Dental Dynamics LLC v. Jolly Dental Group LLC et al
Filing
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ORDER granting 12 defendants' Motion to Dismiss for Lack of Personal Jurisdiction and dismissing this action for lack of personal jurisdiction (as more fully set out). Signed by Honorable Vicki Miles-LaGrange on 5/15/2018. (ks)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
DENTAL DYNAMICS, LLC,
an Oklahoma limited liability company,
Plaintiff,
vs.
JOLLY DENTAL GROUP, LLC, an
Arkansas limited liability company d/b/a
JOLLY FAMILY DENTISTRY, and
SCOTT D. JOLLY, DDS, an individual,
Defendants.
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Case No. CIV-17-1216-M
ORDER
Before the Court is defendants’ Motion to Dismiss for Lack of Personal Jurisdiction, filed
January 2, 2018. On January 23, 2018, plaintiff filed its response, and on January 30, 2018,
defendants filed their reply.
Based upon the parties’ submissions, the Court makes its
determination.
I.
Introduction
Plaintiff is a limited liability company organized and existing under the laws of the State
of Oklahoma with its principal place of business in Oklahoma County, Oklahoma. Kellie Haller
is the sole member and manager of plaintiff. Defendant Jolly Dental Group, LLC (“JDG”) is a
limited liability company organized and existing under the laws of the State of Arkansas with its
principal place of business in North Little Rock, Arkansas. Defendant Scott D. Jolly, DDS (“Dr.
Jolly”) is an individual and a resident of the State of Arkansas and is an owner, manager, and/or
member of JDG.
Plaintiff is engaged in the business of brokering sales of dental units, 2D and 3D imaging
devices and related software between dentists across the United States. On or about May 20, 2017,
plaintiff, by and through Ms. Haller, brokered a contract with JDG, by and through Dr. Jolly, for
the sale of a 2014 Planmeca Promax MID Serial # NTP670746 (the “X-Ray Unit”), which Dr.
Jolly allegedly represented was in perfect working condition. Based on this representation,
plaintiff secured the sale of the X-Ray Unit to Dr. Joiner, a dentist located in Santa Cruz,
California, and Dr. Joiner thereafter paid for the X-Ray Unit in full. Dr. Joiner paid plaintiff, and
plaintiff paid JDG.
According to the terms of the Bill of Sale, JDG agreed to sell the X-Ray Unit and all related
components, including the computer hardware, software, manuals, and X-Ray Unit accessories.
In addition, JDG agreed to secure Patterson Dental, a repair and support company for dental
technology, to properly disassemble and crate the X-Ray Unit. Plaintiff prepared a Bill of Sale for
the X-Ray Unit and emailed Dr. Jolly the Bill of Sale, and Dr. Jolly signed the Bill of Sale and
emailed it back to plaintiff’s office. In August 2017, Ms. Haller received a call from Dr. Joiner,
who discovered the X-Ray Unit was missing hardware and software and was not in perfect working
condition.
On November 10, 2017, plaintiff filed the instant action, alleging a breach of contract claim
against JDG and an actual/constructive fraud claim against Dr. Jolly. Defendants now move this
Court, pursuant to Federal Rule of Civil Procedure 12(b)(2), to dismiss this action without
prejudice due to lack of personal jurisdiction.
II.
Discussion
Plaintiff bears the burden of establishing personal jurisdiction. See Dudnikov v. Chalk &
Vermilion Fine Arts, Inc., 514 F.3d 1063, 1069 (10th Cir. 2008). However, when a motion to
dismiss is decided at the preliminary stage based upon the complaint and affidavits, a plaintiff need
only make a prima facie showing of personal jurisdiction. See id. at 1070. In determining whether
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plaintiff has made a prima facie showing, the Court resolves all factual disputes in favor of
plaintiff. See id. Additionally, a plaintiff must establish a court’s personal jurisdiction with respect
to each of the claims alleged. See Sunward Elecs., Inc. v. McDonald, 362 F.3d 17, 24 (2d Cir.
2004) (“A plaintiff must establish the court’s jurisdiction with respect to each claim asserted.”)
(emphasis in original); 4A Charles Alan Wright, Arthur R. Miller & Adam N. Steinman, Federal
Practice and Procedure § 1069.7 (4th ed. 2015) (“[I]t is important to remember that a plaintiff also
must secure personal jurisdiction over a defendant with respect to each claim she asserts.”).
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. Because Oklahoma’s long-arm
statute permits the exercise of any jurisdiction that is consistent with
the United States Constitution, the personal jurisdiction inquiry
under Oklahoma law collapses into the single due process inquiry.
Intercon, Inc. v. Bell Atl. Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir. 2000) (internal
citations omitted).
The Due Process Clause permits the exercise of personal jurisdiction
over a nonresident defendant so long as there exist minimum
contacts between the defendant and the forum State. The “minimum
contacts” standard may be met in two ways. First, a court may,
consistent with due process, assert specific jurisdiction over a nonresident defendant if the defendant has purposefully directed his
activities at residents of the forum, and the litigation results from
alleged injuries that arise out of or relate to those activities. When
a plaintiff’s cause of action does not arise directly from a
defendant’s forum-related activities, the court may nonetheless
maintain general personal jurisdiction over the defendant based on
the defendant’s business contacts with the forum state.
Id. (internal quotations and citations omitted).
A specific jurisdiction analysis involves a two-step inquiry. First [a
court] must consider whether the defendant’s conduct and
connection with the forum State are such that he should reasonably
anticipate being haled into court there. Second if the defendant’s
actions create sufficient minimum contacts, [a court] must then
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consider whether the exercise of personal jurisdiction over the
defendant offends traditional notions of fair play and substantial
justice.
Benton v. Cameco Corp., 375 F.3d 1070, 1075 (10th Cir. 2004) (internal quotations and citations
omitted).1 “A defendant’s contacts are sufficient if the defendant purposefully directed its
activities at residents of the forum, and . . . the plaintiff’s claim arises out of or results from actions
by the defendant himself that create a substantial connection with the forum state.” Id. at 1076
(internal quotations and citation omitted) (emphasis in original). In the context of a tort claim, the
purposeful direction requirement may be met when a defendant engaged in “(a) an intentional
action . . . (b) expressly aimed at the forum state . . . with (c) knowledge that the brunt of the injury
would be felt in the forum state. . . .” Dudnikov, 514 F.3d at 1072. Further, whether a defendant
has the required minimum contacts must be decided on the particular facts of each case. See
Benton, 375 F.3d at 1076.
A.
Breach of contract claim
Plaintiff has alleged a breach of contract claim against JDG. It is well-established that a
contract between an out-of-state party and a forum state resident cannot, standing alone, establish
sufficient minimum contacts with the forum state. See Benton, 375 F.3d at 1077. “However, with
respect to interstate contractual obligations . . . 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.” Id. (internal quotations
omitted).
In the case at bar, plaintiff does not allege that this Court has general jurisdiction over Defendants
but alleges that this Court has specific jurisdiction over Defendants.
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Having carefully reviewed the Complaint and the parties’ submissions, the Court finds that
plaintiff has failed to establish a prima facie case of personal jurisdiction over JDG for its contract
claim. Specifically, the Court finds that JDG’s contacts with Oklahoma relating to the contract
claim are not sufficient to establish the minimum contacts necessary to support the Court’s exercise
of personal jurisdiction over JDG with respect to this claim. The Court finds that plaintiff has not
shown that there was any continuing relationship or obligations between plaintiff and JDG prior
to them entering the contract at issue. Additionally, the contract at issue was to be performed in
Arkansas.
Accordingly, the Court finds that JDG should be dismissed for lack of personal jurisdiction.
B.
Fraud claim
Plaintiff has alleged an actual/constructive fraud claim against Dr. Jolly. With respect to
the fraud claim, plaintiff alleges that Dr. Jolly falsely represented to plaintiff that the X-Ray Unit
was in perfect working condition and that Dr. Jolly represented and promised he would properly
disassemble and crate the X-Ray Unit and provide the computer hardware and software required
to operate the X-Ray Unit and Dr. Jolly had no intention to perform these promises. See Complaint
at ¶¶ 19-20. These allegations, accepted as true at this stage of the proceedings, are sufficient to
show intentional actions by Dr. Jolly. However, having reviewed the Complaint and the parties’
submissions, the Court finds plaintiff has failed to show that Dr. Jolly’s intentional actions were
expressly aimed at Oklahoma with knowledge that the brunt of the injury would be felt in
Oklahoma. Plaintiff was the broker in the transaction between Dr. Jolly and Dr. Joiner. Dr. Joiner
was the individual who was ultimately purchasing the X-Ray Unit, and the X-Ray Unit was being
shipped directly to Dr. Joiner in California. Therefore, any alleged fraud regarding the condition
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of the X-Ray Unit and the shipment of the X-Ray Unit and its hardware and software by Dr. Jolly
were primarily aimed at California where Dr. Joiner was located.
Accordingly, the Court finds that Dr. Jolly’s contacts with Oklahoma relating to the fraud
claim are not sufficient to establish the minimum contacts necessary to support the Court’s exercise
of personal jurisdiction over Dr. Jolly with respect to this claim. The Court, therefore, finds that
Dr. Jolly should be dismissed for lack of personal jurisdiction.
III.
Conclusion
For the reasons set forth above, the Court GRANTS defendants’ Motion to Dismiss for
Lack of Personal Jurisdiction [docket no. 12] and DISMISSES this action for lack of personal
jurisdiction.
IT IS SO ORDERED this 15th day of May, 2018.
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