Canal Insurance Company v. Moore Freight Service, Inc et al (TV1)

Filing 58

MEMORANDUM OPINION - Signed by Chief District Judge Thomas A Varlan on 6/09/2014. (KMK, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
CANAL INSURANCE COMPANY,
Plaintiff,
v.
MOORE FREIGHT SERVICES, INC.,
PATTY C. WILSON, individually and as
Administrator of the ESTATE OF
JERRY WILSON, TA OPERATING, LLC,
TRESTON WESLEY HARRIS,
EASTBRIDGE TRAILERS, COMPANY,
MANAC, INC., MANAC TRAILERS USA, INC.,
HENDRICKSON, USA, LLC, and
BOLER COMPANY,
Defendants.

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) No.: 3:13-CV-447-TAV-HBG
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MEMORANDUM OPINION
This civil action is before the Court on Defendant Treston Wesley Harris’s Motion
to Dismiss for Lack of Personal Jurisdiction [Doc. 43].

Plaintiff has responded in

opposition to defendant’s motion [Doc. 52]. For the reasons stated below, the Court will
GRANT defendant’s motion to dismiss.
I.

Background
Plaintiff Canal Insurance Company is a South Carolina corporation, with its

principal place of business in Greeneville, South Carolina [Doc. 27 ¶ 1].

Plaintiff

brought the underlying action for declaratory judgment pursuant to 28 U.S.C. §§2201–
2202 against nine defendants [Id.]. The record shows that of the nine defendants, only

two are residents of Tennessee, or have their principal place of business in Tennessee [Id.
¶¶ 2–10]. The remaining defendants are domiciled in North Carolina, Ohio, Canada,
Pennsylvania, and Illinois [Id.]. Defendant Harris is a resident of Pennsylvania [Id. ¶ 5].
Plaintiff’s complaint alleges federal jurisdiction pursuant to 28 U.S.C. § 1332, diversity
jurisdiction [Id. ¶ 11].
The facts that give rise to plaintiff’s complaint for declaratory judgment arise out
of a wrongful death and survival action commenced by defendant Patty Wilson,
individually and on behalf of her deceased husband, Jerry Wilson, who was employed by
defendant Moore Freight Services (“defendant Moore Freight”) [Id. ¶¶ 13, 16–17].
Defendant Wilson filed a lawsuit in the Eastern District of Pennsylvania alleging that on
October 17, 2011, Jerry Wilson was driving a trailer supplied by defendant Moore
Freight, in the course of his employment, when the “trailer’s brakes began smoking
and/or caught fire” [Id. ¶¶ 13, 17–18]. Defendant Wilson further alleged that “[w]hile
responding to this situation, Jerry Wilson’s heart stopped beating, and he died” [Id. ¶ 18].
Defendant Wilson brought her action for personal injury and wrongful death of Jerry
Wilson against various defendants under theories of strict products liability and
negligence [Id. ¶ 19].
Plaintiff issued a commercial automobile policy to defendant Moore Freight,
which was in effect at the time of Jerry Wilson’s death [Id. ¶ 20]. Plaintiff, however,
contends that based on various exclusions and provisions of the policy of insurance, no
duty to defend or indemnify is owed to the defendants in the Pennsylvania lawsuit [Id. ¶¶
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21–24, 26]. Plaintiff, therefore, brought this action seeking a declaratory judgment from
the Court declaring the rights, obligations, and legal relations of plaintiff and defendants,
and declaring that plaintiff is not obligated to furnish legal counsel or indemnify
defendant Moore Freight in the underlying suit [Id.].
II.

Standard of Review
In the context of a Rule 12(b)(2) motion based on lack of personal jurisdiction, 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)). A district
court may address such a motion on the parties’ submissions or it may permit limited
discovery and hold an evidentiary hearing. Id. When, as here, the Court does not
conduct an evidentiary hearing and relies solely on written submissions and affidavits to
resolve the Rule 12(b)(2) 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. S.E.C., 661 F.3d 914, 920
(6th Cir. 2011) (internal citations and quotations omitted). Because the Court relies
solely on the written submissions and affidavits to resolve the jurisdictional issue, the
burden on plaintiffs is “relatively slight.” See Air Prods., 503 F.3d at 549 (citing Am.
Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988)).

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In diversity cases, federal courts apply the law of the forum state, subject to
constitutional limitations, to determine whether personal jurisdiction exists. Aristech
Chem. Int’l Ltd. v. Acrylic Fabricators Ltd., 138 F.3d 624, 627 (6th Cir. 1998); Reynolds
v. Int’l Amateur Athletic Fed’n, 23 F.3d 1110, 1115 (6th Cir. 1994). Thus, a court must
look not only to the forum state’s long-arm statute, but also to the due process
requirements of the United States Constitution. Aristech, 138 F.3d at 627; Reynolds, 23
F.3d at 1115. Tennessee’s long-arm statute, Tenn. Code Ann. § 20-2-214, expands the
jurisdiction of Tennessee courts to the full limit permitted by due process. Gordon v.
Greenview Hosp., Inc., 300 S.W.3d 635, 645 (Tenn. 2009). When a state’s long-arm
statute reaches as far as the limits of the Due Process Clause, the two inquiries merge,
and the Court need only determine whether the exercise of personal jurisdiction violates
constitutional due process. Aristech, 138 F.3d at 627.
“Due process requires that a defendant have ‘minimum contacts . . . with the
forum states . . . such that he should reasonably anticipate being haled into court there.’”
Schneider v. Hardesty, 669 F.3d 693, 701 (6th Cir. 2012) (quoting World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 297 (1980)).

This requirement

ensures that the exercise of jurisdiction does not “offend traditional notions of fair play
and substantial justice.” See Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945);
Schneider, 669 F.3d at 701. Depending on the type of minimum contacts in a case,

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personal jurisdiction can take one of two forms, general or specific. Air Prods., 503 F.3d
at 550. Specific jurisdiction is the only type of jurisdiction at issue in this case.1
“Specific jurisdiction is confined to the adjudication of issues deriving from, or
connected with, the very controversy that establishes jurisdiction.” Indah, 661 F.3d at
920 (quoting Goodyear Dunlop Tires Org. v. Brown, 131 S. Ct. 2846, 2851 (2011). That
is, specific jurisdiction “exposes the defendant to suit in the forum state only on claims
that ‘arise out of or relate to’ a defendant’s contacts with the forum.” Kerry Steel, Inc. v.
Paragon Indus., Inc., 106 F.3d 147, 149 (6th Cir. 1997) (citing Helicopteros Nacionales
de Colombia S.A., v. Hall, 466 U.S. 408, 414–15, nn. 8–10 (1984)). The United States
Court of Appeals for the Sixth Circuit has developed three criteria for determining
whether specific jurisdiction exists over a particular defendant:
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.
S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968).
Thus, for the exercise of specific personal jurisdiction to be appropriate, defendant
Harris must have purposefully availed himself of the privilege of acting or causing a
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General personal jurisdiction exists when a defendant has “continuous and systematic
contacts with the forum state sufficient to justify the state’s exercise of judicial power with
respect to any and all claims.” Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d 147, 149 (6th
Cir. 1997). Plaintiff has not alleged, nor does the record show, that defendant Harris had
continuous and systematic contacts with Tennessee, so general jurisdiction cannot be established.
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consequence in Tennessee, the cause of action must arise from defendant Harris’s
activities in Tennessee, and defendant Harris’s acts or the consequences of his acts must
have a substantial enough connection with Tennessee to make the exercise of personal
jurisdiction reasonable. Mohasco, 401 F.2d at 381.
III.

Analysis
Defendant Harris argues that there is no basis for a finding of specific personal

jurisdiction over him in Tennessee because he “has not acted, engaged in any activities or
caused any consequence in Tennessee” [Doc. 43]. Defendant Harris also argues that it
would be an extraordinary burden on him to litigate this declaratory judgment action in
Tennessee because of the distance between his home state of Pennsylvania and Tennessee
[Id.]. In response, plaintiff argues that Tennessee’s Declaratory Judgment Act requires
that all interested parties to the declaratory judgment action be joined [Doc. 52]. Plaintiff
asserts that as an interested party, defendant Harris must be a party to the declaratory
action [Id.]. Alternatively, plaintiff argues that if defendant Harris is dismissed for lack
of personal jurisdiction, he should be estopped from challenging a later decision of this
Court on the grounds that he did not have the opportunity to contest the declaratory
judgment action [Id.].
Here, defendant Harris has not purposefully availed himself of the privilege of
acting in Tennessee or causing a consequence in Tennessee, the cause of action did not
arise from his activities in Tennessee, and his acts or the consequences of his acts do not
have a substantial connection to Tennessee. Rather, plaintiff’s cause of action arose
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when Jerry Wilson died while operating defendant Moore Freight’s trailer in
Pennsylvania. Plaintiff has not alleged that defendant Harris had any continuous or
systematic contacts with Tennessee. Instead, the record indicates that defendant has had
no business with Tennessee, has never even visited the state, and has otherwise had no
contact with the state [Doc. 43].
Although plaintiff argues that under the Tennessee Declaratory Judgment Act, it is
required to join all interested parties to a declaratory judgment action, the Court notes
that plaintiff has brought this action pursuant to 28 U.S.C. §§2201–2202 [Doc. 27 ¶ 11].
Regardless, it does not appear that the Tennessee Declaratory Judgment Act forecloses
the duty of plaintiff to establish a court’s personal jurisdiction over defendant. See, e.g.,
Byers v. Auto-Owners Ins. Co., 119 S.W.3d 659 (Mo. Ct. App. 2003) (analyzing a
Tennessee Court’s exercise of jurisdiction in an action for declaratory judgment and
finding that the court should have first addressed defendant’s motion to dismiss for lack
of personal jurisdiction). Additionally, in a factually similar case involving plaintiff, this
Court has found that the Court lacked personal jurisdiction over the defendants where
plaintiff sought a declaratory judgment. See Canal Ins. Co. v. XMEX Transp., LLC, No.
3:12-CV-178, 2013 WL 663742, at *8 (E.D. Tenn. Feb. 25, 2013) (holding that the court
lacked personal jurisdiction over the defendants where the defendants did not
purposefully direct their activities to Tennessee and plaintiff’s cause of action did not
arise from or relate to any contacts with Tennessee).

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Therefore, the Court finds that exercising personal jurisdiction over defendant
Harris would offend traditional notions of fair play and substantial justice and would be
inconsistent with the constitutional requirements of due process.
IV.

Conclusion
For the reasons stated above, the Court will GRANT Defendant Treston Wesley

Harris’s Motion to Dismiss for Lack of Personal Jurisdiction [Doc. 43]. Plaintiff’s
complaint against defendant Harris will be DISMISSED.
ORDER ACCORDINGLY.

s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE

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