Keaty v. Dodson , 2020 UT App 9 ( 2020 )

2020 UT App 9THE UTAH COURT OF APPEALS
KEATY LLC, TM KEATY AND ASSOCIATES INC.,
AND STEVEN KEATY,
Appellants,
v.
BLUEPRINT SUMMER PROGRAMS INC.
AND MICHAEL DODSON,
Appellees.
Opinion
No. 20180447-CA
Filed January 9, 2020
Third District Court, Salt Lake Department
The Honorable Richard D. McKelvie
No. 179910990
Jay L. Springer, Attorney for Appellants
Justin D. Heideman and Thomas R. McCosh,
Attorneys for Appellees
JUDGE DIANA HAGEN authored this Opinion, in which
JUDGES KATE APPLEBY and JILL M. POHLMAN concurred.
HAGEN, Judge:
¶1 Keaty LLC, TM Keaty and Associates Inc., and Steven
Keaty (collectively, the Keaty parties) appeal the district court’s
dismissal of their claims arising out of their business dealings
with Blueprint Summer Programs Inc. (Blueprint) based on
lack of personal jurisdiction. We conclude that Blueprint’s
affiliations with Utah are insufficient to establish general
jurisdiction and that the facts alleged relating to the Keaty
parties’ individual claims are insufficient to establish specific
jurisdiction. Accordingly, we affirm.
Keaty v. Dodson
BACKGROUND 1
¶2 Steven Keaty is a Nevada resident who operates two
businesses: Keaty LLC and TM Keaty and Associates Inc. (TM
Keaty). Keaty LLC is a Nevada limited liability company with a
Utah address that offers business consulting services. TM Keaty
is a Utah corporation with a Utah address that offers accounting
and personal assistance services.
¶3 Blueprint is a company that runs summer camp programs
for high school students from across the country at college
1. In determining whether the district court properly granted
Blueprint’s motion to dismiss for lack of personal jurisdiction,
“we accept the factual allegations in the [amended] complaint as
true and consider them, and all reasonable inferences to be
drawn from them, in the light most favorable to [the Keaty
parties].” See Wagner v. Clifton, 2002 UT 109, ¶ 2, 62 P.3d 440(cleaned up). Here, the parties dispute whether the operative
facts derive from the original or amended complaint. The Keaty
parties filed the amended complaint in response to Blueprint’s
motion to dismiss after the deadline for amended pleadings had
passed and without leave of the court. However, Blueprint did
not move to strike the amended complaint, and it is unclear from
the record whether the district court’s order of dismissal relates
to the original or amended complaint. While the original
complaint did not list TM Keaty and Associates Inc. as a
plaintiff, it did assert that Keaty LLC assumed all of the rights
and liabilities of TM Keaty, and each of the relevant
jurisdictional facts in the amended complaint are included in
either the original complaint or the documentary evidence
submitted to the district court. As a result, which version of the
complaint the district court considered has no impact on our
jurisdictional analysis. For purposes of this appeal, we accept the
Keaty parties’ assertion that the district court ruled on the
amended complaint and that TM Keaty is a proper party to this
appeal.
20180447-CA 2 2020 UT App 9Keaty v. Dodson
campuses, none of which are in Utah. Blueprint is incorporated
and has offices in North Carolina. Michael Dodson is an
executive director at Blueprint and also resides in North
Carolina.
¶4 In February 2016, Keaty, Dodson, and another Blueprint
executive met at Blueprint’s office in North Carolina to arrange
for Keaty LLC to provide consulting services to Blueprint (the
February meeting). Keaty LLC agreed to provide consulting
services to Blueprint for compensation in an amount to be
determined at a later date. Beginning shortly thereafter, Keaty
and Dodson participated in regular telephone or video
conference calls through which consulting services were
provided. Keaty participated in most, if not all, of those calls
from locations in Utah and Nevada.
¶5 During this course of dealing, Blueprint began to receive
accounting and personal assistance services through Keaty’s
other company, TM Keaty. One particular TM Keaty employee
provided personal assistance services from Salt Lake City, Utah.
The agreement under which the employee provided these
services “expressly required her to remain an employee of TM
Keaty while providing services to Blueprint, and also prohibited
[the employee] from seeking employment with Blueprint or
entering into an employment relationship with Blueprint.”
Additionally, Blueprint agreed “not [to] seek to employ, nor
actually employ, [the employee] directly for a reasonable period
based on the services [the employee] provided to [Blueprint].”
From March to August 2016, TM Keaty regularly sent invoices to
Blueprint for services that were provided by TM Keaty
employees who lived and worked in Utah. Blueprint timely
remitted payments for those services to TM Keaty’s Utah
address.
¶6 By around August 2016, the relationship between
the Keaty parties and Blueprint had begun to deteriorate.
When Keaty sought clarification from Blueprint regarding
compensation for the consulting services provided by Keaty
20180447-CA 3 2020 UT App 9Keaty v. Dodson
LLC, Blueprint stopped returning calls for several weeks.
Finally, during a phone call with Dodson in October 2016, Keaty
again asked about the compensation for the consulting services,
but Blueprint was unwilling to address the issue. In December,
the Keaty parties sent Blueprint an invoice for Keaty’s services in
the amount of $9,338.80.
¶7 Also in August 2016, the TM Keaty employee who had
performed personal assistance services to Blueprint informed
TM Keaty that she intended to seek employment with Blueprint.
TM Keaty informed the employee that doing so would violate
her employment agreement. Then, “in anticipation of being
terminated,” the employee quit her job with TM Keaty.
Immediately after that, the employee began working for
Blueprint. The employee’s unexpected departure “caused TM
Keaty financial harm and caused TM Keaty to incur executive
costs.”
¶8 As a result of the above-described facts, the Keaty parties
brought suit in Utah against Blueprint for numerous claims. The
district court dismissed all of the claims based on lack of
personal jurisdiction over Blueprint and Dodson. The Keaty
parties now appeal.
ISSUE AND STANDARD OF REVIEW
¶9 The Keaty parties contend the district court erred by
concluding that it lacked personal jurisdiction over Blueprint.
“Because the propriety of a motion to dismiss is a question of
law, we review for correctness, giving no deference to the
decision of the trial court.” Wagner v. Clifton, 2002 UT 109, ¶ 8, 62
P.3d 440 (cleaned up).
ANALYSIS
¶10 “Personal jurisdiction means the power to subject a
particular defendant to the decisions of the court.” Rocky
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Mountain Claim Staking v. Frandsen, 884 P.2d 1299, 1301 (Utah Ct.
App. 1994) (cleaned up). “A court may take personal jurisdiction
of a nonresident defendant if the requirements of due process
and the state’s long-arm statute are met.” Id. Utah’s long-arm
statute is coextensive with the constitutional limitations imposed
by the federal Due Process Clause. Pohl, Inc. of Am. v. Webelhuth,
2008 UT 89, ¶ 32, 201 P.3d 944; accord Utah Code Ann. § 78B-3-
205 (LexisNexis 2018). Therefore, to succeed on appeal, the Keaty
parties must have alleged facts sufficient for us to conclude that
Blueprint’s affiliations with and connections to Utah are “such
that the maintenance of the suit does not offend traditional
notions of fair play and substantial justice.” Pohl, 2008 UT 89,
¶ 23 (cleaned up); see also International Shoe Co. v. Washington, 326
U.S. 310, 316 (1945).
¶11 There are two categories of personal jurisdiction: general
and specific. General jurisdiction, also known as all-purpose
jurisdiction, “permits a court to exercise power over a defendant
without regard to the subject of the claim asserted and is
dependent on a showing that the defendant conducted
substantial and continuous local activity in the forum state.”
Pohl, 2008 UT 89, ¶ 9 (cleaned up). In contrast, “specific personal
jurisdiction gives a court power over a defendant only with
respect to claims arising out of the particular activities of the
defendant in the forum state and only if the defendant has
certain minimum local contacts.” Id. ¶ 10 (cleaned up). The
Keaty parties argue that Utah courts may exercise both general
and specific jurisdiction over Blueprint in relation to their
claims, 2 and so we address each in turn.
2. The Keaty parties also assert claims against Dodson in his
individual capacity. But on appeal, the Keaty parties make no
effort to distinguish between Blueprint and Dodson, and the
entirety of their argument is aimed at addressing whether
Blueprint is subject to personal jurisdiction in Utah. For example,
regarding general jurisdiction, the Keaty parties refer to caselaw
(continued…)
20180447-CA 5 2020 UT App 9Keaty v. Dodson
I. General Personal Jurisdiction
¶12 A party is subject to general personal jurisdiction when its
affiliations with the forum state “indicate[] general submission
to a State’s powers.” J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S.
873, 880 (2011). “With respect to a corporation, the place of
incorporation and principal place of business are paradigm bases
for general jurisdiction,” Daimler AG v. Bauman, 571 U.S. 117, 137
(2014) (cleaned up), because they evidence “an intention to
benefit from and thus an intention to submit to the laws of the
forum State,” Nicastro, 564 U.S. at 881. Functionally, a court can
exercise general jurisdiction over a corporation where “that
corporation’s affiliations with the State are so continuous and
systematic as to render it essentially at home in the forum State.”
Daimler, 571 U.S. at 138–39 (cleaned up). “By contrast, those who
. . . operate primarily outside a State have a due process right not
to be subjected to judgment in its courts as a general matter.”
Nicastro, 564 U.S. at 881.
¶13 We cannot conclude, based on the Keaty parties’ factual
allegations, that Blueprint’s affiliations with Utah are “so
(…continued)
discussing general jurisdiction over corporations, not over
individuals. Regarding specific jurisdiction, the Keaty parties
seek to distinguish an unfavorable precedent by emphasizing
that the defendant in that case was an individual, not a corporate
entity. Because no effort was made to distinguish between the
connections Blueprint and Dodson have to Utah and because the
Keaty parties’ arguments appear to be aimed primarily at
Blueprint, we decline to address any jurisdictional questions
relating to Dodson individually, and we therefore affirm the
district court’s dismissal of claims against him. See Harris v. IES
Associates, Inc., 2003 UT App 112, ¶ 18 n.6, 69 P.3d 297 (declining
to consider issues technically raised on appeal when the
appellant does not address those issues in the argument section
of its brief).
20180447-CA 6 2020 UT App 9Keaty v. Dodson
continuous and systematic as to render it essentially at home” in
Utah. See Daimler, 571 U.S. at 139. The amended complaint
makes clear that Blueprint is a North Carolina corporation and
that its offices are located in North Carolina. Only two facts are
alleged that could possibly demonstrate Blueprint’s continuous
affiliation with Utah: (1) one of Blueprint’s executives has a Utah
residential address, and (2) Blueprint’s summer programs accept
applicants from any state, including Utah. An allegation that an
executive of a corporation resides in Utah is, without more,
insufficient to show that the corporation itself is at home here.
See DeLorenzo v. Viceroy Hotel Group, LLC, 757 F. App’x 6, 9 (2d
Cir. 2018) (concluding that a defendant corporation was not
subject to general jurisdiction in New York even where the
plaintiff alleged that the defendant’s “former director of sales
and marketing . . . is purportedly a New York resident who
worked from a home office or otherwise made trips to New
York”). And Blueprint cannot be considered at home in Utah
merely because it accepts summer program applicants from
Utah, in addition to every other state. See Daimler, 571 U.S. at 139
n.20 (“A corporation that operates in many places can scarcely
be deemed at home in all of them.”).
¶14 The Keaty parties have not alleged any business activities
undertaken by Blueprint that would closely approximate having
its principal place of business in Utah. In the absence of such
factual allegations, the district court rightly rejected the Keaty
parties’ assertion that “Blueprint has maintained substantial and
continuous activity in Utah.”
II. Specific Personal Jurisdiction
¶15 “Specific personal jurisdiction gives a court power over a
defendant only with respect to claims arising out of the
particular activities of the defendant in the forum state.” Raser
Techs., Inc. v. Morgan Stanley & Co., 2019 UT 44, ¶ 35, 449 P.3d 150(cleaned up). A court may exercise specific jurisdiction over a
party “only when the party has minimum contacts with the state
such that the maintenance of the suit does not offend traditional
20180447-CA 7 2020 UT App 9Keaty v. Dodson
notions of fair play and substantial justice.” Id. ¶ 36 (cleaned up);
see also International Shoe Co. v. Washington, 326 U.S. 310, 316
(1945). “In judging minimum contacts, a court properly focuses
on the relationship among the defendant, the forum, and the
litigation.” Raser Techs., 2019 UT 44, ¶ 36 (cleaned up); see also
Calder v. Jones, 465 U.S. 783, 788 (1984). “For a State to exercise
jurisdiction consistent with due process, the defendant’s suit-
related conduct must create a substantial connection with the
forum State.” Walden v. Fiore, 571 U.S. 277, 284 (2014).
¶16 Importantly, “to assert specific jurisdiction, a plaintiff
must demonstrate not only the connection between the
defendant and the forum, but also the connection between the
forum and the claims at issue.” Raser Techs., 2019 UT 44, ¶ 45; see
also Bristol-Myers Squibb Co. v. Superior Court of Cal., 137 S. Ct.
1773, 1781–83 (2017). Therefore, the existence of specific
jurisdiction relating to a single claim does not automatically
establish specific jurisdiction for all claims listed in a complaint.
Rather, “when a plaintiff relies on specific jurisdiction, he must
establish that jurisdiction is proper for each claim asserted
against a defendant.” Picot v. Weston, 780 F.3d 1206, 1211 (9th
Cir. 2015); see also International Energy Ventures Mgmt., LLC v.
United Energy Group, Ltd., 818 F.3d 193, 211 n.73 (5th Cir. 2016)
(“The plaintiff has the burden of demonstrating specific
jurisdiction for each claim asserted against the nonresident
defendant.”).
¶17 In accordance with this principle, we determine whether
specific jurisdiction exists for each of the Keaty parties’ various
claims by analyzing Blueprint’s purposeful conduct toward Utah
in connection with the facts underlying those claims. In their
amended complaint, the Keaty parties asserted ten causes of
action based on two separate sets of operative facts: (A) claims
relating to Blueprint’s nonpayment of consulting services and
(B) claims relating to enticement of a TM Keaty employee. We
address the claims arising under each set of facts separately to
determine whether Blueprint’s suit-related conduct created a
substantial connection with Utah.
20180447-CA 8 2020 UT App 9Keaty v. Dodson
A. Claims Relating to Blueprint’s Nonpayment for
Consulting Services
¶18 The first set of claims arose out of the business
relationship between Blueprint and Keaty LLC. More
specifically, these claims pertain to Blueprint’s representations at
the February meeting and subsequent nonpayment for the
consulting services provided through Keaty LLC. These claims
include: (1) breach of contract, (2) quantum meruit,
(3) misrepresentation and nondisclosure, (4) negotiating in bad
faith, (5) dealing in bad faith/unfair dealing, and (6) unjust
enrichment.
¶19 The primary facts connecting these claims to Utah are
contacts that Keaty and Keaty LLC have with the forum state.
For example, Keaty LLC has a Utah office, and the amended
complaint generally alleges that the Keaty parties were
“physically located in Utah or Nevada during most, if not all,” of
the consulting telephone and video conference calls with
Dodson, who was in North Carolina. More specifically, Keaty
avers that he “was personally present in the state of Utah on
multiple occasions while performing consulting work for
Blueprint through Keaty LLC.” But our focus is not on the Keaty
parties’ connections to Utah. Rather, we must analyze
defendant-Blueprint’s conduct directed at Utah to see if
minimum contacts exist. See Walden v. Fiore, 571 U.S. 277, 284
(2014). Here, the Keaty parties have not alleged facts sufficient to
establish specific jurisdiction with respect to their claims for
nonpayment.
¶20 Blueprint is a North Carolina corporation that sought
consulting services from Keaty LLC, a Nevada company,
and Keaty, a Nevada resident. The February meeting at
which Blueprint and Keaty LCC agreed to do business together
took place in North Carolina. The Keaty parties have not
alleged that Blueprint traveled to or otherwise reached into Utah
to do business with Keaty LLC. See O’Connor v. Sandy Lane Hotel
Co. 496 F.3d 312, 318 (3d Cir. 2007) (determining specific
20180447-CA 9 2020 UT App 9Keaty v. Dodson
jurisdiction existed only with respect to claims based on acts
that “deliberately reached into [the forum state] to target two
of its citizens”). The only Utah connection attributable
to Blueprint—rather than to the Keaty parties—is the allegation
that one of Blueprint’s executives, who resides in Utah,
attended the February meeting in North Carolina and
participated in consulting calls while she was physically present
in Utah. But the Keaty parties have not alleged any facts
connecting that executive, her presence at the February meeting,
or her participation in consulting calls to its claims for
nonpayment.
¶21 The Keaty parties have not alleged any suit-related
actions by Blueprint that were directed toward Utah. Because
Blueprint did not “purposefully avail itself of the benefit of
conducting business in Utah” such that Utah’s “potential
exercise of jurisdiction [would be] foreseeable,” see Fenn v.
Mleads Enters., Inc., 2006 UT 8, ¶ 13, 137 P.3d 706 (cleaned up),
the district court was correct to dismiss the Keaty parties’ claims
related to Blueprint’s nonpayment for consulting services for
lack of specific personal jurisdiction.
B. Claims Relating to Enticement of a TM Keaty Employee
¶22 This category of claims arises out of Blueprint’s hiring of a
former TM Keaty employee in violation of an agreement
between Blueprint and TM Keaty. These claims include:
(1) breach of contract with respect to improperly enticing a TM
Keaty employee and (2) breach of contract with respect to
improperly employing a TM Keaty employee.
¶23 The facts on which these claims are based suggest a closer
connection to Utah than the facts supporting claims relating to
nonpayment for consulting services. TM Keaty is a Utah
company. The employee worked for TM Keaty in Utah.
Blueprint agreed not to “seek to employ, nor actually employ,
[the employee] directly for a reasonable period” but then hired
her immediately after she stopped working for TM Keaty.
20180447-CA 10 2020 UT App 9Keaty v. Dodson
¶24 But once again, these facts primarily relate to the Keaty
parties’ connections to Utah instead of Blueprint’s. This case is
comparable to Walden, in which a Nevada couple sued a Georgia
police officer in a Nevada court due to a seizure that the officer
carried out against the couple at a Georgia airport. 571 U.S. at
279–81. There, the United States Supreme Court held that mere
knowledge of the plaintiffs’ connections to Nevada was
insufficient to support specific jurisdiction because such an
approach “impermissibly allows a plaintiff’s contacts with the
defendant and forum to drive the jurisdictional analysis.” Id. at
289. Rather than focus on a plaintiff’s connections to the forum
state, courts should instead determine whether “the defendant’s
suit-related conduct [created] a substantial connection with the
forum State.” Id. at 284 (emphasis added).
¶25 Here, as related to Blueprint’s conduct in hiring TM
Keaty’s employee, the Keaty parties have alleged that Blueprint
knew it was dealing with a Utah company and that the
employee lived in Utah. But the Keaty parties have not alleged
that Blueprint’s suit-related conduct created a substantial
connection with Utah. See id. The Keaty parties have made no
factual allegations as to what Blueprint did to allegedly entice
the employee away from TM Keaty. There are no allegations, for
instance, that Blueprint or its agents ever traveled to Utah or
reached out to anyone in Utah in an effort to entice the employee
away from TM Keaty. Although one can imagine specific acts
directed at Utah that Blueprint might have taken to recruit the
employee, the Keaty parties have made no such allegations.
¶26 Because there are no allegations that Blueprint took
deliberate actions directed at Utah to entice the employee, the
district court was correct to dismiss these claims for lack of
specific personal jurisdiction. 3
3. The Keaty parties also make two additional claims—(1) breach
of implied warranties and covenants, and (2) fraudulent
(continued…)
20180447-CA 11 2020 UT App 9Keaty v. Dodson
CONCLUSION
¶27 The Keaty parties did not allege facts from which a
finding of either general or specific personal jurisdiction could
be based. Therefore, the district court was correct to dismiss the
Keaty parties’ claims against Blueprint for lack of personal
jurisdiction. 4
¶28 Affirmed.
(…continued)
nondisclosure. It is unclear from the amended complaint which
set of facts those claims are based on. But because we have
determined that specific jurisdiction cannot be established by the
facts alleged regarding either Blueprint’s nonpayment for
consulting services or enticement of a TM Keaty employee, it
follows that specific personal jurisdiction cannot exist for these
claims regardless of the set of operative facts on which they are
based.
4. The Keaty parties also argue that the district court erred by
granting Blueprint’s motion to dismiss without first allowing
jurisdictional discovery. However, the Keaty parties did not
properly move the district court to allow jurisdictional
discovery, only requesting it in their memorandum opposing the
motion to dismiss. See Utah R. Civ. P. 7(n) (“A party may not
make a motion in a memorandum opposing a motion or in a
reply memorandum.”). Because the issue was not properly
raised, the district court had no obligation to address it.
20180447-CA 12 2020 UT App 9