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Sayers Construction, LLC v. Timberline Construction, Inc.

United States District Court, W.D. Texas, Waco Division

October 29, 2019




         Before the Court is Defendants Timberline Construction, Inc.'s (“Timberline”) and High Voltage, Inc.'s (“HVI”) motion to dismiss. ECF No. 16. The defendants request the Court dismiss under Rule 12(b)(2), 12(b)(3), and 12(b)(5) Id. at ¶ 1. After carefully reviewing the related pleadings and the relevant law, the Court is of the opinion Defendants' motion to dismiss should be GRANTED for the following reasons:

         I. Procedural Background

         Plaintiff Sayers Construction, LLC, (“Sayers”) filed its complaint asking the Court to vacate a Florida arbitration award on May 28, 2019. ECF No. 1. Plaintiff filed a Motion to Vacate that same day. ECF No. 6. Plaintiff filed an amended complaint on July 2, 2019. ECF No. 13. Defendants specially appeared and filed their motion to dismiss on July 17, 2019. ECF No. 16. Plaintiff filed a response on August 13, 2019. ECF No. 20. Defendants filed a reply to Plaintiff's response on August 28, 2019. ECF No. 23.

         II. Factual Background

         Sayers, a limited liability company formed in Texas, contracted with Timberline, a South Dakota corporation, and HVI, a Utah corporation, to perform a construction project in Florida. ECF No.6 at ¶ 2. The work continued from April 2016 through March of 2017, until Timberline stopped work on the project because of a payment dispute. ECF No.16 at ¶ 2. Before the dispute, Sayers and Timberline entered into a Master Agreement for Contract Services, which contained a Texas choice-of-law clause and an arbitration clause. ECF No.1, Ex. C, at ¶¶ 38, 51. Soon after the time of the breach, Timberline and HVI filed a Demand for Arbitration pursuant to the contract that controlled the parties project. ECF No.16 at ¶ 2. The American Arbitration Association (“AAA”) set Mr. John Vento to preside over the arbitration in Coral Gables, Florida. Id. On February 25, 2019, Mr. Vento issued the First Interim Arbitration Award in favor of Timberline and HVI in an amount of $8, 602, 525.10. ECF No.1, Ex. A. Mr. Vento then issued a Second Interim Arbitration Award for attorney's fees and costs in the amount of $951, 321.58. Id., Ex. B.

         On May 28, 2019, Sayers filed its Original Complaint and Application to Vacate Interim Arbitration Awards to this Court. ECF No. 1. In its amended complaint, Sayers alleged that the arbitration award should be vacated pursuant to 9 U.S.C. § 10(a)(2), (a)(3), and (a)(4). Id., at ¶ 9. Sayers alleged that Mr. Vento had acted with evident partiality due to his failure to disclose professional relationships with counsel, was guilty of misconduct by awarding attorneys' fees, and exceeded his powers for the arbitration award by awarding amounts not subject to the agreement entered into by Sayers and Timberline/HVI. ECF No.6. Timberline and HVI then filed a motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(2), (b)(3), (b)(5), and the Colorado River abstention. ECF No. 16. Because the Court finds the personal jurisdiction issue dispositive, the Court will not address the Defendants other arguments for dismissal.

         III. Legal Standard

         A defendant may assert lack of personal jurisdiction as a defense. Fed R. Civ. P. 12(b)(2). When the defendant is a nonresident of the forum state, the district court considers first whether exercising jurisdiction over the defendant comports with due process. Religious Tech. Ctr. v. Liebreich, 339 F.3d 369, 373 (5th Cir.2003). If the requirements of due process are met, the court then applies the jurisdictional “long-arm” statute of the forum state. Id. The Texas long-arm statute has been interpreted to extend to the limit of due process. Id. As such, the two inquiries are the same for district courts in Texas. Id.; see also Tex. Civ. Prac. & Rem. Code §§ 17.001- .093.

         Due process requires a nonresident defendant be subject to the personal jurisdiction of the forum. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980). The Court applies a two-pronged test to determine whether a federal court may properly exercise jurisdiction over a nonresident defendant: (1) the nonresident must have minimum contacts with the forum state, and (2) subjecting the nonresident to jurisdiction must be consistent with “traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); Freudensprung v. Offshore Technical Servs., Inc., 379 F.3d 327, 343 (5th Cir.2004).

         A defendant's “minimum contacts” may give rise to either specific personal jurisdiction or general personal jurisdiction, depending on the nature of the suit and the defendant's relationship to the forum state. Freudensprung, 379 F.3d at 343. “A court may exercise specific jurisdiction when (1) the defendant purposely directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there; and (2) the controversy arises out of or is related to the defendant's contacts with the forum state.” Id. Even when the controversy is not related to the defendant's contacts with the forum state, however, a court may exercise general jurisdiction over the defendant if the defendant has such “continuous and systematic contacts” that the defendant is essentially at home. Id. If the nonresident defendant's contacts do not rise to the threshold of sufficient “minimum contacts”, the court may not exercise personal jurisdiction over that defendant. Int'l Shoe, 326 U.S. at 316.

         The plaintiff has the burden of making a prima facie case demonstrating the nonresident defendant has sufficient “minimum contacts” with the forum state to justify the state's exercise of personal jurisdiction. Freudensprung, 379 F.3d at 343. If the plaintiff makes a prima facie case, the burden shifts to the defendant to show such an exercise offends due process because it is inconsistent with traditional notions of fair play and substantial justice. Id. Finally, when a court rules on a 12(b)(2) motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, it must view the alleged facts in the light most favorable to the non-movant, and resolve all factual disputes in its favor. Guidry v. U.S. Tobacco Co., 188 F.3d 619, 625 (5th Cir. 1999).

         IV. Analysis

         In this case, the Court need only analyze whether specific personal jurisdiction exists. It is evidently clear from the record that neither Timberline nor HVI are ...

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