Daniel E. Bannister v. SFB Companies, Inc. of Delaware ( 2019 )

STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
2019 CW 0079
2019 CA 0367
DANIEL E. BANNISTER
VERSUS
SFB COMPANIES, INC. OF DELAWARE, ET AL.
DATE OF JUDGMENT: ``
NOV 15 2019
ON APPLICATION FOR SUPERVISORY REVIEW
FROM THE NINETEENTH JUDICIAL DISTRICT COURT
NUMBER 660562, SECTION 24, PARISH OF EAST BATON ROUGE
STATE OF LOUISIANA
HONORABLE ROBERT D. DOWNING, JUDGE AD HOC
Matthew C. Clark Counsel for Respondents -Appellees
Frank J. Swarr Patricia Ann Bannister, Shannon Rose
Mickey P. Landry Jordan, Daniel E. Bannister, Jr.,
Philip C. Hoffrnan Dolphus Jacob Bannister, Anna Kay
New Orleans, Louisiana Springer, and Grayson Humble
Bannister
Bruce A. Cranner Counsel for Relator -Appellant
Patrice W. Oppenheim SYSTRA Engineering, Inc.
Molly L. Manieri
Mandeville, Louisiana
BEFORE: McDONALD, THERIOT, AND CHUTZ, JJ.
Disposition: APPEAL DISMISSED. MOTION TO DISMISS APPEAL DENIED AS MOOT. WRIT
GRANTED. JUDGMENT REVERSED AND RENDERED.
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CHUTZ, J.
Relator -defendant, SYSTRA Engineering, Inc. ( SYSTRA), seeks review of
the trial court' s judgment, overruling its declinatory exception raising the objection
of lack of jurisdiction over its person and requiring it to appear in this litigation
instituted by decedent, Daniel E. Bannister. We dismiss the appeal, grant the writ,
reverse the trial court' s judgment, and render judgment.
BACKGROUND
Mr. Bannister filed a petition for damages against numerous defendants,
alleging tortious exposure to asbestos and subsequent contraction of mesothelioma.
After his death, his heirs, respondents -plaintiffs, Patricia Ann Bannister, Shannon
Rose Jordan, Daniel E. Bannister, Jr., Dolphus Jacob Bannister, Anna Kay Springer,
and Grayson Humble Bannister, were substituted as proper -party plaintiffs.
SYSTRA was named as a defendant in amending petitions. Without
answering the lawsuit, SYSTRA filed a declinatory exception raising the objection
of lack of jurisdiction over the person, challenging the propriety of the Louisiana
court' s jurisdiction over it.
On September 17, 2018, a hearing was held on the declinatory exception.
The matter was submitted, but the trial court left the record open for additional
briefing. After another hearing, on December 20, 2018, the trial court denied
SYSTRA' s exception in open court.
The trial court signed a judgment on January 9, 2019 to reflect its ruling in
open court. SYSTRA both appealed and filed a notice of intent to apply for
supervisory writs. Thereafter, on February 12, 2019, the trial court signed an
amended judgment certifying its prior judgment, in pertinent part, as follows:
IT IS HEREBY ORDERED, ADJUDGED AND DECREED
that this Court finds that this Judgment should be designated as a final
judgment pursuant to La. C. C.P. art. 1915 because there is no just
reason for delay for the appellate court to determine whether this
Court can exercise personal jurisdiction over [ SYSTRA] and because
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irreparable damage will be done if the decision about personal
jurisdiction is delayed.
After both the writ application and the appeal had been lodged, the
Bannisters filed a motion to dismiss the appeal, asserting that SYSTRA' s only
remedy was review of the underlying ruling pursuant to its writ application since
the interlocutory judgment rendered by the trial court, overruling the exception of
lack of personal jurisdiction, was not appealable. In similar manner, this court
issued an order noting that the judgment overruling the exception did not appear to
be a final, appealable ruling and directed the parties to show cause why the appeal
should not be dismissed. SYSTRA' s writ application along with the Bannisters'
motion to dismiss and this court' s show cause order were referred to this panel for
decision. See Bannister v SFB Companies, 2019- 0079 ( La. App. 1st Cir. 3/ 21/ 19
and 5/ 28/ 19) ( unpublished orders).
APPELLATE REVIEW
Under Louisiana law, a final judgment is one which determines the merits of
a controversy, in whole or in part. La. C. C. P. art. 1841. Clearly, the judgment
denying the exception in this case does not determine the merits in whole or in part
and is not a final judgment. Moreover, it is not a judgment deemed final by
operation of law under La. C. C. P. art. 1915A. 1
1 La. C. C. P. art. 1915A provides:
A final judgment may be rendered and signed by the court, even though it may
not grant the successful party or parties all of the relief prayed for, or may not
adjudicate all of the issues in the case, when the court:
1)Dismisses the suit as to less than all of the parties, defendants, third party
plaintiffs, third party defendants, or intervenors.
2) Grants a motion for judgment on the pleadings, as provided by Articles 965,
968, and 969.
3) Grants a motion for summary judgment, as provided by Articles 966 to 969,
but not including a summary judgment granted pursuant to Article 966( E).
4) Signs a judgment on either the principal or incidental demand, when the two
have been tried separately, as provided by Article 1038.
5) Signs a judgment on the issue of liability when that issue has been tried
separately by the court, or when, in a jury trial, the issue of liability has been tried
before a jury and the issue of damages is to be tried before a different jury.
6) Imposes sanctions or disciplinary action pursuant to Articles 191, 863, or 864
or Code of Evidence Article 510( G).
K'
La. C. C. P. art. 1915B( 1) allows for certification of partial judgments as
follows:
When a court renders a partial judgment or a partial summary
judgment or sustains an exception in part, as to one or more but less
than all of the claims, demands, issues, or theories against a party,
whether in an original demand, reconventional demand, cross- claim,
third -party claim, or intervention, the judgment shall not constitute a
final judgment unless it is designated as a final judgment by the court
after an express determination that there is no just reason for delay.
Although Article 1915 dispenses with finality in the sense of completion of the
litigation, the judgment rendered must be sufficiently final in that it disposes of the
claim or dispute in regard to which the judgment is entered. Van ex rel. White v.
Davis, 2000- 0206 ( La. App. 1st Cir. 2/ 16/ 01), 808 So. 2d 478, 483- 85.
A judgment that denies an exception does not fall into any category
recognized under Article 1915B( 1) that can qualify for certification. As such, this
court has acknowledged that La. C. C. P. art. 1915 does not authorize a trial court to
designate a judgment denying an exception as final. See Young v. City of
Plaquemine, 2004- 2305 ( La. App. 1st Cir. 11/ 4/ 05), 927 So. 2d 408, 411.
Moreover, this court is not bound by the trial court' s designation and if the
judgment is improperly designated, the defect is jurisdictional and this court cannot
consider the merits under its appellate jurisdiction. See, e. g., Van ex rel. White,
808 So. 2d at 485.
Here, SYSTRA timely filed an application for supervisory review of the
January 9, 2019 judgment with this court. And on January 9, 2019, the trial court
granted SYSTRA' s motion for stay pending appellate review. Therefore, because
SYSTRA has a viable remedy for immediate appellate review and the delays
affecting SYSTRA have been stayed, we pretermit a discussion on the effect of the
trial court' s finding that SYSTRA will suffer " irreparable damage if the decision
about personal jurisdiction is delayed" and dismiss the appeal. The relief requested
by the Bannisters pursuant to their motion is denied since it is moot. See In re
fl
E. W., 2009- 1589 ( La. App. 1st Cir. 5/ 7/ 10), 38 So. 3d 1033, 1037 (" An issue is
moot when a judgment or decree on that issue has been `` deprived of practical
significance' or `` made abstract or purely academic."'). We review the propriety of
the trial court' s action of overruling SYSTRA' s objection of lack of personal
jurisdiction through review of the pending writ application. See Herlitz Constr.
Co., Inc. v. Hotel Investors of New Iberia, Inc., 396 So. 2d 878 ( La. 1981) ( per
curiam) (
directing that an intermediate appellate court should consider and rule
upon the merits of a supervisory writ, even if the alleged error can be corrected on
appeal, when: ( 1) an appellate reversal will terminate the litigation; ( 2) there is no
dispute of fact to be resolved; and ( 3) the trial court decision is arguably incorrect).
PERSONAL JURISDICTION
The Louisiana Long Arm Statute provides for the exercise of personal
jurisdiction over a nonresident defendant, who acts directly or by an agent, as to a
cause of action arising from transacting any business in this state, contracting to
supply services or things in this state, or causing injury or damage by an offense or
quasi offense committed through an act or omission in this state. La. R.S.
13: 3201A( 1- 3). Additionally, the Long Arm Statute provides for the exercise of
personal jurisdiction over a nonresident on any basis consistent with the United
States and Louisiana Constitutions. La. R.S. 13: 3201B; Crosstex Energy Servs.,
LP v. Texas Brine Co., LLC, 2017- 1405 ( La. App. 1st Cir. 4/ 25/ 18), 253 So. 3d
806, 810- 11, writ denied, 2018- 0881 ( La. 9/ 28/ 18), 252 So. 3d 919 ( citing
Southeast Wireless Network, Inc. v. U.S. Telemetry Corp., 2006- 1736 ( La.
4/ 11/ 07), 954 So. 2d 120, 124). The addition of Subsection B to the Long Arm
Statute ensures that the long-arm process extends to the limits allowed by due
process. Id. Thus, rather than focusing on the examples set forth in Subsection A,
the sole inquiry into jurisdiction over a nonresident is an analysis of the
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constitutional due process requirements. Crosstex Energy Servs., LP, 253 So. 3d at
811.
Due process allows personal jurisdiction over a nonresident defendant when
it has certain " minimum contacts" with the forum state such that maintenance of
the suit does not offend traditional notions of "fair play and substantial justice." Id.citing Intl Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90
L.Ed. 95 ( 1945)) and Southeast Wireless Network, Inc., 954 So. 2d at 124- 25). The
defendant' s contact with the forum state must be such that he should reasonably
anticipate being haled into court in the forum state.
The minimum contacts between the nonresident defendant and the state must
be based on some act by the defendant through which it purposefully avails itself
of the privilege of conducting activities within the state and thereby invokes the
benefits and protections of the state' s law. Burger King Corp. v. Rudzewicz, 471
U.S. 462, 474- 75, 105 S. Ct. 21749 2183, 85 L.Ed.2d 528 ( 1985). This requirement
ensures that the defendant will not be haled into a jurisdiction solely as a result of a
random, fortuitous, or attenuated contact, or by the unilateral activity of another
party or a third person. de Reyes v. Marine Mgmt. and Cons., Ltd., 586 So. 2d 103,
106 ( La. 1991). If the defendant deliberately engages in significant activities within
a state or creates continuing obligations between itself and residents of the forum,
it manifestly has availed itself of the privilege of conducting business there;
because its activities are shielded by the benefits and protections of the forum' s
laws, it is presumptively not unreasonable to require the defendant to submit to the
burdens of litigation in that forum. Id.Minimum requirements inherent in the concept of fair play and substantial
justice may defeat the inference of reasonableness of jurisdiction even if the
defendant has purposefully engaged in forum activities. Burger King Corp., 105
S. Ct. at 2184. The relationship between the nonresident and the state must be such
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that it would be reasonable to require the nonresident to defend the suit in that
state. The burden on the nonresident defendant is a primary concern. In appropriate
cases, this burden will be considered in light of the other relevant factors such as
the state' s interest in adjudicating the dispute; the plaintiffs' interest in obtaining
convenient and effective relief when that interest is not adequately protected by
their power to choose the forum; the interstate judicial system' s interest in
obtaining the most efficient resolution of controversies; and the shared interest of
the states in furthering fundamental substantive social policies. Boatwright v.
Metro. Life Ins. Co., 95- 1822 ( La. App. 4th Cir. 9/ 28/ 95), 661 So. 2d 169, 171- 72
citing World -Wide Volkswagen v. Woodson, 444 U.S. 286, 100 S. Ct. 559, 62
L.Ed.2d 490 ( 1980) and de Reyes, 586 So.2d at 107).
The parties asserting that personal jurisdiction is proper have the initial
burden of proving minimum contacts. If they satisfy this burden, a presumption of
reasonableness of jurisdiction arises and the burden shifts to the opposing party to
prove that the exercise of jurisdiction would not meet the due process fairness
inquiry. An appellate court conducts a de novo review of a trial court' s legal ruling
on an exception of lack of personal jurisdiction and a manifest error review of any
factual findings underlying the ruling. Crosstex Energy Servs., LP, 253 So. 3d at811- 12.
On appeal, SYSTRA asserts that the record is devoid of the necessary
evidence to establish that it had sufficient minimum contacts with Louisiana. In
support of its objection of lack of personal jurisdiction, SYSTRA submitted into
evidence the affidavit of its secretary, Garry Hartwig. Hartwig attested that, based
on his knowledge of SYSTRA' s corporate history, SYSTRA has never
manufactured, designed, or distributed asbestos or asbestos- related products.
Additionally, he stated that SYSTRA has never been registered to do and has never
done or contracted any business in Louisiana. According to Hartwig, in 2000,
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SYSTRA became a registered corporation in New York after it purchased the stock
of EI Associates, Inc. ( EI Associates), another New York corporation.
The Bannisters contend that despite the lack of direct contacts between
SYSTRA and Louisiana, SYSTRA is the successor to Ford, Bacon & Davis
Construction Corporation ( FB& D), for whom Mr. Bannister worked between 1966
and 1969 at multiple industrial facilities including the Commercial Solvents
facility in Sterlington, Louisiana. They offered into evidence Mr. Bannister' s
record from the Social Security Administration showing his employer as SYSTRA
during the years 1966 through 1969. They also point to discovery responses in
which SYSTRA admitted that its tax identification number is identical to that
formerly held by FB& D. And in further support of SYSTRA' s relationship with
FB& D, the Bannisters submitted into evidence discovery responses by SYSTRA
acknowledging that EI Associates was formerly known as SFB Construction
Corporation ( SFB) and before that SFB was formerly known as FB& D. Thus, the
Bannisters urge that the record demonstrates that " SYSTRA is FB& D" and, as the
successor corporation, the contacts of FB& D should be imputed to SYSTRA
thereby warranting the haling of SYSTRA into a Louisiana court.
Irrespective of whether FB& D had sufficient minimum contacts to permit
Louisiana' s exercise of personal jurisdiction over it directly, we find the record
devoid of the necessary evidence to support a finding that imputation of those
contacts to SYSTRA is warranted under the facts of this case.'
2 SYSTRA challenges the relevancy of the deposition testimony of Mr. Bannister and another
employee who worked at the Commercial Solvents facility in Sterlington; the affidavit of a
consultant attesting to the presence of known asbestos products at the Sterlington facility; and a
contract for the installation of insulation between FB& D and a subcontractor, the latter of which
SYSTRA avers has not been authenticated. The record shows the first time that SYSTRA raised
its objections to this evidence was in a second supplemental memorandum subsequent to the
September 17, 2018 hearing and prior to the December 20, 2018 hearing. At that later hearing,
SYSTRA neither informed the trial court of its written objections nor requested a ruling. Because
for purposes of this review we have assumed that FB& D had sufficient contacts with Louisiana
to hale FB& D into court, we find it unnecessary to address the timeliness or correctness of
SYSTRA' s evidentiary objections.
Initially, we note that, despite the identification of SYSTRA as Mr.
Bannister' s employer in the Social Security Administration' s records, it is
undisputed that SYSTRA did not exist until 2000, making it impossible for it to
have been Mr. Bannister' s employer between 1966 through 1969. Moreover,
according to SYSTRA' s discovery responses, it has no record indicating that Mr.
Bannister ever was employed by SYSTRA. As SYSTRA, through Hartwig, stated
in his responses to deposition by written questions, SYSTRA apparently appears as
Mr. Bannister' s employer in the Social Security Administration' s records because
FB& D was a predecessor corporation that had the same tax identification number
that SYSTRA currently holds. SYSTRA maintains that the sole reason it acquired
EI Associates was to obtain a license to do business in New York as a professional
engineering company in conformity with a New York law, enacted in 1935,
prohibiting business corporations from practicing professions. SYSTRA contends
that because FB& D was practicing as a professional engineering corporation at the
time of the enactment of the New York legislation, SYSTRA was grandfathered in
through acquisition of EI Associates.3
Admitted into evidence was the Stock Purchase Agreement between EI
Associates and SYSTRA.4 While the Bannisters suggest that the transfer of all of
EI Associates' liabilities to SYSTRA would have necessarily included liability for
damages arising from tortious conduct that EI Associates may have had and,
therefore, constituted a contact sufficient to hale SYSTRA into court, we find this
showing insufficient to warrant imputation of FB& D' s liability for damages arising
from tortious conduct directed at Mr. Bannister to SYSTRA.
3 See N.Y. Educ. Law § 7209( 6) ( McKinney) ( 2016).
4 The Stock Purchase Agreement was between EI Associates Group, Inc., the sole stockholder of
the EI Associates stock, and SYSTRA USA, Inc., the parent company of SYSTRA. On review,
the parties have not challenged the accuracy of this portion of the corporations' histories.
C
Conspicuously absent from this record are the agreements that transfer
FB& D to SFB and SFB to EI Associates. Thus, we are unable to ascertain whether
either or both of those agreements included transfers of all FB& D' s liabilities such
that at the time EI Associates conveyed its liabilities to SYSTRA pursuant to the
Stock Purchase Agreement in 2000, any liability FB& D may have had for damages
arising from tortious conduct while Mr. Bannister was in its employ would have
transferred as well.' Given the lack of evidence in this record establishing that
SYSTRA is FB& D," the Bannisters did not sustain their initial burden of proving
minimum contacts, and the trial court erred in imputing any minimum contacts
FB& D may have had with Louisiana to SYSTRA.
Without imputation of FB& D' s minimum contacts to SYSTRA, the
maintenance of this litigation against SYSTRA offends traditional notions of fair
play and substantial justice. Based on its purchase of EI Associates, a New York
corporation, SYSTRA could not have reasonably foreseen being sued in Louisiana
for potential liabilities a long -ago predecessor may have had. SYSTRA has had no
contacts in Louisiana from which it availed itself of the privilege of doing business
in this state, and this record simply does not support imputing any minimum
contacts of FB& D to SYSTRA as a successor corporation. Accordingly, the trial
court erred in overruling SYSTRA' s exception of lack of jurisdiction over the
person.
5 We find no merit in the Bannisters' contention that the terms in the Stock Purchase Agreement,
which identified actions or proceedings pending against EI Associates on the date of transfer
including " Information Requests/ Subpoena" regarding its receipt in March 1998 of a subpoena
duces tecum for the employment records of an individual in conjunction with a Louisiana
lawsuit, provided notice to SYSTRA that it could be haled into court in Louisiana to answer for
possible damages to Mr. Bannister as a result of his alleged exposure to asbestos between 1966
and 1969 by FB& D. Nothing in the agreement references a transfer of FB& D' s liabilities to EI
Associates or its predecessor, SFB, so as to have made suit against SYSTRA as a successor to
FB& D a foreseeable possibility.
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DECREE
For these reasons, we dismiss SYSTRA' s appeal. The Bannisters' motion to
dismiss the appeal is denied as moot. Pursuant to our supervisory jurisdiction, we
reverse the trial court' s interlocutory judgment, overruling SYSTRA' s declinatory
exception raising the objection of lack of jurisdiction over the person. We render
judgment sustaining SYSTRA' s declinatory exception raising the objection of lack
of personal jurisdiction and dismiss SYSTRA from this litigation.
APPEAL DISMISSED. MOTION TO DISMISS APPEAL DENIED AS
MOOT. WRIT GRANTED. JUDGMENT REVERSED AND RENDERED.
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STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
2019 CW 0079
and
2019 CA 0367
DANIEL E. BANNISTER
VERSUS
SFB COMPANIES, INC. OF DELAWARE, ET AL.
McDONALD, J., concurs.
I respectfully concur. I agree with the majority's reversal, under our supervisory
jurisdiction, of the district court' s interlocutory judgment, overruling SYSTRA' s
declinatory exception of lack of jurisdiction over the person, and dismissing SYSTRA
from this litigation. I also agree with the majority's dismissal of SYSTRA' s appeal in this
case, because the judgment is not appealable. Because the Bannisters' motion to
dismiss also correctly pointed out that the judgment is not appealable, I think our
opinion should grant their motion to dismiss the appeal, rather than dismiss their
motion as moot.