Goldwater Bank NA v. Caliber Home Loans Incorporated

• Court: District Court, D. Arizona
• Decided: September 16, 2021
• Docket: 2:21-cv-01190
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Goldwater Bank NA, No. CV-21-01190-PHX-MTM

10 Plaintiff, ORDER

11 v.

12 Caliber Home Loans Incorporated, et al.,

13 Defendants. 14 15 Before the Court is Defendants Amy Waller (“Waller”) and Shelly Farris’s 16 (“Farris”) Motion to Dismiss for Lack of Personal Jurisdiction, filed August 10, 2021 (doc. 17 22). The Court considers the Motion (id.), Plaintiff Goldwater Bank NA’s (“Goldwater”) 18 Response (doc. 41), and Waller and Farris’s Reply (doc. 46). For the reasons discussed 19 herein, the Court does not have personal jurisdiction over Waller and Farris. However, the 20 Court holds its ruling on the Motion in abeyance pending briefing on whether the action 21 against Waller and Farris should be transferred to a court where personal jurisdiction is 22 proper, or whether outright dismissal of Waller and Farris is appropriate. 23 I. BACKGROUND 24 A. Parties. 25 Plaintiff Goldwater is an Arizona corporation with its principal place of business in 26 Arizona. Goldwater’s business includes loan origination. (Doc. 1 ¶ 1; Doc. 9-2 ¶ 3). 27 Defendant Caliber Home Loans Inc. (“Caliber”) is a Delaware corporation with its 28 principal place of business in Texas. (Doc. 1 ¶¶ 2–3). Defendants Julia M. Magler 1 (“Magler”), Amy Waller, and Shelly Farris are all Minnesota residents and employees at a 2 Caliber branch in Minnesota. (Doc. 21-1 ¶¶ 2, 8, 16). Magler is a Mortgage Loan Officer 3 at Caliber who was previously a Loan Originator at a Goldwater branch in Minnesota from 4 March 29, 2018 until her voluntary departure on June 11, 2021. (Id. ¶¶ 4, 16). Waller is a 5 Production Assistant at Caliber; Farris is a Sales Manager (Doc. 22-1 ¶ 4; Doc. 22-2 ¶ 4). 6 B. Jurisdiction & Venue. 7 Goldwater asserts that the Court has subject matter jurisdiction over the action 8 pursuant to 28 U.S.C. § 1332 because complete diversity of citizenship exists between it 9 and Defendants and the amount in controversy exceeds $75,000, exclusive of interest and 10 costs. (Doc. 1 ¶ 11). Goldwater asserts that the Court has personal jurisdiction over the 11 parties to the action. (Id. ¶ 10). Goldwater asserts that venue in the District of Arizona is 12 proper based on the foregoing. (Id.). 13 C. Goldwater’s Claims. 14 Goldwater asserts that it has developed or generated “various trade secrets, 15 confidential information, and other material information of significant commercial value, 16 including ….. [its] business practices, protocols, clients, pricing schemes, sales leads[,] and 17 proprietary interfacing.” (Doc. 9-2 ¶ 5). 18 According to Goldwater, Magler had access to Goldwater’s “Confidential 19 Information,” including its “business methods, leads, loan programs, advertising programs, 20 referral sources, marketing sources, software, technology, investor lists, customer lists, 21 customer information, products, and Goldwater documentation.” (Id. ¶ 12). Goldwater 22 alleges that Magler’s Employment Agreement (Id. ¶ 13; see Doc. 9-3, Ex. B, at 10–19 23 [“Employment Agreement”]) included an acknowledgment that Confidential Information 24 was the property of Goldwater and a requirement that Magler maintain its secrecy, use it 25 solely for the benefit of Goldwater, and return it to Goldwater upon termination of 26 employment. (Doc. 9-3, Ex. B, at 16, Art. 5, §§ 1–2). Goldwater alleges that Magler agreed 27 that all leads and loans in process were property of Goldwater and that she would not “take 28 any action to divert such loans to a competitor or away from [Goldwater].” (Id. at 16–17, 1 Art. 5, § 3). Further, Goldwater alleges Magler agreed to show the Employment 2 Agreement to any subsequent employer that she works with within 12 months of 3 terminating employment with Goldwater. (Id. at 17, Art. 5, § 6). 4 According to Goldwater, in the weeks preceding her departure from Goldwater on 5 June 11, 2021, Magler sent Goldwater loan applicant information to Farris and Waller at 6 Caliber. (Doc. 9-2 ¶ 15). Specifically, Goldwater alleges that on May 26, 2021, Magler 7 emailed Farris and Waller a list of six applicant files that she would be “submitting” to 8 Caliber and stated that she would be sending “full packages on all submissions.” (Doc. 9- 9 3, Ex. D, at 27–30). Goldwater alleges that between May 27, 2021 and May 31, 2021, 10 Magler submitted six loan applications using Caliber’s online portal. (Doc. 9-3, Ex. F, at 11 51–62). Goldwater asserts that on at least two occasions, Farris and Waller specifically 12 requested such documents. (Id. at 35 [5/26/2021: Farris requested an applicant’s “full 13 name, address they are buying, loan type, purchase price and loan amount”], 48 [6/8/2021: 14 Waller requested an applicant’s tax returns]. 15 On July 8, 2021, Goldwater brought the instant action against Caliber, Magler, 16 Farris, and Waller, alleging eight claims for relief: (1) tortious interference with contract; 17 (2) tortious interference with prospective economic advantage; (3) misappropriation of 18 trade secrets; (4) breach of employment agreement; (5) injunctive relief in the form of a 19 TRO, preliminary injunction, and permanent injunction; (6) breach of good faith and fair 20 dealing; (7) breach of fiduciary duty; and (8) aiding and abetting breach of fiduciary duty. 21 (Doc. 1 ¶¶ 33–84). Goldwater seeks actual damages in an amount to be proven at trial but 22 in excess of $75,000.00, as well as punitive damages and injunctive relief. (Id. at 17). 23 II. MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION 24 A. Arguments. 25 Waller and Farris move to dismiss the claims against them for lack of personal 26 jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2). (Doc. 22). 27 Waller and Farris filed declarations stating that they are both “lifelong” citizens of 28 Minnesota and have never lived, worked, or transacted business in Arizona. (Doc. 22-1 ¶¶ 1 2, 6–8; Doc. 22-2 ¶¶ 2, 6–8). Further, they state that they have never worked for or 2 contracted with Goldwater, and all of the loans that Magler allegedly misappropriated 3 involved borrowers and property in Minnesota or Florida. (Doc. 22-1 ¶¶ 9–11; Doc. 22-2 4 ¶¶ 9–11). 5 The Complaint alleges that both Waller and Farris are citizens of Minnesota and 6 agents of Caliber for purposes of establishing subject matter jurisdiction under 28 U.S.C. 7 § 1332. (Id. ¶¶ 6–8, 11). In response to the Motion asserting that this Court lacks personal 8 jurisdiction over Waller and Farris, Goldwater argues that Waller and Farris “purposefully 9 directed their activities at Arizona” and the alleged harm resulting from those activities was 10 felt by Goldwater in Arizona. (Doc. 41 at 6). (Id. at 9–12). 11 B. Applicable Law. 12 “Personal jurisdiction over a nonresident defendant is proper if permitted by a 13 state’s long-arm statute and if the exercise of that jurisdiction does not violate federal due 14 process.” In re Western States Wholesale Nat. Gas Antitrust Litig., 715 F.3d 716, 741 (9th 15 Cir. 2013). Arizona’s long-arm statute permits the exercise of personal jurisdiction “to the 16 maximum extent permitted by . . . the United States Constitution.” Ariz. R. Civ. P. 4.2(a); 17 see Menken v. Emm, 503 F.3d 1050, 1056 (9th Cir. 2007). The exercise of personal 18 jurisdiction comports with federal due process where the defendant has “‘certain minimum 19 contacts’ with the forum state ‘such that the maintenance of the suit does not offend 20 traditional notions of fair play and substantial justice.’” Picot v. Weston, 780 F.3d 1206, 21 1211 (9th Cir. 2015) (quoting Int’l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)); see also 22 Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984) (“[A] 23 relationship among the defendant, the forum, and the litigation is the essential foundation 24 of in personam jurisdiction.”) (quotes and citation omitted). 25 “Depending on the strength of those contacts, there are two forms that personal 26 jurisdiction may take: general and specific.” Picot, 780 F.3d at 1211. For general personal 27 jurisdiction, the defendant must have “continuous and systematic” contacts that 28 “approximate physical presence” within the forum state. In re Western, 715 F.3d at 741. 1 For specific personal jurisdiction, which Goldwater alleges here, the following three 2 requirements must be met: 3 (1) The non-resident defendant must purposefully direct his activities or 4 consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of 5 conducting activities in the forum, thereby invoking the benefits and 6 protections of its laws; (2) the claim must be one which arises out of or relates to the defendant’s 7 forum-related activities; and 8 (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e.[,] it must be reasonable. 9 10 Picot, 780 F.3d at 1211 (quotes and citations omitted). The plaintiff bears the burden of 11 proof on the first two prongs. Id. Once the plaintiff has met this burden, the defendant bears 12 the burden at the third prong of setting forth “a compelling case that the presence of some 13 other considerations would render jurisdiction unreasonable.” Burger King Corp. v. 14 Rudzewicz, 471 U.S. 462, 477 (1985); see Picot, 780 F.3d at 1211. For tort claims like the 15 ones at bar, the inquiry at prong one is whether the defendant purposefully “directed his 16 actions at the forum state, even if those actions took place elsewhere.” Picot, 780 F.3d at 17 1212. To establish such, the plaintiff must show that the defendant “(1) committed an 18 intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant 19 knows is likely to be suffered in the forum state.” Id. at 1214 (quotes and citations omitted). 20 “Where, as here, a defendant’s motion to dismiss is based on a written record and 21 no evidentiary hearing is held, the plaintiff need only make a prima facie showing of 22 jurisdictional facts.” Picot, 780 F.3d at 1211 (quotes and citations omitted). “For the 23 purposes of deciding whether a prima facie showing has been made, the court resolves all 24 disputed facts in favor of the plaintiff.” In re Western, 715 F.3d at 741. 25 C. Analysis. 26 Goldwater fails to show that Waller and Farris purposefully directed their actions at 27 Arizona and therefore fails to satisfy prong one of the test for specific personal jurisdiction. 28 At prong one, Goldwater has shown that Waller and Farris committed “intentional” acts, 1 namely, the conduct described in Section I(C), supra. See Schwarzenegger v. Fred Martin 2 Motor Co., 374 F.3d 797, 806 (9th Cir. 2004) (“‘[I]intent’ in the context of the ‘intentional 3 act’ test [refers] to an intent to perform an actual, physical act in the real world, rather than 4 an intent to accomplish a result or consequence of that act.”). However, Goldwater has not 5 shown that those acts were “expressly aimed” at Arizona. 6 Whether a defendant’s actions were “expressly aimed” at the forum state turns on 7 “whether the defendant’s conduct connects him to the forum in a meaningful way.” Walden 8 v. Fiore, 571 U.S. 277, 290 (2014). Here, Goldwater argues that specific personal 9 jurisdiction is proper in Arizona because it felt the harm of Waller and Farris’s alleged 10 actions in Arizona. (Doc. 41 at 9). Goldwater relies on Mavrix Photo, Inc. v. Brand Techs., 11 Inc., 647 F.3d 1218, 1227–28 (9th Cir. 2011), where the Ninth Circuit focused on “the 12 forum in which the defendant’s actions were felt, whether or not the actions themselves 13 occurred within the forum” (quotes and citations omitted). In Walden, however, the 14 Supreme Court found that the “proper question” for the expressly-aimed requirement is 15 “not where the plaintiff experienced a particular injury or effect but whether the 16 defendant’s conduct connects him to the forum in a meaningful way.” Walden, 571 U.S. at 17 290 (emphasis added). Walden is directly at odds with the analysis in Mavrix Photo; as a 18 result, Goldwater’s reliance on Mavrix Photo is misplaced, even if the Ninth Circuit has 19 not formally overruled Mavrix Photo. See Miller v. Gammie, 335 F.3d 889, 900 (9th Cir. 20 2003) (holding that prior circuit holdings are “effectively overruled” where “the relevant 21 court of last resort [] undercut the theory or reasoning underlying the prior circuit precedent 22 in such a way that the cases are clearly irreconcilable”). 23 Goldwater asserts that Waller and Farris’s actions were “expressly aimed” at 24 Arizona because they “individually targeted” Goldwater, which they knew to be a resident 25 of Arizona and competitor of Caliber in the consumer mortgage industry. (Doc. 41 at 7–8). 26 Goldwater states that on June 18, 2021, it sent Waller and Farris a Cease-and-Desist Letter 27 and a copy of Magler’s Employment Agreement with Goldwater, “which clearly identified 28 Arizona as the location where the contract was made and would be enforced.” (Id.; see 1 Doc. 21-2). Magler also stated that she provided a copy of the Cease-and-Desist letter to 2 Caliber. (Doc. 21-1 ¶ 18). Goldwater alleges that, despite having received this 3 correspondence, Waller and Farris “continued to misappropriate Goldwater’s trade secret 4 and confidential information by closing several loans” brought to Caliber by Magler. (Doc. 5 41 at 8). 6 These allegations are insufficient to establish that Waller and Farris’s actions were 7 “expressly aimed” at Arizona. Plaintiff’s mailing of a copy of the Employment Agreement 8 to Waller and Farris cannot create personal jurisdiction. See Walden, 571 U.S. at 285 9 (“[T]he plaintiff cannot be the only link between the defendant and the forum.”); Axiom 10 Foods, Inc. v. Acerchem Int’l, Inc., 874 F.3d 1064, 1070 (9th Cir. 2017) (“[W]hile a theory 11 of individualized targeting may remain relevant to the minimum contacts inquiry, it will 12 not, on its own, support the exercise of specific jurisdiction, absent compliance with what 13 Walden requires.”); Picot, 780 F.3d at 1214 (“The proper analysis in tort cases . . . looks to 14 the defendant’s contacts with the forum State itself, not the defendant’s contacts with 15 persons who reside there.”) (quotes and citation omitted).1 16 Applying Walden to the facts of this case, the Court finds no meaningful connection 17 between Arizona and Waller or Farris. See Picot, 780 F.3d at 1215. In Picot, the Ninth 18 Circuit affirmed a district court’s finding that it did not have personal jurisdiction over a 19 defendant because all of the defendant’s alleged misconduct occurred outside of the forum 20 state and without the defendant entering into the forum state, contacting any person in the 21 forum state, or otherwise reaching out to the forum state. 780 F.3d at 1215. Under those 22 facts, the Ninth Circuit concluded that “none of [the defendant’s] challenged conduct had 23 anything to do with [the forum state] itself” and therefore specific personal jurisdiction 24 over that defendant was absent. Id. 25

26 1 Prior to Walden, an allegation that the defendant targeted the plaintiff and knew the plaintiff was a resident of the forum state was sufficient to meet the expressly-aimed 27 requirement in the Ninth Circuit. See, e.g., Washington Shoe Co. v. A-Z Sporting Goods 28 Inc., 704 F.3d 668, 675 (9th Cir. 2012), abrogation recognized in Axiom Foods, 874 F.3d at 1070. 1 The facts of the present case are sufficiently similar. All of Waller and Farris’s 2 communications with Magler giving rise to the claims at bar occurred outside of Arizona 3 – in Minnesota, where all three reside. (Doc. 22-1 ¶¶ 2, 4; Doc. 22-2 ¶¶ 2, 4; Doc. 21-1 ¶ 4 2). Those communications discussed loans for homes and borrowers located outside of 5 Arizona – in Minnesota and Florida. (Doc. 22-1 ¶ 11; Doc. 22-2 ¶ 11). The record does not 6 show that Waller and Farris traveled to Arizona, solicited anyone in Arizona, or otherwise 7 reached out to Arizona, nor does the record show that any of the allegedly misappropriated 8 information involved property in Arizona. On the record before the Court, Goldwater has 9 not shown that Waller or Farris have any meaningful connection to Arizona and therefore 10 fails to show that exercise of personal jurisdiction over them is proper. See Walden, 571 11 U.S. at 290. 12 D. Conclusion. 13 This Court does not have personal jurisdiction over Waller or Farris. “Where the 14 court determines that it lacks jurisdiction over a matter, it must determine whether the case 15 should be transferred to another district[,] rather than dismissed[,] pursuant to 28 U.S.C. 16 § 1631.” Pfister v. Selling Source, LLC, 931 F. Supp. 2d 1109, 1119 (D. Nev. 2013) (citing 17 Miller v. Hambrick, 905 F.2d 259, 262 (9th Cir. 1990)).2 Section 1631 states, in pertinent 18 part: 19 [Where the] court finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other such 20 court . . . in which the action or appeal could have been brought at the time 21 it was filed or noticed, and the action or appeal shall proceed as if it had been filed in or noticed for the court to which it is transferred on the date upon 22 which it was actually filed in or noticed for the court from which it is 23 transferred. 24 28 U.S.C. § 1631. 25

26 2 The Court must consider whether transfer is an appropriate remedy, even in the absence of a motion for such. See Hambrick, 905 F.2d at 262 (“Although Miller did not 27 move the district court to transfer the case, we have held that “‘[a] motion to transfer is 28 unnecessary because of the mandatory cast of section 1631’s instructions.’”) (quoting In re McCauley, 814 F.2d 1350, 1353 (9th Cir. 1987)). 1 Here, it appears that personal jurisdiction over Waller and Farris may be proper in 2|| the District of Minnesota, where the alleged acts occurred. The Court will therefore hold || Waller and Farris’s Motion in abeyance pending briefing from Waller, Farris, and Goldwater on whether transferring the action against Waller and Farris to the District of 5 || Minnesota is “in the interest of justice” and therefore the appropriate remedy for this 6 || Court’s lack of personal jurisdiction over them. See Jones v. GNC Franchising Inc., 211 7\| F.3d 495, 498-99 (9th Cir. 2000) (providing multiple factors for determining whether a 8 || transfer is “in the interest of justice” under the change-of-venue statute, 28 U.S.C. § 1404(a)); Lansing v. Feast at Lele, No. CIV. S-08—2287 LKK/DAD, 2009 WL 800228, at *5 n.2 (E.D. Cal. Mar. 25, 2009) (noting that “in the interest of justice” has the same 11 || meaning under 28 U.S.C. §§ 1404(a) and 1631); see also Baeta v. Sonchik, 273 F.3d 1261, 1264-65 (9th Cir. 2001). 13 IT IS THEREFORE ORDERED holding in abeyance Waller and Farris’s 14|| Motion to Dismiss (doc. 22). 15 IT IS FURTHER ORDERED that Goldwater, Waller, and Farris shall file 16 || simultaneous briefs of not more than five (5) pages in length on whether the Court should transfer the action against Waller and Farris to another district court in the United States 18 || pursuant to 28 U.S.C. § 1631 on or before October 1, 2021. 19 Dated this 16th day of September, 2021. 20 21 Wr eted Y- PMereis □□

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