United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION AND ORDER
H. MCKINLEY, JR., CHIEF JUDGE UNITED STATES DISTRICT COURT.
matter is before the Court on Defendants' Motion to
Dismiss [DN 3], Plaintiff's Motion for Default Judgment
[DN 7-1], Plaintiff's Motion for Leave to File Responsive
Pleading [DN 8], Plaintiff's Motion to Strike [DN 12],
and Defendants' Motion for Leave to File a Sur-Reply for
Motion for Default Judgment [DN 13]. Fully briefed, these
matters are ripe for decision.
Childress Cattle, LLC (hereinafter “Childress”)
operates as a cattle broker, selling cattle that it acquires
from various stockyards to interested buyers. (Compl. [DN
1-2] ¶ 5.) Defendant R & C Cain Farms (hereinafter
“Cain Farms”) is in the business of buying cattle
and was a customer of Childress' for several years prior
to this action. (Id. ¶ 6.) Cain Farms was owned
and operated by Roger Cain, now deceased. (Id.
¶ 3.) Plaintiff alleges that Roger Cain and his wife,
Christie Cain, were partners in Cain Farms. (Id.)
During these years, Cain Farms entered into several oral
contracts with Childress in which Childress was to deliver
cattle to Cain Farms and, in return, Cain Farms was to tender
the agreed upon price. (Id. ¶ 6.) As of
September 9, 2015, Cain Farms' account with Childress was
paid in full. (Id. ¶ 8.) Between September 9,
2015 and December 22, 2015, Cain Farms ordered and received
eight shipments of cattle from Childress for a total of $675,
239.63. (Id. ¶ 21.) As of December 22, 2015,
Cain Farms' had remitted payments totaling $380, 607.65.
(Id.) Since then, Cain Farms has failed to tender
further payment, leaving an outstanding balance of $294,
631.98 as of April 28, 2017. (Id.) Due to this
nonpayment, Childress contacted Christie Cain of Cain Farms
many times requesting payment and informing Cain Farms of its
intent to repossess the cattle; however, Cain Farms still
failed to tender prompt payment. [Id.] Childress was
unable to repossess the cattle, as it believes the cattle
have all been sold. [Id.] As such, Childress filed
suit on June 23, 2017 alleging breach of contract, breach of
oral contract, conversion, and quantum meruit against Cain
Farms and Christie Cain. (Id. ¶¶ 24-45.)
the Court now is Defendants' Motion to Dismiss premised
upon a lack of personal jurisdiction, a lack of subject
matter jurisdiction, improper service of process, and
improper venue. In addition, various other motions are now
before the Court as well. The Court will address each in
Motion to Dismiss
Motion to Dismiss sets forth several theories for relief,
including: lack of personal of personal jurisdiction, a lack
of subject matter jurisdiction, improper service of process,
and improper venue.
Standard of Review
party asserting personal jurisdiction has the burden of
showing that such jurisdiction exists. Theunissen v.
Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). Personal
jurisdiction is “[a]n essential element of the
jurisdiction of a district . . . court” and without
personal jurisdiction the court is “powerless to
proceed to an adjudication.” Employers Reinsurance
Corp. v. Bryant, 299 U.S. 374, 382 (1937); Schall v.
Suzuki Motor of Am., Inc., No. 4:14-CV-00074-JHM, 2017
WL 2059662, at *1 (W.D. Ky. May 12, 2017). When a district
court rules on a Rule 12(b)(2) motion to dismiss without an
evidentiary hearing, the plaintiff need only make a
“prima facie” case that the court has personal
jurisdiction. See, e.g., Conn v. Zakharov, 667 F.3d
705, 711 (6th Cir. 2012).
a diversity case, a federal court determines whether personal
jurisdiction exists over a nonresident defendant by applying
the law of the state in which it sits.” Third Nat.
Bank in Nashville v. WEDGE Grp. Inc., 882 F.2d 1087,
1089 (6th Cir. 1989) (citing American Greetings Corp. v.
Cohn, 839 F.2d 1164, 1167 (6th Cir.1988)); see also
First Nat. Bank of Louisville v. J. W. Brewer Tire Co.,
680 F.2d 1123, 1125 (6th Cir. 1982). Thus, the Court will
apply Kentucky law. Kentucky's long-arm statute permits
Kentucky courts to exercise personal jurisdiction over
certain nonresident defendants. Churchill Downs, Inc. v.
NLR Entm't, LLC, No. 3:14-CV-166-H, 2014 WL 2200674,
at *5 (W.D. Ky. May 27, 2014) (citing KRS § 454.210).
However, “the Kentucky Supreme Court [has] clarified
that this statute is not co-extensive with federal due
process.” Id. (citing Caesars Riverboat
Casino, LLC v. Beach, 336 S.W.3d 51, 56 (Ky. 2011)). A
plaintiff's claims must instead “meet one of the
nine explicit categories of the long-arm statute, even if
federal due process would otherwise permit personal
jurisdiction.” Id. In order to assert personal
jurisdiction over a defendant under the Kentucky long-arm
statute, a plaintiff must show: “(1) [the
defendant's] conduct falls under a statutory category
identified in KRS § 454.210(2)(a), and (2) [the
plaintiff's] claim ‘arises from' that statutory
provision.” Id. (citing Caesars, 336
S.W.3d at 58). Under the second prong, “[a] claim
‘arises from' certain conduct when there is a
‘reasonable and direct nexus' between the conduct
causing injury and the defendant's activities in the
state.” Id. (citing Caesars, 336
S.W.3d at 59).
finding that the above requirements are met, each defendant
must “have certain minimum contacts with it such that
the maintenance of the suit does not offend
‘traditional notions of fair play and substantial
justice.'” Hinners v. Robey, 336 S.W.3d
891, 897 (Ky. 2011) (citing Int'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945)).
Parties to the Action Generally
Defendants here, Cain Farms and Christie Cain, contend that
Childress' Complaint should be dismissed for lack of
personal jurisdiction. Specifically, Cain Farms, as an
Indiana entity, and Christie Cain, as an Indiana resident,
argue that they are not subject to personal jurisdiction
under the Kentucky long-arm statute or the Due Process Clause
due to their lack of contacts with the Commonwealth of
Complaint, Childress alleges that Cain Farms is a partnership
and that Roger and Christie Cain were both general partners.
Defendants argue that Cain Farms was in fact a sole
proprietorship and that Christie Cain was neither a partner
nor an agent of the sole proprietorship, rather, she was
simply Roger Cain's wife. Though these matters may be
dispositive as to the claims against the Defendants
individually, here, the Court will take all allegations in
the well-pleaded complaint as true and save all questions of
material fact for later proceedings. Johnson v. Kentucky
Youth Research Ctr., Inc., 682 S.W.2d 799, 800 (Ky. Ct.
App. 1985) (assuming the allegations in the complaint as
true, that defendant was a sole proprietorship, and saving
the question of whether the entity was a sole proprietorship
or a partnership for summary judgment).
has plausibly shown that Cain Farms was a partnership and
Christie Cain was a partner because the name of the entity-R
& C Cain Farms-reflects Roger and Christie Cain's
initials, Christie signed checks on behalf of R & C Cain
Farms to pay for the cattle at issue, the checks Christie
signed were issued from R & C Cain Farms' checking
account rather than a personal account, Christie fielded
phone calls from Bonnie Childress regarding payment for the
cattle, and Christie corresponded with Childress regarding
payment and cattle after Roger's death. These facts give
rise to the reasonable inference that a general partnership
was formed. Therefore, for the purposes of this Opinion, Cain
Farms will be treated as a partnership and Christie Cain as a
partner. Accordingly, the Court must determine that each
Defendant is subject to jurisdiction in the Commonwealth
sufficient to satisfy the long-arm statute and that each
Defendant had minimum contacts with the Commonwealth of
Kentucky in order to properly assert personal jurisdiction.
Cain Farms, “a partner's actions may be imputed to
the partnership for the purpose of establishing minimum
contacts.” Guy v. Layman, 932 F.Supp. 180, 182
(E.D. Ky. 1996) (quoting Sher v. Johnson, 911 F.2d
1357, 1366 (9th Cir. 1990)); see also Stirling v.
Hunt, No. 12-2737, 2013 WL 3328674, at *9 (W.D. Tenn.
July 1, 2013) (adopting the reasoning in Guy, 932
F.Supp. at 182). Thus, Roger and Christie Cain's contacts
with Kentucky will be examined in order to determine if this
Court has sufficient personal jurisdiction over Cain
argues that this court has personal jurisdiction over Cain
Farms pursuant to Kentucky's long-arm statute, KRS §
454.210, as Cain Farms is a nonresident of Kentucky. This
requires two separate showings by Childress, as the Court
must both determine “(1) whether the law of the state
in which the district court sits authorizes jurisdiction, and
(2) whether the exercise of jurisdiction comports with the
Due Process Clause.” Brunner v. Hampson, 441
F.3d 457, 463 (6th Cir. 2006).
the first requirement, the Kentucky Supreme Court has found
that the statute requires a two-prong showing before a court
can exercise personal jurisdiction over a nonresident.
Ceasar's, 336 S.W.3d at 57. First, the Court
must find that a nonresident's conduct or activities fall
within one of nine enumerated subsections in KRS §
454.210. Id. at 58. Second, the Court must determine
if the plaintiff's claims arise from the defendant's
actions. Id. This requires a showing of “a
reasonable and direct nexus between the wrongful acts alleged
in the complaint and the statutory predicate for long-arm
jurisdiction[.]” Id. at 59.
Court finds that Cain Farms' activities in the state
constitute “transacting any business in this
Commonwealth, ” the first of the nine possibilities for
jurisdiction under KRS § 454.210. “Courts
construing the definition of “transacting
business” have defined the terms using their plain
meaning. Black's Law Dictionary defines
‘transact' as ‘[t]o carry on or conduct
(negotiations, business, etc.) to a conclusion.'”
Aces High Coal Sales, Inc. v. Cmty. Tr. & Bank of W.
Georgia, No. CV 15-161-DLB-HAI, 2017 WL 3122661, at *14
(E.D. Ky. July 21, 2017) (citing Bayou City Expl., Inc.
v. Consumer Advocate Servs. Enters., LLC, No.
1:14-CV-99-DJH, 2015 WL 4094259, at *3 (W.D. Ky. July 7,
2015)). “[T]he key inquiry in personal jurisdiction
cases concerns the activities of the defendant, not
the plaintiff.” Philmo, Inc. v. Checker Food
Holding Co., No. 1:15-CV-00098-JHM, 2016 WL 1092862,
at *3 (W.D. Ky. Mar. 21, 2016) (quoting Spectrum Scan,
LLC v. AGM CA, No. 3:07 CV 72 H, 2007 WL 2258860, at *3
(W.D. Ky. Aug. 2, 2007)). The Court must consider that,
“a contract with a Kentucky company [does] not alone
support the exercise of jurisdiction over a nonresident
[d]efendant under KRS 454.210(2)(a)(1).” Churchill
Downs, 2014 WL 2200674, at *6 (citing Spectrum
Scan, 2007 WL 2258860, at *2-3); see also Calphalon
Corp. v. Rowlette, 228 F.3d 718, 722 (6th Cir. 2000)
(“[T]he mere existence of a contract . . . is
insufficient to confer personal jurisdiction over [a
non-resident defendant]”). Instead, “Kentucky
courts have required a course of direct, affirmative actions
within a forum that result in or solicit a business
transaction.” Gentry v. Mead, No. CV
16-100-DLB-CJS, 2016 WL 6871252, at *3 (E.D. Ky. Nov. 21,
2016) (quoting Modern Holdings, LLC v. Corning,
Inc., No. 13-CV-405, 2015 WL 1481443, at *6 (E.D. Ky.
Mar. 31, 2015)).
Cain Farms' conduct amounted to that necessary to confer
jurisdiction under the Kentucky long-arm statute. Cain Farms
entered into several contracts within the state between 2011
and 2016, performed and paid-in full on those contracts,
entered into eight oral contracts between September 9, 2015
and November 9, 2015 alone, partially paid on those 2015
contracts, contacted Childress and was contacted by Childress
numerous times regarding these and all contracts between 2011
and 2015, and maintained an ongoing business relationship
with Childress Cattle in the state for a number of years.
Further it is clear that the contracts created between Cain
Farms and Childress have given rise to the instant action,
meaning there is a “reasonable and direct nexus between
the conduct causing injury and the defendant's activities
in the state, ” Caesars, 336 S.W.3d at 59, as
the nonpayment on these contracts provide the basis for the
instant suit. Based on these facts, and because the parties
do not dispute the fact that Cain Farms transacted business
in Kentucky under the long-arm statute, Cain Farms'
conduct sufficiently falls within the provision of the
long-arm statute permitting personal jurisdiction over any
nonresident defendant “transacting any business in this
[C]ommonwealth.” KRS § 454.210(2)(a)(1); see
Phoenix Process Equip. Co. v. Capital Equip. & Trading
Corp., No. 3:16-CV-00024-JHM, 2017 WL 157834, at *3
(W.D. Ky. Jan. 13, 2017); Philmo, No.
1:15-CV-00098-JHM, 2016 WL 1092862, at *3 (collecting cases).