Allen v. Noah Precision, LLC

Filing 89

MEMORANDUM OPINION AND ORDER REGARDING DEFENDANTS' MOTIONS TO DISMISS - The Court finds that neither the Lauda Defendants nor Defendant Adams have sufficient contacts with the State of Texas to establish general or specific jurisdiction over t hem. The Court also finds that Plaintiff has failed to state a claim for fraudulent transfer against Defendant Adams. Accordingly, Defendant Adams Motion to Dismiss for lack of personal jurisdiction under Rule 12(b)(2) and for failure to state a clai m under Rule 12(b)(6) (Dkt. 77 ) is GRANTED, the Lauda Defendants Motion to Dismiss for lack of personal jurisdiction under Rule 12(b)(2) (Dkt. 78 )is GRANTED, and Plaintiffs claims against said Defendants are dismissed without prejudice. Signed by Magistrate Judge Kimberly C Priest Johnson on 11/2/2016. (baf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
BRIAN R. ALLEN,

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Plaintiff,
v.
NOAH PRECISION, LLC,
LAUDA-NOAH, LP,
LAUDA-NOAH MANAGEMENT, INC.
and PETER M. ADAMS,
Defendants.

Civil No. 4:14-cv-611

MEMORANDUM OPINION AND ORDER
REGARDING DEFENDANTS’ MOTIONS TO DISMISS
Before the Court are Defendant Peter M. Adams’s (“Adams” or “Defendant”) Motion to
Dismiss for lack of personal jurisdiction under Rule 12(b)(2) and for failure to state a claim
under Rule 12(b)(6) (Dkt. 77) and Defendants Lauda-Noah, LP (“Lauda-Noah”) and LaudaNoah Management, Inc.’s (“LNM”) (collectively the “Lauda Defendants”) Motion to Dismiss
for lack of personal jurisdiction under Rule 12(b)(2) (Dkt. 78). Plaintiff filed responses to both
motions. See Dkts. 80 and 84 (Sealed). Plaintiff’s response to Defendant Adams’s motion to
dismiss (Dkt. 80) also includes several sealed attachments. See Dkts. 81-83 (Sealed). For the
reasons set forth below, both motions (Dkts. 77 and 78) should be GRANTED.
FACTUAL BACKGROUND
Plaintiff filed his state court action on August 15, 2014, in the 199th District Court for
Collin County, asserting claims against Defendant Noah Precision, LLC (“Noah Precision”) for
breach of contract and quantum meruit. Defendant Noah Precision timely filed a notice of
removal on June 11, 2014, on the basis of diversity jurisdiction (see Dkt. 1). On January 29,
2015, Plaintiff filed his First Amended Complaint (Dkt. 16) asserting additional claims against
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Noah Precision for fraudulent transfer, alleging that Noah Precision transferred its assets with the
intent of preventing Plaintiff from obtaining reimbursement for his alleged business expenses
and from purchasing “units” in Noah Precision at an allegedly agreed price, and also naming
Adams as a defendant in his individual capacity. See id. Plaintiff then filed a Second Amended
Complaint on March 20, 2015 (see Dkt. 21), alleging that Lauda-Noah and LNM, as LaudaNoah’s general partner, purchased Noah Precision’s assets with notice of Noah Precision’s
intent to hinder, delay, or defraud Plaintiff. See Dkt. 21. Plaintiff filed a Third Amended
Complaint (see Dkt. 33) on May 20, 2016, a Fourth Amended Complaint on May 21, 2015 (see
Dkt. 34), and, finally, a Fifth Amended Complaint on June 10, 2015 (see Dkt. 42), which is the
operative complaint in this action.
According to Plaintiff, he was an employee of Noah Precision from the date of its
organization in 2004 until August 2014, when Plaintiff contends he was wrongfully terminated.
See Dkt. 42 at ¶8. Plaintiff alleges that during the course of his employment with Noah Precision
he was required to “travel extensively on a national and international basis” and to purchase
equipment, which he stored in his home in Collin County, Texas. See id. at ¶12. Plaintiff further
alleges that Noah Precision agreed to reimburse him for his “reasonable and necessary business
expenses.” See id. at ¶13. Plaintiff claims he was not given any deadline for submission of his
business expenses and was told to spend his time performing “income-generating” work rather
than taking the time to prepare and submit his expenses, which according to Plaintiff, was an
“extremely complicated and time-consuming task, involving thousands of receipts from different
countries with different currencies.” See id. at ¶14. Plaintiff contends that when he submitted
approximately $89,000.00 in unpaid business expenses in August 2014, Noah Precision refused
to reimburse him and then wrongfully terminated him to avoid reimbursing him. See id. at ¶18.

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Plaintiff also contends that Noah Precision wrongfully terminated his employment in order to
avoid repurchasing his units in Noah Precision at a previously agreed-upon price. Id.
Plaintiff’s current complaint alleges claims of breach of contract and quantum meruit
against Noah Precision, as well fraudulent transfer against Noah Precision, the Lauda
Defendants, and Adams in his individual capacity. After Adams and the Lauda Defendants filed
motions to dismiss in response to each of Plaintiff’s amended complaints, the Court granted
Plaintiff the opportunity to conduct limited discovery for the purpose of establishing personal
jurisdiction. See Dkt. 72. Said jurisdictional discovery having been conducted, Defendants have
now renewed their motions to dismiss, and Plaintiff has responded.
LEGAL STANDARD
I.

Personal Jurisdiction
In determining whether it may exercise personal jurisdiction over a nonresident

defendant, the court must consider “both the forum state’s long-arm statute and federal due
process.” Johnston v. Multidata Sys. Int’l Corp., 523 F.3d 602, 609 (5th Cir. 2008) (citing
Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 418 (5th Cir. 1993)). If a state’s longarm statute “extends to the limits of federal due process,” as Texas’s does, the court must only
perform a due process analysis. Id. (citing Wilson v. Belin, 20 F.3d 644, 647 (5th Cir. 1994)).
Due process allows a federal court to exercise personal jurisdiction over a nonresident defendant
only if (1) the nonresident defendant has established minimum contacts by “purposely avail[ing]
himself of the benefits and protections of the forum state,” and (2) “the exercise of jurisdiction
does not offend traditional notions of fair play and substantial justice.” Id. (citing Wilson, 20
F.3d at 647) (internal quotations omitted).

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Minimum contacts may be established through either specific or general jurisdiction.
Lewis v. Fresne, 252 F.3d 352, 358 (5th Cir. 2001). General jurisdiction exists if the defendant
has had substantial, continuous, and systematic contacts with the forum state, regardless of
whether those contacts are related to the cause of action. Johnston, 523 F.3d at 609 (citing
Helicopters Nacionales de Colombia v. Hall, 466 U.S. 408, 414-19 (1984)). Specific jurisdiction
exists when a nonresident defendant has purposefully directed his activities at the plaintiff and
the plaintiff’s alleged injuries derive from those activities. Walk Haydel & Assocs., Inc. v.
Coastal Power Prod. Co., 517 F.3d 235, 243 (5th Cir. 2008) (“Specific jurisdiction applies when
a nonresident defendant has purposefully directed its activities at the forum state and the
litigation results from alleged injuries that arise out of or relate to those activities.”) (internal
citations omitted); Religious Tech. Ctr. v. Liebreich, 339 F.3d 369, 375 (5th Cir. 2003) (citing
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)).
The plaintiff bears the burden of proving that the defendant has had minimum contacts
with the forum state; however, the plaintiff need only make a prima facie showing of such
contact. Johnston, 523 F.3d at 609 (citing Wilson, 20 F.3d at 648). The court must resolve any
disputed facts in favor of the plaintiff and a finding of jurisdiction. Id. (citing Bullion v.
Gillespie, 895 F.2d 213, 217 (5th Cir. 1990)). “[U]ncontroverted allegations in the plaintiff’s
complaint must be taken as true, and conflicts between the facts contained in the parties’
affidavits must be resolved in the plaintiff’s favor for purposes of determining whether a prima
facie case for personal jurisdiction exists.” Bullion, 895 F.2d at 217 (internal citations omitted).
“In considering a motion to dismiss for lack of personal jurisdiction a district court may consider
affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized

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methods of discovery.” Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002) (internal citations
omitted).
If the plaintiff successfully makes a prima facie showing of minimum contacts, the
burden shifts to the defendant to show “that traditional notions of fair play and substantial justice
would be violated by the exercise of jurisdiction.” Johnston, 523 F.3d at 615 (citing Wien Air
Alaska, Inc. v. Brandt, 195 F.3d 208, 215 (5th Cir. 1999) (citations omitted)); Luv N’Care, Ltd. v.
Insta-Mix, Inc., 438 F.3d 465, 473 (5th Cir. 2006) (citing Nuovo Pignone, SpA v. STORMAN
ASIA M/V, 310 F.3d 374, 382 (5th Cir. 2002)).
Under the fairness inquiry, the court examines: “(1) the burden on the nonresident
defendant, (2) the forum state’s interests, (3) the plaintiff’s interest in securing relief, (4) the
interest of the interstate judicial system in the efficient administration of justice, and (5) the
shared interest of the several states in furthering fundamental social policies.” Luv N’Care, 438
F.3d at 473 (citing Felch v. Transportes Lar-Mex SA De CV, 92 F.3d 320, 324 (5th Cir. 1996)).
II.

Failure to State a Claim
Rule 12(b)(6) provides that a party may move for dismissal of an action for failure to

state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). The court must accept
as true all well-pleaded facts contained in the plaintiff’s complaint and view them in the light
most favorable to the plaintiff. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). A claim will
survive an attack under Rule 12(b)(6) if it “may be supported by showing any set of facts
consistent with the allegations in the complaint.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
563 (2007). In other words, a claim may not be dismissed based solely on a court’s supposition
that the pleader is unlikely “to find evidentiary support for his allegations or prove his claim to
the satisfaction of the factfinder.” Id. at 563 n. 8.

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Although detailed factual allegations are not required, a plaintiff must provide the
grounds of its entitlement to relief beyond mere “labels and conclusions” and “a formulaic
recitation of the elements of a cause of action will not do.” Id. at 555. The complaint must be
factually suggestive, so as to “raise a right to relief above the speculative level,” and into the
“realm of plausible liability.” Id. at 555, 557 n. 5. “To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).
For a claim to have facial plausibility, a plaintiff must plead facts that allow the court to draw the
reasonable inference that the defendant is liable for the alleged misconduct. Gonzalez v. Kay, 577
F.3d 600, 603 (5th Cir. 2009). Therefore, “where the well-pleaded facts do not permit the court
to infer more than the mere possibility of misconduct, the complaint has alleged – but it has not
shown – that the pleader is entitled to relief.” Id. (internal quotations omitted).
ANALYSIS
The Lauda Defendants argue that both Lauda-Noah and LNM are Georgia entities not
subject to the personal jurisdiction of this Court and seek dismissal accordingly. See Dkt. 78.
Defendant Adams similarly argues that he is a non-resident who is not subject to the personal
jurisdiction of the Court. See Dkt. 77. Adams also argues that Plaintiff has pleaded no facts to
support his cause of action of fraudulent transfer against him. Id. The Court will first take up the
issue of personal jurisdiction.

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I.

Personal Jurisdiction
A. The Lauda Defendants
General Jurisdiction
The Lauda Defendants contend there is no basis for this Court’s exercise of personal

jurisdiction over them because: (1) both Lauda-Noah and LNM are domiciled in Georgia;
(2) they have no employees, officers, or partners who live in Texas or have offices in Texas;
(3) they are not registered to do business in Texas and do not have a registered agent for service
of process in Texas; (4) they do not own or lease property in Texas; and (5) they don’t pay taxes
in Texas or have any bank accounts in Texas. See Dkts. 78 and 78-1. The Lauda Defendants
assert that Lauda-Noah has only three customers in Texas,1 and it has done work with these
customers since approximately October 3, 2014, which is after the transaction upon which
Plaintiff bases his claims. Id. They further contend that the transaction upon which Plaintiff bases
his claims did not occur in Texas and is not performable in Texas, and other than this lawsuit,
they have no litigation pending against them in Texas and have never initiated any legal action in
Texas. See Dkts. 78 and 78-1.
Plaintiff contends the Court may properly exercise general personal jurisdiction over the
Lauda Defendants because: (1) their purchase of the assets of Noah Precision included “Texas
contracts and goodwill;” (2) they did business with Texas clients after the transfer; and (3) their
employees traveled to Texas. See Dkts. 80 (Sealed) at 8-9 and 83-1 (Sealed) at 15, 18-19, and
21-22. The Fifth Circuit “has consistently imposed the high standard set by the Supreme Court
when ruling on general jurisdiction issues.” Johnston, 523 F.3d at 611. See also In re Chinese
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Based on the record, it appears uncontested that Noah Precision actually had four (4) Texas clients (Texas
Instruments, Maxim, Spansion, and Freescale), and Lauda-Noah continues to do business with each. The record also
indicates there may have been “small changes to the [Texas] customer set” after the transfer from Noah Precision to
Lauda-Noah, in that some additional customers may have purchased spare parts from Lauda-Noah. See Dkts. 83-1
(sealed) at 19 and 83-3 (Sealed) at 2.

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Manufactured Drywall Prod. Liab. Litig., 767 F. Supp. 2d 649, 660 (E.D. La. 2011)
(summarizing cases). “[I]n order to confer general jurisdiction a defendant must have a business
presence in Texas.” Johnston, 523 F.3d at 611 (citing Access Telecom, Inc. v. MCI Telecomms.
Corp., 197 F.3d 694, 717 (5th Cir.1999) (emphasis in original)). “It is not enough that a
corporation do business with Texas.” Id.
Here, the Court finds insufficient contacts to establish that the Lauda Defendants’ had a
“business presence in” Texas and, thus, are subject to the general jurisdiction of this Court. See
id. Furthermore, a non-resident defendant’s contacts with the forum are to be considered in toto
for purposes of the general personal jurisdiction inquiry. See generally Johnston, 523 F.3d at
610. Plaintiff relies exclusively on Chinese Manufactured Drywall as support for his argument
that Lauda-Noah and LNM have sufficient contacts to establish a business presence in Texas and
thus general personal jurisdiction of this Court. However, the Court finds Plaintiff’s reliance on
Chinese Manufactured Drywall unpersuasive.
Plaintiff cites the Chinese Manufactured Drywall defendant’s volume of transactions
with forum residents, the percentage of its total business revenue attributable to transactions in
the forum, and the fact that its employees traveled to the forum for his argument that the contacts
in his case are similar to those in Chinese Manufactured Drywall. See Dkt. 80 (Sealed).
However, the contacts cited by Plaintiff were not the contacts found to be determinative of
general personal jurisdiction in Chinese Manufactured Drywall. Rather, it was the fact that the
Chinese Manufactured Drywall defendant: (1) was licensed to sell insurance in the state; (2) had
appointed the Secretary of State as its agent for service of process; (3) had routinely submitted
insurance policy and endorsement forms and rate filings to the state’s Department of Insurance;

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and (4) had paid premium taxes in the state. See Chinese Manufactured Drywall, 767 F. Supp. 2d
at 662.
Although finding that the Chinese Manufactured Drywall defendant’s percentage of
revenue from the forum supported general personal jurisdiction, the court noted that percentage
of revenue must be “considered in the context of the defendant’s other forum contacts.” See id.
at 663. In reaching its conclusion, the Chinese Manufactured Drywall court analyzed a number
of distinguishable cases where general personal jurisdiction was found to be lacking. For
example, in Access Telecom, the defendant derived substantial revenue from forum residents, but
its business was the result of running its foreign-based telephone lines through the forum–and,
thus, not in the forum, and its contacts were with U.S. companies, not forum-specific companies.
See Chinese Manufactured Drywall, 767 F. Supp. 2d at 663 (citing Access Telecomm, 197 F.3d
at 717–18) (emphasis added). In Dalton v. R & W Marine, although the defendant yielded 12.9%
of its total revenues2 from vessels chartered to its forum subsidiaries, it had no authorization to
do business in the forum state and also did not do business there. Id. (citing Dalton v. R & W
Marine 897 F.2d 1359 (5th Cir.1990)). Finally, the defendant in Bearry v. Beech Aircraft
distributed $250 million of its products to dealers in the forum but was not qualified to do
business in the forum, had no agent for service of process in the forum, did not insure any forum
residents, and did not pay taxes in the forum. Id. (citing Bearry v. Beech Aircraft Corp., 818
F.2d 370 (5th Cir. 1987)).
The common thread in Access Telecom, Dalton, and Beech Aircraft is that the
defendant’s percentage of revenue, without other forum contacts, was insufficient to establish
general personal jurisdiction. See Chinese Manufactured Drywall, 767 F. Supp. 2d at 663. Thus,
the court’s finding of general personal jurisdiction in Chinese Manufactured Drywall was based
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Here, Texas clients appear to represent approximately 9.6% of total revenue. See Dkt. 83-3 at 2.

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on the defendant’s revenue, in addition to the other more determinative contacts noted above.
That is not the case here. Plaintiff has not established that the Lauda Defendants have other
determinative contacts with Texas. They are not domiciled in Texas; they maintain no offices or
bank accounts in Texas; they are not registered to do business in Texas, nor do they have a
registered agent for service of process in Texas; they don’t own or lease property in Texas; and
they don’t pay taxes in Texas.
Although Plaintiff cites the fact that Lauda-Noah employees traveled to Texas, a
defendant’s employees traveling to the forum state is “inconsequential to the general personal
jurisdiction analysis.” See Chinese Manufactured Drywall, 767 F. Supp. 2d at 660 (citing
Johnston, 523 F.3d at 614). Accordingly, the Court finds that Plaintiff has failed to meet his
burden to make a prima facie showing of minimum contacts as to the Lauda Defendants, and,
thus, there is no basis for the exercise of general personal jurisdiction over them. See Johnston,
523 F.3d at 615 (internal citations omitted).
Specific Jurisdiction
Specific jurisdiction is a “claim-specific” inquiry. See Seiferth v. Helicopteros Atuneros,
Inc., 472 F.3d 266, 275 (5th Cir. 2006). A plaintiff bringing multiple claims must establish
specific jurisdiction for each claim. Id. Plaintiff contends that Lauda-Noah and LNM are subject
to specific personal jurisdiction because their “fraudulent transfer” committed outside of Texas
has consequences in or affects Texas and, thus, establishes minimum contacts. See Dkt. 80
(Sealed) at 10. According to Plaintiff, Lauda-Noah, and LNM as its general partner, “singled
out, aimed its conduct at, and targeted Plaintiff” by “accepting the assets of Noah Precision with
actual intent to delay, hinder, or defraud [Plaintiff].”

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In support of specific jurisdiction for his fraudulent transfer claim, Plaintiff directs the
Court’s attention to a 2009 Fifth Circuit decision where a non-resident transferee was found to
have sufficient minimum contacts with the forum state to support jurisdiction. See Mullins v.
TestAmerica, Inc., 564 F.3d 386, 400–03 (5th Cir. 2009). In Mullins, the Fifth Circuit upheld the
district court's exercise of personal jurisdiction over defendants who had no contacts with the
forum state of Texas other than their alleged involvement in a fraudulent transfer scheme upon
plaintiffs, concluding that defendants had “purposefully aimed their conduct at [plaintiff] in
Texas …, with the knowledge that their conduct would [] impair the rights of a single, major
creditor and Texas resident under agreements that center around Texas.” Id. at 398.
The Fifth Circuit reached this holding by interpreting the “effects” test articulated by the
Supreme Court in Calder v. Jones, 465 U.S. 783 (1984). Under the Calder effects test, “an act
done outside the state that has consequences or effects within the state [to] suffice as a basis for
jurisdiction in a suit arising from those consequences if the effects are seriously harmful and
were intended or highly likely to follow from the nonresident defendant's conduct.” Mullins v.
TestAmerica, Inc., 564 F.3d at 400 (internal citations omitted). Because the plaintiff was a Texas
resident, because the defendant was “acutely aware” that its conduct would thwart the plaintiff's
claim to a portion of the proceeds involved, and because the contracts governing the parties’
business relationship were governed by Texas law, the Fifth Circuit held that the defendants
“should reasonably have anticipated being haled into a Texas court for precipitating and
directing an alleged[ly] fraudulent transfer at the expense of a known, major creditor in Texas
whose right to payment arises out of contracts that share a strong connection with Texas.” Id. at
402.

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Although the Fifth Circuit expressed skepticism at notions that the Calder effects test
establishes personal jurisdiction whenever the recipient of a fraudulent transfer injures a creditor,
or that “personal jurisdiction exists over the recipient of a fraudulent transfer anywhere a
complaining creditor files suit simply by virtue of the creditor's residence in that forum,” the
court overcame its skepticism based on evidence that the plaintiff/creditor had been targeted and
singled out by the defendants and that the defendants intended to block any sale that included a
distribution of assets to that specific creditor. Id. at 401-02 (emphasis added). Notably, Mullins
did not hold that a categorical finding of personal jurisdiction exists when a transferee acts with
an intent to hinder, delay, or defraud a creditor, nor did it find that the Calder effects test
supplanted the minimum contacts test. Id. at 400. Plaintiff also relies on Dontos v. Vendomation
NZ, Ltd., 582 Fed. App’x 338 (5th Cir. 2014), a case that relies heavily on Mullins. Just as in
Mullins, the Dontos plaintiff alleged specific facts regarding the transferees’ purported
complicity in the alleged fraudulent transfer.
The Court finds Mullins and Dontos both readily distinguishable. The finding of personal
jurisdiction over the non-resident transferees in Mullins was based on a multitude of contacts
with Texas, including the fact that the acts that thwarted the plaintiffs’ right to payment were
executed in Texas and the debtor-creditor relationship at issue was “centered in Texas.” Mullins,
564 3d at 401. The Fifth Circuit in Mullins also paid special attention to the fact that the debtor’s
majority shareholder and a member of its board actually engineered the transaction underlying
the plaintiff’s claim in a manner that would ensure the plaintiff would not get paid. See id. at
401–03. In Dontos, the plaintiff’s allegations involved layers of transactions where the
transferring entities were either on the verge of receivership or bankrupt, and the court based its
jurisdictional finding on the fact that the defendants allegedly fraudulently transferred assets

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specifically to prevent Texas plaintiffs from collecting a pre-existing judgment. See Dontos, 582
Fed. App’x at at 346–47.
Here, nothing in the record demonstrates that the complained-of transfer was engineered
to ensure that Plaintiff would not get paid. Defendant Adams asserts in his declaration that Noah
Precision specifically set aside assets to pay Plaintiff in connection with the claims at issue in
this lawsuit. See Dkt. 78-1. Furthermore, there is evidence in the record indicating that Noah
Precision and Lauda-Noah specifically considered how to resolve the issue of Plaintiff’s
outstanding expenses and his investment in Noah Precision. See Dkt. 83-3 (Sealed) at 3.
Plaintiff’s claims here do not establish the sort of targeted activity described in Mullins and
Dontos. Plaintiff has thus failed to establish a prima facie case of specific personal jurisdiction of
the Lauda Defendants. Accordingly, Plaintiff has failed to establish any theory to support the
Court’s jurisdiction over the Lauda Defendants.
B. Defendant Adams
Plaintiff does not attempt to argue that Defendant Adams in his individual capacity has
substantial, systematic, and continuous contacts with Texas sufficient to establish general
personal jurisdiction. Furthermore, such an argument would be unavailing given evidence that:
(1) Adams is a resident of California; (2) does no business in Texas in his individual capacity;
(3) maintains no offices or bank accounts in Texas; (4) does not maintain a registered agent for
service of process in Texas (nor is he required to do so); (5) does not own any personal or real
property in Texas; and (6) does not pay taxes in Texas or have any bank accounts in Texas. See
Dkts. 77 and 77-1. Additionally, Adams contends that except for the instant lawsuit, he has no
litigation pending by or against him in Texas and has never initiated legal action in Texas, and he
has not individually entered into any contracts performable in whole or part in Texas. See id.

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For similar reasons as those explained above, Defendant Adams is also not subject to this
Court’s specific personal jurisdiction.

As noted, specific jurisdiction is a “claim-specific”

inquiry. See Seiferth, 472 F.3d at 275. Plaintiff argues that Adams is subject to specific personal
jurisdiction based on the transfer of assets from Noah Precision to Lauda-Noah and his role as
“an officer and insider of Noah Precision, Lauda-Noah and Lauda-Noah Management.” See Dkt.
80 (Sealed) at 11. As previously explained, there is nothing here to indicate that the transfer was
fraudulently made to avoid paying Plaintiff for his outstanding expenses and for his investment
in Noah Precision. See Dkts. 78-1 and 83-3 (Sealed) at 3.
Plaintiff has thus failed to establish any theory to support this Court’s jurisdiction over
Defendant Adams.
II.

Failure to State a Claim as to Defendant Adams
Plaintiff’s operative complaint alleges only one cause of action against Adams—

fraudulent transfer. Defendant Adams argues that Plaintiff’s fraudulent transfer claim against
him should be dismissed pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon
which relief can be granted. See Dkt. 77 at 4. Although Plaintiff fails to cite the Texas Uniform
Fraudulent Transfer Act (“TUFTA”), his pleadings indicate that he is alleging Adams violated
Section 24.005(a)(1) of the Texas Business and Commerce Code.
To state a claim under this provision of TUFTA, a plaintiff must show “that (1) [he] is a
‘creditor’ with a claim against a ‘debtor’; (2) the debtor transferred assets after, or a short time
before, the plaintiff’s claim arose; and (3) the debtor made the transfer with the intent to hinder,
delay, or defraud the plaintiff.” See Dontos v. Vendomation NZ Ltd., 582 F. App’x 338, 344 (5th
Cir. 2014); see also TEX. BUS. & COMM. CODE §24.005(a)(1). A “creditor” under TUFTA is
“someone who has a ‘claim.’” See Dontos, 582 F. App’x at 344; see also TEX. BUS. & COMM.

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CODE § 24.002. TUFTA defines “debtor” as “a person who is liable on a claim.” See TEX. BUS.
& COMM. CODE §24.002. TUFTA defines “claim” as “a right to payment or property, whether or
not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured, or unsecured.” See id.
Defendant Adams argues that Plaintiff has failed to allege any facts to state a claim that
he is a creditor with a claim against Adams as a debtor as those terms are defined under TUFTA.
See Dkt. 77 at 5. The Court agrees. As Defendant Adams point out in his motion, nothing in
Plaintiff’s complaint alleges that Adams is personally liable to Plaintiff on a claim, as those
terms are defined under TUFTA. Plaintiff’s allegations in his live complaint only relate to money
allegedly owed to him by Noah Precision. Accordingly, even taking Plaintiff’s well-pleaded
allegations as true, he has failed to state a claim against Defendant Adams.
CONCLUSION
For the foregoing reasons, the Court finds that neither the Lauda Defendants nor
Defendant Adams have sufficient contacts with the State of Texas to establish general or specific
jurisdiction over them. The Court also finds that Plaintiff has failed to state a claim for fraudulent
transfer against Defendant Adams. Accordingly, Defendant Adams’ Motion to Dismiss for lack
of personal jurisdiction under Rule 12(b)(2) and for failure to state a claim under Rule 12(b)(6)

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(Dkt. 77) is GRANTED, the Lauda Defendants’ Motion to Dismiss for lack of personal
jurisdiction under Rule 12(b)(2) is GRANTED, and Plaintiff’s claims against said Defendants
are dismissed without prejudice.
It is SO ORDERED.

SIGNED this 2nd day of November, 2016.
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KIMBERLY C. PRIEST JOHNSON
UNITED STATES MAGISTRATE JUDGE