Daniel Anthony Diulus v. American Express Travel Related Services Company, Inc.

• Court: Court of Appeals for the Eleventh Circuit
• Decided: August 17, 2020
• Docket: 19-12640
• Status: Unpublished

Opinion

Case: 19-12640 Date Filed: 08/17/2020 Page: 1 of 12

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 19-12640 Non-Argument Calendar ________________________

D.C. Docket No. 1:19-cv-01551-MHC

DANIEL ANTHONY DIULUS, LINDA DIULUS,

Plaintiffs-Appellants,

versus

AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC., THE PALMS RESORT TURKS & CAICOS LTD,

Defendants-Appellees.

________________________

Appeal from the United States District Court for the Northern District of Georgia ________________________

(August 17, 2020)

Before WILSON, LUCK, and ANDERSON, Circuit Judges.

PER CURIAM: Case: 19-12640 Date Filed: 08/17/2020 Page: 2 of 12

The Diuluses challenge the district court’s order dismissing their suit against

American Express Travel for failure to state a claim and their suit against The Palms

Resort for lack of personal jurisdiction. We affirm.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

While staying at Palms’s resort in the Turks and Caicos Islands south of the

Bahamas, Daniel Diulus won some money at an island casino. He returned to Palms

with his winnings and, outside the resort’s lobby, he was stabbed, shot, and robbed.

According to the complaint, the attack left him with “a collapsed lung, extensive

deep tissue loss of left thigh, a massive hemorrhage and invasive surgery.”

The Diuluses alleged in their complaint that “The Palms Resort invited [them]

to stay at its resort via its agent,” Amex Travel. They alleged that Palms had

breached its duty “by failing to exercise ordinary care to keep their premises safe”

and that Amex Travel “had a duty to make safe, or warn guests” that the resort was

not safe, but it failed to do so.1

1 In their complaint, the Diuluses provided a long list of ways in which both Amex Travel and Palms were negligent:

Defendants were negligent and said negligence proximately caused Plaintiffs’ injuries in the following ways, to-wit: a) Violation of O.C.G.A. § 51-3-1 by failing to use ordinary care to keep the premises safe; b) Violation of O.C.G.A. § 44-7-13; c) In failing to properly inspect and maintain the premises; d) In failing to warn of the latent dangers on the premises; e) In failing to properly train and supervise employees in regard to the maintenance and safety of said premises; 2 Case: 19-12640 Date Filed: 08/17/2020 Page: 3 of 12

Palms filed a motion to dismiss for lack of personal jurisdiction. In the

motion, Palms alleged that the Diuluses failed to make a prima facie case that the

court had personal jurisdiction because the Diuluses alleged neither that jurisdiction

was appropriate under Georgia’s long-arm statute nor that Palms had sufficient

minimum contacts with Georgia such that jurisdiction could be proper under the Due

Process Clause.

Amex Travel also filed a motion to dismiss, arguing that the Diuluses failed

to state a claim for relief. Amex Travel argued that “the bare allegation that

American Express is a ‘travel agent’ does not give rise to a theory of liability.”

Amex Travel argued that the Diuluses’ claim was one of premises liability, and

because Amex Travel “at no time owned, operated, or managed the property,” it

could not be held liable on such a theory.

The district court granted both motions to dismiss. As to Palms’s motion, the

court applied Georgia’s long-arm statute and determined that “it cannot fairly be said

that [Palms has] performed any act or transaction related to this case that would

amount to the ‘transaction of business’ in Georgia.” The court observed that the

complaint alleged neither that the Diuluses “visited or used Palms’s website in

f) In failing in properly retaining, entrusting, hiring, training and supervising said employees; g) In failing to inspect, patrol, or appropriately monitor the premises; and h) In failing to employ proper security measures in light of the history of the property and high-crime area in which the property is located. 3 Case: 19-12640 Date Filed: 08/17/2020 Page: 4 of 12

electing to go to the resort or to pay for the services” nor “that Palms exhibited an

intent to reach out to [the Diuluses] or persons living in Georgia.”

The court also denied what it construed as the Diuluses’ “request for leave to

take jurisdictional discovery.” The court found that the Diuluses had failed to

establish a prima facie case of personal jurisdiction over Palms. The court also found

that the Diuluses made “no allegation that Palms conducted any business in Georgia

related to activity that forms the factual predicate of this case.” The court declined

to grant the request to take jurisdictional discovery in the absence of any alleged

facts that could “support specific personal jurisdiction over Palms.”

As to Amex Travel’s motion to dismiss, the court granted the motion because

it found that the Diuluses failed to assert a cognizable claim against Amex Travel.

The Diuluses asserted two claims against Amex Travel, one based on premises

liability and the other on negligence. Because the Diuluses made no allegation that

Amex Travel “had possession or exercised any control over the premises in

question,” their complaint failed to support a cause of action based on premises

liability against Amex Travel. Nor did it establish any legal duty for Amex Travel

to warn the Diuluses that they could be robbed if they vacationed at Palms.

The Diuluses appealed.

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STANDARDS OF REVIEW

We review the district court’s ruling on a motion to dismiss de novo. See Am.

Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1288 (11th Cir. 2010) (reviewing de

novo a motion to dismiss for failure to state a claim); Cable/Home Commc’n Corp.

v. Network Prods., Inc., 902 F.2d 829, 855 (11th Cir. 1990) (reviewing de novo a

motion to dismiss for lack of personal jurisdiction). And we review the district

court’s decisions not to take judicial notice and to deny jurisdictional discovery for

abuse of discretion. Paez v. Sec’y, Fla. Dep’t of Corr., 947 F.3d 649, 651 (11th Cir.

2020) (reviewing for abuse of discretion “a district court’s decision to take judicial

notice of a fact”); United Techs. Corp. v. Mazer, 556 F.3d 1260, 1280 (11th Cir.

2009) (reviewing for abuse of discretion the denial of jurisdictional discovery).

DISCUSSION

The Diuluses contend that the district court erred in three ways: (1) by

dismissing their claim against Amex Travel for failure to state a valid claim, (2) by

dismissing their claim against Palms for lack of personal jurisdiction, and (3) by

denying their request for jurisdictional discovery.

Amex Travel

The Diuluses argue that the district court erred when it granted Amex Travel’s

motion to dismiss for failure to state a claim because (a) the district court applied the

law for premises liability, rather than for failure to warn; (b) the district court failed

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to recognize that, as a travel agent, Amex Travel owed a duty of care to the Diuluses;

(c) the district court erred by dismissing the case before the Diuluses could conduct

discovery; and (d) the district court erred by failing to take judicial notice of online

information concerning “recent attacks against American tourists in foreign locales.”

As to the Diuluses’ argument that the district court applied premises liability

law rather than the law for failure to warn, the district court did not err when it

applied premises liability law because the Diuluses’ complaint alleged in part that

Amex Travel and Palms violated Georgia’s premises liability law “by failing to use

ordinary care to keep the premises safe.” But the district court also applied the law

for failure to warn when it found “no legal duty that American Express owed to [the

Diuluses] to warn them of or to protect them from the hazard or dangerous condition

that is alleged to have caused Daniel Diulus’s injuries.”

As to the Diuluses’ argument that it was error to conclude that Amex Travel

owed no duty of care as their travel agent, the complaint failed to allege that Amex

Travel was their travel agent. The complaint alleged only that Amex Travel was

acting as Palms’s agent. Thus, even if Georgia law recognized a duty that a travel

agent had to warn its client of hazards on an upcoming trip—and the Diuluses

acknowledged in their brief that the “law regarding travel agents as fiduciary agents

is still developing” and such a duty is very much in dispute, see, e.g., Lavine v. Gen.

Mills, Inc., 519 F. Supp. 332, 335 (N.D. Ga. 1981) (concluding, under Georgia law,

6 Case: 19-12640 Date Filed: 08/17/2020 Page: 7 of 12

that travel agent had “no duty . . . to warn [plaintiff] of or to protect her from the

hazard that caused her injury”)—the Diuluses did not allege that Amex Travel was

their agent or that Amex Travel had an agent-client relationship with them.

As to the Diuluses’ argument that the district court erred when it granted the

motion to dismiss while discovery was ongoing, because their complaint failed to

state a claim, they were not entitled to discovery. See Ashcroft v. Iqbal, 556 U.S.

662, 686 (2009) (“Because respondent’s complaint is deficient under Rule 8, he is

not entitled to discovery, cabined or otherwise.”). This court has held that a district

court should resolve a motion to dismiss before allowing discovery:

Facial challenges to the legal sufficiency of a claim or defense, such as a motion to dismiss based on failure to state a claim for relief, should . . . be resolved before discovery begins. Such a dispute always presents a purely legal question; there are no issues of fact because the allegations contained in the pleading are presumed to be true. Therefore, neither the parties nor the court have any need for discovery before the court rules on the motion.

Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1367 (11th Cir. 1997) (footnote

and citations omitted).

Finally, as to the Diuluses’ argument that the district court failed to take

judicial notice of online news articles concerning attacks against American tourists

on the island, we find no abuse of discretion. The Diuluses did not request that the

district court take judicial notice of the online news articles, and a court cannot abuse

discretion it was not asked to exercise.

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Palms

The Diuluses also appeal the district court’s order dismissing their complaint

against Palms for lack of personal jurisdiction. They argue that we should reverse

because the district court wrongly concluded that they did not allege a prima facie

case for personal jurisdiction against Palms, the court disregarded evidence attached

to and referenced in their response to the dismissal motion, and it abused its

discretion in denying their request for jurisdictional discovery.

Where, as here, a defendant moves to dismiss a complaint for lack of personal

jurisdiction, the court analyzes the claim under a three-step burden-shifting process.

First, the plaintiff “bears the initial burden of alleging in the complaint sufficient

facts to make out a prima facie case of jurisdiction.” Mazer, 556 F.3d at 1274.

Second, if the complaint alleged sufficient facts, and “the defendant challenges

jurisdiction by submitting affidavit evidence in support of its position, the burden

traditionally shifts back to the plaintiff to produce evidence supporting jurisdiction.”

Id. (quotation marks omitted). Third, “[w]here the plaintiff’s complaint and

supporting evidence conflict with the defendant’s affidavits, the court must construe

all reasonable inferences in favor of the plaintiff.” Diamond Crystal Brands, Inc. v.

Food Movers Int’l, Inc., 593 F.3d 1249, 1257 (11th Cir. 2010).

“A federal court sitting in diversity undertakes a two-step inquiry in

determining whether personal jurisdiction exists: the exercise of jurisdiction must

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(1) be appropriate under the state long-arm statute and (2) not violate the Due

Process Clause of the Fourteenth Amendment to the United States Constitution.” Id.

at 1257–58. Here, the district court dismissed the Diuleses’ complaint because it

failed to allege facts sufficient for a court to exercise jurisdiction under Georgia’s

long-arm statute.

The Georgia long-arm statute provides as follows:

A court of this state may exercise personal jurisdiction over any nonresident or his or her executor or administrator, as to a cause of action arising from any of the acts, omissions, ownership, use, or possession enumerated in this Code section, in the same manner as if he or she were a resident of this state, if in person or through an agent, he or she:

(1) Transacts any business within this state;

....

(3) Commits a tortious injury in this state caused by an act or omission outside this state if the tort-feasor regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state ....

O.C.G.A. § 9-10-91(1) & (3).

The Diuluses contend that their complaint alleged that Palms transacted

business within Georgia and regularly conducted business in the state. We disagree.

The complaint alleged that Palms: (1) was owned, operated, controlled, and

managed in the Turks and Caicos; (2) invited guests to the Turks and Caicos; (3)

invited the Diuluses to stay on March 3, 2017; (4) knew about the crime problem in 9 Case: 19-12640 Date Filed: 08/17/2020 Page: 10 of 12

the Turks and Caicos but failed to warn the Diuluses and failed to maintain their

property and train their staff; and (5) negligently represented that its property was

safe.

Missing is any allegation that Palms transacted business in the state arising

out of the cause of action or regularly conducted business in Georgia. The resort

was in the Turks and Caicos. The negligent acts—failing to maintain the property

and hiring and training staff—all took place in that country. And the complaint did

not allege that the invitations sent to guests were sent to Georgia residents.

As to the Diuleses, the complaint alleged that, “[o]n or around March 3, 2017,

Defendant The Palms Resort invited Plaintiffs to stay at its resort via its agent,

Defendant American Express Travel Related Services Company, Inc.” The Diuleses

did not allege that they were Georgia residents or in Georgia when they received the

invitation. The complaint alleged that “[o]n or about March 4, 2017”—the day after

the Diuluses received the invitation—“Plaintiffs resided in Georgia.” According to

the complaint, the Diuluses became Georgia residents only after they received the

invitation from Palms through Amex Travel.

The Diuluses argue that, even if their complaint was deficient, the district

court should have looked to their affidavit attached to, and documents referenced in,

their response to the motion to dismiss. These attachments, they say, show that

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Palms transacted business in Georgia arising out of this cause of action and regularly

conducted business in the state.

But the Diuluses misunderstand the three-step burden-shifting process for

evaluating a dismissal motion for lack of personal jurisdiction. Once the defendant

files a motion to dismiss, the plaintiff “bears the initial burden of alleging in the

complaint sufficient facts to make out a prima facie case of jurisdiction.” Mazer,

556 F.3d at 1274. If the plaintiff doesn’t meet his burden, the district court doesn’t

go to the second and third steps of the burden-shifting process, and the motion should

be granted. The court will look to the plaintiff’s affidavits and other discovery only

if (1) the complaint alleged sufficient facts to make out a prima facie case of personal

jurisdiction, and (2) “the defendant challenges jurisdiction by submitting affidavit

evidence in support of its position.” Id.

Here, Palms’s motion to dismiss argued only that the complaint did not allege

a prima facie case of personal jurisdiction. The resort’s motion did not rely on any

affidavits or attach additional documents; it only attacked the Diuluses’ complaint.

The district court properly reviewed the allegations in the complaint, found them to

be deficient, and dismissed the complaint. There was no reason for the district court

to look elsewhere after the Diuluses failed to allege a prima facie case of personal

jurisdiction.

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In any event, the documents the Diuluses rely on to establish jurisdiction

under Georgia’s long-arm statute—a printout of Palms’s website listing Atlanta as

one of eleven cities with direct flights to Turks and Caicos and a document from

Georgia’s corporations division identifying Amex Travel as a registered foreign

corporation—are insufficient. The documents establish neither that Palms

transacted business in the state arising out of this cause of action nor that the hotel

regularly conducted business in the state.

Finally, the Diuluses argue that, even if they did not allege a prima facie case

and even if their attachments are deficient, they should have been allowed

jurisdictional discovery. The district court erred, they say, by ruling without giving

them the chance to prove personal jurisdiction. But, as we’ve explained, a district

court does not abuse its discretion by denying jurisdictional discovery if “the

complaint was insufficient as a matter of law to establish a prima facie case that the

district court had jurisdiction.” Butler v. Sukhoi Co., 579 F.3d 1307, 1314 (11th Cir.

2009). Because the Diuluses did not meet their initial burden to allege a prima facie

case of personal jurisdiction, we cannot say it was an abuse of the district court’s

discretion to deny them jurisdictional discovery.

AFFIRMED.