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LLC v. Continental Motors, Inc.

United States District Court, S.D. West Virginia, Beckley Division

March 13, 2018

CP #1109, LLC, and MARTIN E. O'BOYLE, Plaintiffs,
v.
CONTINENTAL MOTORS, INC., and CONTINENTAL MOTORS SERVICES, INC., Defendants.

          MEMORANDUM OPINION AND ORDER

          IRENE C. BERGER, UNITED STATES DISTRICT JUDGE

         The Court has reviewed the Defendants' Motion to Dismiss for Lack of Personal Jurisdiction (Document 3) and Memorandum of Law in Support (Document 4), the Memorandum of Law in Support of Plaintiffs' Response to Motion to Dismiss (Document 11), and the Defendants' Reply in Support of their Motion to Dismiss for Lack of Personal Jurisdiction (Document 12). The Court has also reviewed the Complaint (Document 1-1) and all attached exhibits. For the reasons stated herein, the Court finds that the Defendants' motion to dismiss should be granted.

         PROCEDURAL HISTORY AND FACTUAL BACKGROUND

         The Plaintiffs, CP #1109, LLC (CP #1109), and Martin E. O'Boyle, initiated this action with a Complaint (Document 1-1) filed in the Circuit Court of Raleigh County, West Virginia, on March 23, 2017. The Plaintiffs named Continental Motors, Inc., and Continental Motors Services, Inc., both Delaware corporations, as Defendants. The Defendants removed the case to this Court via Notice of Removal (Document 1) on May 25, 2017, citing diversity jurisdiction.

         CP #1109 is the "owner of a certain aircraft with tail number N400EX, " an aircraft "frequently stored and serviced at the Raleigh County Memorial Airport." (Compl. at ¶ 4.) Martin O'Boyle is "an owner of the corporate members of CP #1109 and was a passenger on the [a]ircraft several times" during the time period relevant to the action. (Id. at ¶ 5.) At some point around November 2010, a mechanic who serviced the aircraft's engine at the Raleigh County Memorial Airport noticed that the aircraft's engine needed repairs. Because the Defendants manufactured the engine and its components, the Plaintiffs contacted the Defendants regarding the engine repairs. The Defendants recommended that their company perform the repairs, and the Plaintiffs entered into an agreement with the Defendants to do so. Shortly thereafter, the Plaintiffs' Raleigh County servicer, Albatross Air, removed and shipped the engine to the Defendants' facility in Long Island, New York. After examining the engine, the Defendants replaced two of the engine's six cylinders and returned the engine to the Raleigh County in March, 2011. Albatross Air then reinstalled the engine in the Plaintiffs' aircraft, and the Plaintiffs proceeded to use it as needed.

         At this point, the Plaintiffs began to experience several problems with the engine, including "overheating and a noticeable lack of power creating dangerous conditions in flight which got progressively worse over the next year." (Id.) After contacting the Defendants again, the Defendants informed the Plaintiffs that these problems arose because the engine needed to be "broken in." (Id. at ¶ 23.) Unbeknownst to the Plaintiffs, however, the Defendants had found that several of the engine cylinders they produced were defective and could cause overheating. Although the cylinders used to repair the Plaintiffs' aircraft engine were part of this defective batch of cylinders, the Defendants did not contact the Plaintiffs concerning the defects. In early 2013, the aircraft's pilot "had to abort his flight [in the aircraft] shortly after take-off due to extreme overheating of the engine." (Id. at ¶ 30.) After this occurrence, the Plaintiffs contacted Continental Motors and were "advised, for the first time, that [the Defendants] had manufactured a 'bad batch' of cylinders and that they were aware of the problem . . . ." (Id. at ¶ 31.)

         Shortly thereafter, the Defendants inspected the Plaintiffs' engine and found that it had been repaired with the defective cylinders. The parties began discussions on a resolution of the issue, and the Defendants informed the Plaintiffs that they "had the right, in their sole discretion, to make any repairs to the Engine they deemed appropriate pursuant to the terms of the contract" between them. (Id. at ¶ 33.) During these discussions, in March 2013, the Defendants transmitted to the Plaintiffs a "false warranty in order to deceive and defraud the Plaintiffs about their legal rights, all to the benefit of [the Defendants]." (Id. at ¶ 34.) As of October of 2013, the Defendants had refused to repair or replace the Plaintiffs' aircraft engine or compensate them for losses.

         The Plaintiffs allege one count based on a violation of the West Virginia Consumer Credit Protection Act (WVCCPA). They allege that the Defendants engaged in "unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce in violation of West Virginia Code § 46A-6-104." (Id. at ¶ 43.) They claim that they relied on these misrepresentations made by the Defendants to their detriment, and that these false statements placed lives in danger.

         Carmen Woodham, the Controller of Continental Motors, Inc., submitted an affidavit stating that Continental Motors is a Delaware corporation with its principal place of business in Mobile, Alabama. He states that Continental Motors and its sister company Continental Motors Services are not registered or licensed to do business in West Virginia, have not maintained offices or places of business in West Virginia, own no real estate or any other interests in property in West Virginia, and have not conducted any regular or ongoing advertising, soliciting, marketing, or other sales or service promotions in West Virginia. The Plaintiffs filed a similar lawsuit against the same Defendants in the Superior Court of New Jersey in November 2013. After the Defendants filed a motion for summary judgment in that lawsuit, the Superior Court of New Jersey dismissed each of the Plaintiffs' claims except a breach of contract action and an action under New Jersey law for consumer fraud. (Defs.' Mem. in Supp. at 3.) The Plaintiffs proceeded to file an amended complaint with similar causes of action which proceeded to trial and ended in a jury verdict for the Defendants. (Id.)

         STANDARD OF REVIEW

         "In order for a court to validly exercise personal jurisdiction over a non-resident defendant: (1) a statute must authorize service of process on the non-resident defendant, and (2) the service of process must comport with the Due Process Clause." In re Celotex Corp., 124 F.3d 619, 627 (4th Cir. 1997). West Virginia's long-arm statute, contained in W.Va. Code § 56-3-33(a), "is coextensive with the full reach of due process, " and so the statutory and constitutional queries merge. Id.; HSBC Bank USA, Nat. Ass'n v. Resh, No. 3T2-CV-00668, 2015 WL 4772524, at *2 (S.D. W.Va. Aug. 12, 2015) (Chambers, C.J.). "A court's exercise of personal jurisdiction over a non-resident defendant is consistent with the Due Process Clause if the defendant has sufficient "minimum contacts" with the forum such that requiring the defendant to defend its interests in the forum does not 'offend traditional notions of fair play and substantial justice.'" Celotex, 124 F.3d. at 628 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). When a defendant challenges a court's personal jurisdiction in a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2), "the burden [is] on the plaintiff to ultimately prove grounds for jurisdiction by a preponderance of the evidence." Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993). When no evidentiary hearing is held, "the plaintiff need prove only a prima facie case of personal jurisdiction" and "the district court must draw all reasonable inferences arising from the proof, and resolve all factual disputes, in the plaintiffs favor." Id.

         A defendant's contacts can establish either specific jurisdiction or general jurisdiction. Specific jurisdiction is available where "the defendant's qualifying contacts with the forum state also constitute the basis for the suit." Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 559 (4th Cir. 2014), cert, denied, 135 S.Ct. 2860, 192 L.Ed.2d 896 (2015) (internal quotation marks and citations omitted). The Fourth Circuit has established a three-part test to determine whether specific personal jurisdiction is appropriate: "(1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the forum state; (2) whether the plaintiffs claims arose out of those activities; and (3) whether the exercise of personal jurisdiction is constitutionally reasonable." Id. (internal punctuation and citations omitted). General jurisdiction is available only if a corporation's contacts with a state "are so continuous and systematic as to render it essentially at home in the forum state." Daimler AG v. Bauman, 134 S.Ct. 746, 761 (2014) (citing and quoting from Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (U.S. 2011)).

         DISCUSSION

         Continental Motors and Continental Motors Services both seek dismissal for lack of personal jurisdiction in West Virginia. Because they are both Delaware corporations with principal places of business in Alabama, the events that lead to the litigation took place at a Continental Motor Services plant in Long Island, New York, and they maintain zero connections to West Virginia, the Defendants argue that they do not maintain the systematic and continuous contacts necessary to support general jurisdiction. Further, the Defendants assert that they have not even maintained such minimum contacts to purposefully avail themselves of the privilege of doing business in West Virginia such that the Court has specific jurisdiction over them. The Plaintiffs counter that the Court does maintain jurisdiction over the Defendants. While all but conceding that the requirements for general jurisdiction are lacking, the Plaintiffs contend that the Defendants maintained sufficient minimum contacts with the forum through the ...


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