not reasonably foreseeable that litigation in Oklahoma could result from its
business transaction.

Although “foreseeability alone” is not sufficient to support personal

jurisdiction, “[f]oreseeability that an event may occur over which a defendant has no control is
distinct from foreseeability of litigation based on the defendant’s own actions.” TH Agriculture, 488
F.3d at 1290 (citing World-Wide Volkswagen, 444 U.S. at 297). The evidence supports the
conclusion that Oklahoma litigation based on its actions was foreseeable to RCI.
According to the evidence of record and the governing law, the Court concludes that RCI
has sufficient contacts with Oklahoma to permit the Court to exercise of personal jurisdiction over
it. Furthermore, the undisputed evidence establishes that the ownership of CCRA is intertwined with
that of RCI and Ourlink, and, as a result of the transfers of ownership which occurred prior to the
filing of this lawsuit, the three movants are sufficiently intertwined to also permit exercise of
personal jurisdiction over Ourlink and CCRA.
Having so concluded, the Court must determine whether the exercise of personal jurisdiction
would offend “traditional notions of fair play and substantial justice.” TH Agriculture, 488 F.3d at
1292 (citing Asahi, 480 U.S. at 113). To do so, the Court weighs five factors: 1) the burden on the
defendant, 2) the forum state’s interest in resolving the dispute, 3) the plaintiff’s interest in receiving
convenient and effective relief, 4) the interstate judicial systems’ interest in obtaining the most
efficient resolution of controversies, and 5) the shared interest of the several states in furthering
fundamental substantive social policies. Id. (citing Intercon, 205 F.3d at 1249).
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In arguing that the exercise of personal jurisdiction would be unreasonable, the movants
focus only on the initial factor. They contend they would be burdened by litigating here because
their principal places of business are in Fort Worth, Texas,5 and all books and records related to the
challenged transfers are located in Fort Worth. However, Fort Worth is not a significant distance
from Oklahoma City, and the movants have retained Oklahoma City counsel.
The second factor requires examination of the forum state’s interest in the dispute, and that
factor favors litigation in Oklahoma. States have “an important interest in providing a forum in
which their residents can seek redress for injuries caused by out-of-state actors.” OMI Holdings,
149 F.3d at 1096. Furthermore, the subject of this lawsuit is a judgment entered by an Oklahoma
court based on a loan agreement which, by its terms, is governed by Oklahoma law. “Oklahoma has
a substantial interest in having a court within Oklahoma decide issues of Oklahoma law.” CITGO
Petroleum Corp. v. Home Service Oil Co., 2009 WL 4348391, at *8 (N.D. Okla. Nov. 30, 2009)
(unpublished). Similarly, Oklahoma has an interest in enforcing judgments entered by its own
courts, and the movants do not argue to the contrary.
The third factor evaluates whether Boatright can receive convenient and effective relief in
another forum. The record before the Court suggests that this factor does not weigh heavily in favor
of either Boatright or the movants, as it does not appear that Boatright’s “chances of recovery will
be greatly diminished” if it is forced to litigate elsewhere. See, e.g., TH Agriculture, 488 F.3d at
1292.
With respect to the fourth factor, this forum appears to be an efficient location for the
litigation. As explained, supra, although documents reflecting the allegedly fraudulent transfers are

5

The movants argue that each is located in Fort Worth, Texas. Reply brief [Doc. No. 9] at p. 8.

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in Texas, the movants do not argue that litigating here will be inefficient. Thus, this factor does not
weigh against litigating the matter in this forum.
The final factor to consider is whether the exercise of jurisdiction here would affect the
“substantive social policy interests of other states.” OMI Holdings, 149 F.3d at 1097. The parties
do not address this factor, and the Court finds nothing in the record to suggest that litigating this
matter in Oklahoma would impact any other state’s social policy.
Having considered the applicable factors, the Court concludes that litigating the action in this
forum would not offend traditional notions of fair play and substantial justice. Accordingly, the
Court may exercise personal jurisdiction over the defendants.
IV. Conclusion:
For the foregoing reasons, the motion to dismiss [Doc. No. 7] for lack of personal jurisdiction
is DENIED. The action will proceed in this Court, and Defendants are directed to file their
responses to the plaintiff’s pleading in accordance with the deadlines in the Local Civil Rules and
the Federal Rules of Civil Procedure.
IT IS SO ORDERED this 11th day of July, 2013.

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