Coast to Coast Hole in One, LLC v. Higgins ( 2024 )

2 3 UNITED STATES DISTRICT COURT 4 DISTRICT OF NEVADA 5 * * * 6 COAST TO COAST HOLE IN ONE, LLC, Case No. 3:24-cv-00195-MMD-CSD et al., 7 ORDER Plaintiffs, 8 v. 9 MICHAEL HIGGINS, et al., 10 Defendants. 11 12 Plaintiffs Terry Ulleseit and Denise I. George created an LLC, Plaintiff Coast to 13 Coast Hole in One, LLC, with Defendant Michael Higgins to engage in the business of 14 prize indemnification at charity golf tournaments. (ECF No. 1-2 (“Complaint”).) Plaintiffs 15 sued Michael, his wife Tracy Higgins,1 and a new company the Higgins set up recently, 16 Hole in One Promotions, LLC, alleging that Michael breached various duties he owed 17 Coast to Coast in setting up Hole in One, along with alleging that Tracy and Hole in One 18 committed various business torts for setting up Hole in One and competing for business 19 with Coast to Coast. (Id.) The Court has thoroughly reviewed the several pending motions 20 and the briefing associated with them. (ECF Nos. 10, 14, 25, 30, 38, 43, 44, 56.)2 The 21 Court previously set a hearing (the “Hearing”) on these pending motions for August 19, 22 2024. (ECF No. 49.) The Court issues this order to dismiss Hole in One for lack of 23 personal jurisdiction and focus counsels’ attention on two specific issues that the Court 24 25 1To distinguish between them, the Court will refer to them as Michael and Tracy in this order. 26 2The Court referred the motion for sanctions (ECF No. 50) to United States 27 Magistrate Judge Craig S. Denney. He will resolve that motion. The motion to disqualify counsel (ECF No. 56) is not yet fully briefed, but will be before the Hearing (ECF No. 64). 28 The Court may refer that motion to Judge Denney, but currently plans to address it. And to be clear, the Court expects the parties to be prepared to discuss the motion to disqualify 2 personal jurisdiction over Tracy; and (2) whether the Operating Agreement is enforceable. 3 The Court begins with the issue of its lack of personal jurisdiction over Hole in One. 4 One of the pending motions is a motion to dismiss for lack of personal jurisdiction filed by 5 Tracy and Hole in One. (ECF No. 14.) Tracy and Hole in One present evidence—Tracy’s 6 declaration—that Hole in One is a Massachusetts company that Tracy set up around 7 March 2024, listing both Michael and Tracy as members. (ECF No. 14-2 at 4.) Tracy later 8 removed Michael as a manager of Hole in One; she is now the sole owner. (Id.) Tracy 9 swears that Hole in One has never done any business with any clients or customers in 10 Nevada. (Id.) Based on this evidence, Hole in One argues that the Court lacks both 11 general and specific personal jurisdiction over it. (ECF No. 14 at 2, 5-9.) 12 And as Hole in One points out in reply (ECF No. 29 at 5), Plaintiffs do not present 13 any specific argument as to whether the Court has personal jurisdiction over Hole in One 14 in response to the motion to dismiss, much less any evidence that could contravene the 15 evidence that Tracy presented about Hole in One in her declaration, and the Court 16 summarized above (see generally ECF No. 24). Indeed, Plaintiffs describe Hole in One 17 as a Commonwealth of Massachusetts Limited Liability Company formed by the Higgins 18 on February 21, 2024, in the Complaint. (ECF No. 1-2 at 4.) Plaintiffs do not allege any 19 facts suggesting that the Court may have personal jurisdiction over Hole in One in the 20 ‘jurisdiction and venue’ section of their Complaint, either. (Id. at 5-6.) In sum, the only 21 evidence before the Court compels the conclusion that the Court lacks personal 22 jurisdiction over Hole in One. Based on the evidence before the Court, Hole in One is a 23 Massachusetts company (whose sole owner resides in Massachusetts) that has never 24 done any business in Nevada. (ECF No. 14-2 at 4.) See also, e.g., Walden v. Fiore, 571 25 U.S. 277, 285 (2014) (“the plaintiff cannot be the only link between the defendant and the 26 forum. Rather, it is the defendant’s conduct that must form the necessary connection with 27 the forum State that is the basis for its jurisdiction over him.”); see also id. at 288 28 (concluding “that petitioner lacks the ‘minimal contacts’ with Nevada that are a 2 Hole in One from this case without prejudice for lack of personal jurisdiction. 3 But whether the Court has personal jurisdiction over Tracy is a closer call that 4 Plaintiffs clearly contest in responding to Tracy’s motion to dismiss for lack of personal 5 jurisdiction. (ECF Nos. 14, 24.) And the Court “generally may not rule on the merits of a 6 case without first determining that it has jurisdiction over . . . the parties (personal 7 jurisdiction).” Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 430-31 8 (2007). Moreover, various aspects of this case would be streamlined if it proceeds only 9 against Michael and not Michael and Tracy. For example, only Michael is listed in the 10 signature section of the unsigned Operating Agreement and only Michael is a manager 11 of Coast to Coast. (ECF Nos. 14-10 at 12, 14-11 at 2.) The Court accordingly orders the 12 parties to be prepared to offer evidence and argument going to whether the Court has 13 personal jurisdiction over Tracy at the Hearing. 14 The Court additionally expects the parties to be prepared to offer evidence and 15 argument going to whether the Operating Agreement (ECF No. 14-10, though filed as 16 various other exhibits as well) is enforceable at the Hearing. If the Operating Agreement 17 is enforceable, the Court is tentatively persuaded by Michael’s argument that the Court 18 would have to send Plaintiffs’ claims against him to arbitration because he submitted an 19 arbitration demand to Plaintiffs. (ECF No. 43 at 2-4 (making the argument).) And were the 20 Court to make that finding, the Court would also grant Michael’s motion to stay Plaintiffs’ 21 claims against him. (ECF No. 44.) See Smith v. Spizzirri, 601 U.S. 472, 475-76 (2024) 22 (“When a federal court finds that a dispute is subject to arbitration, and a party has 23 requested a stay of the court proceeding pending arbitration, the court does not have 24 discretion to dismiss the suit on the basis that all the claims are subject to arbitration.”). 25 This finding could also render several of the other pending motions moot. The Court 26 accordingly seeks to answer the question of whether the Operating Agreement binds its 27 three intended signatories (ECF No. 14-10 at 12) before addressing the other issues in 28 this case. 1 It is therefore ordered that Hole in One Promotions, LLC is dismissed from this 2 || case without prejudice because the Court lacks personal jurisdiction over it. 3 It is further ordered that the parties must be prepared to present evidence and 4 || argument the Hearing going to: (1) whether the Court has personal jurisdiction over 5 || Tracy Higgins; and (2) whether the Operating Agreement is enforceable. The Cour 6 || intends to focus on these issues at the Hearing. 7 DATED THIS 14" Day of August 2024. 9 MIRANDA M. DU 10 CHIEF UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28