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First State Insurance Co. v. Pulmosan Safety Equipment Corp.

United States District Court, W.D. Arkansas, El Dorado Division

December 19, 2017

FIRST STATE INSURANCE COMPANY and NEW ENGLAND REINSURANCE CORPORATION PLAINTIFFS
v.
PULMOSAN SAFETY EQUIPMENT CORPORATION; VICKIE BELL; JONATHAN BELL; PHILLIP B. BELL, JR. DEFENDANTS VICKIE BELL; JONATHAN BELL; PHILLIP B. BELL, JR. THIRD-PARTY PLAINTIFFS
v.
JUDITH SUE WEISS; PATRICIA WEISS a/k/a EDITH FLORENCE WEISS; ELLEN JANE WEISS; et al. THIRD-PARTY DEFENDANTS

          ORDER

          Susan O. Hickey United States District Judge.

         Before the Court is the Motion to Dismiss Third Party Complaint of the Weiss Defendants filed by Third-Party Defendants Judith Sue Weiss, Patricia Weiss a/k/a/ Edith Florence Weiss, and Ellen Jane Weiss (collectively, the “Weisses”). (ECF No. 42). Third-Party Plaintiffs Vickie Bell; Jonathan Bell; and Phillip B. Bell, Jr. (collectively, the “Bells”) filed a response. (ECF No. 46). The Weisses filed a reply. (ECF No. 55). The Court finds the matter ripe for consideration.

         I. BACKGROUND

         On June 5, 2017, Plaintiffs First State Insurance Company and New England Reinsurance Corporation filed this declaratory judgment action, seeking declarations that they have exhausted the applicable aggregate limits of certain insurance policies issued to Defendant Pulmosan Safety Equipment Corporation (“Pulmosan”) and that they have no further defense or indemnity obligations under those insurance policies for certain products-liability lawsuits filed against Pulmosan, including a silica-related suit previously filed by the Bells in this Court.[1] The Bells answered the complaint and filed various counterclaims, crossclaims, and third-party claims. In their responsive pleading, the Bells, among other things, deny that the limits of the policies issued by Plaintiffs to Pulmosan have been exhausted and assert that Plaintiffs are liable to pay the $1, 327, 569.00 default judgment entered in the Bell case in favor of the Bells and against Pulmosan. The Bells argue further that if the limits have been exhausted, they were done so improperly and various parties-including the Weisses-are responsible for payment of the default judgment entered in the Bell case. Therefore, the Bells seek declarations that Plaintiffs' insurance policies are not exhausted; that various third-party defendant insurance companies improperly exhausted the limit of Plaintiffs' policies and thus should defend and indemnify said policies; and that Pulmosan's transfer of assets to former corporate officer Howard Weiss in 1986 was improper and thus, the Weisses, as heirs of his estate, are responsible for payment of the judgment against Pulmosan.

         On October 13, 2017, the Weisses filed the instant motion, arguing that the Bells' third-party claims against them should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. The Weisses also argue that the Bells' third-party claims against Patricia Weiss should be dismissed pursuant to Rule 12(b)(5) for insufficient service of process.[2]

         II. DISCUSSION

         The Weisses ask the Court to dismiss the Bells' third-party claims against them for lack of personal jurisdiction.

         A party may move to dismiss claims for lack of jurisdiction over the person. Fed.R.Civ.P. 12(b)(2). To defeat a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing of jurisdiction. Bell Paper Box, Inc. v. U.S. Kids, Inc., 22 F.3d 816, 818 (8th Cir. 1994). This prima facie showing must be tested, not by the complaint alone, but “by the affidavits and exhibits presented with the [motion to dismiss] and in opposition thereto.” Block Indus. v. DHJ Indus., Inc., 495 F.2d 256, 260 (8th Cir. 1974). If a court does not hold a hearing on personal jurisdiction and instead bases its determination on the parties' written submissions, the court must view the facts in the light most favorable to the nonmoving party. Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991). Although a plaintiff ultimately bears the burden of proof on the issue, the plaintiff does not have to prove personal jurisdiction by a preponderance of the evidence until trial or an evidentiary hearing. See Id. However, when conclusory allegations in a complaint are contested and a plaintiff supplies no factual foundation, the complaint's conclusory allegations are insufficient to confer personal jurisdiction over a nonresident defendant. See Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072-73 (8th Cir. 2004).

         A federal court sitting in diversity may assume jurisdiction over a nonresident defendant to the extent permitted by the forum state's long-arm statute. Arkansas's long-arm statute provides that “[t]he courts of this state shall have personal jurisdiction of all persons, and all causes of action or claims for relief, to the maximum extent permitted by the due process of law clause of the Fourteenth Amendment of the United States Constitution.” Ark. Code Ann. § 16-4-101(B).

         Accordingly, the question before the Court is whether exercising personal jurisdiction over the Weisses is consistent with the due process clause of the Fourteenth Amendment. The Fourteenth Amendment permits the exercise of personal jurisdiction over a nonresident defendant who has “certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.'” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). A defendant's conduct and connection with the forum state must be such that the defendant should “reasonably anticipate being haled into court there.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).

         There are two theories for evaluating minimum contacts: general jurisdiction and specific jurisdiction. Dever, 380 F.3d at 1073. Under the general-jurisdiction theory, the Court may hear this lawsuit against the Weisses if they have “continuous and systematic” contacts with Arkansas as to render them essentially at home in Arkansas, even if the injuries at issue in this lawsuit did not arise out of the Weisses' activities directed at Arkansas. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). In contrast, specific jurisdiction is viable if the Weisses have purposely directed their activities at residents of the forum state, and when the litigation results from alleged injuries that arise out of or relate to those activities. Wessels, Arnold & Henderson v. Nat'l Med. Waste, Inc., 65 F.3d 1427, 1432 (8th Cir. 1995) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)).

         Both theories of personal jurisdiction require some act by which the Weisses purposely availed themselves of the privilege of conducting activities within Arkansas, thus invoking the benefits and protections of its laws. See Dever, 380 F.3d at 1073 (citing Hanson v. Denckla, 357 U.S. 235, 253 (1958)). If the Court determines that the Weisses have minimum contacts with Arkansas, it may then consider “whether the assertion of personal jurisdiction would comport with ‘fair play and substantial justice.'” See Id. (quoting Burger King Corp., 471 U.S. at 476).

         The Eighth Circuit has instructed courts to consider the following factors when resolving a personal-jurisdiction inquiry, with significant weight given to the first three factors: (1) the nature and quality of a defendant's contacts with the forum state; (2) the quantity of such contacts; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties. Id. at 1073-74. The third factor is considered only in a specific-jurisdiction analysis. See Miller v. Nippon Carbon Co., Ltd., 528 F.3d 1087, 1091 (8th Cir. 2008). Moreover, the fourth and fifth factors relate to the Court's consideration of “traditional notions of fair play and substantial justice” in the due process analysis. See Lakin v. Prudential Servs., Inc., 348 F.3d 704, 712 (8th Cir. 2003).

         In the instant motion, the Weisses argue that the Court has no personal jurisdiction- general or specific-over them and thus ask the Court to dismiss the Bells' third-party claims against them for lack of personal jurisdiction. The Bells respond that the Court has personal jurisdiction over the Weisses because: (1) the Weisses are properly joined counterclaim defendants, and (2) the Weisses are the successors-in-interest to Pulmosan and thus the Court's personal jurisdiction over Pulmosan is conferred upon the Weisses pursuant to Federal Rule of Civil Procedure 25(c).[3] The Court will first determine whether it has general personal jurisdiction over the Weisses, and if not, the Court will determine whether it has specific personal jurisdiction over the Weisses. If necessary, the Court will then address the Bells' counterclaim-defendants and successors-in-interest arguments.

         A. General Jurisdiction

         Under the general-jurisdiction theory, the Court has personal jurisdiction if the Weisses have “continuous and systematic” contacts with Arkansas as to render them essentially “at home” in Arkansas, even if the injuries at issue in this lawsuit did not arise out of the Weisses' activities directed at Arkansas. Goodyear, 564 U.S. at 919.

         The Weisses argue that the Bells failed to allege any facts to support a conclusion that the Weisses have any continuous or systematic connection with the state of Arkansas. The Weisses point out that the Bells' third-party complaint states that the Weisses are residents of New York. In further support, the Weisses offer the affidavits of Ellen Jane Weiss and Judith Sue Weiss, each stating that they are both residents of New York and that they have never resided in, done business in, or been to Arkansas.

         The Court agrees with the Weisses that the Court has no power to exercise general personal jurisdiction over them. Evidence offered by the Weisses demonstrates that they are residents of New York and that they have never lived in, done business in, or even been to Arkansas. After the Weisses challenged the exercise of general personal jurisdiction, the Bells have failed to establish a prima facie case and rebut the Weisses's assertions with testimony, affidavits, or other documents. The Bells offer no evidence to demonstrate that the Weisses have any presence in or contacts with Arkansas.

         Accordingly, the Court finds that, even when viewing the facts in the light most favorable to the Bells, the Bells have failed to make a prima facie showing that the Weisses have “continuous and systematic” contacts with Arkansas to make them essentially “at home” in the ...


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