Judi Simek, and Scott Everett v. Christopher Nolan d/b/a Lakeside Farm, LLC, and William P. McCall, III , 2016 Ind. App. LEXIS 426 ( 2016 )

FILED
Nov 30 2016, 9:11 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT
Peter J. Sacopulos
Sacopulos, Johnson & Sacopulos
Terre Haute, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Judi Simek, November 30, 2016
Appellant-Defendant, Court of Appeals Case No.
10A01-1603-CT-412
and Interlocutory Appeal from the
Clark Circuit Court
Scott Everett,
The Honorable Andrew Adams,
Defendant, Judge
Trial Court Cause No. 10C01-
v. 1212-CT-204
Christopher Nolan d/b/a
Lakeside Farm, LLC, and
William P. McCall, III,
Appellees-Plaintiffs
Crone, Judge.
Case Summary
[1] Judi Simek brings an interlocutory appeal from the trial court’s denial of her
motion to reconsider its previous denial of her motion to dismiss the claims
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filed against her by Christopher Nolan d/b/a Lakeside Farm, LLC, and
William P. McCall, III (collectively “the Plaintiffs”). Specifically, Simek asserts
that dismissal is warranted pursuant to Indiana Rule of Trial Procedure
12(B)(2) because the trial court lacks personal jurisdiction over her. We agree
and therefore reverse and remand with instructions for the trial court to dismiss
the Plaintiffs’ claims against Simek.
Facts and Procedural History
[2] The well-pleaded facts, both challenged and unchallenged, when viewed in the
light most favorable to the Plaintiffs indicate that plaintiff Christopher Nolan,
d/b/a Lakeside Farm, LLC, is a limited liability corporation located in and
formed according to the laws of the State of Indiana. Plaintiff William P.
McCall, III, resides in Sellersburg. At some point in time, Nolan contacted
Scott Everett 1 via telephone regarding the possibility of Everett training two
thoroughbred horses, Pacific Palisades and Cinnamon Beach, that were located
in Indiana and owned by Nolan and McCall. Everett is a licensed
thoroughbred trainer in the State of New York. Everett sent a third party to
Indiana to evaluate the horses. Nolan and Everett subsequently entered into an
oral contract which provided that Everett would train the horses and assume all
costs of such training in exchange for a thirty-percent ownership in the horses.
It was agreed that any purse money realized by the horses would be split
1
We note that defendant Scott Everett does not participate in this interlocutory appeal. However, we
included him in the case caption because, pursuant to Indiana Appellate Rule 17(A), “A party of record in
the trial court or Administrative Agency shall be a party on appeal.”
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equally minus jockey fees. Thereafter, the horses were transported by a third
party from Indiana to Kentucky. Approximately eighty to ninety days later, the
horses were transported from Kentucky to Florida. Everett took possession of
the horses in Florida.
[3] Sometime after August 11, 2010, Everett notified Nolan that Pacific Palisades
was incapable of racing. Nolan and Everett determined that the horse would be
given away. In February 2011, Everett notified Nolan that Cinnamon Beach
had suffered a “career ending” broken foot injury. Appellant’s App. at 14.
Based upon Everett’s representation of the injury, Nolan advised Everett “to
obtain a good home for the horse as it was no longer capable of thoroughbred
racing.” Id.
[4] However, in early 2012, Nolan learned that Cinnamon Beach had competed in
several thoroughbred races, all occurring outside of Indiana, and that the horse
had won approximately $159,418 in purse money. When Nolan contacted
Everett regarding what he had learned, Everett advised him that ownership of
Cinnamon Beach had been transferred to Simek.
[5] On December 28, 2012, the Plaintiffs filed a complaint for damages against
Everett and Simek in the Clark Circuit Court. The complaint, sounding in
contract and tort law, alleges that Everett “breached the oral contract for
training services,” that Everett and Simek “committed fraud and
misrepresentation concerning the condition of Cinnamon Beach,” and that
Everett and Simek “converted the Plaintiffs[’] thoroughbred horse to their own
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use without the knowledge and consent of the Plaintiffs ….” Id. at 16. 2 Everett
and Simek subsequently filed a motion to dismiss pursuant to Indiana Trial
Rule 12(B)(2) challenging the trial court’s personal jurisdiction over them. The
Plaintiffs responded to the motion to dismiss, and the trial court heard
argument from counsel for all parties at a hearing on February 3, 2014.
Following the hearing, the trial court denied the motion to dismiss and directed
“that depositions be taken of Mr. Nolan, Mr. Everett and Ms. Simek and lock
in facts under oath. The Court will grant leave to renew the motion [to dismiss]
once those facts are locked in under oath, subject to later discovery.” Id. at 6.
[6] It appears from the record that no depositions were ever taken. On August 18,
2015, Simek filed a motion to reconsider the motion to dismiss for lack of
personal jurisdiction. In support of her motion to reconsider, Simek submitted
her own affidavit as well as four additional affidavits, including that of her co-
defendant Everett. In her personal affidavit, Simek avers that she is a resident
of the State of New York. She states that she has never been to Indiana, does
not know anyone in Indiana, does not possess any assets or real property in
Indiana, has never conducted business in Indiana, has never had any
communication with any business or individual located in Indiana, and has no
2
In addition to seeking damages for the current value of Cinnamon Beach and fifty percent of all purse
monies won by Cinnamon Beach since November 2011, the Plaintiffs seek damages pursuant to Indiana
Code Section 34-24-3-1, which provides that a person who “suffers a pecuniary loss as a result of a violation
of [the criminal conversion statute]” may bring a civil action against the person who caused the loss to
recover an amount not to exceed three times the actual damages of the person suffering the loss. We note
that the Plaintiffs incorrectly cite the applicable statute in their complaint; we have provided the correct
citation.
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intention, other than as necessary for the purposes of the current litigation, of
entering Indiana. Id. at 107. Simek states that she had no involvement with or
knowledge of Cinnamon Beach until the horse was physically present in New
York. She further states that any investment or other transaction regarding her
co-ownership of Cinnamon Beach with Everett occurred in New York, and that
Everett has never, at any time, acted as her agent, employee, or representative
in any capacity.
[7] The trial court held a hearing on the motion to reconsider on December 15,
2015. Following the hearing, the trial court entered an order again denying the
motion to dismiss and ordering “previous discovery to be completed.” Id. at
106. Upon Simek’s motion, the trial court stayed the discovery order as it
applied to her and certified its order denying the motion to dismiss for
interlocutory appeal. We accepted jurisdiction. Additional facts will be
provided as necessary.
Discussion and Decision
[8] As a preliminary matter, we observe that the Plaintiffs did not file an appellees’
brief. Where an appellee fails to file a brief, we do not undertake to develop
arguments on that party’s behalf; rather, we may reverse upon a prima facie
showing of reversible error. Morton v. Ivacic, 898 N.E.2d 1196, 1199 (Ind.
2008). Prima facie error is error “at first sight, on first appearance, or on the
face [of] it.” Id. The “prima facie error rule” relieves this Court from the
burden of controverting arguments advanced for reversal, a duty which remains
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with the appellee. Geico Ins. Co. v. Graham, 14 N.E.3d 854, 857 (Ind. Ct. App.
2014). Nevertheless, we are obligated to correctly apply the law to the facts in
the record in order to determine whether reversal is required. Id.[9] Simek contends that the trial court erred in denying her motion to reconsider
her motion to dismiss for lack of personal jurisdiction pursuant to Indiana Trial
Rule 12(B)(2). A motion to dismiss pursuant to Trial Rule 12(B)(2) is a proper
method for challenging the personal jurisdiction of a trial court. LinkAmerica
Corp. v. Cox, 857 N.E.2d 961, 965 (Ind. 2006). The existence of personal
jurisdiction is a question of law that we review de novo. Id. While we do not
defer to a trial court’s legal conclusion regarding the existence of personal
jurisdiction, whether “personal jurisdiction exists turns on facts, namely the
extent of a defendant’s contacts with the forum, and ordinarily a trial court’s
factual findings on that point would be reviewed for clear error.” Wolf’s Marine
Bar, Inc. v. Brar, 3 N.E.3d 12, 15 (Ind. Ct. App. 2014).
[10] Here, in denying Simek’s motion to dismiss and her motion to reconsider, the
trial court made no findings of jurisdictional facts. Where the trial court does
not find jurisdictional facts, “we may accept the plaintiff’s well-pleaded facts to
the extent they are not challenged, and we may view challenged facts in favor of
the plaintiff.” JPMorgan Chase Bank, N.A. v. Desert Palace, Inc., 882 N.E.2d 743,
747 (Ind. Ct. App. 2008), trans. denied. The party challenging the trial court’s
personal jurisdiction bears “the burden of establishing the lack thereof by a
preponderance of the evidence.” Id. at 748. “We presume jurisdiction exists
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until the defendant comes forth with evidence sufficient to challenge
jurisdiction.” Id.[11] We note that the Plaintiffs’ complaint mentions few facts that are relevant to
the personal jurisdiction question. We also note that the Plaintiffs’ response to
Simek’s motion to dismiss challenging personal jurisdiction primarily addresses
facts relevant to the court’s jurisdiction over Everett. As for the affidavits
submitted by Simek in support of her motion to reconsider, they stand
unopposed by the Plaintiffs, as does Simek’s account of the underlying facts
provided in her brief on appeal. With this in mind, we turn to our de novo
review.
[12] Recently, our supreme court reiterated Indiana’s approach to personal
jurisdiction as follows:
Personal jurisdiction refers to a court’s power to impose
judgment on a particular defendant. In Indiana, personal
jurisdiction analysis begins with Indiana Trial Rule 4.4(A), which
sets out examples of activities that often support jurisdiction. It
also provides that “a court of this state may exercise jurisdiction
on any basis not inconsistent with the Constitutions of this state
or the United States.”
In LinkAmerica Corp. v. Cox, we interpreted this catchall “any
basis” provision to “reduce analysis of personal jurisdiction to the
issue of whether the exercise of personal jurisdiction is consistent
with the federal Due Process Clause.” 857 N.E.2d at 967. More
specifically, before an Indiana court can properly assert personal
jurisdiction over a defendant, the Due Process Clause of the
Fourteenth Amendment mandates that the defendant have
“certain minimum contacts with the state such that the
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maintenance of the suit does not offend traditional notions of fair
play and substantial justice.” Id. (citing Int'l Shoe Co. v. Wash., 326
U.S. 310, 316 (1945)). Minimum contacts include acts defendants
themselves initiate within or without the forum state that create a
substantial connection with the forum state itself. See Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985); see also Anthem Ins.
Cos., Inc. v. Tenet Healthcare Corp., 730 N.E.2d 1227, 1235 (Ind.
2000), superseded on other grounds by LinkAmerica.
The “minimum contacts” test of International Shoe and its
progeny ensures that a defendant’s contacts with Indiana make
an Indiana court’s exercise of personal jurisdiction fair and just.
LinkAmerica, 857 N.E.2d at 967 (citing Int'l Shoe Co., 326 U.S. at
316). To state this another way, due process requires that
potential out-of-state defendants be able to predict what conduct
might make them liable in our courts. Burger King, 471 U.S. at
472 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 297 (1980)). See also Int'l Shoe Co., 326 U.S. at 319; Anthem
Ins. Cos., 730 N.E.2d at 1235-36. “The Due Process Clause ...
gives a degree of predictability to the legal system that allows
potential defendants to structure their primary conduct with
some minimum assurance as to where that conduct will and will
not render them liable to suit.” WorldWide Volkswagen, 444 U.S.
at 297 (citation omitted). Consistent with this longstanding
precedent, Indiana courts will employ caution and exert
potentially coercive legal authority only over a defendant who
has the requisite minimum contacts to Indiana. Int'l Shoe Co., 326
U.S. at 316 (citing Pennoyer v. Neff, 95 U.S. 714 (1877)).
Boyer v. Smith, 42 N.E.3d 505, 509 (Ind. 2015) (parallel citations omitted).
[13] There are two types of personal jurisdiction: general and specific. If the
defendant’s contacts with the state are so “continuous and systematic” that the
defendant should reasonably anticipate being haled into the state’s courts for
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any matter, the defendant is subject to general jurisdiction. LinkAmerica, 857
N.E.2d at 967 (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.
408, 415 n. 9 (1984)). If the defendant’s contacts with the state are not
“continuous and systematic,” the defendant may be subject to specific
jurisdiction “if the controversy is related to or arises out of the defendant’s
contacts with the forum state.” Id. (citing Helicopteros, 466 U.S. at 414 & n. 8).
[14] In this case, the only possible basis for the trial court to exercise jurisdiction
over Simek would be specific jurisdiction. “Specific jurisdiction exists when a
lawsuit arises from or is closely related to a defendant’s minimum contacts with
or substantial connection to the forum state.” Boyer, 42 N.E.3d at 510. In other
words, specific jurisdiction requires purposeful availment. Id. A single contact
with the forum state may be sufficient to establish specific jurisdiction over a
defendant, if it creates a “substantial connection” with the forum state and the
suit is related to that connection. McGee v. Int'l. Life Ins. Co., 355 U.S. 220, 223
(1957). However, a defendant cannot be haled into a jurisdiction “solely as a
result of random, fortuitous, or attenuated contacts or of the unilateral activity
of another party or a third person.” Burger King, 471 U.S. at 476-77 (internal
quotation marks omitted) (citing Helicopteros, 466 U.S. at 417; Keeton v. Hustler
Magazine, Inc., 465 U.S. 770, 774 (1984); WorldWide Volkswagen Corp., 444 U.S.
at 299).
[15] When evaluating a defendant’s contacts with the forum state, a court should
consider:
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(1) whether the plaintiff’s claim arises from the defendant’s forum
contacts; (2) the overall contacts of the defendant or its agent
with the forum state; (3) the foreseeability of being haled into
court in that state; (4) who initiated the contacts; and (5) whether
the defendant expected or encouraged contacts with the state.
Wolf’s Marine, 3 N.E.3d at 15. “[M]inimum contacts analysis focuses on the
relationship among the defendant, the forum, and the litigation.” Boyer, 42
N.E.3d at 510 (citations and quotation marks omitted). That is to say, a
defendant’s “suit-related conduct” must create a substantial connection to the
forum State.” Id. Indeed, “a substantial connection to Indiana is the
touchstone, because that is the only way defendants can reasonably anticipate
being called into court here to defend themselves.” Id. at 511. 3
[16] Without question, we think that Simek has proved the trial court’s lack of
personal jurisdiction by a preponderance of the evidence. Not only has Simek
had insufficient contact with the State of Indiana to establish specific
jurisdiction, she has had no contact with Indiana whatsoever. It is undisputed
that Simek has never been to Indiana and has never owned, operated, or
conducted any business in Indiana. It is undisputed she was not a party to any
negotiations or resulting oral contract with the Plaintiffs regarding the training
or ownership of Cinnamon Beach, and in her uncontested affidavit, Simek
3
Even if a defendant’s contacts are sufficient to confer personal jurisdiction, due process requires that the
assertion of jurisdiction over the defendant be reasonable. LinkAmerica, 857 N.E.2d at 967. Because we
conclude that Simek did not have sufficient minimum contacts with Indiana, we need not reach the
reasonableness inquiry.
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avers that she had no involvement with or knowledge of Cinnamon Beach until
the horse was physically present in New York. Simek also avers that Everett is
not and never has been her agent or representative for any purpose.
[17] Simek’s sole relationship with this litigation is the fact that she appears to have
a current business arrangement with Everett regarding the ownership of
Cinnamon Beach. There are no facts to indicate that she personally initiated,
expected, or encouraged contacts with Indiana such that she could have
reasonably foreseen being haled into court here. This case is a prime example
of when a defendant cannot be haled into a jurisdiction solely as a result of the
unilateral activity of another party and/or a third person. Simply put, Simek
does not have a substantial connection to Indiana, and therefore she cannot be
said to have purposely availed herself of the trial court’s jurisdiction.
[18] In sum, Indiana lacks specific jurisdiction over Simek. Her alleged conduct,
even when viewed in the light most favorable to the Plaintiffs, did not establish
a substantial connection between herself and this State, and thus cannot support
personal jurisdiction. Simek has established prima facie error in the trial court’s
denial of her motion to reconsider her motion to dismiss for lack of personal
jurisdiction. Consequently, we reverse and remand with instructions for the
trial court to dismiss the Plaintiffs’ claims against Simek.
[19] Reversed and remanded.
Kirsch, J., and May, J., concur.
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