Opinion
CIVIL ACTION 03-0976, SECTION "T" (1)
August 27, 2003
Before the Court is a Motion to Dismiss for Lack of Personal Jurisdiction under FRCP Rule 12(b)(2) filed on behalf of the Defendant, Ernest A. Enos d/b/a/ The Maritime Group ("Enos"). The Court, having considered the arguments of counsel, the evidence presented, the law and applicable jurisprudence, is fully advised in the premises and ready to rule.
ORDER AND REASONS
I. BACKGROUND:
This cases arises out of a marine insurance contract placed by Enos on behalf of the Plaintiff, PPD Ship, L.L.C. ("PPD"). There was an initial phone conversation between Captain Luka Frankovic ("Frankovic") of PPD and Enos during the first week of 2003. During the conversation, PPD advised Enos that the American Club and Corvette Underwriters had decided to drop coverage on PPD's vessel, the M/V Adamo, due to a change of the vessel's class to non-IACS member. Upon Frankovic's return to PPD's Kenner, Louisiana office, Frankovic sent a telefax, dated January 9, 2003, to Enos instructing Enos as to the desired coverage, i.e. hull and machinery and P I coverage.
On or about January 17, 2003, Enos telefaxed a quotation for various insurances and with wire transfer instructions to Frankovic at the Kenner office. Frankovic then confirmed the acceptability of the quotes and Enos faxed a cover note to the Kenner office confirming the coverages. In accordance with the instructions, PPD wired Enos 513,333.00 on January 17, 2003. A revised quote was transmitted by Enos to Frankovic on January' 19, 2003.
Enos provided two policies to PPD. Both policies indicated that the insured was PPD Ship L.L.C. and included the address 1101 Veterans Blvd. Kenner, Louisiana 70062. Both policies also stated that Liberty Insurance Co. AW was the insurer and that the insurance and/or memoranda was authorized by `The Maritime Group" on behalf of Liberty Insurance Co. AVV.
At PPD's request, Enos also placed pollution insurance for PPD with the Water Quality Insurance Syndicate ("WQIS") in New York. Of the 513,333.00 wired to Enos, 55,821.61 of it was for the WQIS policy. Shortly after the money was wired, PPD informed Enos that they did not wish to accept the policies and requested a complete reimbursement of the wired funds. Enos wired the funds back to PPD but PPD requested he keep the WQIS policy in force. The WQIS policy remains in force.
Within one week of placing the insurance, while the M/V' Adamo was en route to Mexico to pick up cargo for shipment to the United States, PPD was contacted by the charterers/brokers for the next voyage/cargo regarding the insurance coverages on the vessel. Upon confirming that insurance was placed with Liberty Insurance Co. AVV, the charterers/brokers spoke to Enos. Enos ultimately advised that he would replace the Liberty Insurance Co. AVV coverage with another insurer. Coverage, however, could not be placed immediately because the vessel was at sea and no survey could be performed on behalf of the new insurer. As a result, the charterer canceled the charter party. The lawsuit ensued.
II. ARGUMENTS ON BEHALF OF THE PARTIES:
A. ARGUMENTS OF ENOS IN SUPPORT OF MOTION TO DISMISS:
The Defendant argues that the claim does not arise out of sufficient minimum contacts between Enos and the forum. First, the exercise of personal jurisdiction over a non-resident must satisfy the requirements of dues process. See Burger King Corp. v. Rudzewics, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183 (U.S. 1985). A contract which brings the defendant into contact with the forum, standing alone, is insufficient to establish personal jurisdiction. Id at 2185. Second, even where minimum contacts exist to satisfy the first prong of the due process inquiry, the Court must then inquire into whether requiring the defendant to litigate in the forum would be unfair in determining whether to exercise jurisdiction. Id at 2184. Enos' contacts with Louisiana are virtually non-existent. His contacts do not rise to the level of the required minimum contacts and do not satisfy the due process notions of fair play and substantial justice. The fortuitous event that someone in Mobile, Alabama from PPD would contact Enos, the random act of a third party, cannot satisfy the purposeful availment requirement of due process. Enos had no affirmative contacts with Louisiana regarding PPD. He merely sent a few facsimile transmissions to a Metairie office.
There are numerous cases, similar to the instant matter, that have been dismissed for lack of personal jurisdiction. In a Louisiana case, the court affirmed the dismissal of a claim by a hotel operator in Belize.Alba v. Pyramid Island, Ltd., 474 So.2d 486 (La.App. 4th Cir. 1985). The court stated "it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum." Id. (citing Hanson v. Denckla. 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958); International Shoe Co. v. Washington. 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945)). In the Alba case, the defendant had more contacts with Louisiana than Enos does in this case. The Court, therefore, should not exercise jurisdiction over the Defendant and, since the first prong is not satisfied, there is no need to discuss the second prong.
B. ARGUMENTS OF PPD SHIP IN OPPOSITION TO MOTION TO DISMISS:
The Plaintiff argues that the claims are based on transacting business in Louisiana and/or contracting to supply services or things in the state and, therefore, involves specific jurisdiction. The insurance was provided by Enos to PPD in Louisiana. There are few cases which discuss specific jurisdiction over insurance agents, brokers, or insurers, presumably because very few foreign agents, brokers, or insurers object to Louisiana courts exercising personal jurisdiction over them when they provide services in the state for which they receive commissions or premia. Moreover, the cases cited by Enos in support of his Motion are not dispositive. The cases cited do not involve contracts to provide insurance, which are of particular and continuing concern to Louisiana courts and Louisiana citizens. The Alba case the Defendant relies on did not involve a contract to supply services or things in Louisiana. 474 So.2d at 488. The Defendant's Motion, therefore, should be denied.
C. ENOS' REPLY:
Enos re-urges the fact that Enos' contacts with Louisiana consist of him sending a few faxes to PPD, having a few telephone conversations with PPD, and having the two insurance policies sent to PPD. Enos has no other contacts with Louisiana. The cases cited by PPD in their Opposition are distinguishable from the instant matter in that the defendants had more contacts with the forum than Enos has in the present case and because the Defendant was the insurer, not simply the broker/intermediary who procured the policy. See Adams v. Unione Mediterranea di Sicurta, 234 F. Supp.2d 614 (E.D. La. 2002). All of the cases cited by PPD involve defendants with greater contacts than Enos. The Motion should be granted.
D. PPD'S SUPPLEMENTAL OPPOSITION:
The Court has specific jurisdiction over Enos. The Court need not find substantial and systematic contact between Enos and the State of Louisiana because the Court has specific jurisdiction based on the relationship and contacts he had with PPD in Louisiana. The Motion should be denied or, if the Court is inclined to grant the Defendant's Motion, PPD would ask that the Court delay any ruling until Enos has responded to the discovery requests (See attached Interrogatories).
III. LAW AND ANALYSIS:
Federal personal jurisdiction over a nonresident defendant may be asserted if: (1) the law of the forum state provides for the assertion of such jurisdiction; and (2) the exercise of jurisdiction under state law comports with the dictates of the Fourteenth Amendment Due Process Clause. Job v. ATR Marketing. Inc., 87 F.3d 751 (5th Cir. 1996). Under the Louisiana long arm statute, "a court of this state may exercise personal jurisdiction over a nonresident on any basis consistent with the constitution of this state and the Constitution of the United States. La. R.S. 13:3201(8). Thus, the Louisiana long arm statute, in effect, merges the two part requirement for federal personal jurisdiction over a nonresident defendant and permits the exercise of that jurisdiction to the full extent allowed under the United States Constitution and the Due Process Clause of the Fourteenth Amendment. Id. See also Dalton v. RW Marine, Inc., 897 F.2d 1359 (5th Cir. 1990).
The Due Process Clause, "gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). The due process inquiry has two parts. First, for personal jurisdiction to exist the nonresident defendant purposefully must have established "minimum contacts" with the forum state such that it invoked the benefits and protections of the forum's law and thus reasonably could anticipate being haled into court there. International Shoe Co. v. Washington. 326 U.S. 310. 316. 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945); Holt Oil Gas Corp. v. Harvey, 801 F.2d 773, 777 (5th Cir. 1986). Second, one must determine that circumstances are such that the exercise of personal jurisdiction does not offend "traditional notions of fair play and substantial justice." Asahi Metal Industry Co. v. Superior Court of California, 480, U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987); Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); Gulf Consolidated Services v. Corinth Pipeworks, S.A., 898 F.2d 1071 (5th Cir. 1990).
"Minimum contacts" are established through either "specific" or "general" jurisdiction over the defendant. When a cause of action arises out of a defendant's purposeful contacts with the forum, minimum contacts are found to exist and the court may exercise specific jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall. 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). On the other hand, a court may exercise general jurisdiction when a defendant's contacts with the forum state are "sufficiently systematic and continuous to support a reasonable exercise of jurisdiction," though the contacts with the state may be unrelated to the controversy.Stuart v. Spademan, 772 F.2d 1185, 1191 (5th Cir. 1985). Courts have held that minimum contacts must have a basis in "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefit and protection of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958); Asarco, Inc. v. Glenara, Ltd., 912 F.2d 784 (5th Cir. 1990).
The determination of whether a district court may exercise its personal jurisdiction over a nonresident defendant is a question of law. All questions of jurisdictional facts must be resolved in favor of the party seeking to invoke the court's jurisdiction. Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 418 (5th Cir. 1993).
1. Specific Jurisdiction
When the court attempts to assert "specific jurisdiction" over a non-resident defendant, a "relationship among the defendant, the forum, and the litigation" is the essential foundation of specific jurisdiction.Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569 (U.S. 1977). There must be "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla. 357 U.S. 235, 253, 78 S.Ct. 1228, 1239-40, (U.S. 1958). The "purposeful availment" element "ensures that a defendant will not be haled into a jurisdiction solely as a result of `random, `fortuitous/or `attenuated' contacts, — or the `unilateral activity of another party or a third person."Burger King Corp. v. Rudzewics, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183 (U.S. 1985).
2. General Jurisdiction
Unlike the specific jurisdiction analysis, which focuses on the cause of action, the defendant and the forum, a general jurisdiction inquiry is dispute blind, the sole focus being on whether there are continuous and systematic contacts between the defendant and the forum.Helicopteros, 466 U.S. at 414, 104 S.Ct. at 1872. Due process requires that "continuous and systematic" contacts exist between the State and the foreign corporation to exercise general personal jurisdiction because the forum state does not have an interest in the cause of action. Id., 466 U.S. at 415-416, 104 S.Ct. at 1872-73. The Supreme Court has only addressed the following two cases that have directly dealt with general jurisdiction: Perkins v. Benguet Consolidated Mining Company, 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952) and Helicopteros, supra.
In Perkins, the Court held that Benguet Mining's contacts with Ohio were continuous and systematic and were sufficient to hold them subject to personal jurisdiction in Ohio. Perkins. 342 U.S. at 448, 72 S.Ct. at 420. Due to the Japanese occupation of the Philippine Islands during World War II, Benguet Consolidated Mining Co. ("Benguet Mining") was forced to halt its mining operations. After being exiled from the Philippines, the companies' president, general manager, and principal stockholder returned to his home in Ohio where he conducted the company's business, which included drawing salary checks in which he used two Ohio banks to hold company funds, holding several directors' meetings, and reestablishing business in the Philippines after the occupation. The president of the Benguet Mining essentially "carried on in Ohio a continuous and systematic supervision of the necessarily limited wartime activities of the company." Perkins, 342 U.S. at 448, 72 S.Ct. at 419.
In Helicopteros, several American citizens where killed in a helicopter accident in Peru. The relatives of those citizens sued the foreign defendant, Helicopteros, in Texas state court. In dismissing the defendants for lack of general jurisdiction, the Court found that Helicopteros had never been authorized to do business in Texas, never had an agent for service of process in Texas, never solicited business in Texas, never signed a contract in Texas (although it did contract with residents of Texas several times), never had any employees based in Texas, never owned any real property in Texas, never maintained an office in Texas, did not maintain any records in Texas, and did not have any shareholders in Texas. Helicopteros, 466 U.S. at 411-12, 104 S.Ct. at 1870-71. However, Helicopteros did have numerous contacts with Texas over a seven year period, which included purchasing helicopters, spare parts, and accessories from Bell Helicopters in Texas; sending prospective pilots to Texas for training; and visits to Bell by management and maintenance personnel of Helicopteros. Id., 466 U.S. at 4121, 104 S.Ct. at 1870. Notwithstanding Helicopteros' contacts with Texas, the Court held that the contacts did not "constitute the kind of continuous and systematic general business contacts the Court found to exist in Perkins." Id, 466 U.S at 416, 104 S.Ct., at 1873. "Purchases and related trips, standing alone, are not a sufficient basis for a State's assertion of jurisdiction." Id, 466 U.S. at 417, 104 S.Ct. at 1874.
The Court is hereby prepared to GRANT the Defendant's Motion to Dismiss, The facts and evidence presented do not point to the existence of specific jurisdiction over the Defendant. The Defendant's only contact with Louisiana consisted of him sending a few faxes to PPD and having a few telephone conversations with PPD then having the insurance policies sent to PPD. These contacts do not rise to the level of the Defendant purposefully availing himself of the forum. The Defendant was merely a broker/intermediary who procured the policy, not an insurer.See Adams v. Unione Mediterranea di Sicurta. 234 F. Supp.2d 614 (E.D. La. 2002). As stated in Adams, the Courts simply recognize a lower standard for exercising personal jurisdiction over an insurer. Id. The lower standard, however, does not apply to Enos. Moreover, the circumstances are such that exercising personal jurisdiction over the Defendant would offend traditional notions of fair play and substantial justice.
Accordingly,
IT IS ORDERED that the Defendant's, Ernest A. Enos d/b/a The Maritime Group, Motion to Dismiss for Lack of Personal Jurisdiction is hereby GRANTED
New Orleans, Louisiana, this