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Doyon Drilling, Inc. v. Loadmaster Engineering

November 12, 2010

DOYON DRILLING, INC. PLAINTIFF,
v.
LOADMASTER ENGINEERING, INC., LOADMASTER UNIVERSAL RIGS, INC., ROGER M. BARNES, AND ROBERT R. CUDDIE. DEFENDANTS.



The opinion of the court was delivered by: John W. Sedwick United States District Judge

ORDER AND OPINION

[Re: Motion at Docket 27]

I. MOTION PRESENTED

At docket 27, defendants Loadmaster Universal Rigs, Inc. ("Loadmaster Universal"), Roger M. Barnes ("Barnes"), and Robert R. Cuddie ("Cuddie") move to dismiss the case pursuant to Federal Rule 12(b)(2) for lack of personal jurisdiction. Plaintiff Doyon Drilling, Inc. ("Doyon") opposes the motion at docket 33. Defendants' reply is at docket 43. Oral argument was not requested and would not assist the court.

II. BACKGROUND

Doyon is an Alaska corporation that performs oil and gas drilling. Loadmaster Universal is a Texas corporation, with offices in Houston and Beijing, that does engineering and design work. In 2008, Loadmaster Engineering, Inc. ("Loadmaster Engineering"), a Texas corporation that shares an address and employees with Loadmaster Universal, entered into a contract ("Technical Services Agreement") with Doyon. Under the contract, Loadmaster Engineering--and allegedly Loadmaster Universal--agreed to provide Doyon with engineering, design, and support services for the construction of an oil rig that was to be operated on Alaska's North Slope. The rig was to be "state of the art" and was known as Rig 25.*fn1

Barnes is the president of Loadmaster Engineering and a shareholder of Loadmaster Universal. Cuddie was formerly the vice president and a shareholder of Loadmaster Engineering, and a former officer and shareholder of Loadmaster Universal. Doyon alleges that the Loadmaster entities were unable to meet the project's aggressive schedule, despite assurances to the contrary, resulting in delays and "massively increased" costs.*fn2 Doyon also contends that the Loadmaster entities misrepresented their progress and that their work product was deficient. Doyon has asserted claims for negligence, fraud in the inducement, fraudulent misrepresentation, violation of the Alaska Consumer Protection Act, and in the alternative, breach of contract and breach of express warranty. Doyon named Loadmaster Engineering, Loadmaster Universal, Cuddie, and Barnes as defendants to all claims, except its breach of contract and warranty claims, which are asserted against Loadmaster Engineering and Loadmaster Universal only.

III. STANDARD OF REVIEW

"Where a defendant moves to dismiss a complaint [pursuant to Federal Rule of Civil Procedure 12(b)(2),] for lack of personal jurisdiction, the plaintiff bears the burden of establishing that a court has personal jurisdiction over a defendant."*fn3 Where the motion is based only upon written materials, rather than an evidentiary hearing, the plaintiff is required only to make a prima facie showing of personal jurisdiction.*fn4

Uncontroverted allegations in the complaint are taken as true, and conflicts between parties over statements contained in affidavits are resolved in favor of the plaintiff.*fn5

"Where, as here, there is no applicable federal statute governing personal jurisdiction, the district court applies the law of the state in which the district court sits."*fn6

Alaska's long-arm statute authorizes the exercise of jurisdiction to the extent permitted by federal due process requirements.*fn7 Due process requires that the defendant "have certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice."*fn8

IV. DISCUSSION

A. Loadmaster Universal is Subject to Specific Jurisdiction

Specific jurisdiction describes personal jurisdiction over a defendant where the plaintiff asserts claims related to the defendant's contacts with the forum. Specific jurisdiction "exists if (1) the defendant has performed some act or consummated some transaction within the forum or otherwise purposefully availed himself of the privileges of conducting activities in the forum, (2) the claim arises out of or results from the defendant's forum-related activities, and (3) the exercise of jurisdiction is reasonable."*fn9

1. Loadmaster Universal Has Purposefully Availed Itself of Alaska's Jurisdiction

With respect to the first prong, the Ninth Circuit has "typically treated 'purposeful availment' somewhat differently in tort and contract cases."*fn10 In tort cases, the question is generally "whether a defendant 'purposefully directs his activities' at the forum state" and courts apply "an 'effects' test that focuses on the forum in which the defendant's actions were felt, whether or not the actions themselves occurred within the forum."*fn11

The effects test was first announced by the Supreme Court in Calder v. Jones.*fn12 The Ninth Circuit has construed the Calder test to comprise three prongs: "the defendant allegedly must have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state."*fn13

Doyon asserts tort claims against Loadmaster Universal based on the alleged submission of negligent work, misrepresentations regarding its ability to perform, and false invoices. By definition, negligent acts cannot satisfy the Calder test. However, it is clear that Loadmaster Universal purposefully availed itself of personal jurisdiction in Alaska through intentional submission of drawings, reports, and confusing invoices.

One such invoice indicated that payment was owed to Loadmaster Engineering.*fn14

The address provided on that invoice was the same address used for Loadmaster Universal in e-mail correspondence during negotiation of the Technical Services Agreement.*fn15 More importantly, the Job Number used on that invoice--"6041"--corresponds to a "Loadmaster Universal Rigs Job #" provided in a separate electronic delivery of.pdf drawings.*fn16 The latter transmittal contained a request that Doyon send confirmation of receipt to Loadmaster Universal. Moreover, a report provided to Doyon was composed on Loadmaster Universal letterhead and listed the same job number (6041), but included "Loadmaster Engineering, Inc." in the footer and signature box.*fn17

Doyon has also alleged that numerous misrepresentations were made on behalf of both Loadmaster entities.*fn18 Doyon maintains that "[a]t no time... did Loadmaster ever represent itself as two entities... [r]ather, it always portrayed itself as one entity--Loadmaster."*fn19 This contention is adequately supported by the record. Therefore, any misrepresentations made on behalf of Loadmaster Engineering would also constitute misrepresentations on behalf of Loadmaster Universal.

Even though it is not uncommon for two separate businesses to share an address, interchangeable use of separate entities' names is rare. Resolving factual conflicts in Doyon's favor, Loadmaster Universal committed intentional acts expressly aimed at Alaska by submitting invoices, reports, and drawings to Doyon and through the misrepresentations of its representatives. If Loadmaster Universal's invoices were false, its reports inaccurate, or its drawings deficient, Loadmaster Universal would have known that Doyon would be likely to suffer injury in Alaska. The Calder effects test is met, and Doyon has established purposeful availment in the context of its tort claims against Loadmaster Universal.

Doyon need not establish personal jurisdiction over Loadmaster Universal for each of its claims. Nonetheless, to satisfy defendants' concern that Doyon's case actually sounds in contract, and because Doyon's breach-of-contract claim was pled in the alternative, the court will examine purposeful availment in the context of Doyon's contract claims. In contract cases, courts in the Ninth Circuit consider "whether a defendant 'purposefully avails itself of the privilege of conducting activities' or 'consummates a transaction' in the forum, focusing on activities such as delivering goods or executing a contract."*fn20

Defendants characterize Doyon's claims as arising out of its contract with Loadmaster Engineering, but Doyon has made persuasive arguments that Loadmaster Engineering and Loadmaster Universal were held out as a single entity and acted in concert. Of particular import are a series of e-mails exchanged prior to the consummation of the Technical Services Agreement.

Correspondence between Barnes, Wilson, and Luis Suarez ("Suarez"), a Loadmaster employee, lends further support to the notion that Loadmaster Engineering and Loadmaster Universal functioned as a single entity and supports the exercise of specific jurisdiction over Loadmaster Universal. Suarez's e-mail address contained a "loadmastereng.com" domain name, but his signature box listed Loadmaster Universal as his employer and displayed the Loadmaster Universal website.*fn21 Several e-mails with those characteristics were sent ...


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