Atwater v. Light Korean Presbyterian Church (In re Mak Petroleum, Inc.)

424 B.R. 907, 22 Fla. L. Weekly Fed. B 331, 2010 Bankr. LEXIS 1380
CourtUnited States Bankruptcy Court, M.D. Florida
DecidedFebruary 11, 2010
DocketBankruptcy No. 3:08-bk-2067-PMG; Adversary No. 3:09-ap-435-PMG
StatusPublished

This text of 424 B.R. 907 (Atwater v. Light Korean Presbyterian Church (In re Mak Petroleum, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Atwater v. Light Korean Presbyterian Church (In re Mak Petroleum, Inc.), 424 B.R. 907, 22 Fla. L. Weekly Fed. B 331, 2010 Bankr. LEXIS 1380 (Fla. 2010).

Opinion

ORDER ON MOTION TO DISMISS COMPLAINT

PAUL M. GLENN, Chief Judge.

THIS CASE came before the Court for hearing to consider the Motion to Dismiss Complaint filed by the Defendant, The Light Korean Presbyterian Church (Isling-ton)(the Church).

Gregory L. Atwater, as Chapter 7 Trustee (the Trustee), commenced this adversary proceeding by filing a Complaint to recover a deposit paid by the Debtor in connection with a Purchase and Sale Agreement. The Defendant is a Church located in Ontario, Canada.

In its Motion to Dismiss the Complaint, the Church asserts that it “does not have sufficient minimum contacts with the United States to subject it to the jurisdiction of this Court.” (Doc. 9, p. 3).

Background

The Debtor, Mak Petroleum, Inc., was engaged in the business of owning and operating a number of gas stations and convenience stores throughout Florida. (Main Case, Doc. 1).

The Defendant, The Light Korean Presbyterian Church (Islington)(The Church), is incorporated under the laws of Ontario, and has its principal place of business in Canada. (Doc. 6).

On November 18, 2006, the Debtor and the Church entered into an Agreement [909]*909pursuant to which the Debtor agreed to purchase real property located in Ontario, Canada, from the Church. Pursuant to the Agreement, the Debtor deposited the sum of $100,000.00 with Re/Max West Realty, Inc. in Ontario. (Docs.l, 6).

The sale of the property was not concluded. (Docs.l, 6).

On April 16, 2008, the Debtor filed a petition under Chapter 7 of the Bankruptcy Code.

On August 21, 2009, the Trustee filed a Complaint against the Church to recover the deposit.

The Church subsequently filed a Motion to Dismiss the Complaint. (Doc. 9). In the Motion to Dismiss, the Church asserts that it “does not have sufficient minimum contacts with the United States to subject it to the jurisdiction of this Court.”

Discussion

The doctrine of personal jurisdiction places limits upon the Court’s power to impose a binding and enforceable judgment on a party. General Cigar Holdings, Inc. v. Altadis, S.A., 205 F.Supp.2d 1385, 1340 (S.D.Fla.2002)(citing McGee v. Int’l Life Insurance Company, 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957)). The doctrine recognizes the individual liberty interests of parties by protecting them from the “unreasonable demands of litigating in a faraway forum.” In re Gentry Steel Fabrication, Inc., 325 B.R. 311, 316 (Bankr.M.D.Ala.2005)(quoting Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935, 943-44 (11th Cir.1997)).

In evaluating questions of personal jurisdiction, the Court must first determine whether a statute or rule provides a basis for the exercise of such jurisdiction. In re Tirex International, Inc., 395 B.R. 182, 188 (Bankr.S.D.Fla.2008); In re Federalpha Steel LLC, 341 B.R. 872, 886 (Bankr.N.D.Ill.2006).

In bankruptcy cases, the basis for the exercise of a court’s jurisdiction over a party is found in Rule 7004(f) of the Federal Rules of Bankruptcy Procedure. “Fed. R. Bankr.P. 7004(f) provides the procedural basis for personal jurisdiction over defendants in adversary proceedings pending before a bankruptcy court.” In re Maxon Engineering Services, Inc., 2009 WL 3052437, at *5 (Bankr.D.Puerto Rico). See also In re Tirex International, Inc., 395 B.R. at 188, and In re Federalpha Steel, LLC, 341 B.R. at 887.

Rule 7004(f) of the Federal Rules of Bankruptcy Procedure provides:

Rule 7004. Process; Service of Summons, Complaint

(f) PERSONAL JURISDICTION.

If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service in accordance with this rule or the subdivisions of Rule 4 F.R.Civ.P. made applicable by these rules is effective to establish personal jurisdiction over the person of any defendant with respect to a case under the Code or a civil proceeding arising under the Code, or arising in or related to a case under the Code.

F.R. Bankr.P. 7004(f)(Emphasis supplied).

Pursuant to Rule 7004(f), therefore, personal jurisdiction over a defendant may be established by serving a summons “in accordance with this rule.” Service “in accordance with” Rule 7004 “may be made within the United States by first class mail postage prepaid.” Fed.R.Bankr.P. 7004(b). See also, Rule 7004(d) of the Federal Rules of Bankruptcy Procedure, which provides that a summons “may be served anywhere in the United States.” Fed.R.Bankr.P. 7004(d).

[910]*910Second, in order to establish personal jurisdiction over a defendant pursuant to Rule 7004(f), the exercise of such jurisdiction must be “consistent with the Constitution and laws of the United States.” Under this provision, it is generally recognized that the exercise of personal jurisdiction must comport with the Due Process Clause of the Fifth Amendment to the United States Constitution. “In an adversary proceeding pending before a bankruptcy court, Federal Bankruptcy Rule 7004(f) authorizes personal jurisdiction over defendants to the extent allowed under the Due Process Clause of the Fifth Amendment.” In re Tirex International, Inc., 395 B.R. at 188. See also In re Maxon Engineering Services, Inc., 2009 WL 3052437, at *5, and In re Federalpha Steel LLC, 341 B.R. at 887.

The standard for determining whether a court’s exercise of personal jurisdiction satisfies the due process requirements of the Constitution is well-established:

Historically the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant’s person. Hence his presence within the territorial jurisdiction of court was prerequisite to its rendition of a judgment personally binding him. (Citation omitted). But now that the capias ad respondendum has given way to personal service of summons or other form of notice, due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.” (Citations omitted).

International Shoe Co. v. State of Washington, Office of Unemployment Compensation and Placement, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)(Emphasis supplied).

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424 B.R. 907, 22 Fla. L. Weekly Fed. B 331, 2010 Bankr. LEXIS 1380, Counsel Stack Legal Research, https://law.counselstack.com/opinion/atwater-v-light-korean-presbyterian-church-in-re-mak-petroleum-inc-flmb-2010.