Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_10-cv-08212/USCOURTS-azd-3_10-cv-08212-0/pdf.json

Nature of Suit Code: 450
Nature of Suit: Interstate Commerce
Cause of Action: 49:11702(a)(4) Violations of Interstate Commerce Act

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United Van Lines, LLC, 

Plaintiff, 

vs.

Plains Medical Center, Inc., a Colorado

nonprofit corporation; Dr. Carmen

Alfonso, 

Defendants. 

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No. CV10-8212-PCT-JAT

ORDER

Currently pending before the Court is Defendant Plains Medical Center, Inc.’s

(“Plains Med”) Motion to Dismiss (Doc. 13). The Court now rules on the Motion.

BACKGROUND

On August 3, 2009, Defendant Dr. Alfonso entered into a contract with Plaintiff

United Van Lines, LLC (“United”) for the interstate shipment of her personal property and

household goods from Flagstaff, Arizona to Strasburg, Colorado. The contract, Uniform

Household Goods Bill of Lading and Freight Bill No. 26-2061-9 (the “BOL”), incorporates

United’s published tariffs. 

Defendant Plains Med, Dr. Alfonso’s former employer, guaranteed payment for her

move. On January 28, 2010, Plains Med made a partial payment of $14, 055.47 for the

move, leaving an unpaid balance of $5,528.09. Item 2 of the BOL Terms reads, in pertinent

part: “If the carrier extends credit by agreeing to bill an employer or other party, and in the

Case 3:10-cv-08212-JAT Document 27 Filed 08/23/11 Page 1 of 9
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event that any or all of the charges are not paid, the owner of the goods and/or beneficiary

of the services acknowledges he remains primarily liable for payment.

United delivered Dr. Alfonso’s household goods and personal property to her in

Strasburg, Colorado on August 24, 2009. Despite repeated demands, Defendants have not

paid the outstanding transportation charges of $5,528.09.

United filed this action on November 5, 2010. (Doc. 1.) United filed an Affidavit of

Service indicating Defendant Plains Med was served on November 26, 2010. (Doc. 8-1.)

United filed an Affidavit of Service indicating Defendant Dr. Alfonso was served on June

22, 2011. Plains Med filed the pending Motion to Dismiss for insufficient service and lack

of personal jurisdiction on December 29, 2010. (Doc. 13.)

MOTION TO DISMISS FOR INSUFFICIENT SERVICE

Defendant Plains Med alleges that United did not properly serve it because United

served the Complaint and Summons on Crystal Metcalf, the Quality Resources Coordinator

for Plains Med, who is not an officer, a managing or general partner, or the registered agent

for Plains Med. Plains Med argues that Ms. Metcalf was not authorized to receive service

of process on its behalf. 

“A federal court does not have jurisdiction over a defendant unless the defendant has

been served properly under Fed.R.Civ.P. 4.” Direct Mail Specialists, Inc. v. Eclat

Computerized Techs., Inc., 840 F.2d 685, 688 (9th Cir. 1988). But Rule 4 is flexible and

should be “liberally construed so long as a party receives sufficient notice of the complaint.”

Id. (quoting United Food & Commercial Workers Union v. Alpha Beta Co., 736 F.2d 1371,

1382 (9th Cir. 1984)). Absent substantial compliance with Rule 4, however, neither actual

notice nor naming the defendant in the pleading will provide personal jurisdiction. Id. 

Rule 4(h)(1)(B) provides in relevant part that a corporation, partnership, or

association, such as Plains Med, can be served in a judicial district of the United States by

delivering a copy of the summons and complaint to an officer, managing or general agent,

or any other agent authorized by appointment or law to receive service of process. “Despite

the language of the Rule, service of process is not limited solely to officially designated

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officers, managing agents, or agents appointed by law for the receipt of process. The rules

are to be applied in a manner that will best effectuate their purpose of giving the defendant

adequate notice.” Direct Mail, 840 F.2d at 688. A party therefore can effect service on a

representative “so integrated with the organization that he will know what to do with the

papers. Generally, service is sufficient when made upon an individual who stands in such

a position as to render it fair, reasonable and just to imply the authority on his part to receive

service.” Id. (internal citations omitted). The Court must determine whether service on

Crystal Metcalf, who admittedly is not an officer of Plains Med or its registered service

agent, was sufficient. 

On November 26, 2010, the process server hired by United went the Plains Med office

at 820 First Street, Limon CO 80828. (Affidavit of Service, Doc. 17-1.) When the server

entered the building, she asked the receptionist sitting at the front desk for Zettie Page

because Ms. Page was listed as the statutory agent for Plains Med. (Id.) The receptionist

told the server that Ms. Page had moved away and that Crystal Metcalf was now in charge

of human resources for Plains Med. (Id.) When Ms. Metcalf came to the front desk, the

process server asked Ms. Metcalf if she was authorized to accept papers on behalf of Plains

Med. (Id.) Ms. Metcalf stated that she had that authority, so the server left her a copy of the

Summons and Complaint. (Id.) 

The Court finds that Ms. Metcalf was sufficiently integrated with Plains Med to know

what to do with the Summons and Complaint. Direct Mail, 840 F.2d at 688. The Court

further finds that Ms. Metcalf stood “in a position as to render it fair, reasonable and just to

imply the authority on [her] part to receive service.” Id. As the Ninth Circuit Court of

Appeals noted in Direct Mail, actual receipt of process, combined with extenuating

circumstances, may make process fair. Id.

Plains Med does not argue that the proper party did not receive actual notice of the

Complaint; and extenuating circumstances existed. Plains Med had not updated the name

of its agent for service of process on the Colorado Secretary of State, Business Division,

website, even though the service agent listed had left the company. The process server

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sought the service agent listed on the website and was told that person had left the company.

The receptionist told the process server she should give the documents to Ms. Metcalf. Ms.

Metcalf told the process server that she could accept papers on behalf of Plains Med. Under

those circumstances, the Court finds that Plaintiff United effectively served Defendant Plains

Med. The Court therefore denies Plains Med’s Motion to Dismiss for insufficient service.

MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

Defendant Plains Med also argues that it should be dismissed for lack of personal

jurisdiction. Plains Med asserts that the Court lacks general jurisdiction, that Plains Med has

insufficient minimum contacts with Arizona to support specific jurisdiction, and that the

exercise of jurisdiction would offend the notions of fair play and justice.

The plaintiff bears the burden of establishing personal jurisdiction. Boschetto v.

Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008). If the Court decides a motion to dismiss for

lack of personal jurisdiction without an evidentiary hearing, the plaintiff need only make a

prima facie showing of jurisdictional facts. Id. Uncontroverted allegations in the Complaint

are deemed true for purposes of resolving the motion. Id. 

When, as here, no federal statute governs personal jurisdiction, the Court applies the

law of the forum state. Id. The Arizona long-arm statute provides for personal jurisdiction

to the extent permitted by the Due Process Clause of the United States Constitution.

Ariz.R.Civ.P. 4.2(a); see also Uberti v. Leonardo, 892 P.2d 1354, 1358 (Ariz. 1995)(stating

that under Rule 4.2(a), “Arizona will exert personal jurisdiction over a nonresident litigant

to the maximum extent allowed by the federal constitution”).

Absent traditional bases for personal jurisdiction (i.e., physical presence, domicile,

and consent), the Due Process Clause requires that a nonresident defendant have certain

minimum contacts with the forum state such that the exercise of personal jurisdiction does

not offend traditional notions of fair play and substantial justice. See Int’l Shoe Co. v.

Washington, 326 U.S. 310, 316 (1945); Doe v. Am. Nat’l Red Cross, 112 F.3d 1048, 1050

(9th Cir. 1997). The Due Process Clause protects a defendant’s “liberty interest in not being

subject to the binding judgments of a forum with which he has established no meaningful

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‘contacts, ties or relations.’” Omeluk v. Langsten Slip & Batbyggeri, 52 F.3d 267, 269-70

(9th Cir. 1995)(quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985)). A

nonresident defendant’s liberty interest is protected:

By requiring that individuals have ‘fair warning that a particular

activity may subject [them] to the jurisdiction of a foreign sovereign,’

the Due Process Clause ‘gives a degree of predictability to the legal

system that allows potential defendants to structure their primary

conduct with some minimum assurance as to where that conduct will

and will not render them liable to suit.’

Id. at 270 (alteration in original)(quoting Burger King, 471 U.S. at 472). 

If the Court determines that Plains Med’s contacts with Arizona are sufficient to

satisfy the Due Process Clause, then the Court must exercise either “general” or “specific”

jurisdiction over Plains Med. See Helicopteros Nacionales de Colombia v. Hall, 466 U.S.

408, 414-15 nn.8-9 (1984)(citations omitted). The nature of Plains Med’s contacts with

Arizona will determine whether the Court exercises general or specific jurisdiction. Id.

1. General Jurisdiction

A court may assert general jurisdiction over a nonresident defendant “[i]f the

defendant’s activities in the state are ‘substantial’ or ‘continuous and systematic,’ . . . even

if the cause of action is unrelated to those activities.” Doe, 112 F.3d at 1050-51.

Plains Med argues that it does not have “substantial” or “continuous and systematic”

contacts with Arizona, and the Court agrees. Plains Med does not own property or maintain

an office in Arizona, nor does it have any other presence in Arizona. Because Plains Med’s

activities in Arizona are not sufficiently substantial, this Court cannot assert general

jurisdiction over Plains Med.

2. Specific Jurisdiction

If a defendant does not have substantial or continuous and systematic contacts with

the forum state, then the Court must determine whether the defendant has had sufficient

contacts with the forum state such that the exercise of specific jurisdiction over the defendant

would not offend the Due Process Clause. See Int’l Shoe, 326 U.S. at 316. The Ninth Circuit

applies a three-prong test to determine whether the exercise of specific jurisdiction over a

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nonresident is appropriate. Boschetto, 539 F.3d at 1016. Under this three-prong test, specific

jurisdiction exists if: (a) the nonresident defendant purposefully directs activities or

consummates some transaction with the forum or the resident thereof; or performs some act

by which he personally avails himself of the privilege of conducting activities in the forum,

thereby invoking the benefits and protections of the forum’s laws; (b) the claim arises out of

or relates to the defendant’s forum-related activities; and (c) the exercise of jurisdiction

comports with fair play and substantial justice, i.e., it is reasonable. Id.

Plaintiff bears the burden on the first two prongs. Id. If Plaintiff establishes both

prongs one and two, then Defendant Plains Med must come forward with a “compelling

case” that personal jurisdiction would be unreasonable. Id. Courts analyze cases that arise

out of contracts, as here, under the “purposeful availment” standard. Id.

a. Purposeful Availment 

To purposefully avail itself of the privilege of doing business in a forum, a defendant

must perform some type of affirmative conduct that allows or promotes the transaction of

business within the forum. Id. A nonresident’s formation of a contract standing alone does

not create personal jurisdiction. Id. at 1017 (citing Burger King, 471 U.S. at 478). The Court

considers the prior negotiations, contemplated future consequences, actual terms of the

contract, and the parties’ course of dealing when determining purposeful availment. Gray

& Co. v. Firstenberg Mach. Co., 913 F.2d 758, 760 (9th Cir. 1990)(internal citations

omitted). In analyzing the purposeful availment requirement, the Court performs a

qualitative evaluation of the defendant’s contact with the forum state to determine whether

“the ‘defendant’s conduct and connection with the forum State are such that he should

reasonably anticipate being haled into court there.’” Core-Vent Corp. v. Nobel Industries AB,

11 F.3d 1482, 1485 (9th Cir. 1993)(quoting Worldwide Volkswagen Corp. v. Woodson, 444

U.S. 286, 297 (1980)).

Defendant Plains Med recruited Defendant Alfonso for employment while Dr.

Alfonso was living in Flagstaff, Arizona. When Dr. Alfonso accepted a job with Plains Med,

Plains Med agreed to pay her moving expenses from Arizona to Colorado. Plains Med sent

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a Letter of Authorization to United addressed to United’s office in Flagstaff, Arizona,

thereby acting as a guarantor. (Doc. 17-1.) Plains Med later paid a portion of the

transportation charges for the move from Arizona. 

Plains Med acted as a guarantor in order to facilitate the transportation agreement

between Defendant Alfonso, an Arizona resident at the time, and Plaintiff United. Plains

Med thereby performed an affirmative act that promoted the transaction of business within

Arizona. The Court therefore finds that United has met its prima facie burden of

demonstrating that Plains Med purposefully availed itself of the privilege of doing business

in Arizona. 

The Court’s finding is supported by the holding in Forsythe v. D.H. Overmyer, 576

F.2d 779 (9th Cir. 1978). In Forsythe, a resident of New York signed a personal guaranty

to help secure the lease of his corporation’s warehouse in Oregon. The lease between the

corporation and the California plaintiff was negotiated in California and contained a

California governing law clause, although the personal guaranty did not contain a California

clause. Id. at 783. The Ninth Circuit Court of Appeals held that California had personal

jurisdiction over the New York resident because he entered into the guaranty to secure a

contract that contained a California law clause for the benefit for his corporation. Id. at 783-

84. 

b. Claim Arises Out of Activities

The Ninth Circuit has adopted a “but for” test for determining whether a plaintiff’s

cause of action arises out of the defendant’s forum-related activities. Doe, 112 F.3d at 1051.

The “arising out of” requirement is met if, but for the contacts between the defendant and the

forum state, the cause of action would not have arisen. Terracom v. Valley Nat. Bank, 49

F.3d 555, 561 (9th Cir. 1995).

The “but for” test is satisfied in this matter because the cause of action arises out of

Defendant Plains Med’s forum-related activities. But for Plains Med’s authorization to pay

for Dr. Alfonso’s move from Arizona, United’s breach of contract action against Plains Med

would not have arisen. The Court therefore finds that the alleged breach of contract arises

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out of Plains Med’s Arizona-related activities.

c. Reasonableness of Jurisdiction

An unreasonable exercise of jurisdiction violates the Due Process Clause even if the

“purposeful availment” and “arising out of” requirements of the specific jurisdiction test are

satisfied. Ziegler v. Indian River County, 64 F.3d at 470, 474-75 (9th Cir. 1995). But the

Court presumes that its exercise of jurisdiction over a defendant is reasonable if the first two

requirements of the specific jurisdiction test are met. Ballard v. Savage, 65 F.3d 1495, 1500

(9th Cir. 1995). As outlined earlier, if Plaintiff satisfies the first two requirements for

specific jurisdiction, then the burden of proof shifts to Plains Med, which must come forward

with a “compelling case” that personal jurisdiction would be unreasonable. Id.

The Ninth Circuit considers the following seven factors in determining whether the

exercise of specific jurisdiction over a defendant is reasonable: (1) the extent of the

defendant’s purposeful interjection into the forum state; (2) the burden on the defendant of

litigating in the forum; (3) the extent of conflict with the sovereignty of the defendant’s state;

(4) the forum state’s interest in adjudicating the dispute; (5) the most efficient judicial

resolution of the dispute; (6) the importance of the forum to the plaintiff’s interest in

convenient and effective relief; and (7) the existence of an alternative forum. See Ziegler,

64 F.3d at 475.

Because the Court has found that Plaintiff has met the first two requirements of

specific jurisdiction, Defendant Plains Med must come forward with a compelling case to

rebut the presumption that jurisdiction in Arizona is reasonable. Defendant Plains Med has

failed to meet that burden. 

Given the Court’s finding that Plains Med’s contacts with Arizona satisfy the

purposeful availment prong, the Court also finds that Plains Med purposefully interjected

itself into Arizona to conduct business. Plains Med has failed to show that as a business

entity it would be substantially burdened by litigating in Arizona. Arizona does have an

interest – albeit not a particularly strong one – in adjudicating this dispute because although

Plaintiff United is incorporated in Missouri, it has local offices in Arizona. Moreover, the

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moving contract was entered into in Arizona, and Plains Med sent its authorization to

Arizona to secure the move. In terms of efficiency, Plaintiff may have witnesses from

United’s Flagstaff office, Defendant Plains Med’s witnesses are located in Colorado, and

Defendant Alfonso currently resides in Florida. So, no state can claim a substantial part of

the evidence and witnesses. But alternative forums are available in Colorado and Florida.

After a review of all the factors, the Court finds Defendant Plains Med has failed to

present a compelling case that the exercise of jurisdiction would not comport with fair play

and substantial justice. Because Plaintiff has satisfied the three-prong specific jurisdiction

test, the Court finds that it has personal jurisdiction over Defendant Plans Med. The Court

therefore denies the Motion to Dismiss for lack of personal jurisdiction.

Accordingly,

IT IS ORDERED DENYING Defendant Plains Medical Center’s Motion to Dismiss

for insufficiency of service and for lack of personal jurisdiction (Doc. 13).

DATED this 22nd day of August, 2011.

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