United States District Court, D. Kansas
LAWRENCE M. JARVIS and LAWRENCE M. JARVIS, CHARTERED, A Kansas Professional Corporation, Plaintiffs,
L. DAVID STUBBS, Defendant.
MEMORANDUM AND ORDER
JULIE A. ROBINSON, District Judge.
Plaintiffs Lawrence M. Jarvis and Lawrence M. Jarvis, Chartered, filed this lawsuit in Shawnee County, Kansas alleging breach of contract, breach of the implied covenant of good faith and fair dealing, fraud in the inducement, extortion, and civil conspiracy. Defendant L. David Stubbs removed the case to this Court on grounds of diversity jurisdiction (Doc. 1). Before the Court is Defendant's pro se Motion to Dismiss under Rule 12(b)(2) and 12(b)(6) for Lack of Personal Jurisdiction and Failure to State a Claim (Doc. 5). Plaintiffs oppose the motion. The Court has considered the briefs and the parties' submissions and is prepared to rule. As described more fully below, the Court denies Defendant's motion under Rule 12(b)(2), denies his motion under Rule 12(b)(6) with respect to Count One, and grants the motion to dismiss Counts Two through Six.
I. Factual Background
Drawing all reasonable inferences in favor of Plaintiffs, the following facts are taken from the Petition and attached exhibits, and the declarations and exhibits attached to the parties' briefs. The Court does not consider any general or conclusory allegations unsupported by affidavit or other evidence.
This case arises out of a dispute over payment of legal fees. Plaintiff Lawrence M. Jarvis is an attorney licensed to practice law in Kansas; Lawrence M. Jarvis, Chartered is a Kansas Professional Corporation. Defendant L. David Stubbs, who is also an attorney, is a resident of Arkansas. Stubbs was employed by Latco, Inc. ("Latco") as Director of Human Resources and General Counsel. In August 2011, Stubbs retained Plaintiffs to represent Latco in Kansas to register a judgment Latco obtained in Arkansas against a Kansas corporation and two of its officers, at an hourly rate of $150, plus litigation expenses.
Plaintiffs registered the Arkansas judgment in Kansas, and sent Latco its statement for services rendered in the amount of $12, 334.08, including expenses of $185.08. Stubbs objected to this amount because the statement reflected a total of 23.79 billable hours, and took the position that per the agreement, Plaintiffs' fee should have been $3, 568.50. Plaintiffs allege that Stubbs admitted that he owes the sum of $3, 753.58.
In November 2012, Plaintiffs filed a limited action lawsuit in Wyandotte County, Kansas against Stubbs and Latco. Defendants successfully moved to transfer the case to Johnson County, Kansas, where it was dismissed without prejudice for lack of prosecution. Plaintiffs then filed an action in Shawnee County, Kansas, against Defendant Stubbs, as Latco had filed for protection under Chapter 11 of the United States Bankruptcy Code. Stubbs then removed the state court action to this Court.
Plaintiffs' Petition sets forth six causes of action against Defendant Stubbs. Count One asserts a claim for breach of contract for failure to pay attorneys' fees in the amount of $3, 753.58. Count Two alleges that Stubbs breached the implied covenant of good faith and fair dealing by failing to advise Plaintiffs of the mathematical error in their bill for services, resulting in Plaintiffs needlessly filing a lawsuit; by failing to return Jarvis's phone call to discuss the bill; by not paying the bill after the error was discovered; and by agreeing to pay the bill only if Plaintiff would dismiss all other charges against him. Count Three alleges that Stubbs represented to Plaintiffs that his client Latco was financially secure and then "stiffed" Plaintiffs for services rendered, and that Stubbs admitted to his breach of contract in a grievance filed with the Kansas Disciplinary Administrator. Count Four alleges that Stubbs attempted to obtain dismissal of the Wyandotte County lawsuit by threatening to file a complaint against Jarvis with the Kansas Bar. Count Five alleges that Stubbs advised another Kansas lawyer, Linus Baker, that he had retained a Kansas attorney and will "pursue Jarvis from all angles." Count Six alleges that Stubbs and Latco entered into a civil conspiracy to injure and damage Jarvis's reputation in the legal community and to invade his privacy, and committed an overt act in furtherance of that conspiracy by filing a complaint with the Kansas Disciplinary Administrator. Plaintiffs' total prayer for damages exceeds $250, 000.
II. Legal Standards
A. Personal Jurisdiction Under Rule 12(b)(2)
A plaintiff bears the burden of establishing personal jurisdiction over a defendant. When a court considers a pre-trial motion to dismiss for lack of personal jurisdiction without conducting an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdiction to defeat the motion. "The plaintiff may make this prima facie showing by demonstrating, via affidavit or other written materials, facts that if true would support jurisdiction over the defendant." Allegations in a complaint are accepted as true if they are plausible, non-conclusory, and non-speculative, to the extent that they are not controverted by the submitted affidavits. At the same time the Court does not have to accept as true conclusory allegations, nor incompetent evidence. When a defendant has produced evidence to support a challenge to personal jurisdiction, a plaintiff has a duty to come forward with competent proof in support of the jurisdictional allegations of the complaint. The court resolves all factual disputes in favor of the plaintiff. Conflicting affidavits are also resolved in the plaintiff's favor, and "the plaintiff's prima facie showing is sufficient notwithstanding the contrary presentation by the moving party." "In order to defeat a plaintiff's prima facie showing of jurisdiction, a defendant must present a compelling case demonstrating that the presence of some other consideration would render jurisdiction unreasonable.'"
The Court's subject matter jurisdiction over this suit is based on diversity of citizenship. "To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show both that jurisdiction is proper under the laws of the forum state and that the exercise of jurisdiction would not offend due process." Because Kansas' long-arm statute permits the exercise of any jurisdiction that is consistent with the United States Constitution, the personal jurisdiction analysis under Kansas law collapses into the inquiry required by the Due Process Clause.
B. Failure to State a Claim Under Rule 12(b)(6)
To survive a motion to dismiss, a complaint must present factual allegations, assumed to be true, that "raise a right to relief above the speculative level" and must contain "enough facts to state a claim to relief that is plausible on its face." Under this standard, "the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims." The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief. As the Supreme Court explained, "[a] pleading that offers labels and conclusions' or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertion[s]' devoid of further factual enhancement.'" Additionally, "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."
Defendant Stubbs seeks dismissal on the grounds that the Court lacks personal jurisdiction and ...