State ex rel. Cedar Crest Apartments, LLC and Peterson Properties, Inc. d/b/a The Peterson Companies, Relators v. The Honorable Jack Grate
State ex rel. Cedar Crest Apartments, LLC and Peterson Properties, Inc. d/b/a The Peterson Companies, Relators v. The Honorable Jack Grate
Opinion
Lincoln Rene Aguiriano Martinez ("Martinez") filed a lawsuit in the circuit court of Jackson County, alleging personal injury sustained while working at an apartment complex in Overland Park, Kansas. Two of the defendants, Cedar Crest Apartments, LLC ("Cedar Crest"), and Peterson Properties, Inc. d/b/a The Peterson Companies ("Peterson Properties," and, collectively with Cedar Crest, "Relators"), are Kansas business entities. Relators seek a writ of prohibition directing the circuit court to dismiss Martinez's claims against them for lack of personal jurisdiction. Because Martinez failed to show that Relators are "at home" in Missouri and failed to identify any conduct by Relators in this state out of which his claims arise, the preliminary writ of prohibition is now made permanent.
Background
On August 31, 2015, Martinez, a Kansas resident, alleges he was working at an apartment complex in Overland Park, Kansas. He was electrocuted and seriously injured when he touched a ladder that had become charged due to arcing from or contact with an overhead power line. On August 25, 2017, Martinez filed a lawsuit for damages in the circuit court of Jackson County.
Martinez alleges Relators "owned and/or controlled and/or maintained" the Kansas property on which he was injured and, therefore, are liable to him under various theories including premises liability. Relators are Kansas business entities, 1 with Kansas employees, and their principal places of business are in Kansas. Nevertheless, Martinez claims Peterson Properties has been registered to do business in Missouri since 1979, that it has solicited business here during that period, that it has filed (unrelated) lawsuits in this state, and that it owns (unrelated) rental property here.
Martinez also named as a defendant J.A. Peterson Enterprises, Inc. ("Peterson Enterprises"). Peterson Enterprises is a Missouri corporation, it is the managing member of Cedar Crest, and it owns (through a subsidiary) Peterson Properties.
Relators filed a motion to dismiss on the ground the circuit court lacked personal jurisdiction over them. Respondent overruled Relators' motion. Relators sought - and were denied - a writ of prohibition in the court of appeals and now petition this Court for the same relief. This Court has the authority to issue and determine original remedial writs, Mo. Const. art. V, § 4.1, and the preliminary writ is now made permanent.
Analysis
"Prohibition is an original proceeding brought to confine a lower court to the proper exercise of its jurisdiction."
State ex rel. Bayer Corp. v. Moriarty
,
"Personal jurisdiction refers quite simply to the power of a court to require a person to respond to a legal proceeding that may affect the person's rights or interests."
Bayer
,
General Jurisdiction
"When a [s]tate exercises personal jurisdiction over a defendant in a suit not arising out of or related to the defendant's contacts with the forum, the [s]tate has been said to be exercising 'general jurisdiction' over the defendant."
However, "[i]n 'exceptional cases,' general jurisdiction may exist in an additional state if the corporation's activities in that other state are 'so substantial and of such a nature as to render the corporation at home in that [s]tate.' "
Relators are Kansas business entities with their principal places of business in Kansas. As a result, the traditional bases for general jurisdiction are lacking. Nevertheless, Martinez argues Relators are "at home" in Missouri to such an extent that they are subject to the general jurisdiction of Missouri courts, i.e., that Relators can be sued in this state by anyone on any claim no matter where or how such claims arose. In support of this argument, Martinez claims Relators have had "systematic and continuous" contacts in Missouri because one or both Relators is registered to do business here, has solicited business here, has filed (unrelated) lawsuits in this state, and owns rental property here. But these are typical contacts of a non-resident corporation. As such, they fall far, far short of establishing the "exceptional case" for general jurisdiction over a non-resident corporation that is "at home" in Missouri.
Daimler
,
In
Norfolk
, this Court held a railway company that owned some 400 miles of track, generated approximately $232 million in yearly revenue, and employed some 590 people in Missouri was not "essentially at home" in Missouri.
Norfolk
,
Specific Jurisdiction
Even if general jurisdiction is lacking because Missouri is not the
de facto
domicile of the defendant under
Daimler
and
Norfolk
, Missouri courts may still assert personal jurisdiction over a non-domiciliary defendant corporation without violating due process if that entity has at least one contact with this state
and
the cause of action being pursued arises out of that contact.
Martinez argues the trial court has specific jurisdiction over his claims against Relators based, in part, on the same contacts analyzed above (e.g., registering to do business in Missouri, soliciting business here, filing lawsuits here,
and owning rental property here). The Court already has held that these contacts are insufficient to establish general jurisdiction. Similarly, these contacts are insufficient to establish specific jurisdiction because Martinez fails to show any connection between these contacts and his claims, far less that his claims against Relators arise out of those contacts.
2
Bayer
,
Because Relators' contacts with Missouri are insufficient to make Missouri their de facto domicile (and, therefore, to subject Relators to the general jurisdiction of Missouri courts), and because those contacts are insufficient to establish specific jurisdiction because Martinez's claims against Relators do not arise out of those contacts, Martinez argues the circuit court has personal jurisdiction over Relators because of their relationship with Missouri defendant Peterson Enterprises. Martinez claims Peterson Enterprises is the (indirect) owner of Peterson Properties and the managing member of Cedar Crest and, in those roles, "makes business decisions" for both Relators. In essence, Martinez argues that - because Peterson Enterprises is a Missouri corporation and Relators are, as a practical matter, mere extensions of Peterson Enterprises - Relators should be subject to general jurisdiction (as Peterson Enterprises is) and specific jurisdiction (as Martinez's claims ultimately arise out of decisions Peterson Enterprises made or should have made).
"A corporation can act only through its agents."
Piatt v. Ind. Lumbermen's Mut. Ins. Co.
,
But there is an even more fundamental flaw in Martinez's imputation argument. As noted above, in a proper case, the Missouri contacts of an agent can be imputed to an out-of-state principal for purposes of determining whether Missouri courts have general or specific jurisdiction over that out-of-state principal. But that is not the argument Martinez is making. Instead, Martinez would have this Court impute the Missouri contacts of the principal (Peterson Enterprises) to its out-of-state agents (Relators) for purposes of determining whether Missouri courts have general or specific jurisdiction over those out-of-state agents. Martinez offers no support for this novel argument, and the Court declines to adopt it here.
In sum, this Court declines to hold that Relators are subject to personal jurisdiction in Missouri courts merely because their corporate parent or managing member is domiciled here. Rather, each Relator's contacts with Missouri must be sufficient to create general or specific jurisdiction on their own.
Daimler
,
Conclusion
For the reasons set forth above, the preliminary writ of prohibition is now made permanent.
Russell, Powell, Breckenridge and Fischer, JJ., concur; Draper, C.J., concurs in separate opinion filed.
Stith, J., concurs in opinion of Draper, C.J.
George W. Draper III, Chief Justice, concurring.
I concur with the principal opinion's analysis and result. However, I write separately because I believe the principal opinion does not address fully Lincoln Rene Aguiriano Martinez's (hereinafter, "Martinez") argument regarding J.A. Peterson Enterprises, Inc.'s (hereinafter, "Peterson Enterprises") ownership of Cedar Crest Apartments, LLC and Peterson Properties, Inc. d/b/a The Peterson Companies (hereinafter and collectively, "Relators"). While the principal opinion views Martinez's argument as imputing agency, I view it as a request to pierce the corporate veil. Ultimately, Martinez is not entitled to relief under either theory.
Martinez asserts general jurisdiction should be found because Peterson Enterprises, a Missouri business entity, is a managing member of Cedar Crest and the ultimate owner , not the agent, of Peterson Properties. Martinez believes this confers general personal jurisdiction. 1
A "corporation is regarded as a wholly and separate legal entity, distinct from the members who compose it."
Blanks v. Fluor Corp.
,
1) Control, not mere majority or complete stock control, but complete domination, not only of finances, but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own; and
2) Such control must have been used by the corporation to commit fraud or wrong, to perpetrate the violation of statutory or other positive legal duty, or dishonest and unjust act in contravention of plaintiff's legal rights; and
3) The control and breach of duty must proximately cause the injury or unjust loss complained of.
Doe 1631 v. Quest Diagnostics, Inc.
,
Martinez's assertion Relators should be held liable due to Peterson Enterprises' subsidiary relationship fails at the first factor. There was no allegation demonstrating Peterson Enterprises' ownership or how Peterson Enterprise dominated Relators' corporate structure. There was no allegation showing Peterson Enterprises directed Relators' conduct nor that Relators acted in favor of Peterson Enterprises' interests. "One seeking to pierce the corporate veil needs to show both complete control and improper purpose."
Blanks
,
Martinez argues Cedar Crest is a "citizen of Missouri" because it is a limited liability company ("LLC") and, for purposes of determining federal diversity jurisdiction, the citizenship of an LLC is determined by the citizenship of each of its members. Diversity jurisdiction is a topic peculiar to the subject matter jurisdiction of the federal courts. Martinez offers no support for his assertion that the membership of an LLC has any bearing on the question of whether a state court can assert personal jurisdiction over the LLC itself, and the Court rejects this argument.
In seeking to establish specific jurisdiction, Martinez invokes the hoary notion of "purposeful availment," i.e., that Relators (particularly Cedar Crest) utilized Missouri courts in the past by filing unrelated lawsuits and, so, should expect to be hailed into Missouri courts to defend Martinez's claims. To be sure, "purposeful availment" traditionally has been referred to in the context of specific jurisdiction,
see, e.g.,
Goodyear
,
Even if contacts sufficient to show a subsidiary agent is subject to general jurisdiction are imputed to the parent principal,
Daimler
holds that general jurisdiction over the parent cannot exist unless its own contacts with the forum state are sufficient to create it.
Daimler
,
Martinez failed to show, and does not even argue, that Peterson Enterprises and Relators are alter egos of each or that there is any other basis for disregarding the corporate structure entirely under the merger doctrine.
Finally, if Martinez fails on the merits of his jurisdictional arguments (as the Court holds he does), he asks the Court to quash the preliminary writ nonetheless so he can conduct jurisdiction-related discovery. A court evaluates personal jurisdiction by considering the allegations contained in the pleadings to determine whether, if taken as true, they establish facts adequate to invoke Missouri's long-arm statute and support a finding of minimum contacts with Missouri sufficient to satisfy due process.
Angoff v. Marion A. Allen, Inc.,
While Martinez specifically does not refer to the concept of jurisdictional piercing the corporate veil, I believe it is clear he presented written and oral arguments in support of this concept to reach jurisdiction in Missouri.
Although this concept has not been applied in Missouri, this Court is not precluded from discussing it when the parties present the concept to this Court in their analysis and argument. This piercing concept for purposes of jurisdiction
is
applied in other states.
See
PHC - Minden, L.P. v. Kimberly - Clark Corp.,
Reference
- Full Case Name
- STATE of Missouri EX REL. CEDAR CREST APARTMENTS, LLC and Peterson Properties, Inc. D/B/A the Peterson Companies, Relators, v. the Honorable Jack GRATE, Respondent.
- Cited By
- 12 cases
- Status
- Published