Opinion ID: 771398
Heading Depth: 1
Heading Rank: 3

Heading: stripling presented a prima facie case of personal jurisdiction over guardian

Text: 16 Stripling asserts that the district court erred in holding that the court did nothave personal jurisdiction over Guardian. Stripling contends that it set out a prima facie case for personal jurisdiction under both the contract prong and doing-business prong of Mississippi's long-arm statute. See Miss. Code Ann. § 13-3-57 (2000). 6 We conclude that Stripling met the requirement of a prima facie showing, and therefore, the district court erred in dismissing Guardian for lack of personal jurisdiction at this stage in the proceedings.
17 We review de novo a dismissal for lack of personal jurisdiction. See Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 214 (5th Cir. 2000); Jobe v. ATR Mktg., Inc., 87 F.3d 751, 753 (5th Cir. 1996).
18 Under the Federal Rules of Civil Procedure, a federal court sitting in diversity may exercise jurisdiction over a nonresident corporate defendant only if permitted by state law. See Fed. R. Civ. P. 4(e)(1), 4(h)(1), 4(k)(1); see also Alpine View Co., 205 F.3d at 214. We conduct a two-prong analysis to determine if personal jurisdiction is proper over a nonresident. 7 See Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir. 1999); Jobe, 87 F.3d at 753. First, we determine whether the long-arm statute of the forum state confers personal jurisdiction over the defendant. See Latshaw, 167 F.3d at 211. Second, we ask whether the exercise of such jurisdiction by the forum state is consistent with due process under the United States Constitution. Id. 19 When a court rules on a motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, it must accept as true the uncontroverted allegations in the complaint and resolve in favor of the plaintiff any factual conflicts[.] Id.; see also Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990); Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985); DeMelo v. Toche Marine, Inc., 711 F.2d 1260, 1270-71 (5th Cir. 1983). Therefore, the plaintiff need only present a prima facie case of personal jurisdiction to satisfy its burden. See id.; Bullion, 895 F.2d at 217. From our review of the record, taking as true the uncontroverted allegations and resolving any factual conflicts in favor of Stripling, we conclude that Stripling met its burden of establishing the minimum prima facie showing that Jordan was acting in concert with Guardian when it entered the Agreement with Stripling. 8 20 Regarding the first prong of our personal jurisdiction inquiry, a nonresident who makes a contract with a resident of the state to be performed in whole or in part within the state is within the reach of the long-arm statute. See Miss. Code Ann. § 13-3-57; see also Cycles, Ltd. v. W.J. Digby, Inc., 889 F.2d 612, 617 (5th Cir.1989). Therefore, the question presented is: Under the facts of this case, did Stripling present a prima facie case that Guardian entered a contract with a Mississippi resident, which was to be performed in whole or in part within Mississippi? 9 21 Stripling and Jordan entered into a contract for the sale of a working interest in the Flora Field Unit, which is situated in Mississippi. 10 Under that contract, Jordan was to complete the operations of at least one phase of the Drilling Program. It is not disputed that this contract, at least to the extent that it exists between Stripling and Jordan, is a contract to be performed in whole or in part in Mississippi because Jordan had duties of performance in Mississippi. However, Stripling argues that Jordan entered the contract with Stripling on behalf of itself and Guardian, who financed and purchased seventy-five percent of the eighty-percent working interest in the Field. Stripling offers up the theories of agency, joint venture, and assignment in order to connect Guardian with the contract. Guardian argues in response that its role in this transaction is that of a mere passive investor. We find that, under the facts presented in this case, a prima facie showing exists which demonstrates that Guardian's role may have exceeded that of a mere investor. 22 An agency relationship may be express or de facto. A de facto agency may be proven by the presence of three elements at the time of contracting: (1) [m]anifestation by the alleged principal, either by words or conduct, that the alleged agent is employed as such by the principal, (2) [t]he agent's acceptance of the arrangement, and (3) [t]he parties understood that the principal will control the undertaking. Forest Oil Corp. v. Tenneco, Inc., 626 F. Supp. 917, 921 (S.D. Miss. 1986) (citing Engle Acoustic & Tile, Inc. v. Grenfell, 223 So. 2d 613, 617 (Miss. 1969)). The question whether an agency relationship has been created is generally one of fact: 23 [W]hether an agency has in fact been created is to be determined by the relations of the parties as they exist under their agreements or acts, with the question being ultimately one of intention. . . . [I]f relations exist which will constitute an agency, it will be an agency whether the parties understood the exact nature of the relation or not. Moreover, the manner in which the parties designate the relationship is not controlling, and if an act done by one person in behalf of another is in its essential nature one of agency, the one is the agent of such other notwithstanding he is not so called. 24 Engle Acoustic & Tile, Inc., 223 So. 2d at 617-18 (internal quotations omitted) (emphasis omitted) (quoting 3 Am. Jur. 2d Agency § 21 (1962)). 25 Resolving all factual conflicts in favor of Stripling, the evidence demonstrates that before the final contract between Jordan and Stripling was signed, Jordan agreed to purchase for Guardian seventy-five percent of the eighty-percent interest that Jordan was acquiring from Stripling. As such, prima facie evidence exists that Jordan may have been acting on behalf of Guardian, an undisclosed principal. See Bailey v. Worton, 752 So. 2d 470, 475-76 (Miss. Ct. App. 1999) (Though an agent is personally answerable if at the time of making the contract in his principal's behalf he failed to disclose the fact of his agency, the other party to the contract may proceed against the agent or againstthe principal.). 11 26 The record reveals that there existed an ongoing relationship between Jordan and Guardian, whereby Jordan had an obligation to offer oil and gas interests to Guardian or any other Guardian entity before it made any purchases. Under this relationship, after entering the letter of intent with Stripling on November 2, 1996, Jordan went to Guardian and offered to buy for Guardian a percentage of the working interest. Guardian agreed, and Jordan and Guardian entered a letter agreement on December 6, 1996, under which Guardian would pay the purchase price of seventy-five percent of the eighty-percent interest. On January 1, 1997, Jordan and Stripling entered into the proposed purchase and sale agreement, and the property was purchased with Guardian's money. Before entering the agreement with Jordan, Guardian hired a natural resource consultant and a petroleum engineering consultant to review the project. 27 Evidence exists which demonstrates that Jordan was holding title for Guardian and that Guardian could demand and receive an assignment whenever it deemed appropriate. Deposition testimony revealed that there was [n]o particular reason that Guardian was not made a party to the Jordan/Stripling contract, other than they chose to do it all in Jordan Production Company. The December 6, 1996 agreement between Jordan and Guardian provided that Guardian shall have the right to participate in drilling, completions, re-works, etc. 28 Finally, in a May 5, 1998 letter from Jordan to Stripling regarding reworking wells after Stripling filed suit, Jordan admitted that it was writing on behalf of itself and as agent for others and intended to rework the wells individually and as agent for the remaining parties (emphasis added). We believe this evidence is sufficient for a prima facie case that Guardian entered into a contract through its agent Jordan to be performed in whole or in part in Mississippi, thus placing Guardian within the reach of the state's long-arm statute. 29 Regarding the second prong of our personal jurisdiction inquiry, a court may only exercise personal jurisdiction over a nonresident if that exercise of jurisdiction comports with due process. Jurisdiction may be asserted only in situations in which the nonresident has such minimum contacts with the forum state that its being required to defend a suit in the forum state would not offend 'traditional notions of fair play and substantial justice.' Latshaw, 167 F.3d at 211 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). The focus here is on whether the nonresident purposefully availed itself of the benefits of the forum state. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985). 30 A state exercises 'specific jurisdiction' over a nonresident defendant when the lawsuit arises from or relates to the defendant's contact with the forum state. Latshaw, 167 F.3d at 211; Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 416 (5th Cir. 1993). Moreover, adefendant's single act can be sufficient to confer personal jurisdiction if that act gives rise to the claim being asserted, Ruston Gas Turbines, Inc, 9 F.3d at 416, so long as the defendant reasonably anticipate[s] being haled into court in the forum state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). 31 We find that Guardian had sufficient contact, on the present record, to justify the district court's exercise of specific jurisdiction. Because we conclude that Stripling established a prima facie case of agency to justify the reach of the long-arm statute, we find that such agency permits a conclusion that Guardian entered into a contract with a Mississippi resident and could have reasonably anticipated being haled into Mississippi court should a suit arise from the Flora Field contract. Such an exercise of personal jurisdiction based upon Guardian's specific contact with the forum state does not offend traditional notions of fair play and substantial justice. As such, Stripling met its prima facie burden, and the district court erred in dismissing Guardian for lack of personal jurisdiction. 32