Levert Lyons v. Scott C Kinsel

STATE OF MICHIGAN
COURT OF APPEALS
LEVERT LYONS, UNPUBLISHED
April 25, 2017
Plaintiff-Appellee,
v No. 329584
Wayne Circuit Court
SCOTT C. KINSEL, JEFFREY D. HUNT, and LC No. 15-001381-NM
MOORE LANDREY, LLP,
Defendants-Appellants,
and
ETHAN L. SHAW, JOHN P. COWART, SHAW
COWART, LLP, J. THOMAS RHODES III,
FILEMON B. VELA, JR., RHODES & VELA,
GORDON T. CAREY, JR., GORDON T. CAREY,
JR., PC, TARA J. WILLIAMS, and LAW
OFFICES OF JAMES SCOTT FARRIN,
Defendants.
LEVERT LYONS,
Plaintiff-Appellee,
v No. 329597
Wayne Circuit Court
SCOTT C. KINSEL, JEFFREY D. HUNT, LC No. 15-001381-NM
MOORE LANDREY, LLP, ETHAN L. SHAW,
JOHN P. COWART, SHAW COWART, LLP, J.
THOMAS RHODES III, FILEMON B. VELA,
JR., RHODES & VELA, GORDON T. CAREY,
JR., and GORDON T. CAREY, JR., PC,
Defendants,
and
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TARA J. WILLIAMS and LAW OFFICES OF
JAMES SCOTT FARRIN,
Defendants-Appellants.
LEVERT LYONS,
Plaintiff-Appellee,
v No. 329607
Wayne Circuit Court
SCOTT C. KINSEL, JEFFREY D. HUNT, LC No. 15-001381-NM
MOORE LANDREY, LLP, TARA J. WILLIAMS,
and LAW OFFICES OF JAMES SCOTT
FARRIN,
Defendants-Appellees,
and
ETHAN L. SHAW, JOHN P. COWART, and
SHAW COWART, LLP,
Defendants-Appellants,
and
J. THOMAS RHODES III, FILEMON B. VELA,
JR., RHODES & VELA, GORDON T. CAREY,
JR., and GORDON T. CAREY, JR., PC,
Defendants.
Before: JANSEN, P.J., and BECKERING and GADOLA, JJ.
BECKERING, J. (concurring in part and dissenting in part).
I concur with the majority opinion in all respects but for its conclusion regarding the trial
court’s exercise of personal jurisdiction over the Texas defendants, Scott C. Kinsel, Jeffrey D.
Hunt, John P. Cowart, and Moore Landrey, LLP (the Moore Landrey defendants). I would hold
that subjecting these defendants to the jurisdiction of a Michigan court is not consistent with the
notions of fair play and substantial justice under the Due Process Clause of the Fourteenth
Amendment.
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As the majority notes, this Court in Yoost v Caspari, 295 Mich App 209, 222-223; 813
NW2d 783 (2012), summarized the necessary analysis for determining whether a trial court has
properly exercised personal jurisdiction over a defendant:
When examining whether a Michigan court may exercise limited personal
jurisdiction over a defendant, this Court employs a two-step analysis. First, this
Court ascertains whether jurisdiction is authorized by Michigan’s long-arm
statute.[1] Second, this Court determines if the exercise of jurisdiction is
consistent with the requirements of the Due Process Clause of the Fourteenth
Amendment. Both prongs of this analysis must be satisfied for a Michigan court
to properly exercise limited personal jurisdiction over a nonresident. Long-arm
statutes establish the nature, character, and types of contacts that must exist for
purposes of exercising personal jurisdiction. Due process, on the other hand,
restricts permissible long-arm jurisdiction by defining the quality of contacts
necessary to justify personal jurisdiction under the constitution. [Quotation marks
and citations omitted.]
Courts apply a three-part test for purposes of determining whether sufficient
minimum contacts exist between a nonresident defendant and Michigan to support
exercising limited personal jurisdiction in keeping with due process:
First, the defendant must have purposefully availed itself of the privilege of
conducting activities in Michigan, thus invoking the benefits and protections of
this state’s laws. Second, the cause of action must arise from the defendant’s
activities in the state. Third, the defendant’s activities must be so substantially
connected with Michigan to make the exercise of jurisdiction over the defendant
reasonable. [Mozdy v Lopez, 197 Mich App 356, 359; 494 NW2d 866 (1992).]
The plaintiff bears the ultimate burden of establishing personal jurisdiction over the
defendants, and dismissal is appropriate if all of the facts submitted by the parties collectively
fail to establish personal jurisdiction. Mozdy, 197 Mich App at 359-360. When conducting a
due-process analysis, “a court should examine the defendant’s own conduct and connection with
the forum to determine whether the defendant should reasonably anticipate being haled into court
there.” W H Froh, Inc v Domanski, 252 Mich App 220, 230; 651 NW2d 470 (2002). A due-
process analysis is done on a case-by-case basis. Id. The primary question, according to the
United States Supreme Court, is “whether the assertion of personal jurisdiction would comport
with ‘fair play and substantial justice.’ ” Burger King Corp v Rudzewicz, 471 US 462, 476; 105
S Ct 2174; 85 L Ed 2d 528 (1985), quoting Int’l Shoe Co v Washington, 326 US 310, 320; 66 S
Ct 154; 90 L Ed 95 (1945).
1
“Even if a defendant’s conduct places him within an enumerated category of MCL 600.705 [or
MCL 600.725], a Michigan court may not exercise limited personal jurisdiction over the
defendant unless to do so would not offend constitutional due process concerns.” W H Froh, Inc
v Domanski, 252 Mich App 220, 227; 651 NW2d 470 (2002).
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“With respect to the first prong of the due process analysis, a defendant may submit
himself to the jurisdiction of another state by reaching beyond his own state and purposefully
availing himself of the privilege of exploiting the other state’s business opportunities.” W H
Froh, 252 Mich App at 230-231. “ ‘Purposeful availment’ means something akin to either a
deliberate undertaking to do or cause an act or thing to be done in Michigan or conduct that
properly can be regarded as a prime generating cause of resulting effects in Michigan.” Id. at
231. This standard requires something more than passive availment of opportunities in
Michigan. Id. However, it does not require physical presence in the state. Id.
The United States Supreme Court has held that a contract with an out-of-state party, by
itself, cannot establish minimum contacts. Burger King, 471 US at 478. Therefore, the existence
of the retainer agreement in the instant case is not enough, on its own, to satisfy due process. Id.The majority concludes that the interactions between plaintiff, in his home state of Michigan, and
the Moore Landrey defendants in Texas, while representing plaintiff in an out-of-state lawsuit,
were enough here. I disagree.
The United States District Court for the Eastern District of Michigan recently considered
a factually similar case that analyzed, in light of the Burger King decision, what else was
required besides a contract to establish sufficient minimum contacts. King v Ridenour, 749 F
Supp 2d 648 (ED Mich, 2010). I find this case to be instructive.2 In King, Pauline Ridenour, a
Michigan woman, died due to secondhand exposure to asbestos, leading to mesothelioma. Id. at
649. Her son, Wallace Ridenour (“Wallace”), who also lived in Michigan, was appointed
personal representative of her estate and sought to bring a wrongful death action on behalf of her
estate. Id. Wallace signed a retainer agreement with a Dallas, Texas, law firm in order to file a
lawsuit on behalf of the estate. Id. Shortly thereafter, an addendum was added to that retainer
agreement noting that the Dallas firm would be working with the defendant, another Dallas-
based firm. Id. at 649, 650. Subsequently, the defendant “filed a lawsuit in a Texas state court
against many asbestos-related defendants on behalf of Wallace individually and in his capacity
as personal representative” of the estate.3 Id. at 649. Wallace was required to distribute any
asbestos-related settlements equally between his siblings. Id. at 650. For some of the
settlements, however, Wallace kept all of the money for himself. Id. “The siblings who received
no proceeds from the later settlement phases sued [the defendant], Wallace, and Wallace’s
alleged boyfriend in . . . Michigan.” Id. The defendant moved the court to dismiss the claims
against it for lack of personal jurisdiction. Id. at 651.
2
“Although lower federal court decisions may be persuasive, they are not binding on state
courts.” Abela v Gen Motors Corp, 469 Mich 603, 607; 677 NW2d 325 (2004).
3
Wallace filed a petition to open an unsupervised independent estate in a Michigan probate
court, but the defendant asserted that it did not represent Wallace in the probate action, and there
was no indication of its doing so in the record. King, 749 F Supp 2d at 649.
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In considering the issue of personal jurisdiction4 and whether its exercise of jurisdiction
over the defendant would offend notions of due process, the King court found two cases
particularly instructive, the first being Sawtelle v Farrell, 70 F3d 1381 (CA 1, 1995). The
plaintiffs in Sawtelle were New Hampshire residents whose son, a pilot in training, was killed
when the airplane he was piloting was hit “over the New Hampshire-Vermont border by an
aircraft from Florida.” Sawtelle, 70 F3d at 1386. The plaintiffs contacted a California law firm
to help them file a wrongful death suit on behalf of their son’s estate. Id. The California firm
referred the matter to their Washington, D.C. affiliate, where it was assigned to Virginia attorney
George Farrell, who, in turn, hired counsel in Florida to file the wrongful death lawsuit. Id. The
defendant offered the plaintiffs $155,000 to settle the suit, and Farrell and the Florida attorney
advised the plaintiffs that settlement was in their best interest. Id. at 1386-1387. The plaintiffs
accepted the offer, but later learned that an action against the same defendant was settled for
$500,000. Id. at 1387. That discovery prompted the plaintiffs to file a legal malpractice suit in
federal court in New Hampshire against the law firms that represented them in the Florida action.
Id. The defendant law firms moved for dismissal for lack of personal jurisdiction based on a lack
of sufficient contacts with the forum state of New Hampshire, and the federal district court
granted the motion. Id.5
4
In describing the extent of the defendant’s contacts with Michigan, the King court noted that
the defendant had a practice of representing persons or their relatives who had been physically
injured by exposure to asbestos. Id. at 650. The plaintiffs alleged, but did not support the
allegation by record evidence, that the defendant had represented “at least ‘five sets’ of Michigan
resident clients in the [prior] 10 years,” and that it had once sued Ford Motor Company in a
lawsuit outside Michigan. Id. The King court noted that the defendant firm “like most firms
today, has a website. The website includes an ‘Asbestos Exposure Locator, ’ ” and contains a
link to courts in the Eastern and Western Districts of Michigan. Id. The defendant submitted an
affidavit from one of its attorneys indicating that it never advertised in Michigan. Id. at 651.
The King court rejected the plaintiffs’ general jurisdiction arguments as falling “well
short of approximating a physical presence in Michigan.” Id. at 654. It noted that although the
defendant had represented a few Michigan residents in the past, those clients were all referred by
other attorneys. Id. at 653-654. It also noted that a “website’s accessibility to Michigan
residents is insufficient by itself to establish general jurisdiction in Michigan. A website must
specifically target a forum in order for it to serve as a basis for general jurisdiction. . . . Because
it targets all states equally, it targets no state specifically.” Id. at 653, n 3.
5
In federal diversity cases, the district court’s personal jurisdiction over a nonresident defendant
is governed by the forum’s long-arm statute. Sawtelle, 70 F 3d at 1387.
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In affirming the district court’s order, a panel of the First Circuit Court of Appeals found
no purposeful availment by the defendants, stating:
At the time they agreed to provide legal advice and representation to the
plaintiffs, the defendants knew the [plaintiffs] were residents of New Hampshire.
Defendants’ contacts with New Hampshire, however, were limited to
communicating with the clients in their home state. The wrongful death litigation
was prosecuted in Florida, while other legal services were rendered in Florida and
other places outside New Hampshire. A review of the totality of the defendants’
contacts with the forum state leaves us gravely doubtful that the defendants
purposefully availed themselves of the benefits and protections of New
Hampshire law.” [Id. at 1391.]
The Sawtelle court held that the “mere act of agreeing to represent (and then
representing) an out-of-state client, without more, does not suffice to demonstrate voluntary
purposeful availment for the benefits and protections of the laws of the client’s home state,” id.
at 1394, and that the “written and telephone communications with the clients in the state where
they happened to live[,]” was insufficient to confer personal jurisdiction over the non-forum
defendants in the forum state, id. at 1391-1392.
The King Court also found instructive the Eighth Circuit Court of Appeals’ decision in
Austad Co v Pennie & Edmonds, 823 F2d 223 (CA 8, 1987). Austad, a South Dakota
corporation, hired Pennie & Edmonds, a New York law firm specializing in patent litigation, to
represent it in a patent infringement matter in Maryland. Austad, 823 F2d at 224. During the
course of discovery, Pennie & Edmonds sent an associate and a law clerk to South Dakota for
three days “to review and copy documents and gather information needed to answer
interrogatories.” Id. at 225. It also made phone calls to the client in South Dakota, mailed bills
there, and accepted payments from the client through checks drawn on a South Dakota Bank. Id.
at 226. When the attorney-client relationship soured, Pennie & Edmonds withdrew their
representation. Id. After resolution of the patent dispute, Austad filed suit against Pennie &
Edmonds in a South Dakota federal district court, alleging breach of fiduciary duty and
professional negligence. Pennie & Edmonds moved to dismiss the complaint due to lack of
personal jurisdiction or, in the alternative, to transfer the case to New York. Id. The district
court granted Pennie & Edmonds’ motion to dismiss, Austad appealed, and a panel of the Eighth
Circuit Court affirmed. Id. The King Court summarized the panel’s decision as follows:
Recognizing the existence of an attorney-client relationship between the resident
client and non-resident law firm, the panel nevertheless concluded that the firm
had not purposefully availed itself of South Dakota’s laws in light of the
following facts: the firm did not maintain an office there and none of its attorneys
resided there or maintained a license to practice law there; the firm never
advertised in South Dakota or sought business there; it did not actively seek out
the client; the representation was arranged through a third-party who resided in
New York and was a regular client of the firm; and the actions giving rise to the
lawsuit took place in Maryland, not in South Dakota. In short, the court
concluded, the firm’s only “substantial connection” with South Dakota was its
representation of a South Dakota corporation in connection with litigation taking
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place wholly outside South Dakota. And the court reasoned that these
connections were not enough to show purposeful availment. [King, 749 F Supp
2d at 655-656 (citation omitted).]
Applying the standards set forth in these two cases, the King court concluded that the
exercise of limited personal jurisdiction was improper because the foreign defendant had not
purposefully availed itself of the benefits and protections of the Michigan forum. Id. at 657. In
granting the defendant’s motion to dismiss and finding that the court lacked personal jurisdiction,
the court relied heavily on three facts: (1) the defendant did not actively seek the plaintiffs’
business, (2) the case was referred to the defendant by a different out-of-state firm, and (3) the
defendant’s only contact with the state was the retainer agreement and “the facilitative
correspondence” associated therewith. Id. In sum, the court held “that [the defendant] has not
purposefully availed itself of the benefits and protections of Michigan’s laws. The absence of
purposeful availment is fatal to the Court’s exercise of [limited] personal jurisdiction over [the
defendant].” Id.
I find the reasoning in King and the decisions upon which it relies persuasive. Like the
defendant law firm in Austad, none of the Moore Landrey defendants in this case maintained an
office in, resided in, advertised in, or actively sought out clients in Michigan. Austad, 823 F2d at
226. Like the defendant law firm in King, plaintiff’s case was referred to the Moore Landrey law
firm by another out-of-state law firm, which plaintiff in the instant case found by surfing the
internet.6 In other words, the Moore Landrey defendants did not reach out to plaintiff in
Michigan; rather, plaintiff reached out to another law firm, which then reached out to the Moore
Landrey defendants. The conference call between Kinsel, for Moore Landrey, Williams for the
Farrin firm, and plaintiff, after which plaintiff agreed to and signed a retainer agreement, does
not show Kinsel or Moore Landrey deliberately reaching beyond their own state and
purposefully reaching into Michigan to avail themselves “of the privilege of exploiting
[Michigan’s] business opportunities.” W H Froh, 252 Mich App at 231 (finding purposeful
availment where the defendant intentionally reached out to Michigan by repeatedly contacting
Michigan residents to solicit and cause the performance of trucking activities in Michigan).
While plaintiff purposefully availed himself of the legal services of an out-of-state law firm, as
W H Froh, 252 Mich App at 230, instructs, the focus must be on defendants’ conduct. As is
suggested by the reasoning of a panel of the First Circuit in Sawtelle, 70 F 3rd at 1391, merely
knowing that plaintiff is a Michigan resident, agreeing to represent him in a forum yet to be
determined, and communicating with him in his home state in order to facilitate legal
representation does not constitute purposeful availment.7
6
Plaintiff searched the internet for an attorney to handle a patent infringement action, which led
him to the website of the Law Offices of James Scott Farrin, a firm located in North Carolina.
The Farrin firm’s patent attorney, Tara J. Williams, reached out to the Moore Landrey firm for
assistance.
7
Although the majority opinion deems significant the fact that Kinsel engaged in the conference
call with Williams and plaintiff that resulted in plaintiff retaining the Farrin and Moore Landrey
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Plaintiff contends that hiring an expert who resides in Michigan, when combined with the
retainer agreement and communications between the subject defendants and plaintiff, shows
purposeful availment. I disagree. Nothing in the record indicates that hiring a Michigan-based
expert in the underlying case was anything other than a “random, fortuitous, and attenuated”
contact of the type that cannot support the exercise of personal jurisdiction. See Burger King
Corp, 471 US at 478. The fact that the expert—who was hired for an out-of-state case against an
out-of-state defendant—happens to live in Michigan appears to be nothing more than a
coincidence.
Plaintiff also contends that this case is “remarkably similar” to Smith v Babbit, Johnson,
Osborne & LeClainche, PA, unpublished opinion per curiam of the Court of Appeals, issued
May 14, 2015 (Docket No. 318326), wherein a panel of this Court found that a Michigan state
court could exercise personal jurisdiction over a Florida law firm in a fee-splitting dispute, and
urges the same outcome. I find the instant case factually distinguishable from Smith. In Smith, a
panel of this Court concluded that Babbit “purposefully availed itself of the privileges of
conducting business in Michigan[]” by contracting with a Michigan law firm (Goodman) to
serve as co-counsel against a Michigan company in Florida, “as if the attorneys involved were
partners and members of the same firm,” and agreed to a Michigan choice-of-law provision.
Smith, unpub op at 10. Based on the fee-sharing agreement, “Babbit should have expected that
any dispute between it and Goodman would ultimately be decided in Michigan court.” Id. None
of the facts that supported this Court’s conclusion of purposeful availment in Smith is present in
the instant case.
With regard to the second and third prongs of the due process analysis, the Moore
Landrey defendants pursued an out-of-state lawsuit for plaintiff, and although plaintiff contends
that his underlying patent infringement case against Nike, Inc., located in Oregon, should have
been pursued in Michigan, the relevant question is whether sufficient minimum contacts exist
between the nonresident defendants and Michigan to support exercising personal jurisdiction.
What additional contacts the Moore Landrey defendants allegedly should have had in Michigan
is not material. The facts do not support a finding that the cause of action arose from the Moore
Landrey defendants’ activities in Michigan or that the Moore Landrey defendants’ activities were
so substantially connected8 with Michigan to make the exercise of jurisdiction over these
defendants reasonable. See Mozdy, 197 Mich App 359.
law firms, I do not find this fact pivotal. To hold that one is subject to personal jurisdiction and
being haled into a Michigan court after being contacted by a Michigan resident by telephone and
thereafter encouraging retention or making a sales pitch would render all out-of-state merchants
fair game to being sued in Michigan whenever a customer calls to inquire about their products
and the customer service representative triggers a sale. Although the ensuing relationship and
other activities might end up qualifying as sufficient minimum contacts to justify being sued in
Michigan, I do not find those contacts to be sufficient in the instant case.
8
The Moore Landrey defendants’ only “substantial connection” with Michigan was its
representation of a Michigan resident in an out-of-state case, which entailed the need to
communicate with plaintiff, who happened to live in Michigan, about the case and interact with
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For the reasons set forth above, I would hold that the trial court erred in determining that
it had personal jurisdiction over the Moore Landrey defendants.
/s/ Jane M. Beckering
individuals with knowledge relevant to plaintiff’s underlying claim. Mozdy, 197 Mich App at
359; see also Austed, 823 F2d at 227.
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