Clarke v. Dutton Harris & Company, PLLC

CourtDistrict Court, D. Nevada
DecidedMarch 31, 2021
Docket2:20-cv-00160
StatusUnknown

This text of Clarke v. Dutton Harris & Company, PLLC (Clarke v. Dutton Harris & Company, PLLC) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clarke v. Dutton Harris & Company, PLLC, (D. Nev. 2021).

Opinion

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 Alan Clarke, Case No.: 2:20-cv-00160-JAD-BNW

4 Plaintiff

5 v. Order Denying Motions to Dismiss for Lack of Personal Jurisdiction 6 Dutton Harris & Company, PLLC and Bob W. Dutton, [ECF Nos. 14, 28] 7 Defendants 8

9 After Valda Clarke passed away, her son Alan reached out to her accountant, Bob 10 Dutton, and his accounting firm Dutton Harris & Company, PLLC, to do some accounting work 11 and prepare the tax returns for his mom’s estate and related trusts. But according to Clarke, 12 Dutton Harris flubbed the valuation and tax returns, overlooking key assets and relying on old 13 information, which left Clarke entangled in a lawsuit with a beneficiary of the estate. So Clarke 14 sued Dutton and the firm to indemnify him for any losses that he may incur in that other dispute. 15 The defendants move to dismiss, arguing that this court lacks personal jurisdiction over them. 16 Though most of the defendants’ work takes place out of state, their contacts to Nevada are 17 sufficient, so I deny their motions. 18 Background1 19 Valda Clarke met Dutton through a mutual Nevada connection near the start of the 20 millennium.2 She then hired Dutton’s Texas-based accounting firm to prepare her financial 21 22

23 1 This is merely a summary of Clarke’s allegations and not findings of fact. 2 ECF Nos. 18-1 at ¶ 5 (Clarke Declaration); 28-1 at ¶ 8 (Dutton Declaration). 1 statements and tax returns, which it did for more than a decade.3 Though the firm does work for 2 its clients exclusively from Texas, it maintains clients elsewhere—including nearly ten in 3 Nevada.4 For some of the time that Dutton worked for Valda, he served as the vice president of 4 one of Valda’s Nevada corporations5 and, near the end of Valda’s life, Dutton was involved in 5 her estate planning.6 After Valda passed away, Alan Clarke hired the defendants to prepare the

6 estate and income tax returns for Valda’s estate and various trusts, and to compile information 7 about the assets and equity of one of Valda’s corporations in the estate.7 Clarke claims that the 8 defendants omitted key assets in preparing the tax returns, which led one of the estate’s 9 beneficiaries to sue Clarke.8 Hoping to lessen the blow of that lawsuit, Clarke now seeks 10 indemnification from Dutton and the firm and sues them for malpractice, breach of contract, and 11 negligence. 12 Discussion 13 The Fourteenth Amendment limits a forum state’s power “to bind a nonresident 14 defendant to a judgment of its courts,”9 and Federal Rule 12(b)(2) authorizes a court to dismiss a

15 complaint for lack of personal jurisdiction. To determine its jurisdictional reach, a federal court 16 must apply the law of the state in which it sits.10 Because Nevada’s long-arm statute reaches the 17

18 3 ECF No. 1 at ¶ 20 (complaint). 19 4 ECF Nos. 14-1 at ¶¶ 5 (Erdwurm Declaration), 9; 28-1 at ¶¶ 10, 11. 5 ECF Nos. 18-1 at ¶ 7; 28-1 at ¶ 7. 20 6 ECF No. 18-1 at ¶ 11. 21 7 ECF Nos. 18-4 at 2 (engagement letter); 1 at ¶ 22. 22 8 ECF No. 1 at ¶ 26. 9 Walden v. Fiore, 571 U.S. 277, 283 (2014) (citing World-Wide Volkswagen Corp. v. Woodson, 23 444 U.S. 286, 291 (1980)). 10 Daimler AG v. Bauman, 571 U.S. 117, 125 (2014) (citing Fed. R. Civ. P. 4(k)(1)(A)). 1 constitutional ceiling,11 the question here is whether jurisdiction “comports with the limits 2 imposed by federal due process.”12 A court may only exercise jurisdiction over a nonresident 3 defendant with sufficient “minimum contacts with [the state] such that the maintenance of the 4 suit does not offend ‘traditional notions of fair play and substantial justice.’”13 5 There are two forms of personal jurisdiction: general and specific.14 Clarke argues that

6 this court can exercise both forms over the defendants because of their years of work for Nevada 7 clients and Dutton’s other business ventures in the state. I consider each basis for the exercise of 8 jurisdiction and conclude that this court, though unable to exercise general jurisdiction over the 9 defendants, may exercise specific jurisdiction over them. 10 I. This court lacks general jurisdiction over the defendants. 11 General jurisdiction is far-reaching and permits a defendant to be sued in the forum for 12 conduct “anywhere in the world.”15 “But that breadth imposes a correlative limit: Only a select 13 ‘set of affiliations with a forum’ will expose a defendant to such sweeping jurisdiction.”16 So 14 “[o]nly in an ‘exceptional case’ will general jurisdiction be available anywhere” other than an

15 individual’s domicile or a corporation’s place of incorporation and principal place of business.17 16 This standard is “exacting” and requires a nonresident defendant to “engage in ‘continuous and 17

18 11 Nev. Rev. Stat. § 14.065. 12 Walden, 571 U.S. at 283 (quoting Daimler AG, 571 U.S. at 125). 19 13 Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 20 457, 463 (1940)). 14 Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). 21 15 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801 (9th Cir. 2004). 22 16 Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 592 U.S. ____ (2021), No. 19-368, slip op. at 5 (2021) (citation omitted). 23 17 Ranza v. Nike, Inc., 793 F.3d 1059, 1069 (9th Cir. 2015) (quoting Martinez v. Aero Caribbean, 764 F.3d 1062, 1070 (9th Cir. 2014)). 1 systematic general business contacts,’” “approximat[ing] physical presence in the forum state,” 2 that are “so substantial and of such a nature as to justify suit against [the defendant] on causes of 3 action arising from dealings entirely distinct from those activities.”18 4 Clarke fails to make the “exceptional case” that nonresidents Dutton and Dutton Harris 5 are “essentially at home” in Nevada.19 While the firm worked for Valda for years and has other

6 clients in the state, merely “engaging in commerce with residents of the forum state is not in and 7 of itself the kind of activity that approximates physical presence within the state’s borders.”20 8 After considering the “[l]ongevity, continuity, volume, economic impact, physical presence, and 9 integration into the state’s regulatory or economic markets”21 of Dutton Harris’s Nevada 10 operations, I cannot find that general jurisdiction over the firm is appropriate. As the firm points 11 out and Clarke does not dispute, Dutton Harris does not have a single Nevada employee, its only 12 office is in Texas, and it has less than a dozen clients who live in Nevada.22 13 As for Dutton, Clarke contends that his participation in two Nevada businesses plus his 14 work for Valda is sufficient to assert general jurisdiction over him. Far from showing that

15 Dutton is at home in Nevada, however, these facts merely demonstrate that Dutton has some 16 connection to the state. But he’s never lived in the state, nor is he licensed here. And at the time 17 of this dispute, Dutton was no longer an officer of the Nevada corporation that fell under the 18 19 18 Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1224 (9th Cir. 2011) (citations 20 omitted). 19 Daimler AG, 571 U.S. at 139 n.19. 21 20 Bancroft & Masters, Inc. v. Augusta Nat’l Inc.,

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Clarke v. Dutton Harris & Company, PLLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clarke-v-dutton-harris-company-pllc-nvd-2021.