First Nat'l Bank of Sioux Falls v. Carlson

448 F.Supp.3d 1091

FIRST NATIONAL BANK OF SIOUX FALLS, as Personal Representative for the Estate of Travis Albert Carlson, Plaintiff,

v.The ESTATE OF Eric Ryan CARLSON, and Grinnell Mutual Reinsurance Company, Defendants.

CV 18-111-BLG-TJC

United States District Court, D. Montana, Billings Division.

Signed March 24, 2020

Justin P. Stalpes, Anthony F. Jackson, John L. Amsden, Beck, Amsden & Stalpes, PLLC, Bozeman, MT, for Plaintiff.

Gerry Fagan, Stephanie M. Baucus, Moulton Bellingham PC, Calvin J. Stacey, Stacey & Funyak, Billings, MT, for Defendants.

ORDER

TIMOTHY J. CAVAN, United States Magistrate Judge

Plaintiff First National Bank of Sioux Falls ("First National"), as Personal Representative for the Estate of Travis Albert Carlson, filed this action against Defendants Estate of Eric Ryan Carlson and Grinnell Mutual Reinsurance Company ("Grinnell"), alleging various causes of action related to the death of Travis Carlson. (Doc. 1.) First National's Second Amended Complaint (Doc. 33) alleges two claims against Grinnell relevant to the instant motion: breach of contract (Count 5) and declaratory relief (Count 6). (Doc. 33 at 9-10.)

Pending before the Court is Grinnell's Motion to Dismiss for Lack of Personal Jurisdiction. (Doc. 41.) For the following reasons, the Court orders that the motion to dismiss be GRANTED.

I. Factual Background¹

"In ruling on a motion to dismiss for lack of personal jurisdiction, a court may consider declarations, discovery materials, and uncontroverted allegations in the complaint."

Nationwide Agribusiness Ins. Co. v. Buhler Barth GmbH , 2015 WL 6689572, *3 (E.D. Cal. Oct. 30, 2015) (citing ADO Fin., AG v. McDonnell Douglas Corp. , 931 F.Supp. 711, 714 (C.D. Cal. 1996) ). Therefore, for purposes of the instant motion, the Court accepts as true the uncontroverted facts from First National's Second Amended Complaint. Schwarzenegger v. Fred Martin Motor Co. , 374 F.3d 797, 800 (9th Cir. 2004). The Court will also consider the declarations and discovery materials which have been submitted by the parties, where relevant.

Travis Carlson was a resident of South Dakota. He was in the fencing business and frequently traveled to Montana for work. On October 19, 2017, Travis was building a fence on a ranch in Carter County, Montana, which borders South Dakota. Travis's twin brother, Eric Carlson, drove onto the property and confronted Travis. Travis attempted to flee from Eric in his vehicle, but his vehicle was overtaken by Eric's vehicle. The two vehicles collided and came to a stop. Eric then shot and killed Travis.

Travis carried a business auto insurance policy with Grinnell (the "Policy"), for the period of June 25, 2017 to June 25, 2018. Travis was the named-insured under the Policy, which provided $1,000,000 in uninsured and underinsured motorist coverage. First National alleges Travis's estate is entitled to receive benefits under the Grinnell policy, because his injuries arose out of Eric's use of an uninsured or underinsured vehicle.

Grinnell has filed the present motion to dismiss under Fed. R. Civ. P. 12(b)(2) on the basis that the Court lacks personal jurisdiction.

II. Legal Standard

Personal jurisdiction is a court's power over the parties in a proceeding. See Ford Motor Co. v. Montana Eighth Judicial Dist. Court , 395 Mont. 478, 443 P.3d 407, 412 (2019) cert. granted sub nom. Ford Motor Co. v. Mt Eighth Dist. Court , ––– U.S. ––––, 140 S.Ct. 917, 205 L.Ed.2d 519 (2020). The plaintiff bears the burden of demonstrating that jurisdiction is appropriate when a defendant moves to dismiss a complaint for lack of personal jurisdiction. Learjet, Inc. v. Oneok, Inc. (In re W. States Wholesale Nat. Gas Antitrust Litig.) , 715 F.3d 716, 741 (9th Cir. 2013) (internal citations omitted). When the motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts. Schwarzenegger , 374 F.3d at 800. A court's duty is to inquire into whether the plaintiff's pleadings and affidavits make a prima facie showing of personal jurisdiction, accepting the plaintiff's allegations as true. Id. Although the plaintiff cannot simply rest on the bare allegations of its complaint, uncontroverted allegations in the complaint must be taken as true. Id. (citing AT & T v. Compagnie Bruxelles Lambert , 94 F.3d 586, 588 (9th Cir. 1996) ). Conflicts between parties over statements contained in affidavits must be resolved in the plaintiff's favor. Id.

To exercise personal jurisdiction over a non-resident defendant in a diversity case, a federal court must make the following determinations: (1) whether an applicable state rule or statute confers personal jurisdiction over the defendant; and (2) whether assertion of jurisdiction comports with constitutional principles of due process. Data Disc Inc. v. Systems Tech. Assocs. , 557 F.2d 1280, 1286 (9th Cir. 1977).

With respect to the first inquiry, this Court is bound to look to Montana law. Haywood v. Travelers Indem. Co. of Am. , 2006 WL 2860588 *2 (D. Mont. 2016).

The Montana Supreme Court applies a similar two-step test to determine whether a nonresident defendant is subject to a Montana court's jurisdiction. Milky Whey, Inc. v. Dairy Partners, LLC , 378 Mont. 75, 342 P.3d 13, 17 (2015). First, the court determines whether personal jurisdiction exists under Montana's long-arm statute, M.R.Civ.P. 4(b)(1). Id. "Personal jurisdiction may exist under Rule 4(b)(1) in one of two ways: a party may be ‘found within the state of Montana’ and subject to general jurisdiction, or the claim for relief may arise from any of the acts listed in Rule 4(b)(1)(A-G) and create specific jurisdiction for the purpose of litigating that particular claim." Id. If jurisdiction exists under the statute, the Court then determines whether the exercise of jurisdiction comports with due process. If personal jurisdiction is not found under the statute, however, "further analysis under the second part of the test is unnecessary." Id.

Montana Rule of Civil Procedure 4(b)(1) reads, in pertinent part:

All persons found within the state of Montana are subject to the jurisdiction of Montana courts. Additionally, any person is subject to the jurisdiction of Montana courts as to any claim for relief arising from the doing personally, or through an employee or agent, of any of the following acts:

(A) the transaction of any business within this state; [...]

(D) contracting to insure any person property, or risk located within Montana at the time of contracting[.]

M.R.Civ.P (4)(b)(1). The first sentence of Rule 4(b)(1) establishes the requirements for general jurisdiction and the remainder establishes the requirements for specific jurisdiction. Cimmaron Corp. v. Smith , 315 Mont. 1, 67 P.3d 258, 260 (2003) (citing Bi-Lo Foods Inc. v. Alpine Bank, Clifton , 287 Mont. 367, 955 P.2d 154, 157 (1998) ).

General personal jurisdiction is premised on a defendant's relationship to the forum state. Ford Motor Co. , 443 P.3d at 412. "A court with general jurisdiction may hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different state." Bristol-Myers Squibb Co. v. Sup. Ct. of Cal. , ––– U.S. ––––, 137 S.Ct. 1773, 1780, 198 L.Ed.2d 395 (2017) (emphasis in original). In order to establish general jurisdiction over foreign corporations, their affiliations with the state must be "so ‘continuous and systematic’ as to render them essentially at home in the forum state." BNSF Ry. Co. v. Tyrrell , ––– U.S. ––––, 137 S. Ct. 1549, 1558, 198 L.Ed.2d 36 (2017).

Specific personal jurisdiction, on the other hand, is premised on both the defendant's relationship to the forum and the cause of action. Ford Motor Co. , 443 P.3d at 412. Specific jurisdiction is more limited, and requires the controversy be directly related to the defendant's contacts with the forum. Bristol-Myers , 137 S.Ct. at 1780.

If specific jurisdiction is found, then a determination of whether specific jurisdiction is proportional with the defendant's due process rights under federal law must be made. Bedrejo v. Triple E Can. Ltd. , 295 Mont. 430, 984 P.2d 739, 742 (1999) (citing Simmons v. State , 206 Mont. 264, 670 P.2d 1372, 1376–77 (1983) ; Grizzly Sec. Armored Express, Inc. v. Armored Group, LLC , 360 Mont. 517, 255 P.3d 143, 149 (2011) ). The Ninth Circuit has developed the following three-part test to assess whether the exercise of specific jurisdiction comports with due process:

(1) the non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;

(2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and

(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.

Schwarzenegger , 374 F.3d at 802 ; Simmons Oil Corp. v. Holly Corp. , 244 Mont. 75, 796 P.2d 189, 193 (1990) ;² Ford Motor Co. , 443 P.3d at 413.

III. Discussion

Grinnell argues first there is no general jurisdiction because it is not at home in Montana, nor did it consent to jurisdiction there. (Doc. 42 at 12.) Second, Grinnell argues there is no specific jurisdiction because no connection exists between Grinnell's Montana activities and First National's breach of contract claim. (Id. at 13.)

First National advances several arguments in response as to both general and personal jurisdiction. (Doc. 47 at 9-12.) With respect to general jurisdiction, First National argues that general personal jurisdiction exists because Grinnell has expressly consented to personal jurisdiction through Montana's reinsurance statutory scheme, and because Grinnell gave implied consent through its significant contacts with the State of Montana. (Id. at 9-10.) First...