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Bits & Pieces

Whiting v. Hogan

United States District Court,

D. Arizona.

Larry WHITING, Leroy Whiting and Lorenzo Garcia, Plaintiff,

v.

Dana A. HOGAN; Clark Moving and Storage of Albany, Inc., and Mayflower Transit, LLC; et al., Defendants.

 

No. 12–CV–08039–PCT–GMS.

June 7, 2013.

 

ORDER

G. MURRAY SNOW, District Judge.

*1 Pending before the Court are Plaintiffs’ Motion for Defendants to Show Cause for Not Presenting Deponent Dana A. Hogan at the Noticed Date; Time; and Place for His Deposition, (Doc. 133), Motion to Expedite Briefing (Doc. 140), Defendants’ Motion for Protective Order Re: Dana Hogan’s Continued Deposition, (Doc. 135), Motion for Sanctions (Doc. 143), and Motion for Consolidate Argument (Doc. 152). For the reasons discussed below, the Court denies Plaintiffs’ Motion and grants in part and denies in part Defendants’ Motion. FN1FN2

 

FN1. Defendants’ request for oral argument is denied because the parties have had an adequate opportunity to discuss the law and evidence and oral argument will not aid the Court’s decision. See Lake at Las Vegas Investors Group v. Pac. Malibu Dev., 933 F.2d 724, 729 (9th Cir.1991).

 

FN2. The Parties failed to comply with the Court’s instruction in its Case Management Order that they “shall not file discovery motions or motions for sanctions without leave of the Court.” (Doc. ¶ 6(a).) The Court will not entertain further motions that are filed in contravention of that instruction.

 

BACKGROUND

This matter involves yet another dispute between the Parties relating to discovery. On March 14, 2013, the Court ordered that Plaintiffs would be afforded the opportunity to re-open and continue the deposition of Defendant Dana Hogan on limited topics for two hours and eighteen minutes to be completed by May 13, 2013. (Doc. 110 at 22–23.) The Court further ordered that “[t]he parties shall agree upon a mutually convenient location and date for the deposition. In the alternative, they may jointly stipulate to take the deposition telephonically or by other remote means, pursuant to Fed.R.Civ.P. 30(b)(4).” (Id. at 21.)

 

Plaintiffs’ counsel contacted Defendants’ counsel on March 22, 2013, to request dates of availability and suitable locations to continue Hogan’s deposition. (Doc. 133, Ex. 1.) On April 4, 2013, Plaintiffs offered to Defendants the dates of April 25, April 29–May 1, May 6–10, 13, and 15–17, 2013. (Doc. 137–1, Ex. 3.) On April 11, 2013, Defendants’ counsel informed Plaintiffs’ counsel that because Hogan was currently in Dallas, Texas, Hogan could hold the following week open in his trucking schedule to sit there for the deposition, with Defendants’ counsel willing to travel from Phoenix to attend. Plaintiffs’ counsel was not available that week due to conflicting commitments but stated “I want to be crystal clear that Plaintiff’s [sic] are prepared to depose Defendant Hogan either in Florida; Canada; or any destination he so designates” provided that Plaintiffs’ counsel received two weeks’ notice. (Doc. 133, Ex. 3.) On April 16, 2013, Plaintiffs’ counsel requested Defendants’ counsel to provide locations that would be convenient for Hogan on the dates of May 6, 9, and 10, 2013. (Id., Ex. 5.) On April 17, 2013, Defendants’ counsel suggested the possibility of holding the deposition in Albuquerque, New Mexico, where Plaintiffs’ counsel is located, on one of those dates if Plaintiffs wished to fly Hogan out to Albuquerque. (Id., Ex. 6.) Counsel also suggested the alternative of conducting the deposition remotely. (Id.) Plaintiffs’ counsel responded that Plaintiffs would arrange for Hogan’s travel to Albuquerque for the deposition and were available to conduct it on May 6, 2013. (Id., Ex. 7.)

 

On April 18, 2013, Defendants’ counsel notified Plaintiffs’ counsel that Hogan may be able to arrange to drive through Albuquerque on his trucking route and mentioned that although May “may be out,” counsel was “hopeful we can find another day around there” for the deposition. (Id., Ex. 9.) Defendants’ counsel directed Plaintiffs’ counsel to “still hold May for now.” (Id.) On April 24, 2013, Defendants’ counsel updated Hogan’s availability and stated that Hogan had “tentatively arranged” to pass through Albuquerque twice on his routes but that the plans and dates were not finalized. (Id., Ex. 10.) However, on April 29, 2013, Defendants’ counsel informed Plaintiffs that it was no longer possible for Hogan to appear for the deposition in Albuquerque due to a change in his dispatch orders and suggested conducting the deposition in Phoenix on May or 7, 2013, offering the use of Defendants’ counsel’s office. (Id., Ex. 11.) Plaintiffs’ counsel replied on April 30, 2013, that he would arrange for Hogan’s flight from Phoenix to Albuquerque on May so that he could attend the deposition and return to Phoenix the same evening. (Id., Ex. 12.) Plaintiffs’ counsel notified Defendants’ counsel that he had already “setup the court reporter and videographer for May 6th here in reliance on earlier messages about the time, date, and place for Mr. Hogan’s deposition.” (Id.) However, Defendants’ counsel informed Plaintiffs’ counsel that the “logistics of this” are not viable and that Plaintiffs’ counsel may instead fly out to conduct the deposition in Phoenix. (Doc. 137–2, Ex. 11.)

 

*2 On May 1, 2013, the day after this exchange, Plaintiffs’ counsel filed a Notice of Deposition of Defendant Dana A. Hogan with the Court, (Doc. 127), to which Defendants’ counsel took objection, (Doc. 137–2, Ex. 12). On May 2, 2013, the court reporter who had been scheduled by Plaintiffs’ counsel to record Hogan’s deposition on May 6 in Albuquerque informed Plaintiffs’ counsel that if the deposition was cancelled, the reporter would levy charges amounting to $375. (Doc. 133, Ex. 13.) On May 2 and 3, 2012, the Parties conferred by telephonic means but were not able to resolve this dispute. (Id., Ex. 14.) Hogan did not appear for the noticed deposition in Albuquerque on May 6, 2013.

 

On May 7, 2013, Plaintiffs filed a Motion for Order to Show Cause as to why Hogan did not appear for the deposition. (Doc. 133.) Defendants filed a Motion for Protective Order regarding Hogan’s continued deposition on May 9, 2013. (Doc. 135.) Because the two motions address substantially the same issues, the Court will address them together.

 

DISCUSSION

I. PROTECTIVE ORDER

Defendants move for a protective order to terminate Hogan’s deposition or limit it to a telephonic appearance, pursuant to Fed.R.Civ.P. 26(c). FN3 Rule 26(c) states that “[t]he court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense” resulting from discovery requests. The burden is upon the movant to prove the necessity of a protective order, “which contemplates a particular and specific demonstration of fact as distinguished from stereotyped and conclusory statements.” United States v. Garrett, 571 F.2d 1323, 1326 n. 3 (5th Cir.1978) (citations omitted). Rule 26(c) lists the following types of protective orders that a Court may issue, among others:

 

FN3. Defendants assert that they do not move for such an order under Fed.R.Civ.P. 30(d), which subsection allows for a motion to terminate or limit a deposition if it is being conducted in bad faith. (Doc. 135 at 9.)

 

(A) forbidding the disclosure or discovery;

 

(B) specifying terms, including time and place, for the disclosure or discovery;

 

(A) prescribing a discovery method other than the one selected by the party seeking discovery.

 

Further, a district court enjoys broad discretion in controlling discovery.   Harper v. Betor, 95 F.3d 1157 (9th Cir.1996) (internal citation omitted). The Court “has wide discretion to establish the time and place of depositions.” Hyde & Drath v. Baker, 24 F.3d 1162, 1166 (9th Cir.1994).

 

In its Order authorizing the re-opening of Hogan’s deposition, the Court noted the fact that “Hogan routinely trucks in Canada and resides in Florida. He would spend significant time and expense to travel to New Mexico for a second deposition of a little over two hours.” (Doc. 110 at 13–14). Consequently, the Court ordered the Parties to “agree to a mutually convenient location for the second deposition. In the alternative, they may jointly stipulate to take the deposition telephonically or by other remote means.” (Id. at 14.) It is clear from the record that Defendants did not lead Plaintiffs to believe that Hogan would definitely be able to appear for a deposition in New Mexico on May 6, 2013. Although Defendants’ counsel signaled the possibility that Hogan may able to adjust his trucking route to drive through Albuquerque, there was no hard date agreed upon for such a deposition. Further, Defendants’ counsel informed Plaintiffs as early as April 18, 2013, that a deposition in Albuquerque on May 6 may be not be possible. Defendants did not change their position regarding Hogan’s availability or give the “green light” for such a date and location for his deposition.

 

*3 Plaintiffs’ counsel noticed the deposition on May 1, 2013, when it was evident that Hogan would not be able to appear for it. Plaintiffs’ counsel unreasonably relied upon the slim possibility that Hogan could appear in Albuquerque on May 6 and allegedly incurred expenses from cancellation fees levied by the court reporter and videographer.FN4 Plaintiffs are entirely responsible for bearing those expenses. Further, Defendants’ counsel offered to conduct the deposition at his offices in Phoenix on May 6, 2013, more than one week in advance and assist in obtaining a court reporter and videographer. Plaintiffs’ counsel rejected that offer.

 

FN4. Plaintiffs have not submitted evidence that they actually incurred or paid such fees due to the cancellation of the deposition.

 

Because Hogan’s trucking schedule makes it difficult to conduct the second deposition in a particular geographic location, and, contrary to his representations, Plaintiffs’ counsel seems unwilling to travel to Hogan’s location to conduct it, the Parties shall conduct the deposition telephonically or by other remote means by the date set in this Order. See Fed.R.Civ.P. 30(b)(4) (“[T]he court may on motion order … that a deposition be taken by telephone or other remote means.”) There shall be no further extensions or opportunities to continue Hogan’s deposition. Plaintiffs’ counsel contends that a live deposition is necessary to present certain exhibits to Hogan. However, as Defendants’ counsel points out, Plaintiffs’ counsel does not argue that those exhibits are not “Bates-stamped” or referable; the training documentation about which Hogan would be questioned was disclosed by Defendants Clark and Mayflower. Further, by not working around Hogan’s schedule as the Court ordered, Plaintiffs mishandled their preferred option of taking a live deposition for the remaining time of two hours and eighteen minutes.

 

II. SANCTIONS

“District courts retain broad discretion to control their dockets and ‘[i]n the exercise of that power they may impose sanctions including, where appropriate, default or dismissal.’ “ Adams v. California Dep’t of Health Servs., 487 F.3d 684, 688 (9th Cir.2007) (quoting Thompson v. Hous. Auth. of City of Los Angeles, 782 F.2d 829, 831 (9th Cir.1986) (per curiam). The Court has the inherent power to assess sanctions where a party “engaged in bad faith or willful disobedience of a court’s order.” Chambers v. NASCO, Inc., 501 U.S. 32, 46–47, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991).

 

Both Parties request sanctions relating to expenses incurred in litigating this wasteful discovery dispute. As discussed above, the Parties had not agreed to a mutually convenient location for Hogan’s deposition. Taking into account Hogan’s schedule and the brevity of the second deposition, the Court placed the burden on counsel to travel as needed to facilitate the deposition. Nevertheless, Plaintiffs’ counsel noticed the deposition as taking place in Albuquerque on May 6, 2013, after it was clear that Hogan would not be able to adjust his trucking route to accommodate that location. Plaintiffs’ counsel then brought this Motion to Show Cause as to why Hogan did not attend the deposition. Such tactics are in contravention of the Court’s Order directing the Parties to agree on a location and if they cannot do so, to conduct the deposition remotely. Consequently, Plaintiffs’ counsel shall be sanctioned personally for attorneys’ fees and costs incurred by Defendants in responding to the Motion to Show Cause and in bringing the Motion for Protective Order which go to the same issue. Plaintiff’s counsel is prohibited from billing his client for the above amount or from, in any way, deducting it from any amount he may recover on behalf of his client. Plaintiffs’ counsel is further ordered to provide a copy of this order to his clients and fully explain it to them. The Court denies Plaintiffs’ request for sanctions against Defendants for filing the Motion for Protective Order.

 

*4 IT IS HEREBY ORDERED that Defendants’ Protective Order Re: Dana Hogan’s Continued Deposition (Doc. 135) is granted, as follows:

 

1. Plaintiffs will continue Hogan’s deposition for two hours and eighteen minutes (2:18) on the limited areas of inquiry described in the Court’s previous Order (Doc. 110). However, such deposition will be conducted only by telephonic or other remote means pursuant to Fed.R.Civ.P. 30(b)(4).

 

2. The deadline for completing Hogan’s second deposition shall be extended, to July 8, 2013.

 

IT IS FURTHER ORDERED that Defendants’ Motion for Sanctions (Doc. 143) is granted, as follows:

 

1. Plaintiffs’ counsel is ordered to pay Defendants’ reasonable attorneys’ fees and costs incurred in responding to the Motion to Show Cause (Doc. 133) and in bringing the Motion for Protective Order (Doc. 135) pursuant to Local Rule 7.2(j) and upon Defendants’ application in compliance with Local Rule 54.2.

 

IT IS FURTHER ORDERED that Plaintiff’s Motion for Sanctions (Doc. 133) is denied.

 

IT IS FURTHER ORDERED denying Plaintiffs’ Motion to Expedite (Doc. 140) as being moot.

 

IT IS FURTHER ORDERED that Motion for Consolidated Argument and/or Decision (Doc. 152) is granted.

Lincoln General Ins. Co. v. A & G Commercial Trucking, Inc.

United States District Court,

M.D. Pennsylvania.

LINCOLN GENERAL INSURANCE COMPANY, Plaintiff

v.

A & G COMMERCIAL TRUCKING, INC. and GKD Management, LP, Defendants.

 

Civil Action No. 1:CV–12–1534.

June 12, 2013.

 

Albert B. Miller, York, PA, for Plaintiff.

 

Thomas M. Harrison, Van Matre, Harrison, Hollis, Taylor and Bacon PC, Columbia, MO, Dana W. Chilson, McNees Wallace & Nurick LLC, Harrisburg, PA, for Defendants.

 

ORDER

YVETTE KANE, Chief Judge.

*1 Before the Court in the captioned action is a May 23, 2013 report of the Magistrate Judge. No timely objections have been filed.

 

Accordingly, upon review of the record and the applicable law, IT IS HEREBY ORDERED THAT:

 

1) The Court adopts the Report and Recommendation of Magistrate Judge Schwab.

 

2) The Defendants’ Motion to Dismiss (Doc. No. 6) is DENIED.

 

3) A Case Management Conference will be held on July 17, 2013, at 2:00 p.m. A revised Joint Case Management Plan shall be due on or before July 12, 2013. Plaintiff’s counsel shall initiate the conference call. The Court telephone number is 717–221–3990.

 

REPORT AND RECOMMENDATION

SUSAN E. SCHWAB, United States Magistrate Judge.

I. Introduction.

In this breach-of-contract case, the plaintiff, an insurance company, has sued the defendants for failing to pay deductibles due under three insurance policies. The defendants filed a motion to dismiss arguing that the court lacks personal jurisdiction over them. Because the plaintiff has presented a prima facie case of personal jurisdiction and the defendants have not presented a compelling case that the presence of some other considerations would render jurisdiction unreasonable, we will recommend that the motion to dismiss for lack of personal jurisdiction be denied.

 

II. Background and Procedural History.

The plaintiff, Lincoln General Insurance Company (“Lincoln General”), is a property-casualty insurance company organized under the laws of the Commonwealth of Pennsylvania with its principal place of business in York, Pennsylvania. Lincoln General has brought suit against A & G Commercial Trucking, Inc. (”A & G) and GKD Management, LP (“GKD”). Lincoln General alleges that A & G is a national trucking company organized under the laws of the State of Arizona with its principal place of business in Crump, Tennessee, and GKD is a limited partnership organized under the laws of the State of Arizona with its principal place of business in Tucson, Arizona. This court has jurisdiction under 28 U.S.C. § 1332 as there is diversity of citizenship between the parties and the amount in controversy exceeds $75,000.

 

Lincoln General alleges the following facts in its complaint. A & G, which is the general partner of GKD, specializes in the transportation of manufactured and/or modular housing. In 2005, Lincoln General issued an insurance policy to A & G and GKD providing liability and uninsured motorist coverage. The policy provided that Lincoln General has the right and duty to defend any insured against a claim or suit and to investigate and settle any claim or suit as it deems appropriate. The premium for the policy was reduced because A & G and GKD agreed to pay Lincoln General a $10,000 deductible for each claim settled by Lincoln General under the policy. The policy included the following provisions regarding the deductible:

 

D. [LINCOLN GENERAL’S] RIGHT TO REIMBURSEMENT

*2 To settle any claim or “suit” [Lincoln General] may pay all or any part of any deductible shown in the Schedule. If this happens you must reimburse [Lincoln General] for the deductible or the part of the deductible [Lincoln General] paid.

 

ADDITIONAL PROVISIONS AGREEMENT

Liability Claims Security Escrow Account $120,000

 

In consideration of the reduced premium charged for the Liability Deductible the Insured agrees to maintain the Liability Claims Security Escrow Account as indicted above. The security is subject to a monthly review and adjustment is based upon the reserves within the deductible amount.

 

It is hereby understood and agreed that the insured’s failure to reimburse [Lincoln General] for payment of the Liability Deductible or the insured’s failure to replenish the Liability Claims Security Escrow Account, within 60 days of billing, will be deemed failure to pay the policy premium and subject to the policy provisions for nonpayment of premium. If the policy is cancelled for non-payment of premium for failure to reimburse the Liability Deductible or replenish the Claims Security Escrow Account the insured agrees to be responsible for all legal costs and expenses incurred by [Lincoln General] including, without limitation, reasonable attorney’s fees, incurred by [Lincoln General] in connection with the collection or enforcement of this Agreement.

 

Doc. 1–1 at 13.

 

In 2006 and 2007, Lincoln General issued insurance policies to A & G and GKD containing terms similar to the terms in the 2005 policy, but the 3 deductible in relation to each claim was $100,000 in the 2006 policy and $50,000 in the 2007 policy.

 

Lincoln General settled two claims under the 2005 policy resulting in A & G and GKD owing Lincoln General $11,300 in deductible reimbursements, three claims under the 2006 policy resulting in A & G and GKD owing Lincoln General $116,355.53 in deductible reimbursements, and 14 claims under the 2007 policy resulting in A & G and GKD owing Lincoln General $184,128.74 in deductible reimbursements. Although Lincoln General demanded that A & G and GKD pay these amounts, A & G and GKD refused and failed to pay these amounts, and as a result, Lincoln General brings this case for breach of contract.

 

A & G and GKD filed a motion to dismiss claiming that the court lacks personal jurisdiction over them. That motion to dismiss, which has been fully briefed and which has been referred to the undersigned, is addressed in this Report and Recommendation.

 

III. Rule 12(b)(2) and Personal Jurisdiction Standards.

A defendant may raise the defense of lack of personal jurisdiction in a motion to dismiss in accordance with Fed.R.Civ.P. 12(b)(2). “Once a defendant challenges a court’s exercise of personal jurisdiction over it, the plaintiff bears the burden of establishing personal jurisdiction.” D’Jamoos ex rel. Estate of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94, 102 (3d Cir.2009). Unless the court holds an evidentiary hearing, at the motion-to-dismiss stage the plaintiff need only establish a prima facie case of personal jurisdiction.   Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir.2004). Under a prima facie standard, “the plaintiff’s allegations are presumed true and all factual disputes are resolved in the plaintiff’s favor,” but “the ultimate burden remains on the plaintiff to demonstrate the existence of jurisdiction by a preponderance of the evidence.” LaSala v. Marfin Popular Bank Pub. Co., Ltd., 410 F. App’x 474, 476 (3d Cir.2011). The plaintiff establishes a prima facie case “by ‘establishing with reasonable particularity sufficient contacts between the defendant and the forum state.’ ” Mellon Bank (East) PSFS, Nat. Ass’n v. Farino, 960 F.2d 1217, 1223 (3d Cir.1992) (quoting Provident Nat. Bank v. California Fed. Sav. & Loan Assoc., 819 F.2d 434 (3d Cir.1987)).

 

*3 Federal Rule of Civil Procedure 4 authorizes a federal court to assert personal jurisdiction over a nonresident defendant to the extent permissible under the law of the state where the district court sits. Id. at 1221. The forum state in this case is Pennsylvania, and Pennsylvania law permits courts within Pennsylvania to exercise jurisdiction “to the fullest extent allowed under the Constitution of the United States” and provides that jurisdiction “may be based on the most minimum contact with this Commonwealth allowed under the Constitution of the United States.” 42 Pa.C.S.A. § 5322(b). Thus, this court may properly exercise jurisdiction over a defendant as long as the exercise of that jurisdiction does not violate the due process rights of the defendant. Mellon, supra, 960 F.2d at 1221.

 

Proceeding to the constitutional inquiry, the “Due Process Clause of the Fourteenth Amendment requires that nonresident defendants have ‘certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.’ ” Kehm Oil Co. v. Texaco, Inc., 537 F.3d 290, 299–300 (3d Cir.2008) (quoting, Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). “Having minimum contacts with another state provides ‘fair warning’ to a defendant that h e or she may be subject to suit in that state.” Id. at 300 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)).

 

There are two types or personal jurisdiction—general jurisdiction and specific jurisdiction. Marten v. Godwin, 499 F.3d 290, 296 (3d Cir.2007). “General jurisdiction exists when a defendant has maintained systematic and continuous contacts with the forum state.” Id. On the other hand, even in the absence of such systematic and continuous contacts with the forum state, “[s]pecific jurisdiction exists when the claim arises from or relates to conduct purposely directed at the forum state.” Id. “The central concern of [the] jurisdictional inquiry is the relationship among the defendant, the forum, and the litigation.” Max Daetwyler Corp. v. R. Meyer, 762 F.2d 290, 293 (3d Cir.1985). The court conducts a three-part inquiry to determine whether it has specific jurisdiction over the defendant. O’Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 317 (3d Cir.2007). “First, the defendant must have ‘purposefully directed [its] activities’ at the forum.” Id. (quoting Burger King, supra, 471 U.S. at 472). “Second, the litigation must ‘arise out of or relate to’ at least one of those activities.” Id. (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)). Third, if the court finds that the prior requirements are met, it may consider additional factors to ensure that exercising jurisdiction would be consistent with “ ‘fair play and substantial justice.’ ” Id. (quoting Burger King, supra, 471 U.S. at 476 (quoting Int’l Shoe, supra, 326 U.S. at 320)).

 

IV. Discussion.

 

A. The Parties’ Arguments and Evidence.

 

*4 A & G and GKD contend that they have no connection whatsoever to Pennsylvania, and, thus, this court does not have personal jurisdiction over them. They have submitted a declaration from Gregory A. Deline, an officer of A & G, who states the following regarding A & G and GKD and their lack of contacts with Pennsylvania.

 

GKD, which was formed in 2004, is a limited partnership formed under the laws of Arizona, and A & G, which was also formed in 2004 and is the sole general partner of GKD, is a corporation formed under the laws of Arizona. Doc. 6–2 at ¶¶ 4, 5 & 7. GKD operates a commercial trucking business that specializes in the transportation of manufactured housing, and its customers and clients are manufacturers of manufactured housing. Id. at ¶ 6. The principal offices of both A & G and GKD are located in Ashland, Missouri, and GKD has trucking terminals and offices in Missouri, Alabama, Texas, and Tennessee. Id. at ¶¶ 8–9. Neither A & G nor GKD have or have ever had any offices or terminals in Pennsylvania. Id. at ¶ 9.

 

Through its independent contract drivers, GKD picks up the manufactured homes at the manufacturers’ locations and transports them to retail locations. Id. at ¶ 10. Since 2005, the manufacturers who have been serviced by GKD have had manufacturing locations in Tennessee, Alabama, and Indiana. Id. at ¶ 11. None of the manufacturers which GKD serves or has served have been located in Pennsylvania. Id.

 

Neither A & G nor GKD have ever qualified or registered to transact business in Pennsylvania as foreign entities or otherwise; nor have they ever applied for or obtained any business licenses from Pennsylvania or any other jurisdiction within Pennsylvania. Id. at ¶ 12. They do not have or ever have had a business or office address, telephone number, mailbox, or drop box located in Pennsylvania, and they do not have or ever have had any employees, officers, directors, or agents with offices or residence in Pennsylvania. Id. at ¶¶ 13–14. Neither A & G nor GKD own, use, or possess or have ever owned, used, or possessed any real property located in Pennsylvania, and they do not have or have ever had any bank account located within Pennsylvania or with any banks that are located within Pennsylvania. Id. at ¶¶ 15–16. Neither now nor at any time in the past, have they done or conducted any marketing, advertising, or soliciting in Pennsylvania; nor at any time have they applied to any governmental unit within Pennsylvania for any certificate, license, permit, registration, or similar instrument or authorization. Id. at ¶¶ 17–18.

 

Neither A & G nor GKD at any time have had any employees. Id. at ¶ 20. Rather, GKD uses the services of independent contractor truck drivers, who are not employees. Id. Neither A & G nor GKD dictates to those drivers how to complete the routes that they drive. Id. While it is possible that some of those drivers have driven through Pennsylvania while working as independent contractors for GKD, the routes that those drivers use are entirely up to the drivers and/or permitting authorities and are not dictated or directed by A & G or GKD. Id.

 

*5 A & G and GKD did not apply directly to Lincoln General for the issuance of the insurance policies at issue in this case, and they did not deal directly with Lincoln General with respect to applying for the policies. Id. at ¶ 21. Rather, A & G and GKD applied for and procured the policies through an insurance broker or producer, whose offices are in Atlanta, Georgia. Id.

 

Based on their lack of contacts with Pennsylvania, A & G and GKD contend that this court does not have either general jurisdiction or specific jurisdiction over them. While Lincoln General concedes that the court does not have general jurisdiction over the defendants, it contends that the court has specific jurisdiction over the defendants based on their claims-related activities. See Doc. 12 at 3–4. To that end, Lincoln General submitted an affidavit of Joseph Fiamingo, who is the Treasury Manager of Lincoln General. Fiamingo states that, during the course of their relationship with Lincoln General, A & G and GKD filed 198 claims under the insurance policies at issue in this case. Doc. 12–1 at ¶ 4. According to Fiamingo, “these claims generated a series of contacts with [Lincoln General] in York, such as the filing of a notice of claim, and a myriad of communications between Lincoln General and the defendants required to adjudicate the claims.” Id. at ¶ 5. As a result of the claims filed, Lincoln General paid $2,848,160 to A & G and GKD. Id. at ¶ 6. Pursuant to their obligations under the policies, A & G and GKD provided Lincoln General with a letter of credit, issued from a bank in Alabama, to collateralize their obligations to pay the deductibles. Id. at ¶ 7 and Doc. 12–5. But when Lincoln General used the letter of credit to satisfy certain unpaid deductibles, A & G and GKD complained and then filed a lawsuit against Lincoln General in Missouri, during the course of which they took the depositions of certain Lincoln General employees located in York, Pennsylvania. Doc. 12–1 at ¶ ¶ 8–9. The lawsuit in Missouri was ultimately settled. Id. at ¶ 8. Fiamingo attached to his affidavit, a letter sent from A & G to several Lincoln General employees, including two in York, Pennsylvania, objecting to Lincoln General drawing down the letter of credit and a similar letter from an attorney apparently representing A & G. See Doc. 12–6.

 

Characterizing Fiamingo’s affidavit as bare bones and lacking in specifics, A & G and GKD assert that Lincoln General has not carried its burden of establishing personal jurisdiction. More specifically, they assert that Lincoln General has provided no details concerning the issues that bear on the jurisdictional question before the court. In that regard, they assert that just because Lincoln General’s principal offices are located in Pennsylvania does not mean that the claims process was centered in Pennsylvania or even that it involved Pennsylvania at all, and they argue that Fiamingo’s affidavit is not specific about whether the claims process had any connection with Pennsylvania. Further, they contend that there is no evidence that they made payments of the policy premiums to Lincoln General or its agents in Pennsylvania or, for that matter, that they sent any payments of any nature whatsoever to Pennsylvania. They also contend that there is no evidence about how the claims were made on the insurance policies, where the employees or representatives of the Lincoln General who dealt with those claims were located, whether they submitted any claims materials to anyone in Pennsylvania, whether they visited Pennsylvania, whether they entered into any contract in Pennsylvania, whether they owned or leased any property in Pennsylvania, or whether they ever maintained any bank accounts in Pennsylvania.

 

B. Purposeful Availment.

*6 The first step in the specific-jurisdiction analysis is determining whether the defendant “ ‘purposefully avail[ed] itself of the privilege of Iconducting activities within the forum.’ ” O’Connor, supra, 496 F.3d at 317 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)). “This ‘purposeful availment’ requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts, or of the ‘unilateral activity of another party or a third person.’ ” Burger King, supra, 471 U.S. at 475–76 (citations and footnote omitted). To qualify as purposeful availment, the defendant must deliberately target the forum. O’Connor, supra, 496 F.3d at 317. Thus, “contacts with a state’s citizens that take place outside the state are not purposeful contacts with the state itself.” Id. Also, “[t]he fact that a non-resident has contracted with a resident of the forum state is not, by itself, sufficient.” Mellon, supra, 960 F.2d at 1223. “But a contract is typically an intermediate step between past negotiations and future transactions, and … ‘it is these factors—prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealing—that must be evaluated in determining whether the defendant purposefully established minimum contacts with the forum.’ ”   Budget Blinds, Inc. v. White, 536 F.3d 244, 261 (3d Cir.2008) (quoting Burger King, supra, 471 U.S. at 479).

 

Although the evidence that Lincoln General submitted in the form of the affidavit of Fiamingo is sparse, we conclude that Lincoln General has satisfied its obligation to present a prima facie case that, through their claims activities, A & G and GKD purposely availed themselves of the privilege of conducting activities within Pennsylvania. Fiamingo states in his affidavit that A & G and GKD filed 198 claims under the policies, that these claims generated a series of contacts with Lincoln General in York, such as the filing of notices of claims and a myriad of communications required to adjudicate the claims. Such contacts are relevant to the jurisdictional question. Cf. Grand Entm’t Grp., Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 482 (3d Cir.1993) ( “Mail and telephone communications sent by the defendant into the forum may count toward the minimum contacts that support jurisdiction.”); Vetrotex Certainteed Corp. v. Consol. Fiber Glass Prods. Co., 75 F.3d 147, 152–53 (3d Cir.1996) (concluding that informational communications in that case, such as letters and telephone calls, in furtherance of a contract not sufficient to establish purposeful availment, but distinguishing cases where, for example, the defendant sent payments to the forum state or engaged in extensive post-sale contacts with the plaintiff in the forum state). Even though, as A & G and GKD assert, Fiamingo does not specifically set forth the nature of the claims procedure, construing his affidavit in the light most favorable to Lincoln General, as we must at this stage of the proceedings, the affidavit leads to a reasonable inference that the claims procedure involved an extensive series of contacts over a prolonged period of time with Pennsylvania. Accordingly, at this stage of the proceedings, we conclude that Lincoln General has satisfied its burden at the first step of the specific-jurisdiction analysis.

 

C. Relationship Between the Claim and the Contacts.

*7 The second step in the specific-jurisdiction analysis is determining whether the plaintiff’s claim “ ‘arises out of or relates to’ at least one of” the defendant’s contacts with the forum. O’Connor, supra, 496 F.3d at 318. While the Third Circuit has refrained from adopting “a definitive approach to the relatedness requirement,” it has held that the defendant’s contacts with the forum must be more than merely the “but-for” cause of the plaintiff’s claim. Id. at 321–22 (“But although the analysis may begin with but-for causation, it cannot end there.”). “Because personal jurisdiction can be conceptualized as a quid pro quo by which the defendant submits to the forum’s jurisdiction in exchange for the benefit of its laws, the Third Circuit suggests that ‘[t]he causal connection can be somewhat looser than the tort concept of proximate causation, but it must nonetheless be intimate enough to keep the quid pro quo proportional and personal jurisdiction reasonably foreseeable.’ ” Tamburo v. Dworkin, 601 F.3d 693, 708–09 (7th Cir.2010) (quoting O’Connor, supra, 496 F.3d at 323). “In contract cases, courts should inquire whether the defendant’s contacts with the forum were instrumental in either the formation of the contract or its breach.” Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir.2001).

 

This case is a breach of contract case based on the alleged failure of A & G and GKD to pay deductibles due under the insurance policies. Lincoln General asserts that the claims made by A & G and GKD on the policies gave rise to their duty to pay the deductibles and that A & G and GKD’s claims-related activity in Pennsylvania relate directly to the breach of contract claim in this case. Given the close relationship between the breach of contract claim and the purported claims-related activities of A & G and GKD in Pennsylvania, we conclude that, at this stage of the proceedings, Lincoln General has satisfied its burden at the second step of the specific-jurisdiction analysis.

 

D. Fair Play and Substantial Justice.

The first two steps in the specific-jurisdiction analysis “determine whether a defendant has the requisite minimum contacts with the forum.” D’Jamoos, supra, 566 F.3d at 102. At the third step of the analysis, the court considers “whether the exercise of jurisdiction would otherwise comport with ‘traditional notions of fair play and substantial justice.’ ” O’Connor, supra, 496 F.3d at 324 (quoting Int’l Shoe, supra, 326 U.S. at 316). “The existence of minimum contacts makes jurisdiction presumptively constitutional, and the defendant ‘must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.’ ” Id. (quoting Burger King, supra, 471 U.S. at 477). The court may consider a number of factors in this regard including: “(1) the burden to defendant of litigating in the forum, (2) the forum’s interest in adjudicating the lawsuit, (3) ‘the plaintiff’s interest obtaining convenient and effective relief,’ (4) the interstate judicial system’s interest in resolving conflicts efficiently, and (5) ‘the shared interest of the several states in furthering fundamental substantive social policies .’ ” In re Chocolate Confectionary Antitrust Litig., 674 F.Supp.2d 580, 618 (M.D.Pa.2009) (quoting Pennzoil Prods. Co. v. Colelli & Assocs., 149 F.3d 197, 205–06 (3d Cir.1998)).

 

*8 A & G and GKD have not presented any evidence or any argument about this last step in the specific-jurisdiction analysis. Thus, we cannot conclude at this stage of the proceedings that the exercise of personal jurisdiction over A & G and GKD does not comport with traditional notions of fair play and substantial justice.

 

E. Summary.

Having determined that Lincoln General has established a prima facie case of jurisdiction and that A & G and GKD have not presented a compelling case that the presence of some other considerations would render jurisdiction unreasonable, we will recommend that A & G and GKD’s motion to dismiss for lack of personal jurisdiction be denied.

 

V. Recommendations.

Accordingly, for the foregoing reasons, IT IS RECOMMENDED that A & G and GKD’s motion (doc. 6) to dismiss for lack of personal jurisdiction be denied.

 

The Parties are further placed on notice that pursuant to Local Rule 72.3:

 

Any party may object to a magistrate judge’s proposed findings, recommendations or report addressing a motion or matter described in 28 U.S.C. § 636(b)(1)(B) or making a recommendation for the disposition of a prisoner case or a habeas corpus petition within fourteen (14) days after being served with a copy thereof. Such party shall file with the clerk of court, and serve on the magistrate judge and all parties, written objections which shall specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The briefing requirements set forth in Local Rule 72.2 shall apply. A judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge, however, need conduct a new hearing only in his or her discretion or where required by law, and may consider the record developed before the magistrate judge, making his or her own determination on the basis of that record. The judge may also receive further evidence, recall witnesses or recommit the matter to the magistrate judge with instructions.

 

Submitted this 23rd day of May, 2013.

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