Beagles & Elliott Enterprises, LLC v. Florida Aircraft Exchange, Inc.

United States Court of Appeals
Fifth Circuit
F I L E D
In the July 10, 2003
United States Court of Appeals Charles R. Fulbruge III
Clerk
for the Fifth Circuit
_______________
No. 03-10063
Summary Calendar
_______________
BEAGLES AND ELLIOTT ENTERPRISES, LLC,
Plaintiff-Appellee,
VERSUS
FLORIDA AIRCRAFT EXCHANGE, INC., ET AL.,
Defendant,
THOMAS DAVID KING,
Defendant-Appellant.
_________________________
Appeal from the United States District Court
for the Northern District of Texas
No. 4:01-CV-368-A
_________________________
Before HIGGINBOTHAM , SMITH , and Defendant Thomas King appeals the denial
CLEMENT , Circuit Judges. of his FED . R. CIV . P. 12(b)(2) motion to dis-
miss for lack of personal jurisdiction. Finding
PER CURIAM :*
published and is not precedent except under the
*
Pursuant to 5TH CIR . R. 47.5, the court has limited circumstances set forth in 5TH CIR . R.
determined that this opinion should not be 47.5.4.
no error, we affirm. before delivery to Texas.1 On appeal, King
contends that Beagles never proved jurisdic-
I. tion by a preponderance of the evidence.
Plaintiff Beagles and Elliott Enterprises, Felch v. Transportes Lar-Mex SA De CV, 92
LLC (“Beagles”), a Texas-based company, F.3d 320, 326 (5th Cir. 1996).
contracted with Florida Aircraft Exchange,
Inc. (“FAE”), for the purchase and modifica- II.
tion of a Beechcraft Duke Aircraft. FAE of- We review de novo a district court’s ex-
ficers King and John Rourke signed the con- ercise of personal jurisdiction over a non-
tract. After FAE allegedly breached the agree- resident defendant. Nuovo Pignone, SpA v.
ment, Beagles sued FAE and King, premising Storman Asia M/V, 310 F.3d 374, 378 (5th
liability against the latter on an alter ego the- Cir. 2002). Where, as here, the court denies
ory. Separately, Beagles alleged that King the motion to dismiss without holding an evi-
was liable based on an oral promise to guar- dentiary hearing, the plaintiff must make only
antee performance, made after FAE had a prima facie showing of the facts on which
breached the original contract. jurisdiction is predicated. Id. The district
court should accept as true the plaintiff’s “un-
FAE and King filed a rule 12(b)(2) motion controverted allegations, and resolve in [its]
to dismiss for lack of personal jurisdiction. In favor all conflicts between the facts contained
finding jurisdiction over FAE, the district in the parties’ affidavits and other documen-
court relied on the company’s contractual
agreement to deliver the aircraft to Texas and
1
on a forum selection clause naming Tarrant Because King made this oral promise for his
County, Texas, as the site of litigation. As to own benefit, the court determined that the Statute
King, the court found that Beagles had estab- of Frauds did not bar its admission. BMC Indus.,
lished a prima facie case of alter ego liability. Inc. v. Barth Indus., Inc., 160 F.3d 1322, 1338
Later, in the pretrial order, FAE and King (11th Cir. 1998) (“Under the statute of frauds,
where the main purpose of the guarantor is to ob-
stipulated that “there are presently no pending
tain some benefit or serve some interest of its own
jurisdictional issues.” rather than to gain some advantage for the
beneficiary, that promise is considered ‘direct,’
At trial, the district court found FAE and and remains beyond the reach of the statute.”).
King jointly and severally liable. Without dis- Insofar as King argues that the Statute of Frauds
cussing whether FAE’s corporate veil should bars the oral promise because it was made after
be pierced, the court determined that King had FAE’s breach, King does not controvert the
“agreed to be personally responsible for seeing court’s finding that King sought to “prevent a
that the performance was completed.” This confrontation between plaintiff and FAE at a
finding was made as a result of King’s oral crucial point in King’s maneuvers to liquidate
FAE for his personal gain.” In other words,
promise personally to guarantee the contract if
King’s oral promise was made for self-interested
Beagles allowed the airplane to be transported
reasons, despite FAE’s pre-existing breach. Cf.
from Florida to a new hangar in Mississippi, id. at 1337 n.30 (“The likelihood that someone
would assume liability for an obligation that was
already in default is too minute to permit such a
promise to be enforced absent a writing to prove
its existence.”).
2
tation.” Id. If a prima facie showing is used Rather, he contends that at trial, Beagles failed
to establish personal jurisdiction, the plaintiff to prove personal jurisdiction. Instead of rely-
must nevertheless establish personal jurisdic- ing on an alter ego theory of liability, the court
tion at trial by a preponderance of evidence. found that King personally assumed the con-
Felch, 92 F.3d at 326; DeMeloe v. Touche tract in a separate oral promise. In sum, the
Marine, Inc., 711 F.2d 1260, 1271 n.12 (5th district court saw no need to decide whether
Cir. 1983). FAE’s corporate veil should be pierced.
Generally, personal jurisdiction over a cor- King’s argument is tarnished by his pretrial
porate officer such as King cannot be predicat- order stipulation that “[t]here are presently no
ed on jurisdiction over the corporation. Stuart pending jurisdictional issues.” Though King
v. Spademan, 772 F.2d 1185, 1197 (5th Cir. pled lack of personal jurisdiction in his an-
1985). Jurisdiction may be asserted, however, swer, FED . R. CIV. P. 8(c), his abandonment of
where the corporation is the alter ego of the this defense in the pretrial order is tantamount
officer. Id. This determination is made by ex- to a concession of personal jurisdiction.
amining the “totality of the circumstances,” Trans-Asiatic Oil Ltd., S.A. v. Apex Oil, 804
Century Hotels v. United States, 952 F.2d 107, F.2d 773, 778-79 (1st Cir. 1986). “Once the
110 (5th Cir. 1992), looking to such factors as [pretrial] order is entered, it controls the scope
the degree of control and dominion exercised and course of the trial. FED . R. CIV . P. 16. If
by the officer, the commingling of funds, a claim or issue is omitted from the order, it is
whether corporate formalities were observed, waived.”3 Given King’s waiver, Beagles was
whether the corporation was adequately capi- not required to prove personal jurisdiction at
talized, and the whether the corporation trans- trial.
acts the officers’ personal business. United
States v. Jon-T Chems., Inc., 768 F.2d 686, AFFIRMED.
691 (5th Cir. 1985).
Importantly, King does not take issue with
the preliminary finding of alter ego liability.2
2
In finding the establishment of a prima facie
case of alter ego liability, the court relied on un-
controverted evidence that “(a) King and Rourke
organized FAE; (b) King used FAE funds for
personal purposes; (c) King commingled personal
funds with those of FAE; (d) King disregarded
corporate formalities; (e) King had used FAE
funds to pay personal obligations; and (f) King’s
withdrawals of assets from FAE resulted in its evidentiary hearing or reserving the issue for the
being unable to meet its obligations.” The fact merits.
that this evidence was uncontroverted, coupled
3
with King’s failure to request an evidentiary hear- Valley Ranch Dev. Co. v. FDIC, 960 F.2d
ing, compels the conclusion that the court did not 550, 554 (5th Cir. 1992) (quoting Flannery v.
err by deciding personal jurisdiction without an Carroll, 676 F.2d 126, 129 (5th Cir. 1982)).
3