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Smith v. Skopos Financial, LLC

United States District Court, N.D. Texas, Dallas Division

January 22, 2019

ANGELIA SMITH and KELVIN SMITH, Plaintiffs,
v.
SKOPOS FINANCIAL, LLC, ET AL., Defendants.

          FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

          DAVID L. HORAN UNITED STATES MAGISTRATE JUDGE

         This action brought by plaintiffs proceeding pro se and removed from a state court in Dallas County, see Dkt. No. 1, has been referred to the undersigned United States magistrate judge for pretrial management under 28 U.S.C. § 636(b) and an order of reference from United States District Judge Sam A. Lindsay, see Dkt. No. 7.

         Defendants Skopos Financial, LLC, Dan Porter, Mark Gallas, and Jerry Kroshus (collectively, the “Moving Defendants”) move to dismiss Plaintiffs Angelia Smith and Kelvin Smith's claims against Koshus for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2) and insufficient service of process under Federal Rule of Civil Procedure 12(b)(5) and Plaintiffs' claims against the Moving Defendants for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). See Dkt. Nos. 4 & 5.

         The Court entered an order advising the Smiths of the legal standards governing Rule 12(b)(2), 12(b)(5), and 12(b)(6) motions and setting a deadline for them to respond to the motion to dismiss. See Dkt. No. 8. They failed to file a response, no reply brief was filed, and the filing deadlines have expired. See id.

         The undersigned enters these findings of fact, conclusions of law, and recommendation that the Court should grant the motion to dismiss to the extent and for the reasons explained below.

         Applicable Background

         The Smiths filed this action in state court on July 26, 2018, asserting that, in August 2017, Skopos illegally repossessed Angelia's 2014 Mitsubishi Lancer. See Dkt. No. 1-1 at 8-9; see also Id. at 16-17 (“There are several different causes of action that Skopos Financial violates against the Plaintiffs, ” including under the “Fair Debt Collection Practices Act” (the “FDCPA”)). An amended petition, adding the remaining Moving Defendants, appears to have been filed on July 31, 2018. See Dkt. No. 1-1 at 29. And Skopos timely removed this action on the basis of a federal question. See Dkt. No. 1, ¶ 3 (citing 28 U.S.C. §§ 1331 & 1441(b)); 28 U.S.C. § 1446(b).

         After removal, the Smiths filed on November 28, 2018 - and presumably in response to the motion to dismiss - a third amended complaint. See Dkt. No. 9.

         While Federal Rule of Civil Procedure 15(a)(1) allows a party to “amend its pleading once as a matter of course, ” as applicable here, the Smiths' amended complaint was due “21 days after service of” the motion to dismiss. Fed.R.Civ.P. 15(a)(1)(B). That motion was served on August 31, 2018. See Dkt. No. 4. But the third amended complaint was filed almost three months later. See Dkt. No. 9.

         A separate obstacle also prevent the Smiths' amending their complaint as a matter of course - their filing an amended petition in state court prior to removal. See, e.g., Charla G. Aldous v. Lugo, No. 3:13-cv-3310-L, 2014 WL 3952670, at *6 (N.D. Tex. Aug. 12, 2014) (“As Plaintiffs filed an Amended Petition on July 30, 2013, in state court, this court does not believe that [Rule 15(a)(1)] applies. This is so because removed cases must be considered in accordance with Federal Rule of Civil Procedure 81(c)(1), which states that the Federal Rules of Civil Procedure ‘apply to a civil action after it is removed from a state court.' Therefore, once the action was removed, the plain language of Rule 15(a) applied to this action. As Plaintiffs had already amended once, they could not file an amended pleading without Defendants' written consent or leave of court. Fed.R.Civ.P. 15(a)(2).”).

         As such, the third amended complaint [Dkt. No. 9] “is a nullity, ” id., which will be ignored by the undersigned in entering these findings, conclusions, and recommendation, cf. Ferris Plaza, Ltd. v. Peerless Indem. Ins. Co., No. 3:10-cv-633-L, 2010 WL 2540826, at *2 (N.D. Tex. June 22, 2010) (“Plaintiff's First Amended Complaint[, filed without complying with Rule 15, ] is null and the court must look to Plaintiff's Original Petition filed in state court on February 25, 2010.”).

         Legal Standards

          I. Federal Rule of Civil Procedure 12(b)(2)

         When a non-resident defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing that the court has jurisdiction over the nonresident. See Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 431 (5th Cir. 2014); Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir. 2008). If the court decides the matter without an evidentiary hearing, the plaintiff may meet its burden by presenting a prima facie case for personal jurisdiction. See Gardemal v. Westin Hotel Co., 186 F.3d 588, 592 (5th Cir. 1999); Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994).

         A federal district court may exercise personal jurisdiction over a non-resident defendant if (1) the long-arm statute of the forum state permits the exercise of personal jurisdiction over the defendant and (2) the exercise of jurisdiction by the forum state is consistent with due process under the United States Constitution. See Mullins v. TestAmerica, Inc., 564 F.3d 386, 398 (5th Cir. 2009). “As the Texas long-arm statute extends as far as constitutional due process allows, we only consider the second step of the inquiry.” McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir. 2009).

         The due process component of personal jurisdiction requires two elements: (1) the nonresident must have some minimum contact with the forum such that the he or she could anticipate being haled into the courts of the forum state, and (2) it must be fair or reasonable to require the nonresident to defend the suit in the forum state. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-78 (1985); Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir. 2008). The Due Process Clause ensures that persons have “fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign.” Burger King, 471 U.S. at 472 (internal quotation marks omitted). Personal jurisdiction must be assessed on an individual-defendant basis. See Rush v. Savchuk, 444 U.S. 320, 332 (1980).

         First, to establish minimum contacts with the forum, a non-resident defendant must do some act by which he “purposefully avails himself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Burger King, 471 U.S. at 474-75 (internal quotation marks omitted). But the unilateral activity of one asserting a relationship with the non-resident defendant does ...


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