Stirling v. Hunt et al
Filing
24
ORDER granting 3 Motion to Dismiss for Failure to State a Claim; granting 7 Motion to Dismiss; denying 17 Motion for Leave to File Amended Complaint. Signed by Judge Samuel H. Mays, Jr on 07/01/2013.
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
STEPHEN J. STIRLING,
Plaintiff,
v.
BARRY HUNT and TERESA HUNT,
Defendants.
)
)
)
)
)
)
)
)
)
No. 12-2737
ORDER DENYING MOTION TO AMEND COMPLAINT AND GRANTING MOTION TO
DISMISS
Before the Court is Plaintiff Stephen J. Stirling’s
(“Stirling”) December 28, 2012 Motion to Amend Complaint.
to Amend, ECF No. 17.)
(Mot.
Defendants Barry Hunt and Teresa Hunt
(collectively “the Hunts”) filed a Response in opposition to
Stirling’s Motion on January 14, 2013.
ECF No. 19.)
(Resp. Mot. to Amend,
Also before the Court is Barry Hunt’s October 3,
2012 Motion to Dismiss Stirling’s First Amended Complaint as
barred by res judicata.
7.)
(Barry Hunt Mot. to Dismiss, ECF No.
Stirling filed a Response in opposition on October 31,
2012.
(Resp. Barry Hunt Mot., ECF No. 10).
Also before the
Court is Teresa Hunt’s September 4, 2012 Motion to Dismiss
Stirling’s First Amended Complaint for lack of personal
jurisdiction.
(Teresa Hunt Mot. to Dismiss, ECF No. 3.)
Stirling filed a Response in opposition on October 2, 2012.
(Resp. Teresa Hunt Mot., ECF No. 5).
For the following reasons, Stirling’s Motion to Amend
Complaint is DENIED.
Barry Hunt’s Motion to Dismiss is GRANTED.
Teresa Hunt’s Motion to Dismiss is GRANTED.
I.
Background
The facts stated are those alleged in Stirling’s First Amended
Complaint unless otherwise indicated.
Stirling brought this
action in the Chancery Court of Tennessee for the Thirtieth
Judicial District against the Hunts individually, doing business
as or as an officer or owner of United Mortgage Desoto, UMD
Financial, and Paragon Home Loans, LLC.
No. 1-1.)
(First Am. Compl., ECF
On August 27, 2012, the Hunts removed the case to
this Court on the ground of diversity of citizenship.
(Notice
of Removal, ECF No. 1.)
Stirling alleges that on May 20, 2003, he obtained a Veteran’s
Administration home loan for residential property located in
Shelby County, Tennessee.
(First Am. Compl. ¶ 1.)
The loan was
serviced by Wells Fargo Home Mortgage (“Wells Fargo”).
(Id.)
Stirling alleges that he timely paid his mortgage up to July 1,
2009, when he attempted to get a loan modification as a result
of financial hardship caused by the death of his wife.
2-3.)
(Id. ¶¶
Stirling alleges that he called Barry Hunt (“Hunt”) on
July 1, 2009, and that Hunt agreed to handle Stirling’s loan
2
modification and advised him to stop making payments on his
existing mortgage.
(Id. ¶ 3.)
He alleges that Hunt told him he
could not get a modification without Hunt’s expert help and that
Wells Fargo would not grant a modification while mortgage
payments were still being made.
(Id.)
Stirling alleges that Hunt was not authorized to communicate
with Wells Fargo on Stirling’s behalf and that, without
Stirling’s knowledge, Hunt impersonated Stirling when
communicating with Wells Fargo about Stirling’s loan.
4.)
(Id. ¶
Stirling alleges that Hunt had the knowledge and
acquiescence of Teresa Hunt when he impersonated Stirling.
(Id.)
Stirling alleges that Hunt was unreachable and did not
keep him apprised of the status of his modification.
(Id.)
He
alleges that, when he was able to reach Hunt, Hunt told him
again not to make his mortgage payments and to ignore
foreclosure notices.
(Id.)
Stirling alleges that Hunt
communicated with Stirling using both Hunt’s individual name and
the names of his businesses with the knowledge and acquiescence
of Teresa Hunt.
(Id.)
Stirling alleges that he went into default on his mortgage
and Wells Fargo initiated foreclosure on his property because of
Hunt’s actions.
(Id. ¶ 5.)
Stirling alleges that Hunt asked
Stirling to send Hunt money to do “emergency work” to stop
foreclosure on Stirling’s property. (Id.)
3
Stirling alleges that
a foreclosure sale of his property was scheduled for January 15,
2010, but that the sale actually occurred on February 12, 2010.
(Id. ¶ 6.)
He alleges that Hunt sent him a bill for $2,000.00
for “stopping foreclosure and for modification for your loan” on
January 14, 2010.
(Id.)
He alleges that Hunt resent the same
bill on January 15, 2010, but requested that the money be sent
to Teresa Hunt rather than to Hunt himself or one of his
businesses.
(Id.)
Stirling alleges that, after the foreclosure
sale was completed on February 12, 2010, he received an
additional bill from Hunt for $450.00 for “current emergency and
additional work.”
(Id.)
Stirling alleges that Hunt never
revealed his actual identity or the fact that he had instructed
Stirling not to pay his mortgage to Wells Fargo before it
foreclosed on Stirling’s property.
II.
(Id.)
Jurisdiction
Subject-matter jurisdiction is proper in this court under 28
U.S.C. § 1332, the parties are completely diverse and the amount
in controversy exceeds $75,000.
Personal jurisdiction over
Teresa Hunt is the underlying issue in Stirling’s Motion to
Amend Complaint, and it will be addressed below.
III. Choice of Law
In a diversity action, state substantive law governs.
See
Brocklehurst v. PPG Indus., Inc., 123 F.3d 890, 894 (6th Cir.
1997)
(citing
Erie
R.R.
Co.
v.
4
Tompkins,
304
U.S.
64,
78
(1938)).
To
determine
the
governing
state
law,
a
federal
district court must apply the choice-of-law rules of the state
in which it sits.
See Klaxon Co. v. Stentor Electric Mfg. Co.,
313 U.S. 487, 496 (1941); Montgomery v. Wyeth, 580 F.3d 455, 459
(6th Cir. 2009) (citation omitted).
For contract claims, Tennessee follows the rule of lex loci
contractus, which provides that “a contract is presumed to be
governed by the law of the jurisdiction in which it was executed
absent a contrary intent.”
Vantage Tech., LLC v. Cross, 17
S.W.3d 637, 650 (Tenn. Ct. App. 1999) (citing Ohio Cas. Ins. Co.
v. Travelers Indem. Co., 493 S.W.2d 465, 467 (Tenn. 1973)); see
also Southeast Tex. Inns, Inc. v. Prime Hospitality Corp., 462
F.3d 666, 672 n.8 (6th Cir. 2006) (observing that “Tennessee
adheres to the rule of lex loci contractus.”).
manifest
an
intent
to
instead
apply
the
“If the parties
laws
of
another
jurisdiction, then that intent will be honored provided certain
requirements are met”: (1) the choice of law provision must be
executed in good faith, (2) the chosen jurisdiction must bear a
material connection to the transaction, (3) the basis for the
choice of law must be reasonable, and (4) the choice of “another
jurisdiction’s law must not be ‘contrary to a fundamental policy
of a state having a materially greater interest and whose law
would
otherwise
govern.’”
Vantage
(citations omitted).
5
Tech.
17
S.W.3d
at
650
Although Stirling includes a cause of action for breach of
contract against the Hunts, neither his First Amended Complaint
nor his Proposed Amended Complaint alleges the existence of a
written contract between Stirling and the Hunts.
has entered any contract into the record.
Neither party
Stirling alleges that
he entered into a verbal agreement with the Hunts and alleges
generally that “[t]he actions complained of took place in Shelby
County,
Tennessee.”
manifested
an
jurisdiction.
(First
Am.
to
apply
intent
The
Court
will
Compl.)
the
apply
Neither
law
the
of
a
party
has
different
substantive
law
of
Tennessee to all contract-related claims.
For tort claims, Tennessee follows the “most significant
relationship” rule, which provides that “the law of the state
where the injury occurred will be applied unless some other
state has a more significant relationship to the litigation.”
Hicks v. Lewis, 148 S.W.3d 80, 86 (Tenn. Ct. App. 2003) (quoting
Hataway v. McKinley, 830 S.W.2d 53, 59 (Tenn. 1992)).
The
alleged injuries in this case occurred in Tennessee, Stirling is
a citizen of Tennessee, and the Hunts do not contend that
another state’s law should apply.
governs all tort claims.
IV.
Standard of Review
A. Amendment
6
Tennessee substantive law
When amendment is no longer permitted as a matter of course,
Federal Rule of Civil Procedure 15(a)(2) allows a party to amend
his pleading only when he obtains the opposing party’s written
consent or leave of court.
Fed. R. Civ. P. 15(a)(2).
“should freely give leave when justice so requires.”
The Court
Id.
A
party seeking leave to amend beyond the deadlines in the
scheduling order must also comply with the requirements of Rule
16, which provides that the court’s schedule may only be
modified for good cause shown.
Leary v. Daeschner, 349 F.3d
888, 906 (6th Cir. 2003); Fed. R. Civ. P. 16(b)(4).
Although leave to amend should be freely given, when “deciding
whether to grant a motion to amend, courts should consider undue
delay in filing, lack of notice to the opposing party, and
futility of amendment.”
Brumbalough v. Camelot Care Ctrs.,
Inc., 427 F.3d 996, 1001 (6th Cir. 2005).
Although “delay by
itself is not sufficient reason to deny a motion to amend,” when
“amendment is sought at a late stage in the litigation, there is
an increased burden to show justification for failing to move
earlier.”
Wade v. Knoxville Utils. Bd., 259 F.3d 452, 458-59
(6th Cir. 2001) (internal citations omitted).
“‘A proposed
amendment is futile if the amendment could not withstand a Rule
12(b)(6) motion to dismiss.’” Riverview Health Inst. LLC v.
Medical Mut. of Ohio, 601 F.3d 505, 520 (6th Cir. 2010) (quoting
7
Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 420 (6th
Cir. 2000)).
B. Motion to Dismiss
In addressing a motion to dismiss for failure to state a claim
under Federal Rule of Civil Procedure 12(b)(6), the court must
construe
the
complaint
in
the
light
most
favorable
to
the
plaintiff and accept all well-pled factual allegations as true.
League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523,
527
(6th
Cir.
2007).
A
plaintiff
can
support
a
claim
“by
showing any set of facts consistent with the allegations in the
complaint.”
(2007).
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 563
This standard requires more than bare assertions of
legal conclusions.
Bovee v. Coopers & Lybrand C.P.A., 272 F.3d
356, 361 (6th Cir. 2001).
“[A] formulaic recitation of the
elements of a cause of action will not do.”
at 555.
Twombly, 550 U.S.
Any claim for relief must contain “a short and plain
statement of the claim showing that the pleader is entitled to
relief.”
curiam).
Erickson
v.
Pardus,
551
U.S.
89,
93
(2007)
(per
“Specific facts are not necessary; the statement need
only ‘give the defendant fair notice of what the . . . claim is
and the grounds upon which it rests.’”
Id. (quoting Twombly,
550 U.S. at 555).
Nonetheless, a complaint must contain sufficient facts “to
‘state a claim to relief that is plausible on its face’” to
8
survive a motion to dismiss.
678
(2009)
(quoting
plausibility
Ashcroft v. Iqbal, 556 U.S. 662,
Twombly,
standard
is
550
not
U.S.
akin
at
to
570).
a
“The
‘probability
requirement,’ but it asks for more than a sheer possibility that
a defendant has acted unlawfully.”
U.S. at 556).
of
action,
Id. (citing Twombly, 550
“Threadbare recitals of the elements of a cause
supported
by
mere
conclusory
statements,
do
not
suffice.”
Id. at 678 (citation omitted).
A plaintiff with no
facts
“armed
conclusions”
and
with
nothing
more
“unlock the doors of discovery.”
V.
Hunts
cannot
Id. at 679.
Analysis
The
than
three
object
grounds.
to
Stirling’s
First,
they
First
contend
Amended
that
Complaint
Stirling’s
on
claims
against Barry Hunt are precluded by the doctrine of res judicata
because Stirling did or should have brought all of them in the
case he filed against Barry Hunt in 2010.
that
Stirling’s
before
the
claims
Court
against
because
Teresa
Stirling
Second, they contend
Hunt
cannot
are
not
establish
properly
that
the
Court has personal jurisdiction over Teresa Hunt, a resident of
Mississippi.
In the alternative, they argue that Stirling fails
to state a claim for which relief can be granted against Teresa
Hunt.
Stirling seeks to amend his First Amended Complaint to address
these objections.
The Hunts argue that his proposed amendments
9
should be denied as futile because they are insufficient to
demonstrate that the Court has jurisdiction over Teresa Hunt,
and they do not set forth any claims against Barry Hunt that are
not barred by res judicata.
A. Proposed Amended Complaint Against Barry Hunt
Stirling
seeks
to
add
factual
allegations
and
a
cause
of
action to his First Amended Complaint stating that Barry Hunt
conducted business without a license in Tennessee and entered
into a contract relating to foreclosure in violation of the
Tennessee Code.
(Prop. Am. Compl. ¶ 3, ECF No.17-1.)
Stirling
also seeks to add allegations that Hunt referred Stirling to
Hunt’s own attorney when Stirling requested legal advice about
the foreclosure of his mortgage.
(Id. ¶ 4.)
Stirling seeks to
add language to his First Amended Complaint elaborating Hunt’s
alleged
“breach
of
the
standard
of
care
for
mortgage
professionals” and Stirling’s “detrimental reliance” on Hunt’s
alleged fraud.
(Id. ¶¶ 6-7.)
allegation
Hunt
that
used
Stirling also seeks to add an
“malicious
and
improper
procure a business relationship” with Stirling.
means
to
(Id. ¶ 8.)
The Hunts argue that every claim raised by Stirling in his
Proposed Amended Complaint could have been brought and litigated
in Stirling’s prior case before this Court, Stirling v. Wells
Fargo Home Mortgage, et al., No. 2:10-cv-2254 (W.D. Tenn. Dec.
6,
2010),
and
that
all
claims
10
are
therefore
barred
by
the
doctrine of res judicata, specifically claim preclusion.
If
Stirling’s claims are barred by claim preclusion, they cannot
survive a motion to dismiss and his amendments are futile.
The doctrine of res judicata includes both claim preclusion
and issue preclusion.
Brooks v. Whirlpool Corp., 499 F. App’x
450, 451 (6th Cir. 2012).
Issue preclusion “is when a judgment
forecloses ‘relitigation of a matter that has been litigated and
decided.’”
Id. (quoting Migra v. Warren City Sch. Dist. Bd. of
Educ., 465 U.S. 75, 77 n.1 (1984)).
to
the
effect
of
a
judgment
in
Claim preclusion “‘refers
foreclosing
litigation
of
a
matter that has never been litigated, because of a determination
that it should have been advanced in an earlier suit.’”
Id.
A
defendant may rely on res judicata when he can show that: “(1) a
court of competent jurisdiction rendered a prior judgment; (2)
the
prior
judgment
was
final
and
on
the
merits;
(3)
both
proceedings involved the same parties or their privies; and (4)
both proceedings involved the same cause of action.”
Hooker v.
Haslam, 393 S.W.3d 156, 165 n.6 (Tenn. 2012).
Barry Hunt argues that Stirling is barred by res judicata from
litigating new claims that arise from the same transaction or
occurrence that formed the basis of Stirling’s cause of action
in Wells Fargo.
amended
facts
occurrence
and
Hunt contends that all of Stirling’s proposed
and
that
claims
arise
amendment
11
is
from
that
futile
transaction
because
or
Stirling’s
Proposed Amended Complaint, including those facts and claims,
could
not
survive
a
motion
to
dismiss.
All
of
Stirling’s
proposed amended facts and claims arise from his alleged attempt
to modify his mortgage and the foreclosure of the mortgage on
his property.
legal
Stirling’s proposed amendments do not affect the
sufficiency
purposes
of
res
of
Stirling’s
judicata.
First
Because
Amended
both
Complaint
Hunt
and
for
Stirling
address res judicata more completely in their filings related to
the
First
Amended
Complaint,
the
Court
will
consider
those
arguments in deciding whether Stirling’s proposed amendments are
futile.
(See Mem. in Supp. of Mot. to Dismiss, ECF No. 7; Pl.’s
Resp. to Mot. to Dismiss, ECF No. 10.)
Hunt argues that all conditions of res judicata have been met
because the claims Stirling brings against him could have been
brought
in
the
previous
action,
which
arose
from
the
same
circumstances and which was dismissed on the merits by this
Court.
(Mem. in Supp. of Mot. to Dismiss.)
Stirling does not
contest that a court of competent jurisdiction entered the prior
judgment
or
that
both
proceedings
involve
(See Pl.’s Resp. to Mot. to Dismiss.)
the
same
parties.
He does not specifically
address whether the two proceedings involve the same cause of
action, but he impliedly admits that they do in his arguments
about whether the judgment was final and on the merits.
12
(Id.)
Stirling argues that he alleged claims for breach of contract,
fraud, and “other torts” against Hunt in Wells Fargo and that
Hunt did not address those claims in his motion to dismiss in
that case.
(Id.)
Stirling contends that, because the Court
dismissed his claims against Hunt on the basis of the arguments
in Hunt’s motion to dismiss, Stirling’s common law tort claims
were never decided, and he was entitled to refile those claims
under the Tennessee Savings Statute allowing a new action after
an adverse decision.
Tenn. Code Ann. § 28-1-105.
The savings
statute provides, in relevant part, that “[i]f the action is
commenced
within
the
time
limited
by
a
rule
or
statute
of
limitation, but the judgment or decree is rendered against the
plaintiff upon any ground not concluding the plaintiff’s right
to action...the plaintiff...may...commence a new action within
one (1) year.”
Stirling’s
Id. at § 28-1-105(a).
argument
is
unavailing.
Stirling’s
Amended
Complaint in Wells Fargo explicitly states that he brings suit
“pursuant
to
(FDCPA)...and
1977...for
the
the
damages
Fair
Debt
Tennessee
to
Collection
Consumer
redress
breach
committed by the Defendant Barry Hunt.”
2254, ECF No. 6.)
of
Practices
Protection
contract
Act
Act
and
of
fraud
(Am. Compl., No. 10-
Stirling does not allege any causes of action
under the common law of the state of Tennessee.
The Court
considered and dismissed Stirling’s claims against Hunt on their
13
merits under these two legal frameworks, stating that all of
Stirling’s claims had been dismissed.
Dismiss, No. 10-2254, ECF No. 30.)
(Order Granting Mot. to
Stirling cites no authority
obligating the Court to address every possible claim that could
be
read
into
specifically
a
plaintiff’s
allege
it.
complaint,
Stirling
did
even
not
if
he
plead
does
not
common
law
causes of action for fraud or breach of contract in Wells Fargo
and cannot now contend that the Court failed to enter final
judgment terminating his right of action because it did not
dismiss his case on those grounds.
The Court’s Judgment in Wells Fargo is final and dismisses
Stirling’s
cause
foreclosure
of
of
his
action
property
against
in
its
Hunt
relating
entirety
(Judgment, No. 10-2254, ECF No. 40.)
on
the
to
the
merits.
Any claim relating to
Stirling’s foreclosure should have been brought in Wells Fargo.
All claims in the instant case arising from that transaction are
barred by res judicata.
Stirling does not bring any claims
against Barry Hunt in this case, either in Stirling’s First
Amended Complaint or the Proposed Amended Complaint, that arise
from a different set of facts or circumstances.
The claims
raised by Stirling’s Proposed Amended Complaint are barred by
res judicata and amendment is futile.
Stirling’s Motion to
Amend as to Barry Hunt is DENIED.
B. Proposed Amended Complaint Against Teresa Hunt
14
Stirling seeks to add jurisdictional allegations to his First
Amended Complaint stating that Teresa Hunt worked in a business
partnership
services
with
and
Barry
that
the
Hunt
Court
providing
has
foreclosure
personal
rescue
jurisdiction
over
Teresa Hunt pursuant to Tenn. Code Ann. §§ 20-2-214, 20-2-223,
and 20-2-225.
(Prop. Am. Compl. ¶ 1.)
Stirling seeks to add
factual allegations that Teresa Hunt handled the collection of
fees as a partner in the business.
(Id. ¶ 2.)
He also seeks to
add allegations that the Hunts knowingly conducted business in
Tennessee without a license and entered into a contract relating
to foreclosure in violation of Tenn. Code Ann. § 47-18-5402.
(Id. ¶¶ 3, 5.)
stating
that
Stirling seeks to add amended causes of action
the
Hunts
“breached
the
standard
of
care
for
mortgage professions” and that Stirling detrimentally relied on
the
Barry
Hunt’s
fraudulent
acquiescence of Teresa Hunt.
misrepresentations
(Id. ¶¶ 6-7.)
made
with
the
Stirling also seeks
to amend his cause of action for tortious interference with
contract to state that Barry Hunt used malicious and improper
means,
with
the
acquiescence
of
business relationship with Stirling.
The
Hunts
argue
that
Teresa
Hunt,
to
procure
a
(Id. ¶ 8.)
Stirling’s
proposed
amendments
are
futile because they do not establish that the Court has personal
jurisdiction
over
Teresa
Hunt
and
15
because,
even
if
they
do
establish jurisdiction, they fail to state a claim on which
relief can be granted on any of the grounds alleged.
The party asserting personal jurisdiction has the burden to
demonstrate that jurisdiction exists.
Schneider v. Hardesty,
669
The
F.3d
693,
697
(6th
Cir.
2012).
“‘weight
of
[the]
burden...depends on whether the trial court chooses to rule on
written
submissions
or
jurisdiction issue.’”
Bank
Nat’l
Assoc.,
to
hear
evidence
on
the
personal
Id. (quoting Serras v. First Tennessee
875
(alteration in original)).
F.2d
1212,
1214
(6th
Cir.
1989)
“When the district court ‘rules on
written submissions alone’ the burden consists of ‘a prima facie
showing that personal jurisdiction exists.’”
original).
Id. (emphasis in
The Court “must view the pleadings and affidavits in
the light most favorable to [the plaintiff] and not consider the
controverting assertions of [the defendant].”
Calphalon Corp.
v. Rowlette, 228 F.3d 718, 721 (6th Cir. 2000).
The Court did
not conduct an evidentiary hearing on this issue, and Stirling
must therefore satisfy only the prima facie standard.
In a diversity case, the Court uses a two-part test to
determine whether it has personal jurisdiction over a defendant.
“The exercise of personal jurisdiction is valid only if it meets
both the state long-arm statute and constitutional due process
requirements.”
Id.
interpreted
be
to
Tennessee’s long-arm statute “‘has been
coterminous
16
with
the
limits
on
personal
jurisdiction imposed by the Due Process Clause of the United
States
Constitution,
and
thus,
the
jurisdictional
limits
of
Tennessee law and of federal constitutional law of due process
are identical.’”
Smith v. Home Depot USA, Inc., 294 F. App’x
186, 189 (6th Cir. 2008) (quoting Intera Corp. v. Henderson, 428
F.3d 605, 616 (6th Cir. 2005) (internal quotations omitted)).
Because
the
analysis
merges,
the
Court
need
only
determine
whether the exercise of personal jurisdiction over Teresa Hunt
would satisfy the requirements of due process.
Due
process
“requires
that
a
defendant
have
‘minimum
contacts...with the forum State...such that he should reasonably
anticipate being haled into court there.’”
Schneider, 669 F.3d
at 701 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 291 (1980)).
must
“‘not
A court’s exercise of personal jurisdiction
offend
traditional
substantial justice.’”
notions
of
fair
play
and
PT Pukuafu Indah v. United States SEC,
661 F.3d 914, 920 (6th Cir. 2011) (quoting Int’l Shoe Co. v.
Washington,
326
U.S.
310,
316
(1945)
(internal
quotations
omitted)).
Personal jurisdiction can be general or specific.
General jurisdiction “is found where contacts ‘are so continuous
and systematic as to render [a foreign defendant] essentially at
home in the forum state.’” Schneider, 669 F.3d at 701 (quoting
Goodyear Dunlop Tire Ops., S.A. v. Brown, 131 S. Ct. 2846, 2851
(2011)
(alteration
in
original)).
17
Specific
jurisdiction
“‘depends
on
an
affiliatio[n]
between
the
forum
and
the
underlying controversy, principally, activity or an occurrence
that takes place in the forum State and is therefore subject to
the
State’s
regulation.’”
Id.
(alteration
in
original).
Stirling alleges only that the Court has specific jurisdiction
over Teresa Hunt based on her alleged acts in conjunction with
Stirling’s attempt to modify his mortgage and the subsequent
foreclosure.
In
the
Sixth
Circuit,
“a
finding
of
specific
jurisdiction comprises three elements”:
First the defendant must purposely 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.
Conn v. Zakharov, 667 F.3d 705, 713 (6th Cir. 2012) (restating
the
Southern
Machine
factors
from
S.
Mach.
Co.
v.
Mohasco
Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968)).
Purposeful availment is essential to a finding that a court
has
personal
jurisdiction.
requirement
prevents
jurisdiction
“solely
Intera,
defendants
as
a
result
428
F.3d
from
being
of
random,
at
616.
haled
The
into
a
fortuitous,
or
attenuated contacts, or of the unilateral activity of another
party or a third person.”
Schneider, 669 F.3d at 701 (quoting
Citizens Bank v. Parnes, 376 F. App’x 496, 502 (6th Cir. 2010)).
18
The Sixth Circuit has held that “purposeful availment may exist
when a defendant makes telephone calls and sends facsimiles into
the forum state and such communications ‘form the bases for the
action.’”
Intera, 428 F.3d at 616 (quoting Neal v. Janssen, 270
F.3d 328, 332 (6th Cir. 2001).
It has also held that the
“‘actual content’ of communications into the forum state that
give
rise
to
an
intentional
purposeful availment.”
tort
action
may
constitute
Id.
The “arising from” prong of the Southern Machine test is
satisfied “when the operative facts of the controversy arise
from the defendant’s contacts with the state.”
F.3d at 723.
although
Personal jurisdiction “may exist over a defendant
he
‘purposely
Calphalon, 228
is
not
directs
communications
physically
present
communications
form
the
“heart”
into
of
in
the
the
the
forum
forum,
cause
of
and
if
he
those
action,’”
because “‘physical presence is not the touchstone of personal
jurisdiction.’”
Intera, 428 F.3d at 617 (quoting Neal, 270 F.3d
at
“arising
333).
The
from”
requirement
is
“subject
to
a
lenient standard.”
Schneider, 669 F.3d at 703.
It “‘does not
require
cause
“arise
that
defendant’s
the
contacts
with
of
action
the
forum;
formally
rather
this
from”
criterion
requires only that the cause of action, of whatever type, have a
substantial
activities.’”
connection
with
the
defendant’s
in-state
Bird v. Parsons, 289 F.3d 865, 875 (6th Cir.
19
2002) (quoting Third Nat’l Bank v. WEDGE Group, Inc., 882 F.2d
1087, 1091 (6th Cir. 1989)).
The
third
prong
requires
that
“the
defendant
have
a
sufficiently substantial connection to the forum such that the
exercise of jurisdiction is not unreasonable.”
F.3d at 703.
Schneider, 669
When the first two prongs are met, “‘an inference
of reasonableness arises and only the unusual case will not meet
[the substantial connection] criteri[on].’”
Id. (quoting Air
Prods. & Controls, Inc. v. Safetech Int’l, Inc., 503 F.3d 544,
554 (6th Cir. 2007) (alteration in original)).
whether
an
exercise
of
jurisdiction
is
To determine
reasonable
the
Court
considers “‘(1) the burden on the defendant; (2) the interest of
the
forum
state;
(3)
the
plaintiff’s
interest
in
obtaining
relief; and (4) other states’ interest in securing the most
efficient resolution of the policy.’”
Id.
Stirling alleges that the Court has personal jurisdiction
over Teresa Hunt under the Tennessee long-arm statute.
The
long-arm statute provides jurisdiction “over non-residents on
‘[a]ny
basis
not
inconsistent
with
the
constitution
of
[Tennessee] or of the United States’...and also as to ‘[a]ny
tortious act or omission within [Tennessee].’”
Harris v. Lloyds
TSP
(6th
Bank,
PLC,
281
F.
App’x
489,
492
(quoting Tenn. Code Ann. § 20-2-214(a)).
is
committed
outside
the
state
20
and
the
n.3
Cir.
2008)
“‘[I]f a tortious act
resulting
injury
is
sustained within the state, the tortious act and the injury are
inseparable,
and
the
jurisdiction
(quoting Neal, 270 F.3d at 331).
tortious
acts
committed
by
lies
in
Tennessee.’”
Id.
Stirling does not allege any
Teresa
Hunt
individually.
Her
alleged liability is predicated on her alleged partnership with
Barry Hunt and her alleged knowledge of and acquiescence in his
alleged tortious activities.
Stirling’s allegations as amended are insufficient to allow
the Court to conclude that it has personal jurisdiction over
Teresa Hunt.
“[w]hile
In Rush v. Shavchuk, the Supreme Court held that,
the
relationships
among
the
parties
may
be
of
significance in evaluating their ties to the forum, the minimum
requirements of International Shoe must nevertheless be met as
to each defendant over whom a court claims jurisdiction.”
U.S. 320, 332 (1980).
444
The “contacts of each defendant must be
assessed individually.”
Am. Copper & Brass, Inc. v. Mueller
Eur., Ltd., 452 F. Supp. 2d 821, 827 (W.D. Tenn. 2006).
Courts
in
the
Sixth
Circuit
have
elaborated
on
this
requirement as it applies to personal jurisdiction and business
associations.
“Personal jurisdiction must be based on something
that the defendant itself has done involving the forum.”
Cupp
v. Alberto-Culver USA, Inc., 308 F. Supp. 2d 873, 878 (W.D.
Tenn. 2004).
When a corporation and its officers are named
separately as defendants in an action, “‘jurisdiction over the
21
individual officers of a corporation cannot be predicated merely
upon jurisdiction over the corporation.’”
Nova Int’l Res., LLC
v. Andec, Inc., 875 F. Supp. 2d 804, 808 (W.D. Tenn. 2012)
(quoting Weller v. Cromwell Oil Co., 504 F.2d 927, 929 (6th Cir.
1974)).
The Court “must make an independent determination about
whether it can exercise specific personal jurisdiction over an
officer or agent named as a party.”
In
Guy
v.
Layman,
a
court
Id.
in
the
Eastern
District
of
Kentucky applied the requirements of Rush to the question of
personal jurisdiction and partnership.
Ky. 1996).
[the
932 F. Supp. 180 (E.D.
The court held that to “exercise jurisdiction over
individual
defendant]
based
on
his
membership
in
the
[defendant] partnership despite his lack of personal contacts
with Kentucky” would be to “ignore[] the dictates of Rush.”
at 183.
The court found that “liability and jurisdiction are
independent”
liability”
Id.
such
based
that
on
even
the
if
acts
all
of
“partners
the
independent for jurisdictional purposes.”
have
partnership,
Id.
potential
“they
are
In essence, “the
possible contacts of the co-Defendants cannot be imputed to [the
defendant partner] to establish the requisite minimum contacts
necessary to exercise personal jurisdiction.”
Id.
Stirling’s Proposed Amended Complaint alleges no actions
taken
by
Teresa
Hunt
in
Tennessee
and
no
tortious
acts
she
committed in a different jurisdiction that resulted in an injury
22
in Tennessee.
Although Stirling alleges that the Hunts worked
together in a partnership that took action in Tennessee, all of
the actual acts of which he complains are those of Barry Hunt.
Even if Stirling had stated the alleged torts as actions of the
partnership rather than of Barry Hunt, those actions could not
be imputed to Teresa Hunt on the sole basis of her membership in
the
partnership
Amended
without
Complaint
does
violating
not
Rush.
satisfy
Stirling’s
any
of
the
Proposed
elements
of
Southern Machine as to Teresa Hunt, and Stirling fails to make a
prima facie showing that the Court has personal jurisdiction.
Because Stirling’s Proposed Amended Complaint could not survive
a motion to dismiss by Teresa Hunt, amendment is futile and
Stirling’s Motion to Amend as to Teresa Hunt is DENIED.
C. Barry Hunt’s Motion to Dismiss
For
the
reasons
stated
above
at
section
V(A),
Stirling’s
claims against Barry Hunt in the First Amended Complaint are
barred by the doctrine of res judicata.
Dismiss
Stirling’s
First
Amended
Barry Hunt’s Motion to
Complaint,
(ECF
No.
7),
is
therefore GRANTED.
D. Teresa Hunt’s Motion to Dismiss
Stirling’s First Amended Complaint does not allege any actions
taken
by
Teresa
Hunt
in
Tennessee
or
any
tortious
acts
she
committed in a different jurisdiction that resulted in an injury
in Tennessee.
For the reasons stated above at section V(B),
23
Stirling’s First Amended Complaint does not make a prima facie
showing of personal jurisdiction as to Teresa Hunt.
Hunt’s
Motion
to
Dismiss
Stirling’s
First
Amended
Stirling’s
Motion
Teresa
Complaint,
(ECF No. 3), is therefore GRANTED.
VI.
Conclusion
For
the
foregoing
Complaint is DENIED.
reasons,
to
Amend
Barry Hunt’s Motion to Dismiss is GRANTED.
Teresa Hunt’s Motion to Dismiss is GRANTED.
Stirling’s claims
against the Hunts are DISMISSED.
So ordered this 1st day of July, 2013.
s/ Samuel H. Mays, Jr.____
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE
24
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