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Ramos v. Foam America, Inc.

United States District Court, D. New Mexico

February 20, 2018

REFUGIO RAMOS, Plaintiff,
v.
FOAM AMERICA, INC., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          HONORABLE CARMEN E. GARZA CHIEF UNITED STATES MAGISTRATE JUDGE

         THIS MATTER is before the Court on Defendants Reeves Roofing Equipment Co., Inc., JNR Enterprises, Inc., Joe Reeves, John Reeves, and Amy Reeves' (collectively the “Reeves Defendants”) Motion to Dismiss for Lack of Personal Jurisdiction (the “Motion to Dismiss”), (Doc. 167), filed August 21, 2017; Defendants Great Northern Building Products, Great Northern Holding, LLC, and Harrisonville Equipment Company's Response in Opposition to Defendants Reeves Roofing Co., Inc., JNR Enterprises, Inc., Joe Reeves, John Reeves, and Amy Reeves' Motion to Dismiss (the “Great Northern Response”), (Doc. 168), filed September 5, 2017; Plaintiff Refugio Ramos' Response to Defendants Reeves Roofing Equipment Co., Inc., N/K/A JAJ Equipment, Inc., JNR Enterprises, Inc., Joe S. Reeves, John Reeves, and Amy Reeves' Motion to Dismiss for Lack of Personal Jurisdiction (“Plaintiff's Response”), (Doc. 171), filed September 5, 2017; and the Reeves Defendants' Reply in Support of Their Motion to Dismiss for Lack of Personal Jurisdiction (the “Reply”), (Doc. 189), filed October 10, 2017.

         Also before the Court are Plaintiff's Objection to Defendant JAJ Equipment, Inc., F/K/A Reeves Roofing Equipment Co., Inc.'s Motion to Dismiss for Lack of Personal Jurisdiction and Notice of Waiver (the “Objection”), (Doc. 192), filed October 22, 2017; the Reeves Defendants' Motion to Strike or Disregard Plaintiff's “Objection” to Their Motion to Dismiss (the “Motion to Strike”), (Doc. 211), filed January 5, 2018; Plaintiff's Response in Opposition to Reeves Defendants' Motion to Strike or Disregard Plaintiff's Objection to Their Motion to Dismiss (Doc. 211) (the “Response to the Motion to Strike”), (Doc. 215), filed January 17, 2018.

         After reviewing the briefing, the Court finds that it may consider the argument Plaintiff raises in the Objection, but that the Court lacks personal jurisdiction over the Reeves Defendants. Therefore, for the following reasons, the Reeves Defendants' Motion to Strike is DENIED and the Reeves' Defendants' Motion to Dismiss is GRANTED.

         I. Background

         This case arises from injuries Plaintiff suffered on a commercial roofing job while employed by Defendant C. Ortiz Corporation (“C. Ortiz”). Plaintiff was injured when a tar lugger overturned and spilled hot tar onto him. (Doc. 192 at 1-2). The tar lugger involved in the incident was designed, manufactured, marketed, and sold by defendant Reeves Roofing Equipment Co., Inc. (“Reeves Roofing”), a Texas corporation. Defendants Joe Reeves, John Reeves, and Amy Reeves (the “Individual Reeves Defendants”) were employees and officers of Reeves Roofing before its sale to Defendant Great Northern Holdings, LLC (“Great Northern”). (Docs. 167 at 4; 171 at 2). Following its sale, Reeves Roofing changed its name to JAJ Equipment, Inc. (“JAJ”)[1] and ceased operation. (Doc. 167 at 2). Defendant JNR Enterprises, Inc. (“JNR”), another Texas corporation, is a holding company. JNR is the sole shareholder of JAJ, and leased land to JAJ on which JAJ manufactured roofing equipment. (Doc. 167-1 at 2).

         After his injury, Plaintiff brought claims against the Reeves Defendants alleging strict liability, recklessness, and negligence in designing, manufacturing, marketing, and selling the tar lugger. (Doc. 85 at 5-6) (Amended Complaint). Plaintiff alleged that JAJ and JNR are Texas corporations doing business in New Mexico and that the Individual Reeves Defendants participated in designing and marketing the tar lugger. Id. at 2, 4. In its Answer to the Amended Complaint, JAJ denied that it does business in New Mexico, (Doc. 93 at 2), while JNR and the Individual Reeves Defendants filed a Motion to Dismiss for Lack of Personal Jurisdiction (the “First Motion to Dismiss”), (Doc. 102). Plaintiff then moved to stay a ruling on the First Motion to Dismiss and to allow ninety days of jurisdictional discovery. (Doc. 106). JNR and the Individual Reeves Defendants consented to discovery provided it was narrowly tailored to facts related to personal jurisdiction. (Doc. 108). The other Defendants in this case did not oppose allowing jurisdictional discovery, but they preferred to proceed with general discovery rather than wait for a ruling on the First Motion to Dismiss. (Doc. 115). Accordingly, the Court ordered ninety days of jurisdictional discovery and allowed general discovery against the rest of the Defendants, including JAJ. Id.

         Jurisdictional discovery revealed the following facts. JAJ was originally founded and incorporated in Texas in 1966 and manufactured roofing equipment, including tar luggers. (Doc. 167-1 at 3). Between 2010 and 2011, JAJ sold to four customers in New Mexico: The Flashing Company and L&P Building Supply in Las Cruces, NM; Reed Roofing and Construction Co. in Clovis, NM; and Albuquerque Equipment and Roofing Supply (“Albuquerque Equipment”) in Albuquerque, NM. (Doc. 167-7 at 7-10). In fiscal year 2008-2009, JAJ made no sales to New Mexico-based customers, and in fiscal year 2009-2010, JAJ made one sale to The Flashing Company. (Doc. 167-3 at 1-6). Ms. Reeves estimated making 50 sales to New Mexican customers over 20 years, though she was not the main order receiver, (Doc. 167-1 at 6), and sales were not made every year, (Doc. 167-1 at 7).

         JAJ owned no property and maintained no physical presence in New Mexico, nor did it send agents or salespeople into New Mexico. Rather, JAJ considered Albuquerque Equipment its “distributor.” (Doc. 167-1 at 7). JAJ provided Albuquerque Equipment with brochures of its products and included Albuquerque Equipment on its mass email list. Id. If a customer from New Mexico called JAJ, JAJ would refer the customer to Albuquerque Equipment. Id. If Albuquerque Equipment did not have what the customer needed, the customer could call JAJ directly. Id. JAJ's representatives also occasionally spoke with Albuquerque Equipment's employees. (Doc. 167-1 at 4, 7). JAJ had a practice of extending credit to customers and calling references as part of a credit check, but JAJ did not extend credit to anyone in New Mexico. Id.

         Regarding the particular tar lugger involved in this case, JAJ did not sell it to Albuquerque Equipment or any other New Mexico customer. Rather, C. Ortiz bought the tar lugger in El Paso, Texas, from another roofing company and brought it into New Mexico. (Doc. 167-8 at 2). C. Ortiz purchased several tar luggers and does not know which one contributed to Plaintiff's injuries. Id. at 3.

         Following jurisdictional discovery, the Reeves Defendants, including JAJ, filed the Motion to Dismiss. (Doc. 167). The Reeves Defendants argue they lack the sufficient minimum contacts with New Mexico for the Court to exercise personal jurisdiction over them, and even if they did have sufficient contacts, they claim exercising jurisdiction over them would “offend traditional notions of fair play and substantial justice.” Id. at 10. In Plaintiff's Response, he argues that these defendants are subject to personal jurisdiction, that exercising personal jurisdiction over them would not offend traditional notions of fair play and substantial justice, and that the Reeves Defendants are alter-egos of one another, therefore if the Court has jurisdiction over one of them, the Court has jurisdiction over all of them. (Doc. 171). In their Reply, the Reeves Defendants dispute Plaintiff's contentions that their contacts with New Mexico are sufficient to establish personal jurisdiction over them. (Doc. 189 at 2-12). The Reeves Defendants did not reply to Plaintiff's alter-ego argument.

         Great Northern opposes dismissing the Reeves Defendants because the Reeves Defendants agreed to indemnify, defend, and hold Great Northern harmless as part of their purchase agreement. (Doc. 168 at 2-3). Great Northern only opposed the Motion to Dismiss to preserve these rights and does not argue that the indemnification clause confers personal jurisdiction. Id. The Reeves Defendants also did not reply to Great Northern's Response.

         After the Reeves Defendants filed their Reply and a Notice of Completion of Briefing, (Doc. 190), Plaintiff filed his Objection, arguing for the first time that JAJ has waived its right to assert the Court lacks personal jurisdiction over it. (Doc. 192). Plaintiff contends that JAJ waived this defense because it “did not challenge” personal jurisdiction in its answer to the amended complaint, (Doc. 93), and was not a party to the First Motion to Dismiss. (Doc. 192 at 1-2). The Reeves Defendants did not respond to the Objection.

         Instead, the Reeves Defendants filed the Motion to Strike, stating the Court should either strike the Objection from the record or at least disregard the arguments therein. (Doc. 211). The Reeves Defendants first claim the Objection is an improper surreply filed without leave of court. Id. at 1-4. Second, according to the Reeves Defendants, Plaintiff's waiver argument is meritless because JAJ denied Plaintiff's only jurisdictional allegation, (Doc. 93 at 2), and lack of personal jurisdiction is not an affirmative defense that must be pled in an answer. (Doc. 211 at 4-6).

         In response to the Motion to Strike, Plaintiff first denies that his Objection should be ignored because it is procedurally improper. Rather, he says, under the applicable Federal Rules of Civil Procedure, plaintiffs cannot waive their right to assert a defendant has waived its right to assert lack of personal jurisdiction. (Doc. 215 at 5-9). Second, Plaintiff disputes that he is substantively incorrect. Assuming for the sake of argument that JAJ sufficiently raised lack of personal jurisdiction in its answer, Plaintiff instead argues that JAJ has waived the defense through its conduct and participation in this case. Id. at 9-12. The Reeves Defendants have not filed a reply in support of the Motion to Strike, and the time for doing so has passed.

         The Motion to Dismiss, Objection, and Motion to Strike all affect the ultimate question before the Court: are the Reeves Defendants subject to the Court's jurisdiction? Because the Motion to Strike and the Objection relate to what arguments and which defendants are properly before the Court, the Court will start with those. The Court will then discuss whether or not it has personal jurisdiction over the Reeves Defendants.

         II. ...


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