WILLIAM H. STEELE, Chief Judge.
This matter comes before the Court on four overlapping Motions to Dismiss (docs. 19, 20, 22, 23) filed by defendants, Eli Zatezalo and Blake Marine Group. The Motions have been briefed and are now ripe for disposition.
On September 16, 2011, plaintiff, Prince Hotel, S.A., filed a Complaint (doc. 1) in this District Court against defendants, Blake Marine Group, Inc. and Eli Zatezalo. On its face, the Complaint predicates federal jurisdiction on 28 U.S.C. § 1332, with Prince seeking damages in excess of $75,000 and alleging complete diversity of citizenship between plaintiff and defendants.
The underlying factual allegations are straightforward. Prince alleges that it operates a hotel in Port au Prince, Haiti, and that it contracted to provide accommodations at that facility to Blake Marine employees from February 25, 2010 through May 22, 2010. (Doc. 1, ¶¶ 4, 9, 11.) According to the Complaint, defendant Zatezalo (the President of defendant Blake Marine) provided Prince with a Blake Marine check that he had written in the amount of $62,359.60 drawn on First National Bank of Baldwin County in Fairhope, Alabama, in payment for lodging services on or about April 21, 2010. (Id., ¶ 12.) The Complaint alleges that this check was returned for "not sufficient funds (NSF)," but that defendants failed and refused to make alternate payment arrangements or even to discuss the matter with Prince. (Id., ¶¶ 12-13.) Plaintiff's final bill to defendants included the $62,359.60 returned check, as well as invoices for $7,137.50 and $1,080. (Id., ¶ 13.) Defendants never paid a dime of these obligations, and apparently never made any effort to do so, aside from passing the worthless check signed by Zatezalo on a Blake Marine bank account in Alabama.
Based on these allegations, Prince brings claims against defendants for misrepresentation and fraud based on violation of Alabama § 34-15-19 (obtaining food, lodging or other accommodations by fraud or misrepresentation), and for violation of Alabama Code § 6-5-285 (right of action for holder of worthless check, draft or order to recover "such damages, both punitive and compensatory, including a reasonable attorney fee, as the jury or court trying the case may assess"). The Complaint claims as damages the $62,359.60 amount of the worthless check, plus the sums of $7,137.50 and $1,080.00 for the other invoices (as set forth in Prince's final bill), as well as unspecified punitive damages, attorney's fees and costs. (Id. at 12.)
Significantly, this case is not the first time that Prince has sued Blake Marine and Zatezalo in this District Court over this hotel bill and worthless check. On August 6, 2010, Prince filed suit against these same defendants based on the same incident. The suit was styled Prince Hotel, SA v. Blake Marine Group, Inc. and Eli Zatezalo, Civil Action 10-0424-WS-M (the "Prior Lawsuit"). In that complaint, however, Prince did not assert that there was complete diversity of citizenship, nor did it otherwise invoke the provisions of 28 U.S.C. § 1332. Instead, the lone jurisdictional allegation in the Prior Lawsuit was that "[t]his complaint arises under ATCA [Alien Tort Claims Act]. The jurisdiction of this court is founded on federal question jurisdiction." (Civil No. 10-424, doc. 1, ¶ 2.) This Court sua sponte raised the question of subject-matter jurisdiction and, after briefing, found that § 1331 "does not supply subject matter jurisdiction over this action." See Prince Hotel, SA v. Blake Marine Group, 2010 WL 5279975, *3 (S.D.Ala. Dec. 16, 2010). On that basis, the Court dismissed the Prior Lawsuit without prejudice for lack of jurisdiction. This Court did not consider or decide whether diversity jurisdiction would have been proper, for the simple reason that Prince never raised it.
When the Complaint was filed in this case, the Court promptly issued its standard Service Order (doc. 2). The Service Order provided, inter alia, that "[i]f within forty-five (45) days after the filing of the Complaint, Plaintiff has not effected service..., Plaintiff shall file with the Court a notice describing the action taken by Plaintiff to effect service and the result thereof." (Doc. 2, at 1.) That 45-day period passed without Prince filing the required notice.
Nonetheless, plaintiff was not idle as to service of process. To the contrary, Prince made arrangements with the U.S. Marshals Service to serve the Summons and Complaint on Blake Marine and Zatezalo, at their addresses on file with the Alabama Secretary of State.
The next day after learning that the Marshals Service had been unable to serve process on defendants, Prince's counsel established contact with and retained a private process server in Baton Rouge, Louisiana
Coincidentally, on January 18, 2012, the undersigned entered a Show Cause Order (doc. 16) concerning service of process. In particular, the January 18 Order reflected that the 120-day time limit for service provided by Rule 4(m), Fed.R.Civ.P., had expired,
On February 8, 2012, defendants filed "Special Appearances," by and through counsel, along with a combined total of four Motions to Dismiss.
Defendants' Motions to Dismiss raise a host of arguments — some colorable, some not — in support of their contention that this action should be dismissed. In particular, defendants assert that dismissal is warranted because (i) plaintiff failed to complete service of process in a timely manner; (ii) defendant Blake Marine was not properly served; (iii) personal jurisdiction is lacking as to defendant Zatezalo; (iv) the amount in controversy requirement of 28 U.S.C. § 1332 is not satisfied, such that there is no subject-matter jurisdiction; (v) dismissal is appropriate on a collateral estoppel theory; and (vi) dismissal on the merits is appropriate under Rule 41. Each of these arguments will be addressed in turn.
For starters, defendants assert that dismissal is warranted under Rule 4(m), Fed. R.Civ.P., because Prince did not complete service of process within 120 days. This argument has superficial appeal, given that Prince commenced this litigation on September 16, 2011, and served defendants on January 20, 2012, 126 days later. Nonetheless, a closer look reveals the infirmities in defendants' position.
It is true that, as a general matter, "[a] plaintiff is responsible for serving the defendant with a summons and the complaint within the time allowed under Rule 4(m)." Lepone-Dempsey v. Carroll County Com'rs, 476 F.3d 1277, 1280-81 (11th Cir.2007). It is also true that Rule
Assuming (without deciding) that Prince has not shown good cause for failing to perfect service of process within 120 days, the Court readily finds that the attendant facts and circumstances favor an extension. First, the record shows that Prince acted with reasonable diligence to serve the defendants by making service arrangements with the U.S. Marshals Service and with a private process server in Louisiana well within the 120-day period. So this is not a case in which the plaintiff simply shirked his service obligation until it was too late. Second, plaintiff's difficulty in serving defendants was at least partially attributable to defendants' own acts, inasmuch as (a) defendants moved out of Alabama shortly before the filing of the Complaint, (b) Blake Marine apparently failed to update its address (or that of its registered agent, Zatezalo) with the Alabama Secretary of State, and (c) defendants' counsel declined to cooperate with plaintiff's requests as to defendants' whereabouts.
For all of these reasons, the Court in its discretion
Next, defendants argue that dismissal of the Complaint as to Blake Marine is warranted because Prince failed to serve process on it in a manner authorized by Louisiana law. To support this contention, defendants show that attorney E. Carroll Rogers of New Orleans, Louisiana is Blake Marine's registered agent in Louisiana; that Rogers' registered address for service is her law office located at 701 Poydras Street, Suite 400, New Orleans, LA 70139; and that rather than personally serving Rogers with the Summons and Complaint, plaintiff's process server left those items with Rogers' receptionist at that address. (See Rogers Aff. (doc. 21-2), ¶¶ 2, 5-7.) Defendants further show that Louisiana law requires both delivery to the registered agent and mailing to the defendant itself, but that no such mailing was ever done in this case.
This theory for dismissal of the Complaint against Blake Marine is not compelling. As an initial matter, movants' contention (with no citation to authority) that service on Blake Marine is not valid unless it comports with Louisiana law is incorrect. See Rule 4(e)(1), Fed.R.Civ.P. (service of process in federal court is achieved by "following state law for serving a summons in an action brought in courts of general jurisdiction
Moreover, defendants gloss over plaintiff's contention that service of process on Blake Marine was properly performed by and through service on Zatezalo, who is Blake Marine's registered agent for service of process in Alabama (doc. 29, Exh. 1) and (by defendants' own admission) the president of Blake Marine (doc. 21, at 3). Under federal law, a corporation may be served "by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process." Rule 4(h)(1)(B), Fed.R.Civ.P. And Alabama law allows service of process on a domestic corporation by "serving an officer ..., a
Finally, the Court observes that Blake Marine's challenge to service of process is unfair and inequitable in light of its own failure to adhere to its obligations under Alabama law vis a vis maintaining a registered agent. The Complaint alleges (and defendants have not disputed) that Blake Marine was incorporated in the State of Alabama. (Doc. 1, ¶ 3.) Likewise, record evidence shows that Blake Marine is regarded as a domestic corporation by the Alabama Secretary of State. (Doc. 29, Exh. 1.) It is an Alabama corporation. Alabama law requires domestic corporations to "designate and continuously maintain in this state ... a registered agent; and ... a registered office." Ala. Code § 10A-1-5.31(a). It likewise requires notice to the Alabama Secretary of State when the registered agent's address changes. See Ala. Code § 10A-1-5.33. Yet plaintiff's evidence shows that, to this day, Blake Marine lists Zatezalo as its registered agent in Alabama, with an address of 5990 Rutherford Lane, Fairhope, AL 36532. (Doc. 29, Exh. 1.) In other words, when Blake Marine and Zatezalo packed up and left Alabama, they did not update their registered agent's address with the Alabama Secretary of State as required by law. Blake Marine's Motion to Dismiss is, in this respect, an attempt to parlay its own noncompliance with Alabama law into an unfair obstacle to service of process by Prince. Movants make no showing that such a maneuver is proper under Alabama law.
For all of these reasons, defendants' Motion to Dismiss is
As the next ground for their Motion to Dismiss, defendants assert that personal jurisdiction is lacking as to defendant Zatezalo because he changed his residence from Alabama to Louisiana in August 2011, shortly before the Complaint was filed.
"When a defendant challenges personal jurisdiction, the plaintiff has the twin burdens of establishing that personal jurisdiction over the defendant comports with (1) the forum state's long-arm provision and (2) the requirements of the due-process clause of the Fourteenth Amendment to the United States Constitution." Matthews v. Brookstone Stores, Inc., 469 F.Supp.2d 1056, 1060 (S.D.Ala.2007) (citations omitted); see also Horizon Aggressive Growth, L.P. v. Rothstein-Kass, P.A., 421 F.3d 1162, 1166 (11th Cir.2005) (similar). In Alabama, this inquiry collapses
Due process authorizes the exercise of personal jurisdiction when "(1) the nonresident defendant has purposefully established minimum contacts with the forum" and "(2) the exercise of jurisdiction will not offend traditional notions of fair play and substantial justice." S.E.C. v. Carrillo, 115 F.3d 1540, 1542 (11th Cir. 1997); see also Diamond Crystal Brands, Inc. v. Food Movers Int'l, Inc., 593 F.3d 1249, 1267 (11th Cir.2010) (similar). The minimum contacts analysis varies depending on whether the type of jurisdiction asserted is general or specific. In that regard, facts supporting personal jurisdiction "may be general, which arise from the party's contacts with the forum state that are unrelated to the claim, or specific, which arise from the party's contacts with the forum state that are related to the claim." Nippon Credit Bank, Ltd. v. Matthews, 291 F.3d 738, 747 (11th Cir.2002).
Prince contends that personal jurisdiction is proper as to Zatezalo on a specific jurisdiction theory. "Specific jurisdiction refers to jurisdiction over causes of action arising from or related to a defendant's actions within the forum." PVC Windoors, Inc. v. Babbitbay Beach Const., N.V., 598 F.3d 802, 808 (11th Cir.2010) (citation and internal quotation marks omitted). Specific jurisdiction is properly found where (i) the defendant's contacts with the forum state are related or give rise to the plaintiff's cause of action, (ii) the contacts involve some act by which the defendant purposefully avails himself of the privilege of conducting activities within the forum, and (iii) the defendant's contacts with the forum are such that he should reasonably anticipate being haled into court there. See, e.g., Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1220-21 (11th Cir.2009); McGow v. McCurry, 412 F.3d 1207, 1214 (11th Cir. 2005).
Defendants insist that this lawsuit has "nothing to do with [Zatezalo's] previous residence in Alabama." (Doc. 21, at 11.) That is incorrect. The facts before the Court are that, during the time that Zatezalo was admittedly domiciled in Alabama, he was president of Blake Marine, an Alabama corporation; that Blake Marine's business was headquartered in Alabama; that, in performing his Blake Marine duties, he wrote a check payable to Prince drawn on a Blake Marine account at the First National Bank of Baldwin County in Fairhope, Alabama; and that he ignored Prince's many faxes and telephone calls to him in Alabama seeking payment of the hotel bill. In other words, Prince is suing Zatezalo for Zatezalo's conduct as an Alabama resident running an Alabama company, passing an allegedly fraudulent check drawn on an Alabama bank, and rebuffing correspondence to him in Alabama about the dishonored check. On these factual allegations, the Court readily concludes that Zatezalo's contacts with Alabama are related or give rise to Prince's causes of action, that Zatezalo purposefully availed himself of the privilege
Of course, as a general proposition, the minimum contacts a defendant has purposefully established with the forum "must be evaluated in light of other factors to ensure that the exercise of jurisdiction comports with traditional notions of fair play and substantial justice." Oldfield, 558 F.3d at 1221 (citation and internal quotation marks omitted). However, "[t]he presence of minimum contacts raises a presumption that the court may constitutionally exercise jurisdiction," which presumption may only be rebutted where the defendant presents "a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Id. at 1221 n. 29 (citation omitted). Defendants have come forward with no such considerations here. Simply put, there appears to be nothing remotely unfair or unjust about requiring Zatezalo to defend against Prince's claims in federal court in Alabama. Accordingly, the Court readily finds that the exercise of jurisdiction over Zatezalo in Alabama in this matter would comport with traditional notions of fair play and substantial justice.
The Motion to Dismiss is
As their fourth ground for seeking dismissal of the Complaint, defendants challenge the existence of diversity jurisdiction pursuant to 28 U.S.C. § 1332. In particular, defendants' position is that, even though the Complaint specifically alleges that the amount in controversy exceeds $75,000, this minimum monetary threshold is not satisfied.
Under 28 U.S.C. § 1332(a), federal courts have original jurisdiction over all civil actions between citizens of different states where the amount in controversy exceeds the sum or value of $75,000, exclusive of interest and costs. See Underwriters at Lloyd's, London v. Osting-Schwinn, 613 F.3d 1079, 1085 (11th Cir. 2010) ("For federal diversity jurisdiction to attach, all parties must be completely diverse ... and the amount in controversy must exceed $75,000.") (citations omitted). Defendants do not argue (and could not
The most glaring flaw in defendants' reasoning is their failure to recognize — much less attempt to satisfy — the stringent legal test governing their challenge. It is black-letter law that "[a] diversity suit should not be dismissed unless it is apparent, to a legal certainty, that the plaintiff cannot recover the requisite amount in controversy." Deen v. Egleston, 597 F.3d 1223, 1228 (11th Cir.2010) (citations and internal marks omitted); see also Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805 (11th Cir.2003) ("Generally, it must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.") (citation and internal marks omitted); Leonard v. Enterprise Rent a Car, 279 F.3d 967, 972 (11th Cir.2002) ("Dismissal of a case brought under 28 U.S.C. § 1332 is proper where the pleadings make it clear to a legal certainty that the claim is really for less than the jurisdictional amount.") (citation and internal marks omitted).
From the pleadings, it is not apparent to a legal certainty that Prince will be unable to recover $75,000, exclusive of interest and costs, in this case. By the clear terms of the Complaint, Prince seeks recovery of the $62,359.60 face value of the check that was returned for insufficient funds, plus two other invoices in the respective amounts of $7,137.50 and $1,080, plus punitive damages. It cannot seriously be contended that punitive damages are unavailable for the kinds of intentional tort claims asserted in the Complaint. See, e.g., Ala.Code § 6-5-285 ("The holder of a worthless check, draft, or order for the payment of money shall have a right of action against the person who unlawfully made, uttered or delivered the same to him. .... The plaintiff in such action may recover such damages,
As their fifth ground for dismissal, defendants insist that plaintiff's claims are precluded by principles of collateral estoppel. In that regard, defendants rely on the Prior Lawsuit, and specifically Prince's request in that case that the Eleventh Circuit find diversity jurisdiction, even though plaintiff had never asserted that basis for subject-matter jurisdiction at the district court level. The appeals court did not determine that there was or was not § 1332 jurisdiction; instead, it simply "decline[d] to address the issue." Prince Hotel, SA v. Blake Marine Group, 433 Fed. Appx. 706, 706 n. 2 (11th Cir.2011).
Defendants' argument misapprehends the nature of this doctrine. Collateral estoppel, or issue preclusion, may "prevent the relitigation of particular issues which were actually litigated and decided in a prior suit." Citibank, N.A. v. Data Lease Financial Corp., 904 F.2d 1498, 1501 (11th Cir.1990). "To successfully invoke collateral estoppel, a party must demonstrate that: (1) the issue at stake in a pending action is identical to the one involved in the prior litigation; (2) the issue must have been actually litigated in the prior suit; (3) the determination of the issue in the prior litigation must have been a critical and necessary part of the judgment in the action; and (4) the party against whom the earlier decision is asserted must have had a full and fair opportunity to litigate the issue in the earlier proceeding." Barger v. City of Cartersville, Ga., 348 F.3d 1289, 1293 (11th Cir. 2003) (citation omitted); see also Ex parte Flexible Products Co., 915 So.2d 34, 45 (Ala.2005) (collateral estoppel requires three elements: "(1) The issue must be identical to the one involved in the previous suit; (2) the issue must have been actually litigated in the prior action; and (3) the resolution of the issue must have been necessary to the prior judgment.") (citations omitted). No court in the Prior Lawsuit decided whether there was or was not diversity jurisdiction because Prince never raised it before the District Court. The issue was simply never resolved or determined, one way or the other. Because
The Motion to Dismiss on grounds of collateral estoppel is
Finally, as a supplement to their original Motions to Dismiss, defendants ask the Court to dismiss plaintiff's claims against them with prejudice pursuant to Rule 41(b), Fed.R.Civ.P.
As grounds for invoking Rule 41(b), defendants first maintain that "Plaintiff failed to serve the complaint within the deadlines provided by this Court." (Doc. 22, 23, at ¶ 3.)
For all of these reasons, defendants' Rule 41 Motions to Dismiss (docs. 22, 23) are
For all of the foregoing reasons, defendants' Motions to Dismiss (docs. 19, 20, 22 & 23) are all