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Gross & Janes, Co. v. Jeff Neill Timberland Management, Inc.

United States District Court, E.D. Missouri, Eastern Division

September 7, 2016

GROSS & JANES CO., Plaintiff,



         This matter is before the Court on Defendant Jeff Neill Timberland Management, Inc.'s Motion to Dismiss Plaintiff's Complaint for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2) and for improper venue under Fed.R.Civ.P. 12(b)(3). (Doc. No. 8) Defendant argues it is not subject to personal jurisdiction in Missouri under Missouri's long-arm statute, Mo. Rev. Stat. § 506.500.1 (id. at 4-5), and lacks sufficient contacts with Missouri to permit this Court to exercise jurisdiction over it (id. at 5-8). Defendant further argues that even if this Court has personal jurisdiction, venue is improper in the Eastern District of Missouri. (Id. at 9-10) Plaintiff Gross & Janes Co. opposes the motion, arguing that Defendant entered into a contract in Missouri (Doc. No. 11 at 4-5), and has sufficient minimum contacts with Missouri such that personal jurisdiction over Defendant is proper in this Court (id. at 5-8). Plaintiff also contends venue is proper in the Eastern District. (Id. at 8) The motion is fully briefed and ready for disposition. For the following reasons, the Court finds it does not have personal jurisdiction over Defendant, and this action will be dismissed.

         I. Facts

         Plaintiff, a Missouri corporation with its principal place of business in Missouri, is in the business of procuring and processing railroad ties. As part of its business, Plaintiff acquires parcels of land to secure available sources of timber. (Complaint (“Compl.”), Doc. No. 1 at ¶¶ 7-8) Defendant, an Arkansas corporation with its principal place of business in Arkansas, provides forestry consulting services.

         In November 2011, Plaintiff was investigating the purchase of certain parcels of timber in Arkansas. (Id. at ¶ 9) Defendant was retained by Plaintiff's lender to determine and report the operable stocking, tonnage and value of standing timber for a timber deed for harvest on 4, 217.77 acres that Plaintiff intended to purchase. (Id. at ¶ 10) On November 28, 2011, Defendant provided its Forestry Appraisal Report to Plaintiff's lender, which then agreed to finance the acquisition of the property based on the timber tonnage and values provided therein. (Id. at ¶ 14) In reliance on the Appraisal Report, Plaintiff purchased the property on January 12, 2012. (Id. at ¶ 15)

         By letter dated January 16, 2012, Defendant proposed to provide Plaintiff with certain forestry consulting/management services in exchange for five percent (5%) of the gross proceeds for related timber sales. (Id. at ¶ 25; Doc. No. 1-1) Plaintiff alleges this letter was a “proposed agreement, ” which it then signed and accepted in the State of Missouri. (Id.)

         In its complaint, Plaintiff alleges that subsequent to the purchase of the property, it learned that many components of the inventory and reports prepared and provided by Defendant were “incorrect and/or non-existent beyond the statistical limits and industry standards.” (Compl. at ¶¶ 17-21) In particular, Plaintiff alleges that at the time of the closing, Defendant estimated the value of the standing timber on the property to be 5.8 to 6.4 million dollars when the actual value was significantly less than represented. (Id. at ¶ 22) Plaintiff further alleges that the actual value of the timber cut on the property significantly exceeds the amounts paid to Plaintiff. (Id. at ¶ 29)

         Plaintiff asserts claims for breach of the forestry appraisal services agreement (Count I) and forestry management services agreement (Count II), and for negligence (Count III). Plaintiff states the Court has personal jurisdiction over Defendant because Defendant entered into a contract with Plaintiff that satisfies Missouri's long-arm statute and because the injuries which give rise to this action have a connection to the State of Missouri. (Id. at ¶ 4) Plaintiff states venue is proper because a substantial part of the events or omissions giving rise to Plaintiff's claims occurred in this District. (Id. at ¶ 5) Defendant moves to dismiss the complaint for lack of personal jurisdiction and improper venue under Rule 12(b)(2) and (3).

         II. Legal standard

         “To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing that personal jurisdiction exists, which is accomplished by pleading sufficient facts ‘to support a reasonable inference that the defendant[ ] can be subjected to jurisdiction within the state.'” K-V Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d 588, 591-92 (8th Cir. 2011) (quoting Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004)). “Although the evidentiary showing required at the prima facie stage is minimal, the showing must be tested, not by the pleadings alone, but by the affidavits and exhibits supporting or opposing the motion.” Id. (internal citations and quotation marks omitted). The evidence must be viewed in the light most favorable to the plaintiff and all factual conflicts are resolved in its favor in deciding whether the plaintiff made the requisite showing. Id. (citing Digi-Tel Holdings, Inc. v. Proteq Telecomms. (PTE), Ltd., 89 F.3d 519, 522 (8th Cir. 1996)).

         When considering a motion to dismiss for lack of personal jurisdiction, a federal court engages in a two-step inquiry. First, the district court must determine “whether the defendant committed one of the acts enumerated in [Missouri's] long-arm statute.” Scullin Steel Co. v. Nat'l Ry. Utilization Corp., 676 F.2d 309, 312 (8th Cir. 1982). Then, the court must consider whether the exercise of personal jurisdiction over the defendant comports with the requirements of due process. Id. Missouri courts have construed the long arm statute “‘to extend the jurisdiction of the courts of this state over nonresident defendants to the extent permissible under the Due Process Clause.'” Moog World Trade Corp. v. Bancomer, 90 F.3d 1382, 1384 (8th Cir. 1996) (quoting State ex rel. Deere & Co. v. Pinnell, 454 S.W.2d 889, 892 (Mo. 1970) (en banc)).

         A defendant moving to dismiss under Rule 12(b)(3) must demonstrate that the plaintiff's choice of venue is improper, generally by submitting affidavits or other evidence. Mounger Constr., LLC v. Fibervision Cable Servs., LLC, No. 2:11-CV-00081-ERW, 2012 WL 4793764, at *3 (E.D. Mo. Oct. 9, 2012) (citing Fed.R.Civ.P. 12(b)(3); Webb Candy, Inc. v. Walmart Stores, Inc., No. 09-CV-2056-PJS/JJK, 2010 WL 2301461, at *4 (D. Minn. June 7, 2010)). Under 28 U.S.C. § 1391(a)(2), venue in a diversity case such as this is proper in “a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred.” To resolve the motion to dismiss then, the Court must analyze whether this District has a substantial connection to the claims in the case. Nordyne, Inc. v. Flick Distrib., LLC, No. 4:09-CV-0055-TCM, 2009 WL 1508778, at *3 (E.D. Mo. May 28, 2009). If venue is improper, the court may either dismiss the action or transfer it the proper district. 28 U.S.C. § 1406(a).

         A. Personal Jurisdiction

         1. ...

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