1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE DISTRICT OF IDAHO 10 11 NAKOTA TRUCKING, LLC, Case No. 1:22-cv-00041-MCE 12 Plaintiff, 13 v. MEMORANDUM AND ORDER 14 HUB INTERNATIONAL MOUNTAIN STATES LIMITED, et al., 15 Defendants. 16
17 18 By way of this action, Plaintiff Nakota Trucking, LLC, (“Nakota”) seeks to recover 19 from Defendant insurers HUB International Mountain States Limited (“HUB”) and 20 American Empire Surplus Lines Insurance Company (“AESLIC”) those monies Nakota 21 paid to settle claims arising out of a collision involving one of Nakota’s independent 22 contractors. Ex. A, Dkt. 1-2 (“Am. Compl.”). Presently before the Court is a Motion to 23 Dismiss for Lack of Personal Jurisdiction filed by AESLIC. Dkt. 2-1.1 For the following 24 reasons, AESLIC’s Motion is hereby GRANTED with leave to amend. 25 /// 26 /// 27 ///
28 1 HUB filed a statement of non-opposition. Dkt. 18. 1 BACKGROUND2 2 3 On February 15, 2016, a motor vehicle accident occurred between Matthew 4 Hardrick and Hector Luis Salas in La Salle County, Texas. Am. Compl., ¶ 21. At the 5 time of the accident, Hardrick (an independent contractor of Nakota) was driving a 6 tractor-trailer owned by Nakota and hauling crude oil on behalf of Nakota for a third 7 party, Rose Rock Midstream Field Services, LLC (“Rose Rock”). Id. ¶ 16; see Ex. 1, Am. 8 Compl., at 1. Hardrick was operating pursuant to a Master Service Agreement (the 9 “Agreement”) that Nakota and Rose Rock entered into on October 19, 2015. That 10 Agreement lists Nakota’s address as “7411 Grandview Ave., Arvada, CO 80002” and 11 specifies that notices should be sent to that address. Id. ¶ 17. Rose Rock is an 12 Oklahoma corporation. Id. At the time of the accident, Salas was driving a tractor-trailer 13 on behalf of Rose Rock. Am. Compl., ¶ 21. 14 Hardrick filed a negligence-based suit against Rose Rock and Salas in the District 15 Court for the 81st Judicial District, in La Salle County, Texas, Case No. 16-03-00023- 16 CVL (the “Underlying Lawsuit”). Id. ¶ 23. Rose Rock and Salas then filed a crossclaim 17 against Nakota for contribution and breach of contract. Id. ¶ 24. According to Rose 18 Rock, Nakota failed to indemnify, defend, and hold harmless Rose Rock and Salas, as 19 required by the Agreement. Id. ¶ 25. 20 On April 13, 2017, the Texas court granted Rose Rock’s motion for summary 21 judgment against Nakota, ruling that the Agreement in place at the time of the underlying 22 accident provided that Nakota would defend and indemnify Rose Rock from and against 23 claims such as the one brought by Hardrick against Rose Rock. Id. ¶ 28. The Texas 24 court determined that Rose Rock was entitled to costs of defense and indemnification 25 from any damages awarded to Hardrick under the claims made in his complaint as well 26 as reasonable attorney’s fees and expenses. Id. After the Texas court issued its order,
27 2 Unless otherwise indicated, the following recitation of facts is taken, for the most part verbatim, from AESLIC’s Motion to Dismiss, which sets forth in truncated form the allegations in Nakota’s Amended 28 Complaint. 1 on May 23, 2017, Nakota, Rose Rock, and Hardrick executed a settlement agreement 2 (“Hardrick Settlement”). Id. ¶ 30; see Ex. 4, Am. Compl. Under that agreement, Nakota 3 contends it was required to pay $89,067.63 to Hardrick from its own coffers; $60,932.37 4 to Hardrick from funds in Rose Rock’s possession but otherwise owed to Nakota; and 5 $140,000 to Zurich Insurance (Rose Rock’s surety) for attorney’s fees and expenses 6 incurred in defending Rose Rock against Hardrick’s claims. Am. Compl. ¶ 34. 7 In the present suit, which was initiated in Idaho state court, Nakota seeks to 8 recover the $290,000.00 it agreed to pay under the Hardrick Settlement from Defendants 9 HUB and AESLIC. Id. ¶¶ 34, 51. The Amended Complaint, in part, includes a single 10 cause of action against AESLIC for breach of contract, with Nakota contending that its 11 duty to indemnify Rose Rock under the Agreement is a covered loss under its 12 commercial general liability policy with AESLIC. See id. ¶¶ 67–77. Nakota alleges 13 AESLIC breached said policy by disclaiming coverage for the Hardrick Settlement. Id. 14 ¶ 76. 15 Defendants subsequently removed this action here. HUB has filed an Answer, 16 but AESLIC filed the instant Motion to Dismiss, arguing that it lacks sufficient contacts 17 with Idaho to be subject to the jurisdiction of this Court and that requiring it to defend 18 against this action in this venue would violate due process. 19 20 STANDARD 21 22 A judgment rendered in violation of due process is void, and due process requires 23 that a defendant be subject to the personal jurisdiction of the court. World–Wide 24 Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980) (citing Pennoyer v. Neff, 25 95 U.S. 714, 732–33 (1877); Int’l Shoe Co. v. Wash., 326 U.S. 310 (1945)). In opposing 26 a defendant’s motion to dismiss for lack of personal jurisdiction, the plaintiff bears the 27 burden of establishing the court’s jurisdiction over the defendant. Wash. Shoe Co. v. 28 A-Z Sporting Goods Inc., 704 F.3d 668, 671 (9th Cir. 2012) (citation omitted). However, 1 when the defendant’s motion is based on written materials rather than an evidentiary 2 hearing, the plaintiff need only make a “prima facie showing of jurisdictional facts” to 3 withstand the motion to dismiss. Id. at 672 (citing Pebble Beach Co. v. Caddy, 453 F.3d 4 1151, 1154 (9th Cir. 2006)). The court resolves all disputed facts in favor of the plaintiff. 5 Wash. Shoe, 704 F.3d at 672. 6 Where, as here, there is no federal statute authorizing personal jurisdiction, the 7 district court applies the law of the state in which the district court sits. Mavrix Photo, 8 Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). Idaho’s long-arm 9 statute, Idaho Code § 5-514, is “coextensive” with federal due process requirements. 10 SRE-Cheaptrips, Inc. v. Media Synergy Grp., LLC, No. CV 09-00622-S-EJL, 2010 WL 11 1913589, at *2 (D. Idaho, May 12, 2010). Accordingly, “the Court need only determine 12 whether asserting personal jurisdiction complies with due process.” Id. 13 There are two categories of personal jurisdiction from a due process perspective: 14 general and specific. A court has general jurisdiction over a nonresident defendant 15 when the defendant’s contacts with the forum are “substantial” or “continuous and 16 systematic.” Bancroft & Masters, Inc. v. Augusta Nat. Inc., 223 F.3d 1082, 1086 (9th Cir. 17 2000). The standard for establishing general jurisdiction is an exacting standard that 18 requires the defendant’s contacts to approximate physical presence in the forum state. 19 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801 (9th Cir. 2004). Specific 20 personal jurisdiction, on the other hand, exists when a defendant’s “in-state activity is 21 continuous and systematic and that activity gave rise to the episode-in-suit.” Goodyear 22 Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 923 (2011) (citing Int’l Shoe, 23 326 U.S. 317 (1945)) (internal quotation marks omitted).
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE DISTRICT OF IDAHO 10 11 NAKOTA TRUCKING, LLC, Case No. 1:22-cv-00041-MCE 12 Plaintiff, 13 v. MEMORANDUM AND ORDER 14 HUB INTERNATIONAL MOUNTAIN STATES LIMITED, et al., 15 Defendants. 16
17 18 By way of this action, Plaintiff Nakota Trucking, LLC, (“Nakota”) seeks to recover 19 from Defendant insurers HUB International Mountain States Limited (“HUB”) and 20 American Empire Surplus Lines Insurance Company (“AESLIC”) those monies Nakota 21 paid to settle claims arising out of a collision involving one of Nakota’s independent 22 contractors. Ex. A, Dkt. 1-2 (“Am. Compl.”). Presently before the Court is a Motion to 23 Dismiss for Lack of Personal Jurisdiction filed by AESLIC. Dkt. 2-1.1 For the following 24 reasons, AESLIC’s Motion is hereby GRANTED with leave to amend. 25 /// 26 /// 27 ///
28 1 HUB filed a statement of non-opposition. Dkt. 18. 1 BACKGROUND2 2 3 On February 15, 2016, a motor vehicle accident occurred between Matthew 4 Hardrick and Hector Luis Salas in La Salle County, Texas. Am. Compl., ¶ 21. At the 5 time of the accident, Hardrick (an independent contractor of Nakota) was driving a 6 tractor-trailer owned by Nakota and hauling crude oil on behalf of Nakota for a third 7 party, Rose Rock Midstream Field Services, LLC (“Rose Rock”). Id. ¶ 16; see Ex. 1, Am. 8 Compl., at 1. Hardrick was operating pursuant to a Master Service Agreement (the 9 “Agreement”) that Nakota and Rose Rock entered into on October 19, 2015. That 10 Agreement lists Nakota’s address as “7411 Grandview Ave., Arvada, CO 80002” and 11 specifies that notices should be sent to that address. Id. ¶ 17. Rose Rock is an 12 Oklahoma corporation. Id. At the time of the accident, Salas was driving a tractor-trailer 13 on behalf of Rose Rock. Am. Compl., ¶ 21. 14 Hardrick filed a negligence-based suit against Rose Rock and Salas in the District 15 Court for the 81st Judicial District, in La Salle County, Texas, Case No. 16-03-00023- 16 CVL (the “Underlying Lawsuit”). Id. ¶ 23. Rose Rock and Salas then filed a crossclaim 17 against Nakota for contribution and breach of contract. Id. ¶ 24. According to Rose 18 Rock, Nakota failed to indemnify, defend, and hold harmless Rose Rock and Salas, as 19 required by the Agreement. Id. ¶ 25. 20 On April 13, 2017, the Texas court granted Rose Rock’s motion for summary 21 judgment against Nakota, ruling that the Agreement in place at the time of the underlying 22 accident provided that Nakota would defend and indemnify Rose Rock from and against 23 claims such as the one brought by Hardrick against Rose Rock. Id. ¶ 28. The Texas 24 court determined that Rose Rock was entitled to costs of defense and indemnification 25 from any damages awarded to Hardrick under the claims made in his complaint as well 26 as reasonable attorney’s fees and expenses. Id. After the Texas court issued its order,
27 2 Unless otherwise indicated, the following recitation of facts is taken, for the most part verbatim, from AESLIC’s Motion to Dismiss, which sets forth in truncated form the allegations in Nakota’s Amended 28 Complaint. 1 on May 23, 2017, Nakota, Rose Rock, and Hardrick executed a settlement agreement 2 (“Hardrick Settlement”). Id. ¶ 30; see Ex. 4, Am. Compl. Under that agreement, Nakota 3 contends it was required to pay $89,067.63 to Hardrick from its own coffers; $60,932.37 4 to Hardrick from funds in Rose Rock’s possession but otherwise owed to Nakota; and 5 $140,000 to Zurich Insurance (Rose Rock’s surety) for attorney’s fees and expenses 6 incurred in defending Rose Rock against Hardrick’s claims. Am. Compl. ¶ 34. 7 In the present suit, which was initiated in Idaho state court, Nakota seeks to 8 recover the $290,000.00 it agreed to pay under the Hardrick Settlement from Defendants 9 HUB and AESLIC. Id. ¶¶ 34, 51. The Amended Complaint, in part, includes a single 10 cause of action against AESLIC for breach of contract, with Nakota contending that its 11 duty to indemnify Rose Rock under the Agreement is a covered loss under its 12 commercial general liability policy with AESLIC. See id. ¶¶ 67–77. Nakota alleges 13 AESLIC breached said policy by disclaiming coverage for the Hardrick Settlement. Id. 14 ¶ 76. 15 Defendants subsequently removed this action here. HUB has filed an Answer, 16 but AESLIC filed the instant Motion to Dismiss, arguing that it lacks sufficient contacts 17 with Idaho to be subject to the jurisdiction of this Court and that requiring it to defend 18 against this action in this venue would violate due process. 19 20 STANDARD 21 22 A judgment rendered in violation of due process is void, and due process requires 23 that a defendant be subject to the personal jurisdiction of the court. World–Wide 24 Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980) (citing Pennoyer v. Neff, 25 95 U.S. 714, 732–33 (1877); Int’l Shoe Co. v. Wash., 326 U.S. 310 (1945)). In opposing 26 a defendant’s motion to dismiss for lack of personal jurisdiction, the plaintiff bears the 27 burden of establishing the court’s jurisdiction over the defendant. Wash. Shoe Co. v. 28 A-Z Sporting Goods Inc., 704 F.3d 668, 671 (9th Cir. 2012) (citation omitted). However, 1 when the defendant’s motion is based on written materials rather than an evidentiary 2 hearing, the plaintiff need only make a “prima facie showing of jurisdictional facts” to 3 withstand the motion to dismiss. Id. at 672 (citing Pebble Beach Co. v. Caddy, 453 F.3d 4 1151, 1154 (9th Cir. 2006)). The court resolves all disputed facts in favor of the plaintiff. 5 Wash. Shoe, 704 F.3d at 672. 6 Where, as here, there is no federal statute authorizing personal jurisdiction, the 7 district court applies the law of the state in which the district court sits. Mavrix Photo, 8 Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). Idaho’s long-arm 9 statute, Idaho Code § 5-514, is “coextensive” with federal due process requirements. 10 SRE-Cheaptrips, Inc. v. Media Synergy Grp., LLC, No. CV 09-00622-S-EJL, 2010 WL 11 1913589, at *2 (D. Idaho, May 12, 2010). Accordingly, “the Court need only determine 12 whether asserting personal jurisdiction complies with due process.” Id. 13 There are two categories of personal jurisdiction from a due process perspective: 14 general and specific. A court has general jurisdiction over a nonresident defendant 15 when the defendant’s contacts with the forum are “substantial” or “continuous and 16 systematic.” Bancroft & Masters, Inc. v. Augusta Nat. Inc., 223 F.3d 1082, 1086 (9th Cir. 17 2000). The standard for establishing general jurisdiction is an exacting standard that 18 requires the defendant’s contacts to approximate physical presence in the forum state. 19 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801 (9th Cir. 2004). Specific 20 personal jurisdiction, on the other hand, exists when a defendant’s “in-state activity is 21 continuous and systematic and that activity gave rise to the episode-in-suit.” Goodyear 22 Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 923 (2011) (citing Int’l Shoe, 23 326 U.S. 317 (1945)) (internal quotation marks omitted). However, “the commission of 24 certain ‘single or occasional acts’ in a State may be sufficient to render a [defendant] 25 answerable in that State with respect to those acts . . . .” Id. (citation omitted). 26 The Ninth Circuit employs a three-part test to determine whether a non-resident 27 has sufficient minimum contacts to be subject to specific personal jurisdiction: i) the non- 28 resident defendant must purposefully direct his activities or consummate some 1 transaction with the forum or resident thereof; or perform some act by which he 2 purposefully avails himself of the privilege of conducting activities in the forum, thereby 3 invoking the benefits and protections of its law; ii) the claim must be one which arises out 4 of or relates to the defendant’s forum-related activities; and iii) the exercise of jurisdiction 5 must comport with fair play and substantial justice, i.e., it must be reasonable. Wash. 6 Shoe, 704 F.3d at 672. If the plaintiff satisfies the first two elements, the burden shifts to 7 the defendant to present a “compelling case” that the exercise of jurisdiction would not 8 be reasonable. Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985). 9 A court granting a motion to dismiss a complaint must then decide whether to 10 grant leave to amend. Leave to amend should be “freely given” where there is no 11 “undue delay, bad faith or dilatory motive on the part of the movant, . . . undue prejudice 12 to the opposing party by virtue of allowance of the amendment, [or] futility of [the] 13 amendment . . . .” Foman v. Davis, 371 U.S. 178, 182 (1962); Eminence Capital, LLC v. 14 Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman factors as those to 15 be considered when deciding whether to grant leave to amend). Not all of these factors 16 merit equal weight. Rather, “the consideration of prejudice to the opposing party . . . 17 carries the greatest weight.” Id. (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 18 185 (9th Cir. 1987)). Dismissal without leave to amend is proper only if it is clear that 19 “the complaint could not be saved by any amendment.” Intri-Plex Techs., Inc. v. Crest 20 Group, Inc., 499 F.3d 1048, 1056 (9th Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 21 1006, 1013 (9th Cir. 2005); Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th 22 Cir. 1989) (“Leave need not be granted where the amendment of the complaint . . . 23 constitutes an exercise in futility . . . .”)). 24 25 ANALYSIS 26 27 According to the Amended Complaint, the only relevant contact AESLIC has with 28 Idaho is that Nakota is purportedly an Idaho limited liability company. Am. Compl. ¶ 1. 1 However, nowhere in the operative pleading does Nakota allege that AESLIC knew or 2 could have known that Nakota was domiciled in Idaho. To the contrary the relevant 3 policy documents all list Nakota’s address as “7411 Grandview Ave., Arvada, CO 4 80002.’’ Contracting with a party, who happens to have a presence in a particular state, 5 for insurance coverage pertaining to activities in another state is wholly insufficient to 6 establish general personal jurisdiction over the contracting party. Moreover, no other 7 allegations in the Amended Complaint permit a plausible inference that AESLIC 8 otherwise has such continuous and systematic contacts with Idaho that the exercise of 9 general jurisdiction is warranted. 10 Nor does the Amended Complaint set forth sufficient facts to establish the 11 propriety of specific jurisdiction. Again, the only allegation in the Amended Complaint 12 that ties AESLIC at all to Idaho is that Nakota is purportedly domiciled there. However, 13 as the United States Supreme Court has observed: “If the question is whether an 14 individual's contract with an out-of-state party alone can automatically establish sufficient 15 minimum contacts in the other party's home forum, we believe the answer clearly is that 16 it cannot.” Burger King, 471 U.S. at 478. This conclusion is especially apt here when 17 nothing in the record even indicated that Nakota had ties to Idaho in the first place and 18 all contract-related activities took place in other states. That is, the insurance policy 19 concerned Nakota’s activities while delivering crude oil to Rose Rock, an Oklahoma 20 entity, in Texas. Given that, the Amended Complaint simply does not establish that 21 AESLIC purposefully availed itself of the privilege of conducting business in Idaho or that 22 the claim for injuries sustained in a Texas vehicle accident and adjudicated by a Texas 23 court arose out of any purported Idaho-related activities. Finally, especially given the 24 lack of alleged contacts that AESLIC has with Idaho, it would be wholly unreasonable to 25 force AESLIC to defend itself here. Accordingly, AESLIC’s Motion is well taken and thus 26 GRANTED. 27 /// 28 /// 1 CONCLUSION 2 3 For the foregoing reasons, AESLIC’s Motion to Dismiss for Lack of Personal 4 || Jurisdiction (Dkt. 2) is GRANTED with leave to amend. Not later than twenty (20) days 5 || following the date this Memorandum and Order is electronically filed, Plaintiff may (but is 6 || not required to) file an amended complaint. If no amended complaint is timely filed, the 7 || causes of action dismissed by virtue of this Memorandum and Order will be deemed g || dismissed with prejudice upon no further notice to the parties. 9 IT IS SO ORDERED. 10 | Dated: July 12, 2022 Er 11 J bn beer LEK. "2 ONIED STAN URI T JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28