Joshua Properties, LLC v. D1 Sports Holdings, LLC

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2012-IA-01467-SCT
JOSHUA PROPERTIES, LLC, PERFORMANCE
SPORTS ACADEMY, LLC AND CHRIS SNOPEK
v.
D1 SPORTS HOLDINGS, LLC
DATE OF JUDGMENT: 08/24/2012
TRIAL JUDGE: HON. WILLIAM A. GOWAN, JR.
COURT FROM WHICH APPEALED: HINDS COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANTS: TERRIS CATON HARRIS
DENNIS C. SWEET, III
WILLIAM (BO) ROLAND
ATTORNEYS FOR APPELLEE: CHRISTOPHER LAMAR WANSLEY
ARMIN J. MOELLER, JR.
NATURE OF THE CASE: CIVIL - OTHER
DISPOSITION: REVERSED AND REMANDED - 01/30/2014
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE RANDOLPH, P.J., PIERCE AND KING, JJ.
PIERCE, JUSTICE, FOR THE COURT:
¶1. Joshua Properties, LLC; Performance Sports Academy, LLC; and Chris Snopek (all
referred to as “Snopek”), filed suit against St. Dominic Health Services, Inc. (St. Dominic);
D1 Sports Holdings, LLC (D1 TN); and D1 Sports Training of Mississippi, LLC (D1 MS)
in the Circuit Court of the First Judicial District of Hinds County, Mississippi. D1 TN
moved for dismissal based on lack of personal jurisdiction and failure to state a claim. After
a hearing on the matter, the trial court entered an order granting D1 TN’s motion based on
a lack of personal jurisdiction over the party. Snopek subsequently was granted this
interlocutory appeal seeking this Court’s ruling on whether personal jurisdiction exists in
Mississippi over D1 TN. We find that personal jurisdiction does exist over D1 TN.
¶2. D1 TN relies on Public Employees’ Retirement System v. Hawkins, 781 So. 2d 899,
900-01 (Miss. 2001), in which this Court, in the interest of justice, considered issues that
were not raised in the petition for interlocutory appeal, to assert in the alternative that this
case should be dismissed for failure to state a claim pursuant to Mississippi Rule of Civil
Procedure 12(b)(6). D1 TN properly raised this issue before the trial court, however, the trial
court did not rule on the issue; therefore, we will not address this issue for the first time on
appeal.
STATEMENT OF THE FACTS
¶3. In 2007, Snopek proposed to St. Dominic the concept of working together in opening
a multi-use sports complex for the Jackson metropolitan area. Through Joshua Properties,
LLC, land was located for the complex in Madison County, Mississippi. After Snopek and
St. Dominic collaborated over the designs and plans for the complex, the parties entered into
a letter of intent. The letter of intent included the purchase of property located through
Joshua Properties, LLC, but the letter was subject to expiration on February 28, 2008. The
property was never acquired, and the letter of intent expired. However, Snopek alleges that
the parties continued to move forward with the project together.
¶4. In December 2009, Snopek contacted D1 TN, a limited liability company formed
under Tennessee state law, which has its principal place of business in Tennessee, and is not
qualified to conduct business in the state of Mississippi. Snopek proposed to D1 TN the idea
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of becoming involved in the development of the sports complex by aiding with the sports and
fitness aspects of the project, since D1 TN’s business focuses on custom sports-training
programs, expert coaching, and sports therapy. D1 TN displayed an interest in becoming
involved in the endeavor.
¶5. Snopek provides that it thereafter introduced D1 TN to St. Dominic, and all of the
parties together moved forward with the opening of the sports complex. D1 TN states that
it discussed the project with Snopek only one time, in December 2009. D1 TN further states
that it was contacted by St. Dominic around September 2010 about collaborating to create
a sports-training facility in Madison County, Mississippi.
¶6. St. Dominic and D1 TN worked together to form D1 MS, which was created to
manage the operations of St. Dominic’s sports-training facility. D1 MS’s members are
comprised of St. Dominic and D1 TN. In late 2011, St. Dominic published its collaboration
with D1 TN in undertaking the building of a sports-training facility in Madison, Mississippi.
¶7. Thereafter, Snopek initiated suit against St. Dominic, D1 MS, and D1 TN, alleging-
breach of fiduciary duties, misappropriation of trade secrets, tortious interference with
prospective advantage, unfair competition, civil conspiracy, and usurpation of business
opportunity. On D1 TN’s motion to dismiss, the trial court ruled that personal jurisdiction
did not exist over D1 TN in Mississippi for the purposes of this action. Snopek then filed a
motion for interlocutory appeal with this Court.
ANALYSIS
Whether personal jurisdiction exists in Mississippi over D1 Sports
Holdings, LLC.
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¶8. Jurisdictional issues are reviewed pursuant to a de novo standard of review.
McDaniel v. Ritter, 556 So. 2d 303, 308 (Miss. 1989) (citing MISS CAL 204, Ltd. v.
Upchurch, 465 So. 2d 326, 330 (Miss. 1985)). Jurisdiction is decided based on the existing
facts at the time the action is commenced. Estate of Jones v. Phillips ex rel. Phillips, 992
So. 2d 1131, 1137 (Miss. 2008) (citing Euclid-Mississippi v. Western Cas. & Sur. Co., 249
Miss. 547, 554, 163 So. 2d 676, 679 (1964)).
¶9. Determining whether personal jurisdiction can be exercised over a nonresident
defendant involves a two-part analysis. Phillips, 992 So. 2d at 1137 (citing Sorrells v. R &
R Custom Coach Works, Inc., 636 So. 2d 668, 671 (Miss. 1994)). First, we must analyze
and decide if the Mississippi long-arm statute is applicable to D1 TN. Phillips, 992 So. 2d
at 1137 (citing Sorrells, 636 So. 2d at 671). Second, we must determine if applying the long-
arm statute to D1 TN comports with the Due Process Clause of the Fourteenth Amendment
and the U.S. Constitution. Id.
1. Mississippi Long-Arm Statute
¶10. Mississippi Code Section 13-3-57 sets forth the following occurrences which subject
a nonresident to personal jurisdiction within the state of Mississippi:
Any nonresident person, firm, general or limited partnership, or any foreign or
other corporation not qualified under the Constitution and laws of this state as
to doing business herein, who shall make a contract with a resident of this state
to be performed in whole or in part by any party in this state, or who shall
commit a tort in whole or in part in this state against a resident or nonresident
of this state, or who shall do any business or perform any character of work or
service in this state, shall by such act or acts be deemed to be doing business
in Mississippi and shall thereby be subjected to the jurisdiction of the courts
of this State.
Miss. Code Ann. § 13-3-57 (Rev. 2012).
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¶11. Snopek alleges that D1 TN committed a tort in the state, entered into a contract in the
state, and conducted business within the state. Because we find that D1 TN was “doing
business” within the state in accordance with the long-arm statute, we will not address
whether D1 TN committed a tort or entered into a contract in the state. Phillips, 992 So. 2d
at 1139.
¶12. Before the long-arm statute was amended in 1991, the “doing business” element of
the statute could not be applicable to a nonresident defendant without a connection between
the cause of action and the business, work, or service taking place within the state. Phillips,
992 So. 2d at 1139 (citing Mladinich v. Kohn, 250 Miss. 138, 147, 164 So. 2d 785, 790
(1964)). After the statute was amended, the “nexus” requirement between the cause of action
and the business being conducted within the state was eliminated. Phillips, 992 So. 2d at
1139 (citing Gross v. Chevrolet Country, Inc., 655 So. 2d 873, 878 (Miss. 1995)).
Currently, “. . . the long-arm statute, by its plain terms, applies to any person or corporation
performing any character of work in this state.” Phillips, 992 So. 2d at 1139; see ITL Int’l,
Inc. v. Constenla, S.A., 669 F.3d 493, 498 (5th Cir. 2012); Davenport v. Hansaworld USA,
No. 2:12-CV-233-KS-MTP, 2013 WL 5406900, at *4 (S.D. Miss. Sept. 25, 2013).
¶13. D1 TN contends that it is “joint owners” of D1 MS with St. Dominic. As previously
mentioned, D1 TN and St. Dominic are the members of D1 MS, an LLC. D1 TN created the
LLC with St. Dominic via telephone and email communication. D1 TN executed the
documents to create D1 MS and electronically provided the documents to St. Dominic. Will
Bartholomew, on behalf of D1 TN, traveled to Mississippi on the following occasions: (1)
to meet with medical professionals at Mississippi Sports Medicine and Orthopedic Center,
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(2) to meet with St. Dominic regarding the creation of D1 MS, (3) to further discuss the
creation of D1 MS with St. Dominic, (4) to finalize the creation of D1 MS with St. Dominic,
(5) to discuss real estate options for the location of D1 MS, and (6) to attend the ground
breaking for D1 MS.
¶14. D1 TN argues that it is not conducting business within the state so as to render it
amenable to suit under the state long-arm statute because D1 TN has never conducted the
following transactions within the state: (1) held an office or place of business, (2) solicited
business on behalf of itself or through an agent, (3) contracted on behalf of itself or through
an agent to supply goods and services, (4) maintained a Mississippi bank account, (5)
obtained a telephone listing, (6) paid income taxes, (7) owned any real property, or (8)
purposefully solicited, marketed, or promoted itself. D1 TN cites Roxco, Ltd v. Harris
Specialty Chemicals, Inc., 133 F. Supp. 2d 911, 916 (S.D. Miss. 2000), in which that court
held the defendants made “transient” visits within the state to inspect products, but were not
“doing business” within Mississippi because they did not sell products directly to residents,
did not obtain a bank account in state, did not have a telephone listing, and did not own or
lease real property. We find this argument to be without merit.
¶15. Looking to the plain language of the long-arm statute, we find that D1 TN was
conducting business within the state and that it subjected itself to suit, considering the sum
of its activities. D1 TN collaborated with St. Dominic about creating a sports-training
facility in the state, communicated and planned with St. Dominic furthering its formation,
participated in meetings in the state, substantially participated in the actual creation of D1
MS, and subsequently became members or “joint owners” of D1 MS. Finding the long-arm
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statute applicable to D1 TN, we must now determine whether the application offends the Due
Process Clause of the Fourteenth Amendment.
2. Due Process
¶16. To ensure that the application of the long-arm statute over a nonresident corresponds
with the requirements of due process, it must be shown that there are sufficient minimum
contacts with the state such that allowing suit within the state “. . . does not offend
‘traditional notions of fair play and substantial justice.’” Phillips, 992 So. 2d at 1139
(quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95
(1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S. Ct. 339, 85 L. Ed. 278 (1940))).
“Conduct in connection with the forum state must be such that he ‘should reasonably
anticipate being haled into court’ in the forum state.” Internet Doorway, Inc. v. Parks, 138
F. Supp. 2d 773, 778 (S.D. Miss. 2001) (citations omitted); see World-Wide Volkswagen
Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1980). Due process
requires minimum contacts with the forum state to prevent nonresidents from becoming
bound by judgments in a state where “. . . no meaningful ‘contacts, ties, or relations’” have
been established. Internet Doorway, 138 F. Supp. 2d at 778 (citing Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 2183, 85 L. Ed. 2d 528 (1985)).
¶17. Minimum contacts with the forum state may trigger either specific personal
jurisdiction or general personal jurisdiction. American Cable Corp. v. Trilogy Commc’ns,
Inc., 754 So. 2d 545, 550 (Miss. Ct. App. 2000) (citations omitted); see Phillips, 992 So. 2d
at 1140; Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-415 nn.8-
9, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984); Burger King Corp., 471 U.S. at 473 n.15.
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General personal jurisdiction is appropriate over a nonresident when no nexus exists between
the defendant’s activities in the forum state and the litigation, and the contacts with the state
are “systematic and continuous.” Phillips, 922 So. 2d at 1141 (citing Helicopteros, 466 U.S.
at 415-418, 104 S. Ct. 1868). Specific personal jurisdiction is exercised over a nonresident
when a nexus exists between the litigation and the activities within the state. Id. See Shaffer
v. Heitner, 433 U.S. 186, 204, 97 S. Ct. 2569, 2579, 53 L. Ed. 2d 683 (1977).
¶18. Here, the cause of action arises because of D1 TN’s contacts with St. Dominic of
Mississippi and the creation of and membership in a Mississippi LLC. “A single act by the
defendant directed at the forum state . . . can be enough to confer personal jurisdiction if that
act gives rise to the claim being asserted.” Horne v. Mobile Area Water & Sewer Sys., 897
So. 2d 972, 980 (Miss. 2004) (citing Med. Assurance Co. of Miss. v. Jackson, 864 F. Supp.
576, 578-79 (S.D. Miss. 1994) (quoting Ruston Gas Turbines, Inc. v. Donaldson Co.,
Inc., 9 F.3d 415, 419 (5th Cir. 1993))). Minimum contacts may be sufficient under specific
jurisdiction when the nonresident’s act or acts “. . . purposefully avails itself of the privilege
of conducting activities within the forum state, thus invoking the benefits and protections of
its laws.” Med. Assurance Co. of Mississippi, 864 F. Supp. at 579 (quoting Ruston Gas
Turbines, 9 F.3d at 419).
¶19. In Medical Assurance Co. of Mississippi, the court found specific personal
jurisdiction could be exercised over the nonresident defendant even though he had never
been physically present within the state. Med. Assurance Co. of Miss., 864 F. Supp. at 579.
The defendant negotiated a settlement on behalf of his client through two letters and two
telephone conversations, which the court found were sufficient minimum contacts with the
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forum state such that the defendant purposefully availed itself of the benefits of the state. Id
at 579-80.
¶20. In comparison, D1 TN purposefully availed itself of the forum state by becoming a
member of an LLC that is subject to the benefits and protections of the State of Mississippi.
D1 TN becoming a member of an LLC through in-state and out-of-state negotiations,
combined with its substantial participation in the formation of the LLC, are sufficient
minimum contacts with the forum. Further, D1 TN is a member of an LLC formed for the
purpose of overseeing a sports-training facility in the State of Mississippi.
¶21. Lastly, we must determine whether subjecting D1 TN to suit in Mississippi will
offend “traditional notions of fair play and substantial justice” by considering the following
factors: (1) Mississippi’s interest in settling the case, (2) the potential hardship on D1 TN,
(3) Snopek’s concern with receiving “convenient and effective relief,” (4) “the interstate
judicial system’s interest in obtaining the most efficient resolution of controversies, and (5)
“the shared interest of the several States in furthering fundamental substantive social
policies.” Burger King Corp., 471 U.S. at 477 (citing World-Wide Volkswagen Corp., 444
U.S. at 292).
¶22. Ultimately, D1 TN provides that no minimum contacts exist between it and
Mississippi. D1 TN argues that the above factors need not be considered individually.
Rather, only the fairness of exercising jurisdiction over it should be considered in
determining whether “traditional notions of fair play and substantial justice” would be
offended through exercising jurisdiction. However, the case D1 TN cites provides that
“fairness” is determined by considering the aforementioned factors. Allred v. Moore &
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Peterson, 117 F.3d 278, 286 n.7 (5th Cir. 1997). D1 TN asserts that exercising jurisdiction
over it would be burdensome because it is a Tennessee LLC and its principal place of
business is in Tennessee. Further, D1 TN alleges that Snopek does not have a valid interest
in any relief because Snopek fails to present any tortious or wrongful conduct by D1 TN in
Mississippi.
¶23. Because D1 TN purposefully availed itself of the benefits of the State of Mississippi
by becoming members of and aiding in the formation of an LLC in the state via telephone
and electronic communications and by traveling to the state, we are unpersuaded by D1 TN’s
assertion that its physical location in Tennessee, alone, would subject it to an undue burden
if required to appear in court in Mississippi. Further, Mississippi has an interest in
overseeing the adjudication of the case, because D1 TN is a component part of a Mississippi
LLC, which also is a defendant in the impending litigation. Lastly, Snopek obtains an
interest in obtaining “convenient and effective” relief in Mississippi because the harm it
alleges stems from the actions and contacts that D1 TN has within the state.
¶24. Accordingly, the “doing business” prong of the Mississippi long-arm statute is
applicable to D1 TN. Further, D1 TN has established sufficient minimum contacts with
Mississippi, and subjecting it to personal jurisdiction in the state would not violate the
Fourteenth Amendment of the United States Constitution.
CONCLUSION
¶25. The trial court’s dismissal for lack of personal jurisdiction over D1 TN is reversed
because exercising personal jurisdiction over the defendant does not violate the Mississippi
long-arm statute or the Fourteenth Amendment of the United States Constitution. This case
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is remanded to the First Judicial District of Hinds County, Mississippi for proceedings
consistent with this opinion.
¶26. REVERSED AND REMANDED.
WALLER, C.J., DICKINSON AND RANDOLPH, P.JJ., LAMAR, KITCHENS,
CHANDLER, KING AND COLEMAN, JJ., CONCUR.
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