Fowler v. C3 Racing et al
Filing
11
MEMORANDUM AND ORDER granting 5 MOTION to Dismiss for lack of personal jurisdiction. ORDERED that Defendants C3 Racing and Marc Evanss Motion to Dismiss for Lack of Personal Jurisdiction [Doc. # 5] is GRANTED. All claims against C3 Racing and Marc Evans are DISMISSED WITHOUT PREJUDICE. It is furtherORDERED that by September 25, 2015, Plaintiff shall either present evidenceof service on Defendant George Squire or show cause why this case should not bedismissed for lack of service. (Signed by Judge Nancy F. Atlas) Parties notified. (wbostic, 4)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
DAVID FOWLER,
Plaintiff,
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v.
C3 RACING, et al.,
Defendants.
CIVIL ACTION NO. H-15-1421
MEMORANDUM AND ORDER
Plaintiff David Fowler filed this lawsuit asserting a conversion claim, a claim
under the Texas Theft Liability Act, and a slander of title claim. Plaintiff seeks
declaratory and monetary relief. Defendants C3 Racing d/b/a New England Classic
Car Company (“C3 Racing”) and Marc Evans filed a Motion to Dismiss for Lack of
Personal Jurisdiction [Doc. # 5], to which Plaintiff filed a Response [Doc. # 7], and
Defendants filed a Reply [Doc. # 10]. Having reviewed the full record and applied
governing legal authorities, the Court grants the Motion to Dismiss.
I.
BACKGROUND
Plaintiff alleges that in November 2007, he purchased a 1989 Morgan Plus 4
(“Morgan”) automobile from Defendants C3 Racing and Evans, the President of C3
Racing. Plaintiff wire transferred $30,000.00 to Evans’s personal bank account as
payment for the Morgan, but the bill of sale was between Plaintiff and C3 Racing.
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In November 2009, Plaintiff filed a lawsuit in Texas state court alleging that C3
Racing violated the Texas Deceptive Trade Practices Act by failing to deliver to
Plaintiff a certificate of title to the Morgan. The Texas state court entered default
judgment against C3 Racing on September 14, 2010.
In December 2013, Plaintiff filed a lawsuit in Connecticut state court seeking
to domesticate the Texas court default judgment against C3 Racing. Alternatively,
Plaintiff alleged that C3 Racing breached a contract entered into between Plaintiff and
C3 Racing in June 2010 when C3 Racing promised to deliver paperwork that Plaintiff
needed to obtain title to the Morgan in Texas. The Connecticut state court denied
domestication of the default judgment against C3 Racing, holding that C3 Racing
lacked the necessary minimum contacts for the Texas court to exercise personal
jurisdiction. The matter is currently on appeal in Connecticut.
In connection with the Connecticut state court proceeding, Evans and C3
Racing produced documents indicating that the Morgan sold to Plaintiff in 2007 was
sold by C3 Racing to Defendant George Squire on February 12, 2015, for $2,000.00.
Squire has registered the Morgan with the Maine Bureau of Motor Vehicles, but
Plaintiff has a bill of sale from C3 Racing and has physical possession of the vehicle.
Plaintiff filed this lawsuit against C3 Racing, Evans, and Squire on May 27,
2015, and filed an Amended Complaint [Doc. # 6] on July 23, 2015. There is no
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evidence in the record that Plaintiff has served the summons and complaint on Squire.
Defendants C3 Racing and Evans have moved to dismiss, arguing that this Court lacks
personal jurisdiction. The Motion to Dismiss has been fully briefed and is now ripe
for decision.
II.
STANDARD FOR PERSONAL JURISDICTION
“In diversity cases under 28 U.S.C. § 1332, the exercise of personal jurisdiction
over a non-resident defendant must comport with both federal constitutional due
process requirements and the long-arm statute of the state in which the district court
is located.” Companion Prop. & Cas. Ins. Co. v. Palermo, 723 F.3d 557, 559 (5th Cir.
2013); accord Clemens v. McNamee, 615 F.3d 374, 378 (5th Cir. 2010). Only one
inquiry is required in Texas since the long-arm statute extends to the limits of federal
constitutional due process.
Palermo, 723 F.3d at 559.
The constitutional
requirements are satisfied if the nonresident purposefully availed itself of the benefits
and protections of the forum state by establishing minimum contacts there such that
it could reasonably anticipate being haled into court in the forum state, and if the
exercise of jurisdiction does not offend traditional notions of fair play and substantial
justice. J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780, 2787-88 (2011);
Clemens, 615 F.3d at 378.
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The plaintiff bears the ultimate burden of showing that the nonresident
defendant is subject to personal jurisdiction in the forum state. Ainsworth v. Moffett
Eng’g, Ltd., 716 F.3d 174, 176 (5th Cir. 2013); Clemens, 615 F.3d at 378. On a
motion to dismiss decided without an evidentiary hearing, the plaintiff need only make
a prima facie showing of personal jurisdiction. Palermo, 723 F.3d at 559; Clemens,
615 F.3d at 378. “‘[T]he court must accept as true all uncontroverted allegations in
the complaint and must resolve any factual disputes in favor of the plaintiff.’”
Ainsworth, 716 F.3d at 176 (quoting ITL Int’l, Inc. v. Constenla, S.A., 669 F.3d 493,
496 (5th Cir. 2012)).
Minimum contacts with Texas may result in a federal court’s “general” or
“specific” jurisdiction over a nonresident defendant. See Clemens, 615 F.3d at 378.
“A court may assert general jurisdiction over foreign (sister-state or foreign-country)
corporations to hear any and all claims against them when their affiliations with the
State are so ‘continuous and systematic’ as to render them essentially at home in the
forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846,
2851 (2011).
“The inquiry whether a forum State may assert specific jurisdiction over a
nonresident defendant focuses on the relationship among the defendant, the forum,
and the litigation.” Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014) (internal quotation
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marks and citations omitted). Courts must determine whether “there was ‘some act
by which the defendant purposefully avail[ed] itself of the privilege of conducting
activities within the forum State, thus invoking the benefits and protections of its
laws.’” Goodyear Dunlop Tires Operations, S.A., 131 S. Ct. at 2854 (quoting Hanson
v. Denckla, 357 U.S. 235, 253 (1958)) (alteration in original). “[T]he defendant's
suit-related conduct must create a substantial connection with the forum State.”
Walden, 134 S. Ct. at 1121; Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 432 (5th
Cir. 2014).
The courts should apply a three-step analysis for the specific jurisdiction
inquiry: “‘(1) whether the defendant has minimum contacts with the forum state, i.e.,
whether it purposely directed its activities toward the forum state or purposefully
availed itself of the privileges of conducting activities there; (2) whether the plaintiff’s
cause of action arises out of or results from the defendant’s forum-related contacts;
and (3) whether the exercise of personal jurisdiction is fair and reasonable.’” Monkton
Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 432 (5th Cir. 2014) (quoting Seiferth v.
Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006)). The plaintiff bears
the burden of proof for the first two prongs of the analysis, and the burden then shifts
to the defendant to show that exercising jurisdiction would be unfair or unreasonable.
Id.
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III.
ANALYSIS
Plaintiff Fowler argues that this Court has specific jurisdiction over both
Defendants, and has general jurisdiction over Defendant C3 Racing. It is undisputed
that C3 Racing and Evans are citizens of Connecticut. Neither Defendant has an
office or employees in Texas. C3 Racing is not licensed to do business in Texas, and
neither Defendant regularly conducts business in this state. There is no evidence that
C3 Racing or Evans directed any marketing efforts to Texas residents other than
advertising in a publication printed in Vermont and distributed nationwide.
A.
Specific Jurisdiction
Plaintiff argues that this Court has specific personal jurisdiction over both C3
Racing and Evans, but fails to make the necessary showings. As stated previously,
a court has specific personal jurisdiction over a non-citizen defendant only if there was
some act by which the defendant purposefully availed himself of the privilege of
conducting activities in the forum state. See Goodyear Dunlop Tires Operations, S.A.,
131 S. Ct. at 2854. Purposeful availment requires evidence that the defendant’s
contacts with the forum state are attributable to his own conduct and not based solely
on the plaintiff’s actions. See Crystal Semiconductor Corp. v. OPTI Inc., 1997 WL
783357, *4 (W.D. Tex. July 14, 1994).
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In this case, the undisputed evidence shows that Plaintiff travelled to
Connecticut to view and test drive the Morgan.1 Plaintiff paid for the vehicle by
wiring the $30,000.00 purchase price to Evans’s personal bank account at the
Toronto-Dominion Bank, which is located in a state other than Texas. Plaintiff
received delivery of the Morgan in Connecticut and paid to have it shipped to Texas.2
See Memorandum of Decision (by Connecticut State Court), Exh. A to Motion to
Dismiss, p. 2.
Plaintiff asserts that his claims in this lawsuit arise out of the purported sale of
the Morgan to Squire. There is no evidence that any conduct by C3 Racing and Evans
in connection with the sale of the Morgan to Squire occurred in Texas. Plaintiff
argues that the transfer of ownership of the Morgan to Squire “through Maine’s
vehicle registration system is no different than Evans and C3 coming to Texas and
physically taking Fowler’s Morgan to Maine.” See Response, ¶ 25. For purposes of
personal jurisdiction, however, there is a significant difference. There is no evidence
1
The Declaration of Marc Evans, attached as Exhibit 1 to Defendants’ Reply, is made
“upon personal knowledge” and “under penalty of perjury.” As a result, Defendants
have cured the challenged defects in the original Evans Declaration. Plaintiff’s
Objections and Motion to Strike included in the Response to Defendants’ Motion to
Dismiss are denied.
2
Plaintiff does not allege that Defendants delivered the Morgan to him in Texas, only
that the Morgan was delivered to him in Texas. Defendants explain that Plaintiff paid
for the Morgan to be transported to Texas after delivery to him in Connecticut, and
the state court in Connecticut so found.
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that any of the conduct by C3 Racing and Evans in connection with the sale of the
vehicle to Squire took place in Texas. Indeed, it appears that the allegedly wrongful
conduct would have occurred, if at all, in Connecticut and Maine. There is no
evidence that C3 Racing and Evans purposely availed themselves of the laws of the
state of Texas when they allegedly sold the Morgan to Squire and assisted in his
registering the vehicle in Maine.
In this lawsuit, Plaintiff has asserted a conversion claim against C3 Racing and
Evans based on their refusal to deliver the necessary documents for him to register the
Morgan in Texas, his state of residence.3 Plaintiff argues that, because the Morgan is
physically present in Texas, this Court has specific personal jurisdiction over
Defendants. Plaintiff’s argument is unsupported by relevant legal authority and is
unpersuasive. None of Defendants’ conduct in connection with delivering a certificate
of title occurred in Texas.
Nor did Defendants engage in conduct by which
Defendants purposely availed themselves of the right to conduct business in Texas.
Plaintiff has failed to demonstrate that C3 Racing or Evans engaged in conduct
by which they purposefully availed themselves of the privilege of conducting business
3
Under Texas law, conversion is a tort against the right to the possession of property,
not title. See Killian v. TransUnion Leasing Corp., 657 S.W.2d 189, 192 (Tex. App.
-- San Antonio 1983, writ ref’d n.r.e.); Crest Infiniti II, LP v. Texas RV Outlet, 2015
WL 350621, *1 (Tex. App. -- Dallas 2015); Bank of Houston v. Thomas, 1989 WL
131081 (Tex. App. -- Houston [14th Dist.] 1989, writ denied).
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or other activities in Texas. Plaintiff, therefore, has failed to satisfy his burden to
establish that this Court has specific personal jurisdiction over either of these two
Defendants.
B.
General Jurisdiction
Plaintiff argues that this Court has general jurisdiction over C3 Racing. As
noted above, a court may exercise general jurisdiction over non-citizens when their
contacts with the forum state are “continuous and systematic.” See Goodyear Dunlop
Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011).
Plaintiff has presented evidence that C3 Racing advertises in Hemmings Motor
News, a national publication based in Vermont. “National advertising, not targeted
to the forum state, has been found insufficient as a basis for general personal
jurisdiction.” Glazier Group, Inc. v. Mandalay Corp., 2007 WL 2021762, *10 (S.D.
Tex. July 11, 2007) (citing Singletary v. B.R. X., Inc., 828 F.2d 1135, 1136 (5th Cir.
1987)); see also Thompson v. Diamond State Ins. Co., 2007 WL 654337, *4 (E.D.
Tex. Feb. 27, 2007) (citing Bearry v. Beech Aircraft Corp., 818 F.2d 370, 376 (5th
Cir. 1987)).
C3 Racing has presented uncontroverted evidence that it has been selling classic
cars for approximately twenty years, selling approximately one thousand cars during
that period of time. Fewer than five of those cars have been sold to persons living in
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Texas. Five sales to Texas residents over a twenty-year period of time does not
constitute “continuous and systematic” general business contacts with this state.
Additionally, while it is clear that C3 Racing has done limited business in Connecticut
with Texas residents, there is no evidence that it has done business in Texas. See
Autoflex Leasing, Inc. v. Team Motor Sports, Inc., 2004 WL 1402517, *3 (N.D. Tex.
June 23, 2004) (citing Revell v. Lidov, 317 F.3d 467, 471 (5th Cir. 2002)).
Plaintiff has failed to satisfy his burden to demonstrate continuous and
systematic contacts with the State of Texas by C3 Racing. Consequently, Plaintiff has
not established that this Court has general personal jurisdiction over that Defendant.
IV.
CONCLUSION AND ORDER
As explained herein, Plaintiff has failed to satisfy his burden to establish that
this Court has personal jurisdiction over Defendants C3 Racing and Marc Evans. It
is, therefore, hereby
ORDERED that Defendants C3 Racing and Marc Evans’s Motion to Dismiss
for Lack of Personal Jurisdiction [Doc. # 5] is GRANTED. All claims against C3
Racing and Marc Evans are DISMISSED WITHOUT PREJUDICE. It is further
ORDERED that by September 25, 2015, Plaintiff shall either present evidence
of service on Defendant George Squire or show cause why this case should not be
dismissed for lack of service. Plaintiff is advised that failure to comply will result in
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dismissal of this case pursuant to Rule 4(m) of the Federal Rules of Civil Procedure
as against Defendant Squire. It is further
ORDERED that the initial conference is rescheduled to October 5, 2015, at
11:30 a.m.
SIGNED at Houston, Texas, this 21st day of August, 2015.
NAN Y F. ATLAS
SENIOR UNI
STATES DISTRICT JUDGE
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