Lea v. McGue

VICKIE E. LEA Plaintiff, v. CLINTON D. McGUE Defendant.

Civil Action No. 4:20-CV-00483

United States District Court EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

September 22, 2020

Judge Mazzant

MEMORANDUM OPINION AND ORDER

Pending before the Court is Defendant Clinton D. McGue's Motion to Dismiss Pursuant to Rules 12(b)(2) and 12(b)(6). (Dkt. #5). Having considered the motion and the relevant pleadings, the Court finds that it does not have personal jurisdiction over Clinton D. McGue ("McGue"). Accordingly, the Court finds the Motion should be granted as to the Rule 12(b)(2).

BACKGROUND

This case arises from a debt collection after Plaintiff Vickie Lea ("Lea") defaulted on her Toyota Corolla payments. (Dkt. #1 ¶¶ 21-24). On April 27, 2018, Lea purchased a Toyota Corolla from Orr Motors of Searcy, Inc., a car dealership in Arkansas. (Dkt. #1 ¶ 16). She signed the automobile finance contract and financed the Corolla with Arkansas Federal Credit Union ("AFCU") all in Arkansas. (Dkt. #1 ¶ 18). After defaulting on her loan, Lea voluntarily surrendered the Corolla to AFCU, and AFCU repossessed the vehicle from Lea's home in Denton County, Texas. (Dkt. #1 ¶ 21). On April 12, 2019, AFCU mailed Lea a deficiency explanation to Lea's home (Dkt. #1 ¶ 23), and McGue—attorney for AFCU—then filed the Debt Collection Complaint in the Circuit Court of Pulaski County, Arkansas, on June 25, 2019. (Dkt. #1 ¶ 24).

On the same day, the Clerk of the Court issued a Summons to Lea at her residence. (Dkt. #1 ¶ 25). On July 8, 2019, McGue served Lea with the Debt Collection Complaint and Summons by certified mail to her residence. (Dkt. #1 ¶ 28). On August 12, 2019, McGue moved for default judgment against Lea. (Dkt. #1 ¶ 29). The Circuit Court of Pulasaki County, Arkansas entered a Default Judgment prepared by McGue on August 15, 2019. (Dkt. #1 ¶ 32).

Lea filed this suit on June 19, 2020, alleging McGue violated the Fair Debt Collection Practices Act because McGue did not send Lea a written notice containing the information in 15 U.S.C. § 1692g(a)(1)-(5) within five days of his "initial communication" with Lea. (Dkt. #1 ¶ 30). Lea claims the motion for default judgment constituted the "initial communication" with Lea as the term has been interpreted in 15 U.S.C. § 1692g(a). (Dkt. #1 ¶ 30).

On July 29, 2020, McGue filed this Motion to Dismiss Pursuant to Rules 12(b)(2) and 12(b)(6). Lea responded on August 12, 2020, (Dkt. #7), and McGue filed a reply on August 19, 2020. (Dkt. #10).

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(2) requires a court to dismiss a claim if the court does not have personal jurisdiction over the defendant. FED. R. CIV. P. 12(b)(2). After a non-resident defendant files a motion to dismiss for lack of personal jurisdiction, it is the plaintiff's burden to establish that in personam jurisdiction exists. Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990) (citing WNS, Inc. v. Farrow, 884 F.2d 200, 202 (5th Cir. 1989)).

To satisfy that burden, the party seeking to invoke the court's jurisdiction must "present sufficient facts as to make out only a prima facie case supporting jurisdiction," if a court rules on a motion without an evidentiary hearing. Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000). When considering the motion to dismiss, "[a]llegations in [a] plaintiff's complaintare taken as true except to the extent that they are contradicted by defendant's affidavits." Int'l Truck & Engine Corp. v. Quintana, 259 F. Supp. 2d 553, 557 (N.D. Tex. 2003) (citing Wyatt v. Kaplan, 686 F.2d 276, 282-83 n.13 (5th Cir. 1982)); accord Black v. Acme Mkts., Inc., 564 F.2d 681, 683 n.3 (5th Cir. 1977). Further, "[a]ny genuine, material conflicts between the facts established by the parties' affidavits and other evidence are resolved in favor of plaintiff for the purposes of determining whether a prima facie case exists." Id. (citing Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 161, 1067 (5th Cir. 1992)). However, if a court holds an evidentiary hearing, a plaintiff "must establish jurisdiction by a preponderance of the admissible evidence." In re Chinese Manufactured Drywall Prods. Liab. Lit., 742 F.3d 576, 585 (5th Cir. 2014) (citing Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 241-42 (5th Cir. 2008)).

A court conducts a two-step inquiry when a defendant challenges personal jurisdiction. Ham v. La Cinega Music Co., 4 F.3d 413, 415 (5th Cir. 1993). First, absent a controlling federal statute regarding service of process, the court must determine whether the forum state's long-arm statute confers personal jurisdiction over the defendant. Id. And second, the court establishes whether the exercise of jurisdiction is consistent with due process under the United States Constitution.

The Texas long-arm statute confers jurisdiction to the limits of due process under the Constitution. Command-Aire Corp. v. Ont. Mech. Sales and Serv. Inc., 963 F.2d 90, 93 (5th Cir. 1992). Therefore, the sole inquiry that remains is whether personal jurisdiction offends or comports with federal constitutional guarantees. Bullion, 895 F.2d at 216. The Due Process Clause permits the exercise of personal jurisdiction over a non-resident defendant when the defendant has established minimum contacts with the forum state "such that maintenance of thesuit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Minimum contacts with a forum state can be satisfied by contacts that give rise to either general jurisdiction or specific jurisdiction. Wilson v. Belin, 20 F.3d 644, 647 (5th Cir. 1994).

General jurisdiction exists only when the defendant's contacts with the forum state are so "'continuous and systematic' as to render them essentially at home in the forum State." Daimler AG v. Bauman, 571 U.S. 117, 127 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)); see Cent. Freight Lines v. APA Transp. Corp., 322 F.3d 376, 381 (5th Cir. 2003) (citing Helicopteros Nacionales de Colum., S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984)). Substantial, continuous and systematic contact with a forum is a difficult standard to meet and requires extensive contacts between a defendant and the forum. Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir. 2008). "General jurisdiction can be assessed by evaluating contacts of the defendant with the forum over a reasonable number of years, up to the date the suit was filed." Access Telecom, Inc. v. MCI Telecomms. Corp., 197 F.3d 694, 717 (5th Cir. 1992) (citation omitted). However, "vague and overgeneralized assertions that give no indication as to the extent, duration, or frequency of contacts are insufficient to support general jurisdiction." Johnston, 523 F.3d at 609 (citing Gardemal v. Westin Hotel Co., 186 F.3d 588, 596 (5th Cir. 1999)).

Specific jurisdiction is proper when the plaintiff alleges a cause of action that grows out of or relates to a contact between the defendant and the forum state. Helicopteros, 466 U.S. at 414 n.8. For the court to exercise specific jurisdiction, the court must determine "(1) whether the defendant has . . . purposely directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises outof or results from the defendant's forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable." Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir. 2002) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)).

Defendants who "'reach out beyond one state' and create continuing relationships and obligations with citizens of another state are subject to regulation and sanctions in the other state for consequences of their actions." Burger King Corp., 471 U.S. at 475 (citing Travelers Health Assoc. v. Virginia, 339 U.S. 643, 647 (1950)). Establishing a defendant's minimum contacts with the forum state requires contacts that are more than "random, fortuitous, or attenuated, or of the unilateral activity of another party or third person." Id.

"If the plaintiff successfully satisfies the first two prongs, the burden shifts to the defendant to defeat jurisdiction by showing that its exercise would be unfair or unreasonable." Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006). In this inquiry, the Court examines five factors: (1) the burden on the nonresident defendant; (2) the forum state's interests; (3) the plaintiff's interest in securing relief; (4) the interest of the interstate judicial system in the efficient administration of justice; and (5) the shared interest of the several states in furthering fundamental social policies. Burger King, 471 U.S. at 477. "It is rare to say the assertion of jurisdiction is unfair after minimum contacts have been shown." McFadin v. Gerber, 587 F.3d 753, 760 (5th Cir. 2009) (quoting Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208, 215 (5th Cir. 1999)).

ANALYSIS

McGue asks the Court to dismiss the case because the Court lacks personal jurisdiction over him and because Lea failed to state a claim upon which relief can be granted. Because the Court finds it lacks personal jurisdiction, it does not address the Rule 12(b)(6) claim. In this case, Lea asserts that the Court can exercise personal jurisdiction over McGue using either specific or general jurisdiction. The Court will address both in turn.

I. Specific Jurisdiction

McGue claims he does not have sufficient contacts with the forum to subject him to personal jurisdiction. McGue is an attorney residing in Cabot, Arkansas, with his only office also located in Cabot, Arkansas. (Dkt. #5 at p. 1). Because McGue is not a resident, the question is whether he had minimum contacts with Texas sufficient to establish personal jurisdiction over him.

A. ...