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Olbers v. Thompson

United States District Court, W.D. Kentucky, Louisville Division

August 25, 2017



          David J. Hale, Judge United States District Court.

         Defendant Charles Thompson, a Texas resident, is “the President, sole shareholder and Director” of Walker County Custom Motorcycles, a Texas Corporation. (Docket No. 6-1, PageID # 26, 29; D.N. 11, PageID # 128-29) Walker County Custom Motorcycles does business as Defendant American IronHorse Motorcycles of Huntsville. (D.N. 10, PageID # 115) Jeffrey Goodwin, a Kentucky resident, ordered a motorcycle seat, along with several other items, from American IronHorse. (Id.) While Goodwin was riding on this motorcycle seat with his girlfriend, Plaintiff Heather Olbers, the seat became loose, resulting in injury to Olbers. (D.N. 1, PageID # 6-7) Olbers filed suit against Thompson and American IronHorse Motorcycles of Huntsville, alleging that the seat was defective. (Id., PageID # 9-13) The defendants have moved to dismiss the case for lack of personal jurisdiction or, alternatively, failure to state a claim. (D.N. 6) Olbers has filed a motion for leave to amend her complaint to add Walker County Custom Motorcycles as a defendant. (D.N. 8) Because Olbers has demonstrated that the Court has personal jurisdiction over American Iron Horse Motorcycles of Huntsville but has not, at this stage, demonstrated that Thompson can be held individually liable, the Court will deny in part and grant in part the defendants' motion to dismiss. The Court will grant Olbers's motion for leave to amend her complaint.

         I. BACKGROUND

         While looking to purchase a motorcycle seat, Jeffrey Goodwin, a Kentucky resident, visited the website (D.N. 7-1, PageID # 81) The website advertised the “Air Ride 2-up seat” and instructed interested customers to “Call and talk with Charles about the seats & travel bags to be able to ride & travel with luggage in comfort.” (Id., PageID # 82) To make a purchase or inquire about pricing, customers had to email or call Charles Thompson, a Texas resident. (D.N. 6-1, PageID # 29; D.N. 6-2, PageID # 41; D.N. 11, PageID # 128-29)

         On May 8, 2014, Goodwin called Thompson and ordered an upgraded “Air Ride 2-up seat” along with several other items for his motorcycle. (D.N. 7-1, PageID # 82) Goodwin's order was shipped to his residence in Cox's Creek, Kentucky. (Id.) Goodwin states that upon receiving the seat, he installed it in accordance with the instructions that were provided. (Id.)

         On August 15, 2015, Goodwin took his girlfriend, Heather Olbers, for a ride on his motorcycle in Marion County, Kentucky. (D.N. 6-1, PageID # 29) While Goodwin was navigating a pothole, the seat allegedly became loose, causing the seat and Olbers to fall off the motorcycle. (D.N. 1, PageID # 6-7) Olbers claims that she suffered injuries to her back, neck, right shoulder, and chest, as well as “multiple abrasions, burns and bruises around her body.” (Id., PageID # 7)

         On August 15, 2016, Olbers filed suit against Thompson and American IronHorse Motorcycles of Huntsville, claiming (1) negligent sale of defective products; (2) breach of express and implied warranties; (3) negligence per se; and (4) strict liability for defective products. (Id., PageID # 9-13) Olbers invoked the Court's diversity jurisdiction. (Id., PageID # 2-4) Olbers asserted that diversity of citizenship was established because she is a citizen of Kentucky and the defendants are citizens of Texas. (Id.) Olbers also claims that the amount in controversy exceeds $75, 000. (Id.)

         The defendants have filed a motion to dismiss arguing that the Court lacks personal jurisdiction over them and that the plaintiffs have failed to state a claim upon which relief can be granted. (D.N. 6) The defendants claim that federal due process is not satisfied. (D.N. 6-1, PageID # 38-40) Additionally, Thompson claims that he cannot be sued personally because American IronHorse Motorcycles of Huntsville is a sole proprietorship, and Walker County Custom Motorcycles, Inc. is the correct Defendant. (Id.) Walker County Custom Motorcycles, Inc. is a Texas corporation and is certified to do business in the state of Texas under the assumed name of American IronHorse Motorcycles of Huntsville. (D.N. 6-3, PageID # 45, 49)

         In response, Olbers filed a motion to amend her complaint to add Walker County Custom Motorcycles, Inc. as a defendant. (D.N. 8-1, PageID # 85) Defendants oppose this motion because they believe that personal jurisdiction is still lacking. (D.N. 10, PageID # 116)

         Because the Court found that the parties had not sufficiently addressed the extent of the defendants' commercial contacts with Kentucky, the Court ordered supplemental briefing on that issue. (D.N. 12) The parties filed simultaneous supplemental briefs on August 14, 2017. (D.N. 13; D.N. 14) In their brief, the defendants clarified that Walker County Custom Motorcycles has made eighty-two sales to Kentucky residents over the last thirteen years and eight months. (D.N. 13, PageID # 135)


         A. Personal Jurisdiction

         The burden is on Olbers to demonstrate that personal jurisdiction exists. See Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). To make this showing, a plaintiff “may not stand on [her] pleadings but must, by affidavit or otherwise, set forth specific facts” demonstrating the Court's jurisdiction. Id. When presented with a motion to dismiss for lack of personal jurisdiction, the Court has three options: (1) “decide the motion upon the affidavits alone, ” (2) “permit discovery in aid of deciding the motion, ” or (3) “conduct an evidentiary hearing to resolve any apparent factual questions.” Id. (citing Serras v. First Tenn. Bank Nat'l Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989)).

         Neither party has requested jurisdictional discovery in this case. Nor does the Court find that there are factual disputes necessitating an evidentiary hearing. Consequently, Olbers's burden is relatively light: “Where the court relies solely on the parties' affidavits to reach its decision, the plaintiff must make only a prima facie showing that personal jurisdiction exists in order to defeat dismissal.” Id. The Court must view the pleadings and affidavits in the light most favorable to the plaintiff, without “weigh[ing] the controverting assertions” of the defendant. Id. at 1459. Dismissal is proper only “if all of the specific facts . . . alleged” by the plaintiff “collectively fail[ ] to state a prima facie case for jurisdiction.” Id.

         1. Long-Arm Statute

         Federal Rule of Civil Procedure 4(k)(1)(A) provides that personal jurisdiction exists over a defendant “who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located.” Fed.R.Civ.P. 4(k)(1)(A). In Kentucky, the Court must first look to Kentucky's long-arm statute to determine whether “the cause of action arises from conduct or activity of the defendant that fits into one of the statute's enumerated categories.” Caesars Riverboat Casino, LLC v. Beach, 336 S.W.3d 51, 57 (Ky. 2011). If the long-arm statute is applicable, the Court must then apply the traditional test “to determine if exercising personal jurisdiction over the non-resident defendant offends his federal due process rights.” Id.

         Olbers relies on Kentucky Revised Statutes § 454.210(2)(a)(2) and (5) to assert personal jurisdiction. (D.N. 7, PageID # 75) Those subsections provide that

         [a] court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a claim ...

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