Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-1_06-cv-00996/USCOURTS-almd-1_06-cv-00996-0/pdf.json

Nature of Suit Code: 371
Nature of Suit: Truth in Lending
Cause of Action: 15:1601 Truth in Lending

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IN THE DISTRICT COURT OF THE UNITED STATES FOR THE

MIDDLE DISTRICT OF ALABAMA, SOUTHERN DIVISION

JOHN DAVID BRANNON and )

TERESA GAYLE BRANNON, )

)

Plaintiffs, )

)

v. ) CIVIL ACTION NO.

) 1:06cv996-MHT

FINANCE AMERICA, LLC; BNC ) (WO)

MORTGAGE, INC.; LEHMAN )

BROTHERS BANK, FSB; LEHMAN )

BROTHERS HOLDINGS, INC.; )

DANA CAPITAL GROUP, INC.; )

BRIDGE CAPITAL CORPORATION; )

RESIDENTIAL FINANCE )

AMERICA, LLC a/k/a RFA; )

and TIEMPO ESCROW II, )

)

Defendants. )

OPINION AND ORDER

Plaintiffs John David Brannon and Teresa Gayle

Brannon brought this lawsuit pursuant to various federal

statutes, including the Fair Credit Reporting Act, 15

U.S.C. § 1681, et seq., and the Truth in Lending Act, 12

U.S.C. § 2601, et seq. The Brannons’ central allegation

is that the defendants, including Bridge Capital

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Corporation (BCC), suppressed or misrepresented the terms

of a mortgage refinancing loan. Subject-matter

jurisdiction is proper under 12 U.S.C. § 2614, 15

U.S.C. § 1681p, and 28 U.S.C. § 1331.

This case is before the court on BCC’s motion to

dismiss for lack of personal jurisdiction. The thrust of

BCC’s motion that it is a California corporation and has

not, and would not, do business in Alabama. The Brannons

respond that, through its allegedly fraudulent behavior,

BCC established that it was subject to jurisdiction in

Alabama. For the reasons that follow, BCC’s motion will

be denied. 

I. STANDARD OF REVIEW

On a motion to dismiss in which no evidentiary

hearing is held, a plaintiff need establish only a primafacie case of jurisdiction. Madara v. Hall, 916 F.2d

1510, 1514 (11th Cir.1990). “The district court must

accept the facts alleged in the complaint as true, to the

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extent they are uncontroverted by the defendant's

affidavits.” Id. at 1514. Where the parties' evidence

conflicts, all evidence relating to jurisdictional facts

is to be construed in the light most favorable to the

plaintiff. Mutual Service Ins. Co. v. Frit Industries,

Inc., 358 F.3d 1312, 1319 n. 6 (11th Cir.2004). 

II. FACTS

The following facts are construed in the light most

favorable to the plaintiffs:

In September 2005, the Brannons submitted an online

application for refinancing of their mortgage. Several

lenders, who apparently had access to applications

generated by the website to which the Brannnons submitted

their application, replied. One of those who replied was

Elmer Rodan, who at various times identified himself as

an employee of various companies, including BCC. 

In a letter dated September 19, 2005, BCC Branch

Manager Jason McAffee sent the Brannons a letter stating

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1. It is not clear from the letter to whose lowest

fixed rate the letter refers.

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that, contingent upon certain conditions, the company

agreed to submit a refinancing of the Brannons’ loans; to

cover their brokerage fees and their origination fees;

and to give the Brannons the “lowest fixed rate.”1

 Pf.’s

Response in Opp. M. Dismiss, Exhibit 4, “Offer Letter.”

These promises were contingent upon four conditions being

met for 12-to-24 months: (1) all payments on the first

mortgage being made on time; (2) the property maintaining

its value; (3) “overall consumer credit [being] paid as

agreed”; and (4) the Brannons’ debt-to-income ratio

meeting “Fannie Maye guidelines.” Id. A “Loan Package”

was attached to the letter, with each page signed by

Rodan. Id., Exhibit 6, pp. 2-4, “Loan Package.” The

package specified which loans were to be refinanced and

the amount of those loans, as well as the Brannons’

projected savings on monthly payments. In addition, BCC

sent the Brannons a referral sheet, also signed by Rodan,

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soliciting further business. Id., p. 1, “Referral

Sheet.”

III. DISCUSSION 

When a defendant challenges personal jurisdiction,

the plaintiff bears the burden of establishing that the

exercise of personal jurisdiction over the defendant

comports with certain fundamental requirements. First,

the requirements of the forum State's long-arm provision

must be met. Second, the requirements of the due process

clause of the Fourteenth Amendment to the United States

Constitution must be met. Olivier v. Merritt Dredging

Co., 979 F.2d 827, 830 (11th Cir. 1992). In this case,

the two are coextensive, as Alabama’s long-arm provision

extends to the limits of due process. Ala. R. Civ. P.

4.2(b). 

The due-process inquiry, in turn, has two

requirements. First, the defendant must have “certain

minimum contacts” with the forum State and, second, the

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exercise of jurisdiction over the defendant must not

offend “traditional notions of fair play and substantial

justice.” International Shoe Co. v. State of Washington,

326 U.S. 310, 316 (1945).

a. Minimum Contacts

Personal jurisdiction is of two sorts: “specific” and

“general.” Here, the Brannons allege only specific

jurisdiction. To constitute minimum contacts for

purposes of specific jurisdiction, the defendant's

contacts with the applicable forum must be related to the

plaintiff's cause of action or have given rise to it;

involve some act by which the defendant purposefully

avails itself of the privilege of conducting activities

within the forum; and be such that the defendant should

reasonably anticipate being haled into court in the

forum. United States SEC v. Carrillo, 115 F.3d 1540,

1542 (11th Cir. 1997).

There is no question that the contacts alleged by the

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Brannons relate to one or more of their causes of action;

the Brannons allege that the refinancing offer issued by

BCC constituted the alleged intentional or negligent

misrepresentation. 

The second and third requirements are more

contentious. BCC challenges principally the contention

that it “purposefully availed” itself of conducting

activities in Alabama, arguing that, because it is not

licensed to do business here it could not have had

minimum contacts with the State, and, because it could

not receive any compensation for any transactions here,

it would be illogical for it have any contacts here. It

further argues that its involvement with the Brannons and

Alabama was initiated by the Brannons and that its

involvement can therefore be analogized to a passive

advertisement on a website, not directed at any

particular place. It thus also argues that it could not

have anticipated being haled into court in Alabama.

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BCC is correct that whatever minimum contacts the

Brannons present to meet their burden must establish that

BCC directed its conduct at the forum and that the

Brannons’a plaintiff’s actions alone are not enough to

establish personal jurisdiction. “No plaintiff can

establish jurisdiction over a defendant through his own

actions.” Molina v. Merritt & Furman Ins. Agency, Inc.,

207 F.3d 1351, 1356 (11th Cir. 2000); see also Hanson v.

Denckla, 357 U.S. 235, 253 (1958). Nor can a mere

“fortuitous circumstance,” like the unforseen

transportation of a product into a State, establish

minimum contacts. World-Wide Volkswagen Corp. v.

Woodson, 444 U.S. 286 (1980). However, the evidence

presented here belies BCC’s contention that it was a mere

passive actor in this case, such that it did not have

minimum contacts with Alabama. 

Calder v. Jones, 465 U.S. 783, 789-90 (1984),

establishes that, where a defendant directs its behavior

toward an individual or individuals in a particular

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State, and knows that the effect of the action will be

felt in that State, the defendant must “reasonably

anticipate being haled into court there.” In Calder, the

author of a newspaper article was sued for libel; the

author had virtually no contact with the forum State, and

certainly did not deliver the newspaper to the forum

State, but knew that the effects of its article would be

felt where the subject of the article lived. This--the

intentional direction of action, knowing that it will

have an effect in the forum State--was, in the Supreme

Court’s view, enough to justify personal jurisdiction.

Id. 

Later, in Asahi Metal Industry Co. v. Superior Court

of California, 480 U.S. 102 (1987), which concerned the

entry of products into the stream of commerce, the

Supreme Court divided on the analysis of purposeful

availment, but Justice O’Connor, who applied the most

restrictive reading of that standard, Morris v. SSE,

Inc., 843 F.3d 489, 493 (1988), stated that certain

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conduct by a defendant may “indicate an intent or purpose

to serve the market in the forum State,” such that

purposeful direction may be found. As examples of such

conduct, Justice O’Connor cited, “designing the product

for the market in the forum State, advertising in the

forum State, [or] establishing channels for providing

regular advice to customers in the forum State.” Asahi,

408 U.S. at 112.

Similarly, in Molina v. Merritt & Furman Ins. Agency,

Inc., 207 F.3d 1351, 1356 (11th Cir. 2000), the Eleventh

Circuit Court of Appeals stated that “the defendant has

‘fair warning’ if he purposefully directs his activities

at the forum and injury claims result from those

activities.” In Molina, the broker defendant was found

to have had no direct contact with Alabama whatsoever,

not even to have sent a letter to Alabama; rather, all

dealings related to the procurement of insurance by the

broker occurred in Florida. However, the broker located

insurance for a boat located in Alabama. According to

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the appellate court, once the broker agreed to procure

insurance for a boat anchored in Alabama, it

“purposefully availed [itself] of the opportunity to do

business with an Alabama resident in Alabama.” Id. at

1357 (emphasis in original). 

From these cases it is apparent that the purposeful

availment and reasonable anticipation are interrelated,

if not essentially different ways of saying the same

thing. Compare Carillo, 115 F.3d at 1545 (“It is well

settled that advertising that is reasonably calculated to

reach the forum may constitute purposeful availment of

the privileges of doing business in the forum.”) with id.

at 1546 (“The Supreme Court has previously held that

defendants whose ‘intentional actions were expressly

aimed at [the forum]’ could reasonably anticipate being

haled into court there.”). These cases also stand for

the straightforward principle that, where the defendant

has designed its product for a particular State’s market

(as opposed to simply the national market), advertised

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the product there, solicited business there focused on

activities and people in the State, and knew that its

business activities would have a concrete and predictable

effect there, the defendant cannot argue that it did not

direct its activities so as to establish minimum contacts

in that State. It is clear from the evidence presented

here that the mortgage offer establishes minimum contacts

under this standard. 

First, BCC clearly directed its activities toward the

Brannons, and not the other way around. The Brannons

submitted an online application, with no expectation of

any particular company responding. The Brannons did not

submit their application directly to BCC; rather, BCC

sought out their application, and responded to them. The

resulting “offer” sent to the Brannons reflects that not

just Alabama residents generally, but a specific consumer

in Alabama was targeted; BCC’s actions evince intent to

conduct business on an ongoing basis with a particular

consumer in Alabama. This is not an unfocused

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solicitation, such as an advertisement on a nationally

oriented website might be thought to be. The offer was

clearly a solicitation of the Brannons’ business, and not

purely informational; BCC’s response to the Brannons

twice states that the BCC representative wants to “earn

[the Brannons’] business.” Pf.’s Response in Opp. M.

Dismiss, Exhibit 6, pp. 2,3, “Loan Package.” BCC thus

directed its conduct to the Brannons, and thus to

Alabama. 

Further, the product (the refinancing offer) was

designed for Alabama. The offer was based on the value

of the Brannons’ existing loans, id., p. 3, and the value

of a house owned by the Brannons in Dothan, and it was

conditioned on the value of that house not substantially

changing. Id., Exhibit 4. Thus, the value of the offer,

and presumably the basis of the offer, for both BCC and

the Brannons hinges on loans made and paid in Alabama,

and on on the health of a housing market in Alabama.

Finally, it is clear that BCC anticipated ongoing

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2. In addition to the offer being based on the value

of the house not changing, David Brannon requested, on

October 3, 2005 (14 days after the date of the offer

letter), a copy of his appraisal from Rodan at a

“elmer@bridgecapcorp.com,” the email address given in the

loan package. Pf.’s Response in Opp. M. Dismiss,

Exhibit 6, p. 4.

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business concerning the Alabama property with the Alabama

residents; the offer was based on a probationary period

of two years. Id. 

BCC solicited business in Alabama by offering to

refinance a house in Alabama with Alabama residents. The

offer letter was sent to the Brannons, and a FedEx

package was provided for them to sign documents and send

back. Id., Exhibit 6, p. 2. BCC apparently appraised

the house, and conditioned the offer on the stability of

the value of the house.2

 BCC’s contention that it did

not, and would not, do business in Alabama, if not

roundly disproved by the evidence, is irrelevant to the

minimum-contacts calculus. BCC established nonfortuitous connections, through its own directed action.

Minimum contacts have been established. 

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b. Fair play and substantial justice 

In evaluating whether the exercise of jurisdiction

comports with fair play and substantial justice, the

court must consider such factors as the burden on the

defendant, the forum State's interest in adjudicating the

dispute, the plaintiff's interest in obtaining convenient

and effective relief, the interstate judicial system's

interest in obtaining the most efficient resolution of

controversies, and the shared interest of the several

States in furthering fundamental substantive social

policies. Burger King Corp. v. Rudzewicz, 471 U.S. 462,

477 (1985). 

Although BCC does not appear to argue that the

exercise of jurisdiction over it would not comport with

fair play and substantial justice, the court still

considers the issue and finds that the exercise of

jurisdiction comports. The burden on BCC in defending

the suit in Alabama is slight, especially given modern

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modes of transportation, and the Brannons, as Alabama

citizens, have a substantial interest in the resolution

of the case in Alabama. Alabama has a strong interest in

protecting its citizens who have been defrauded. Ruiz de

Molina v. Merritt & Furman Ins. Agency, Inc., 207 F.3d

1351, 1358 (11th Cir. 2000). There is nothing to suggest

that the exercise of jurisdiction in Alabama will

undermine efficiency; to the contrary, given that the

remainder of the transactions involved in this lawsuit,

including those involving the many other defendants, are

being evaluated by this court, it would not be efficient

to break off of any the claims against BCC. See Huey v.

American Truetzschler Corp., 47 F.Supp.2d 1342, 1349

(M.D. Ala. 1999) (Thompson, J.) (discussing how avoiding

“splintering” a case serves efficiency). 

* * *

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Because defendant Bridge Capital Corporation directed

its activity into Alabama and established minimum

contacts here and because the exercise of jurisdiction in

Alabama would not offend notions of fair play and

substantial justice, it is ORDERED that defendant Bridge

Capital Corporation’s motion to dismiss (doc. no. 11) is

denied. 

DONE, this the 15th day of February, 2007.

_____________________________ /s/ Myron H. Thompson

UNITED STATES DISTRICT JUDGE

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