Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_05-cv-01529/USCOURTS-caed-1_05-cv-01529-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Contract Default

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1

IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

GARY W. HALL, ) 

 )

Plaintiff, )

)

vs. )

)

NELSON AIRCRAFT SALES, INC., )

a North Dakota corporation, )

JASON NELSON, an individual, )

PIETSCH AIRCRAFT RESTORATION )

AND REPAIR, INC., a North )

Dakota corporation, HOLLIE )

“RED” EWING, an individual, )

and DOES 1 through 100, )

)

Defendants. )

)

) 

No. CV-F-05-1529 REC LJO

ORDER DENYING DEFENDANT

PIETSCH AIRCRAFT

RESTORATION AND REPAIR,

INC.’S MOTION FOR DISMISSAL

FOR LACK OF JURISDICTION.

(Doc. 28) 

On April 3, 2006, the Court heard Defendant Pietsch Aircraft

Restoration and Repair, Inc.’s Motion for Dismissal for Lack of

Jurisdiction (the “Motion”). Upon due consideration of the

written and oral arguments of the parties and the record herein,

the Court DENIES the Motion, as set forth herein.

I. Factual Background

This case involves the circumstances surrounding a North

Dakota resident’s sale of an airplane to a purchaser in

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Because the Complaint has been verified by Plaintiff, the 1

Court will treat it as if it were an affidavit with respect to

facts of which Plaintiff has personal knowledge. See, e.g.,

Leonard A. Feinberg, Inc. v. Cent. Asia Capital Corp., 936 F. Supp.

250, 255 (E.D. Pa. 1996) (deciding, for the purposes of determining

whether plaintiff had made a prima facie case for personal

jurisdiction, to “consider the verified Complaint a submission in

support of Plaintiff’s position” and to “afford it the same

consideration I would an affidavit”); Salomon Smith Barney v.

McDonnell, 201 F.R.D. 297, 303 (S.D.N.Y. 2001).

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California. This Motion concerns whether this Court has personal

jurisdiction over Defendant Pietsch Aircraft Restoration and

Repair, Inc. (“Pietsch”). Pietsch, a North Dakota corporation

based in Minot, North Dakota, inspected the airplane prior to the

completion of the sale and allegedly made false representations

or material omissions regarding its airworthiness.

In or around April 2005, Defendants Nelson Aircraft and Mr.

Nelson (collectively “Seller”) – who have not joined in this

Motion – placed a listing in “Trade-A-Plane,” a national

publication. The listing advertised a 1968 Cessna 177 (“the

Aircraft”) that Seller wished to sell: “1968 177, LOW TOTAL TIME

A+E, 1600 TT. Very clean aircraft, no damage history, no hail,

paint-7, interior-9, looks/flies excellent, needs nothing,

$34,900. ND/(701)838-1998.” Compl. ¶ 17. 

1

Plaintiff Gary W. Hall (“Plaintiff”), a California resident,

called Seller to inquire about the Aircraft. Plaintiff entered

an oral agreement to purchase the Aircraft from Seller. 

Plaintiff asked Seller to provide the names of independent

inspectors in North Dakota who could perform a pre-buy inspection

of the Aircraft. Seller referred Plaintiff to Pietsch, which

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According to the Aircraft Log, on April 24, 1980, the right- 2

hand main gear bolt, two ribs in the stabilator, and pop rivets in

the right-hand door post were replaced due to shear. Compl. ¶ 29.

The Log also revealed that on May 18, 1982, door damage was

repaired. Id. Microfiche reports on the Aircraft revealed that on

October 29, 1970, a Federal Aviation Agency Major Repair and

Alteration for identified thirty-five parts that had been installed

because of damage, including aft fuselage assembly, propeller, prop

bulkhead, lower and upper firewall, cabin door, and floor board.

Id.

3

Seller called “my mechanic.” Hall Decl. ¶ 3. 

On or about April 20, 2005, Plaintiff called Pietsch to

arrange a pre-buy inspection of the Aircraft. Pietsch stated

that it would inspect the Aircraft for mechanical or structural

damage and test the instruments for deficiencies. Pietsch also

indicated it would inspect all records, flight logs, and annuals

of the Aircraft and document any damage it discovered.

On or about April 21, 2005, Pietsch told Plaintiff over the

telephone that the inspection revealed only minor deficiencies

and no major damage. Pietsch reported that it did not have time

to perform the annual inspection that would be due in several

weeks. Pietsch sent Plaintiff a copy of the inspection report by

facsimile.

When Plaintiff took his first flight in the Aircraft on May

13, 2005, he discovered that its avionics were not operating. 

Compl. ¶ 28. On May 16, 2005, a third-party inspection of the

Aircraft revealed it to be in an “UNAIRWORTHY CONDITION.” Compl.

¶ 30. Entries in the Aircraft Log indicated the Aircraft had

previously suffered damage on multiple occasions. Compl. ¶ 29. 2

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Only Defendant Pietsch brings this Motion. On March 9, 2006, 3

the Court denied Defendants Nelson Aircraft and Mr. Nelson’s motion

to dismiss for lack of personal jurisdiction. 

4

The Aircraft remains grounded. Hall Decl. ¶ 8.

II. Procedural History

On November 7, 2005, Plaintiff filed this lawsuit, seeking

to recover from Pietsch on intentional and negligent

misrepresentation theories. On March 2, 2006, Pietsch filed this

Motion, along with the supporting Declaration of Warren Pietsch.3

On March 17, 2006, Plaintiff filed its Opposition to the Motion

and the supporting Declaration of Gary W. Hall. Plaintiff

claimed that specific jurisdiction was appropriate because

Pietsch had purposefully directed intentionally tortious conduct

toward California. Pietsch did not file a Reply or appear at

oral argument.

III. Discussion

A. Legal Standard

Plaintiff has the burden to establish a court’s personal

jurisdiction over a defendant. Doe v. Unocal Corp., 248 F.3d

915, 922 (9th Cir. 2001). Where the district court rules on the

motion to dismiss without holding an evidentiary hearing, the

plaintiff need only make a prima facie showing of jurisdictional

facts to withstand the motion. Id. This requires a plaintiff to

demonstrate facts that, if true, would support jurisdiction over

defendant. Id. “Although the plaintiff cannot ‘simply rest on

the bare allegations of its complaint,’ uncontroverted

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allegations in the complaint must be taken as true.”

Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th

Cir. 2004) (internal citations omitted). Conflicts between facts

contained in the parties’ affidavits are resolved in Plaintiff’s

favor. AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588

(9th Cir. 1996). “If the Court denies a Rule 12(b)(2) motion

because a prima facie case has been shown, the movant can

nevertheless put the opposing party to its proof by continuing to

contest personal jurisdiction, either at a pretrial evidentiary

hearing or at the trial itself.” Ado Fin., AG v. McDonnell

Douglas Corp., 931 F. Supp. 711, 717 (C.D. Cal. 1996) (citing

Metro. Life Ins. Co. v. Neaves, 912 F.2d 1062, 1064 n. 1 (9th

Cir. 1990)). Where facts bearing on jurisdiction are

“intertwined with the merits of the action” determination of

jurisdiction at trial is preferable. Id. at 714 (citing Data

Disc, Inc. v. Sys. Tech. Assocs., 557 F.2d 1280, 1285-86 n. 2

(9th Cir. 1977)).

In ruling on a motion to dismiss for lack of personal

jurisdiction in California, a court must consider: (1) whether a

state statute potentially confers personal jurisdiction over the

nonresident defendant, and (2) whether the exercise of

jurisdiction accords with federal constitutional principles of

due process. Congoleum Corp. v. DLW Aktiengesellschaft, 729 F.2d

1240 (9th Cir. 1984) (citing Data Disc, 557 F.2d at 1285-86). 

California’s long-arm statute, California Civil Procedure Code

section 410.10, authorizes state and federal courts to exercise

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personal jurisdiction to the full extent permitted by the

Constitution. Congoleum Corp., 729 F.2d at 1241. 

Due process limitations on state power require that the

defendant have certain “minimum contacts” with the forum such

that haling it into court there “does not offend ‘traditional

notions of fair play and substantial justice.’” World-Wide

Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S. Ct. 559,

62 L. Ed. 2d 490 (1980) (quoting Int’l Shoe Co. v. Washington,

326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945)). 

B. Specific Jurisdiction

A defendant is subject to specific jurisdiction only when

each of three elements exist: (1) the “nonresident defendant

must have purposefully availed himself of the privilege of

conducting activities in the forum by some affirmative act or

conduct, (2) plaintiff’s claim must arise out of or result from

the defendant’s forum-related activities; and (3) exercise of

jurisdiction must be reasonable.” Roth v. Garcia Marquez, 942

F.2d 617, 620-21 (9th Cir. 1991).

1. Purposeful Direction

Courts use the phrase “purposeful availment” as shorthand to

refer to both purposeful availment and purposeful direction. 

Schwarzenegger, 374 F.3d at 802. The purposeful availment prong

is satisfied where the nonresident defendant has “purposely

availed itself of the privilege of conducting activities within

the forum State, thus invoking the benefits and protections of

its laws” or has purposefully directed its activities toward the

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forum. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.

Ct. 2174, 85 L. Ed. 2d 528 (1985); Dole Food Co. v. Watts, 303

F.3d 1104, 1111 (9th Cir. 2002). Courts generally use a

purposeful availment analysis for suits sounding in contract and

purposeful direction analysis for suits sounding in tort. 

Schwarzenegger, 374 F.3d at 802. 

Plaintiff claims that personal jurisdiction is appropriate

on a purposeful direction theory. Plaintiff contends that

Pietsch committed a tort when it made intentional

misrepresentations in connection with the sale of the Aircraft. 

Courts analyze the purposeful direction of intentional torts

under the “effects” test. Calder v. Jones, 465 U.S. 783, 104 S.

Ct. 1482, 79 L. Ed. 2d 804 (1984). The effects test dictates

that the purposeful availment requirement is met where defendant

has “(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.” Dole, 303 F.3d at 1111.

a. Intentional Act

Plaintiff alleges Pietsch directed intentionally tortious

acts toward the forum that satisfy the first requirement. “The

elements of fraud, which give rise to the tort action for deceit,

are (a) misrepresentation (false representation, concealment or

nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c)

intent to defraud, i.e., to induce reliance; (d) justifiable

reliance; and (e) resulting damage.” See Agosta v. Astor, 120

Cal. App. 4th 596, 603 (2004) (quoting 5 Witkin, Summary of Cal.

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Law (9th ed. 1988) Torts, § 676, p. 778.). 

When Plaintiff contacted Pietsch to perform a pre-buy

inspection, Pietsch told him that as part of the inspection it

would “document any structural or mechanical damage or corrosion,

instrument deficiencies, inspect all records, flight logs, and

annuals pertaining to the subject aircraft, and document any

damage to the subject aircraft.” Hall Decl. ¶ 4. 

Following the inspection, Pietsch informed Plaintiff by

telephone that it did not have time to perform the annual

inspection of the Aircraft that was due in several weeks. Hall

Decl. ¶ 5. It is not clear whether Pietsch intended this

statement to inform Plaintiff that it had not conducted some of

the inspection tasks that it had initially promised. 

Nevertheless, Pietsch represented that the inspection “revealed

only minor deficiencies and disclosed no major damage.” Hall

Decl. ¶ 5. Pietsch does not deny that it made any of these

representations. Pietsch claims that its only connection with

California was “a telephone call” rather than two telephone calls

as Plaintiff contends. Pietsch Decl. ¶ 6 (emphasis added). At

this stage, the Court will resolve this conflict in the

affidavits in favor of Plaintiff. See AT&T, 94 F.3d at 588. 

The representations of Pietsch that the Aircraft did not

have major damage induced Plaintiff to complete the purchase of

the Aircraft and pay $360 for the pre-buy inspection. Compl.

¶ 32. Plaintiff claims that Pietsch knew the representations

that it made were false. Compl. ¶ 31. On May 13, 2005, when

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Plaintiff took his first flight in the Aircraft, its avionics

were not operating. Compl. ¶ 28. On May 16, 2005, Sierra West

Airlines performed an annual inspection of the Aircraft and found

it to be in an “UNAIRWORTHY CONDITION.” Compl. ¶ 30. The

Aircraft Log indicated the Aircraft had previously suffered

damage on multiple occasions. Compl. ¶ 29.

Plaintiff has made a prima facie showing that Pietsch’s

representations and omissions regarding the condition of the

Aircraft amount to fraud giving rise to the tort of deceit. See

Agosta, 120 Cal. App. 4th at 603. Thus, Plaintiff has met the

first requirement of purposeful direction.

b. Aimed at the Forum

Second, an intentional act is expressly aimed at the forum

when “‘the defendant is alleged to have engaged in wrongful

conduct targeted at a plaintiff whom the defendant knows to be a

resident of the forum state.’” Dole, 303 F.3d at 1111 (quoting

Bancroft & Masters, Inc. v. Augusta Nat’l, Inc., 223 F.3d 1082,

1087 (9th Cir. 2000)). Where a defendant’s alleged acts were

“‘performed for the very purpose of having their consequences

felt in the forum state,’” the express aiming requirement is met. 

Dole, 303 F.3d at 1112 (quoting Brainerd v. Governors of the

Univ. of Alberta, 873 F.2d 1257, 1259-60 (9th Cir. 1989)). “The

inducement of reliance in California is a sufficient act within

California to satisfy the requirement of minimum contacts where

the cause of action arises out of that inducement.” Data Disc,

557 F.2d at 1288; see Wien Air Alaska, Inc. v. Brandt, 195 F.3d

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208, 212 (5th Cir. 1999) (purposeful availment requirement

satisfied where foreign attorney made fraudulent

misrepresentations to client in the forum in letters, faxes, and

phone calls).

Plaintiff’s allegation that Pietsch intentionally

misrepresented the airworthiness of the Aircraft, and the

thoroughness of the inspection, to induce Plaintiff to complete

the purchase evinces conduct targeted at Plaintiff in the forum. 

That the telephone representations were Pietsch’s “only

connection . . . with California” does not affect the purposeful

direction analysis. Pietsch Decl. ¶ 6. The Court finds that

Plaintiff has made a prima facie showing that Pietsch’s alleged

conduct was aimed at California.

c. Harm in the Forum

The Ninth Circuit has not decided the degree of harm that

defendant must cause in the forum state to meet the effects test. 

Dole, 303 F.3d at 1112-13. A line of Ninth Circuit authority

requires that “the brunt of the harm” occur within the forum

state. See id. at 1112; Core-Vent Corp. v. Nobel Indus. AB, 11

F.3d 1482, 1486 (9th Cir. 1993). These cases appear to be in

tension with a Supreme Court holding that any significant amount

of harm in the forum is sufficient. See Keeton v. Hustler

Magazine, 465 U.S. 770, 772-73, 104 S. Ct. 1473, 79 L. Ed. 2d 790

(1984); Dole, 303 F.3d at 1113. Here, as in Dole, we need not

decide between these standards because under either standard, the

harm Plaintiff suffered in California is sufficient. See Dole,

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303 F.3d at 1113. 

Plaintiff is a California resident. He contends that

Pietsch’s representations and omissions induced him to buy a

plane that was not airworthy and to pay for Pietsch’s inspection

services. Plaintiff suffered all of the harm — spending money

and receiving a poorly functioning plane — in the forum state,

where he resides. See Dole, 303 F.3d at 1114 (forum resident

that defendant induced to approve an injurious transaction

suffered harm in the forum). The Court finds that Plaintiff has

alleged sufficient harm in California to establish purposeful

availment. 

2. Relationship Between Lawsuit and Defendant’s 

California Activities

The Ninth Circuit employs a “but for” test to determine

whether a claim arises from forum-related activities. Ballard v.

Savage, 65 F.3d 1495, 1500 (9th Cir. 1995). The question is

whether, but for Pietsch’s contacts with California, Plaintiff’s

claims would have arisen. Because all of Plaintiff’s claims

against Pietsch arise out of representations it made to Plaintiff

in California, the “but for” test is satisfied with respect to

Plaintiff’s claims for fraud and deceit.

3. Reasonableness

The Ninth Circuit has listed seven factors to balance to

determine whether jurisdiction is reasonable: 

the extent of purposeful interjection, the

burden on the defendant to defend the suit in

the chosen forum, the extent of conflict with

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the sovereignty of the defendant’s state, the

forum state’s interest in the dispute; the

most efficient forum for judicial resolution

of the dispute; the importance of the chosen

forum to the plaintiff’s interest in

convenient and effective relief; and the

existence of an alternative forum.

Amoco Egypt Oil Co. v. Leonis Navigation Co., 1 F.3d 848, 851

(9th Cir. 1993). Once a court has decided that the defendant has

minimum contacts with the forum, the defendant bears the burden

to “‘present a compelling case’ that the exercise of jurisdiction

would, in fact, be unreasonable.” Id. at 851-52 (quoting Shute

v. Carnival Cruise Lines, 897 F.2d 377, 386 (9th Cir. 1990),

rev’d on other grounds, 499 U.S. 585, 111 S. Ct. 1522, 113 L. Ed.

2d 622 (1991) (quoting Burger King, 471 U.S. at 477)).

Pietsch does not dispute the reasonableness of jurisdiction

in California, other than to argue that it did not purposefully

avail itself of the forum. As the Court held above, Plaintiff

has made a prima facie showing that Pietsch reached out to

California and committed an intentional tort. Pietsch’s alleged

intentional misrepresentation to Plaintiff of the condition of

the Aircraft is a strong indication that personal jurisdiction is

reasonable. Pietsch has not made a “compelling” showing that

California would be an unreasonable forum. See Amoco Egypt, 1

F.3d at 851-52.

Accordingly, the Court holds that personal jurisdiction over

Pietsch is appropriate with respect to the intentional tort

claims. 

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C. Pendent Personal Jurisdiction

Where a district court has jurisdiction over certain claims

against a party, but not others, it has discretion to exercise

pendent personal jurisdiction over the other claims. CE

Distrib., LLC v. New Sensor Corp., 380 F.3d 1107, 1113 (9th Cir.

2004) (district court properly exercised pendent jurisdiction

over contract claim based on personal jurisdiction over

intentional tort claim). A court may require a party to defend a

claim that lacks an independent basis of personal jurisdiction if

it “‘arises out of a common nucleus of operative facts with a

claim in the same suit over which the court does have personal

jurisdiction.’” Id. (quoting Action Embroidery v. Atl.

Embroidery, 368 F.3d 1174, 1180 (9th Cir. 2004)).

Plaintiff has pleaded four causes of action against Pietsch:

the Second Cause of Action for Fraud and Deceit — Intentional

Misrepresentation of Fact; the Third Cause of Action for Fraud

and Deceit — Negligent Misrepresentation of Fact; the Fourth

Cause of Action for Fraud and Deceit — Suppression of Fact; and

the Fifth Cause of Action for Fraud and Deceit — Fraud in Sale of

Personal Property. Pietsch’s alleged intentional acts toward the

forum establish personal jurisdiction over it for the intentional

tort claims only: the Second, Fourth, and Fifth Causes of

Action. The Negligent Misrepresentation claim, however, arises

out of a common nucleus of fact. All claims concern

communications and other conduct surrounding Pietsch’s inspection

of the Aircraft. The intentional tort claims, like the other

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claims, depend on the content of the alleged representations

Pietsch made about the Aircraft, whether the representations were

accurate, and the state of Aircraft when inspected. Therefore,

“[w]hether to exercise pendent personal jurisdiction is committed

to the sound discretion of the district court.” CE Distrib., 380

F.3d at 1113.

Considerations of “judicial economy, avoidance of piecemeal

litigation, and overall convenience of the parties” are served by

retaining jurisdiction over the all of the claims against

Pietsch. See Action Embroidery, 368 F.3d at 1181. Otherwise

Plaintiff and Pietsch could be faced with litigation in multiple

fora, with certain claims remaining before this Court and other

claims properly brought elsewhere. Simultaneously litigating a

claim based on negligent misrepresentation in North Dakota, for

example, and the claims based on intentional misrepresentation in

this Court would be unnecessarily burdensome to both the

litigants and the courts. If, however, the Court grants

jurisdiction and then the intentional tort claims fail as a

matter of law, the remaining claims may be dismissed for lack of

personal jurisdiction. See Rosenberg v. Seattle Art Museum, 42

F. Supp. 2d 1029, 1038 (W.D. Wash. 1994). 

ACCORDINGLY, Pietsch’s Motion for Dismissal for Lack of

Jurisdiction is DENIED.

IT IS SO ORDERED.

Dated: April 5, 2006 /s/ Robert E. Coyle 

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810ha4 UNITED STATES DISTRICT JUDGE

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