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M-D Medical Services, Inc. v. M.A.S.H. Inc.

United States District Court, S.D. Mississippi, Northern Division

March 28, 2019




         BEFORE THIS COURT is the Motion to Dismiss for Lack of Personal Jurisdiction [Docket no. 3] filed by defendants M.A.S.H., INC. (“M.A.S.H”), Gregory L. Horn (“Horn”), and Charles Bordenca (“Bordenca”) (hereinafter collectively referred to as “Defendants”). The Defendants filed their memorandum brief in support of their motion to dismiss on the same date, May 24, 2018 [Docket no. 4]. Plaintiff M-D Medical Services, Inc. (hereinafter referred to as “M-D Medical” or “Plaintiff”) filed its response in opposition and memorandum in support of its opposition on June 7, 2018 [Docket no. 7]. Defendants filed their second memorandum in support of their motion to dismiss on June 18, 2018 [Docket no. 10].

         In their motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2)[1" name="FN1" id= "FN1">1], Defendants campaign that each of them lacks sufficient contacts with Mississippi to support the assertion of personal jurisdiction over them according to the requirements of Mississippi's Long-Arm Statute and Due Process under the Fourteenth Amendment to the United States Constitution. For the reasons presented herein, this Court disagrees with the Defendants and hereby denies the Defendants' Motion to Dismiss for Lack of Personal Jurisdiction. [Docket no. 3].

         This court possesses federal subject matter jurisdiction over the parties based on diversity of citizenship under Title 28 U.S.C. § 1332[2] because the matter in controversy exceeds the sum of $75, 000, exclusive of interests and costs, and is between citizens of different states. Complete diversity of citizenship exists here, as none of the defendants resides in the same state as the plaintiff[3].


         This lawsuit arises from a contractual agreement between M-D Medical and M.A.S.H, whereby M-D Medical agreed to provide certain enteral nutrition[4" name="FN4" id="FN4">4] and supplies to patients of M.A.S.H. residing in nursing facilities in the State of Alabama. The facts below are derived from Plaintiff's Amended Complaint [Docket no. 7].

         M-D Medical is a Mississippi corporation. Defendant M.A.S.H. is an Alabama corporation with its principal place of business in Alabaster, Alabama[5]. Defendant Horn is the president of M.A.S.H. and a resident of Alabama. Defendant Bordenca is the secretary/treasurer of M.A.S.H. and a resident of Alabama. M-D Medical alleges that Horn and Bordenca, as owners/operators of M.A.S.H., exercise absolute control over M.A.S.H.[6]

         On July 1, 2016, M-D Medical entered into a Subcontract Agreement (hereinafter referred to as “the Agreement”) with M.A.S.H. to provide inventory acquisition, delivery and training products, and general product management to patients of M.A.S.H. These patients reside in nursing homes in Competitive Bidding Areas (hereinafter referred to as “CBAs”) in the State of Alabama. The only signatories to the Agreement were M.A.S.H. and M-D Medical.

         Plaintiff M-D Medical alleges that in marketing and selling products pursuant to the Agreement, M-D Medical “advanced credit, money, product and/or services to Defendant for business purposes in the amount of $153, 681.17.00, such amount being presently due.” [Docket no. 1 at p. 3]. M-D Medical also claims that M.A.S.H has wrongly received payments belonging to M-D Medical in the amount of $98, 500.00 as a result of a third-party billing error.

         M-D Medical's lawsuit seeks damages from all defendants for: breach of contract; bad faith breach of contract; conversion; negligence and/or fraud; tortious interference with business relations; and civil conspiracy. M-D Medical also demands an audit or accounting of each defendant[7] from July 1, 2016 to present, seeking disgorgement of any funds due to M-D Medical. M-D Medical further seeks to pierce to the corporate veil in its effort to obtain damages from the individual defendants, Horn and Bordenca, for: breach of fiduciary duties; breach of contract; malfeasance; and conversion and/or misappropriation of funds.


         A federal court sitting in diversity may exercise personal jurisdiction only to the extent allowed by a state court under applicable state law. Mortensen Const. & Util., Inc. v. Grinnell Mut. Reinsurance Co., 718 F.Supp.2d 781, 782 (S.D.Miss. 2010). Under the Federal Rule of Civil Procedure 12(b)(2)[8], a defendant may move for dismissal on the basis of lack of personal jurisdiction. “The party seeking to invoke the power of the court bears the burden of proving that jurisdiction exists.” Luv N' Care, Ltd. V. Insta-Mix, Inc., 438 F.3d 465');">438 F.3d 465, 469 (5th Cir. 2006).

         “The court may determine the jurisdictional issue by receiving affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.” Allred v. Moore & Peterson, 117 F.3d 278');">117 F.3d 278, 281 (5th Cir. 1997). In making this determination, uncontroverted allegations in a plaintiff's complaint, other than conclusory allegations, must be taken as true. Thompson v. Chrysler Motors Corp., 1162');">755 F.2d 1162, 1165 (5th Cir. 1985)(“the allegations of the complaint, except insofar as controverted by opposing affidavits, must be taken as true.”) Additionally, factual conflicts must be resolved in favor of the plaintiff. Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001).


         In diversity cases under 28 U.S.C. § 1332, such as this matter before the Court, 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. and Cas. Ins. Co. v. Palermo, 723 F.3d 557, 559 (5th Cir. 2013)(citing Paz v. Brush Engineered Materials, Inc., 445 F.3d 809, 812 (5th Cir. 2006)).

         A. Mississippi's Long-Arm Statute

         Under the provisions of Mississippi's Long-Arm Statute, Miss. Code Ann. § 13-3-57, three activities permit Mississippi courts to exercise personal jurisdiction over a nonresident defendant: If that person has (1) entered into a contract to be performed [in whole or in part] in Mississippi; (2) has committed a tort in Mississippi; or, (3) is conducting business in Mississippi." Dunn v. Yager, 58 So.2d 1171, 1184 (Miss. 2011) (citing Yatham v. Young, 12 So.2d 467');">912 So.2d 467, 469-70 (Miss. 2005)). These strictures of Mississippi's Long-Arm Statute are commonly referred to as the three prongs: the contract prong, the tort prong and the doing business prong. MissITL Int'l, Inc. v. Constenla S.A., 493');">669 F.3d 493, 497 (5th Cir. 2012).

         M.A.S.H. asserts that this Court lacks personal jurisdiction over all defendants because M-D Medical's Complaint lacks any factual allegations of any conduct by any Defendant that occurred in whole or in part in Mississippi [Docket no. 4, p. 1]. M-D Medical disagrees with M.A.S.H.'s argument, and for support, points to the exhibits. Although Mississippi's Long-Arm Statute manifests three prongs, this Court will only address the contract prong to show that, here, personal jurisdiction exists over M.A.S.H.

         The ...

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