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Hanback v. Ggnsc Southaven, LLC

United States District Court, N.D. Mississippi, Oxford Division

July 15, 2014



MICHAEL P. MILLS, District Judge.

This cause comes before the court on Defendants Drumm Corp. (Drumm), Pearl Senior Care LLC (Pearl), and Geary Property Holding's (Geary) (collectively the "Moving Defendants") motion to dismiss [Doc. 15] pursuant Rule 12(b)(2) of the Federal Rules of Civil Procedure. Plaintiff Wanda Hanback, as the Administratrix of the Estate of Vera Atwood, deceased and on behalf of her heirs and wrongful death beneficiaries, has responded in opposition to the motion. Upon due consideration of the memoranda and relevant law, the court is now prepared to rule.

On November 7, 2007, Vera Atwood was admitted to Golden LivingCenter in Southaven, Mississippi and continued to reside there until her death on August 16, 2012. On October 10, 2013, Wanda Hanback, as Administratrix of Atwood's estate, sued GGNSC Southaven, licensee of Golden LivingCenter-Southaven, and several affiliated entities alleging negligence, medical malpractice, and wrongful death. Plaintiff bases her claims on the contention that Atwood's death was a direct result of Golden LivingCenter-Southaven's failure to provide adequate care. Moving Defendants are among the affiliated entities named in the suit. However, Moving Defendants contend that this court lacks personal jurisdiction over them, and should, therefore, dismiss them from this suit.

When a district court rules on a motion to dismiss for lack of personal jurisdiction without an evidentiary hearing, the plaintiff must only make a prima facie case that jurisdiction is proper. Quick Techs., Inc. v. Sage Group, PLC, 313 F.3d 338, 343 (5th Cir. 2002). In determining whether a prima facie case for personal jurisdiction exists, a court must accept the uncontroverted allegations in the plaintiff's complaint as true, and all factual conflicts contained in the parties' affidavits must be resolved in favor of the plaintiff. Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990).

"A federal district court sitting in diversity may exercise personal jurisdiction only to the extent permitted a state court under applicable state law." Allred v. Moore & Peterson, 117 F.3d 278, 281 (5th Cir. 1997), cert. denied, 522 U.S. 1048 , 118 S.Ct. 691, 139 L.Ed.2d 637 (1998) (internal citation omitted). "A state court or a federal court sitting in diversity may assert jurisdiction if: (1) the state's long-arm statute applies, as interpreted by the state's courts; and (2) if due process is satisfied under the Fourteenth Amendment to the United States Constitution." Allred, 117 F.3d at 281 (quoting Cycles, Ltd. v. W.J. Digby, Inc., 889 F.2d 612, 616 (5th Cir. 1989)). However, if Mississippi law does not provide for the assertion of personal jurisdiction over the defendants, we need not consider the due process issue. Cycles, 889 F.2d at 616.

Mississippi's long-arm statute provides:

Any nonresident person, firm, general or limited partnership, or any foreign or other corporation not qualified under the Constitution and laws of this state as to doing business herein, who shall make a contract with a resident of this state to be performed in whole or in part by any party in this state, or who shall commit a tort in whole or in part in this state against a resident or nonresident of this state, or who shall do any business or perform any character of work or service In this state, shall by such act or acts be deemed to be doing business in Mississippi and shall thereby be subjected to the jurisdiction of the courts of this state.

Miss. Code Ann. § 13-3-57. Thus, in order to exercise jurisdiction over the defendants, the court must find that (1) the defendants entered into a contract with plaintiff to be performed in whole or in part in Mississippi; or (2) the defendants committed a tort, in whole or in part, against a plaintiff in Mississippi; or (3) the defendants were "doing business" in Mississippi. See Roxco, Ltd. v. Harris Specialty Chem., Inc., 133 F.Supp.2d 911, 915 (S.D.Miss. 2000).

Due process is satisfied under the Fourteenth Amendment to the United States Constitution when the minimum contacts test is met. The minimum contacts standard may be met in two ways. Specific jurisdiction exists when 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, 1240, 2 L.Ed.2d 1283 (1958) (internal citation omitted). The minimum contacts necessary for specific personal jurisdiction are established "if the defendant has purposefully directed' his activities at residents of the forum, and the litigation results from alleged injuries that arise out of or relate to' those activities." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). General jurisdiction, on the other hand, lies when the defendant's contacts with the forum state are so "continuous and systematic" that the state may exercise personal jurisdiction over the defendant even if the suit is unrelated to the defendant's contacts with the state. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16, n. 9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). In either case, the court must confirm that the exercise of jurisdiction "does not offend traditional notions of fair play and substantial justice." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). This determination is made by balancing five factors: (i) the burden on the defendant; (ii) the forum's interest; (iii) the plaintiff's interest; (iv) the interest in an efficient judicial system; and (v) the interest in promoting public policy. See Burger King Corp. v. Rudzewicz, 471 U.S. at 467-77.

In support of their motion, Moving Defendants assert that the entities have never purposely availed themselves of the laws and privileges of Mississippi to warrant this court exercising personal jurisdiction over them. According to Moving Defendants, they are nonresidential entities that took no part in the incidents alleged in Plaintiff's complaint because Moving Defendants do not operate Golden LivingCenter-Southaven, do not control GGNSC Southaven LLC, and have no contacts in Mississippi.

In opposition to Moving Defendants' motion, Plaintiff asserts that all of the defendants are involved in a joint venture in Mississippi and therefore, are jointly liable and subject to personal jurisdiction in Mississippi. Plaintiff bases this contention on allegations, albeit conclusory, that all defendants had a mutual understanding for the common purpose of operating Golden LivingCenter-Southaven; had a right to a voice in the direction and control of the means to carry out this common purpose; and combined their property, money, skill, and knowledge to operate Golden LivingCenter-Southaven. In addition, Plaintiff purports that defendants established multiple corporations in order to divert resources and profits that would otherwise have been available for resident care and to limit liability. As such, Plaintiff argues that all defendants should be held jointly liable for the damages caused in pursuit of their joint venture.

A Mississippi court has not specifically held that when the activities of one co-venturer in the forum are sufficient to sustain the exercise of personal jurisdiction, jurisdiction will attach as to all the participants in the venture. Likewise, Mississippi's long-arm statute provides no clarity as it only specifies a "nonresident person, firm, general or limited partnership, or any foreign or other corporation." Miss. Code Ann. § 13-3-57. However, multiple federal district courts applying their respective state's laws have reached the conclusion that they may exercise personal jurisdiction over a non-resident co-venturer. See Wendt v. Handler, Thayer & Duggan, LLC, 613 F.Supp.2d 1021, 1030 (N.D. Ill. 2009) ("Where two or more companies enter a joint venture, the minimum contacts of one co-venturer are attributable to other co-venturers such that personal jurisdiction over one means personal jurisdiction over all."); Nolan v. Boeing Company, 736 F.Supp. 120, 127 (E.D. La. 1990); Itel Containers Intern. v. Atlanttrafik Exp. Serv., 116 F.R.D. 477 (S.D.N.Y. 1987)); Aigner v. Bell Helicopters, Inc., 86 F.R.D. 532, 540 (N.D. Ill.1980)); Fund v. Debio Holding, S.A., CIV. A. 99-2207, 2000 WL 877015 (E.D. La. June 29, 2000). This reasoning seems to be the logical extension of the Mississippi long-arm statute, and because Mississippi courts view joint ventures as a type of partnership, the court finds that it may exercise personal jurisdiction over a non-resident co-venturer in certain circumstances.

In Mississippi, a joint venture might be characterized as a "single shot partnership." Hults v. Tillman, 480 So.2d 1134, 1143 (Miss. 1985). "Indeed, the only purpose in distinguishing a joint venture from a partnership is to define a business relationship which is limited to specified undertakings for profit, rather than a general and continuing business of a particular kind." Id. at 1141. "It exists when two or more persons combine in a joint business enterprise for their mutual benefit with an understanding that they are to share in profits or losses and each to have a voice in its management." Id. at 1142. "A condition precedent for the existence of a joint venture is a joint proprietary interest in the enterprise and right of mutual control." Id. In short, it is a business relationship used for a specific undertaking for profit as opposed to a general, ongoing business. Allied Steel Corp. v. Cooper, 607 So.2d 113, 117 (Miss. 1992). Moreover, "an agreement to share in profits and losses is not alone sufficient; there must be, in addition, an intention of the parties to be associated together as general partners, or for the more limited duration of a joint venture." Hults, 480 So.2d at 1143 (emphasis added). A showing of "actual intent to form a joint venture is essential." Id.

Upon an examination of the evidence and applicable law, this court finds no justifiable grounds for exercising personal jurisdiction over Moving Defendants, however. Drumm's Corporate Disclosure Statement attests that it is a privately held LLC, the stock of which is solely held by Fillmore Strategic Investors, LLC. The affidavit of Michael Patipa, Senior Vice President of Fillmore Strategic Investors, states that Drumm is a holding company that, through formally and functionally separate business entity subsidiaries, holds various investments and lines of business, including nursing facilities operated under the "Golden LivingCenter" trade name. Patipa also conveyed that Drumm is an indirect parent of GGNSC Southaven LLC, through several intermediary entities, [1] every one of which is and operates as a separate and distinct entity. In addition, Patipa's affidavit puts ...

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