United States District Court, D. Kansas
WARD KRAFT, INC., and TWIN CITY FIRE INS. CO., Plaintiffs,
UMB BANK, N.A., and FARRIS BOBANGO PLC, Defendants. UMB BANK, N.A., Third-Party Plaintiff,
TRIUMPH BANK, Third-Party Defendant.
MEMORANDUM AND ORDER
MURGUIA, United States District Judge.
matter before this court is the motion to dismiss for lack of
personal jurisdiction brought by third-party defendant
Triumph Bank. (Doc. 29.) Triumph Bank, a Tennessee-chartered
bank based in Memphis, seeks to dismiss the claims against it
brought by defendant and third-party plaintiff, UMB Bank,
N.A. (“UMB”), based in Missouri. The claims stem
from a single fraudulent check-cashing transaction. For
reasons explained below, the court holds that UMB has not
demonstrated that Triumph Bank had minimum contacts with
Kansas sufficient to support the court's exercise of
underlying complaint (Doc. 1), plaintiffs Kansas-corporation
Ward Kraft, Inc., and its insurer Twin City Fire Ins. Co.
describe the following events. On April 9, 2018, Ward Kraft
issued and mailed a company check for $7, 500 to a vendor in
Canada, Arcis Digital Security Inc. The check was intercepted
and stolen by an unknown wrongdoer. Based on plaintiffs'
investigation, that wrongdoer, or a confederate, approached
Tennessee law firm Farris Bobango seeking legal assistance
with the purchase of an excavator. After Farris Bobango
agreed to take on the representation for a $4, 800 fee, the
wrongdoer presented the firm with the Ward Kraft check. The
check had been altered from its original state: the payee was
changed to Farris Bobango; the date was changed to April 30,
2018; and the amount of the check was changed to $247, 500.
Farris Bobango deposited the check in the firm's trust
account at Triumph Bank, which in turn presented the check to
UMB for payment on May 4, 2018. After receiving the funds
from UMB, Triumph Bank distributed them by wire transfer
according to instructions from Farris Bobango. Ward Kraft
discovered the improper payment when it reviewed its May bank
statement from UMB.
with its insurance company, Ward Kraft filed suit against
defendants UMB and Farris Bobango, alleging that they
wrongfully facilitated the fraudulent scheme. UMB filed a
counterclaim against Ward Kraft, a cross-claim against Farris
Bobango, and a third-party complaint against Triumph Bank.
(Doc. 11.) In its third-party complaint, UMB makes one claim
against Triumph Bank for breach of its presentment warranties
under Tennessee law, T.C.A. §§ 47-3-417(b) and
47-4-208(b). To demonstrate that this court has specific
personal jurisdiction over Triumph Bank, stemming from this
one transaction, UMB alleges:
Triumph Bank is subject to personal jurisdiction in this
Court under K.S.A. § 60-308 because Triumph Bank
transacted business in the State of Kansas and/or engaged in
acts or omissions that caused injury within the State of
Kansas while engaged in service activities in Kansas. Triumph
Bank intentionally directed actions into the State of Kansas
by accepting for deposit an allegedly fraudulent check drawn
on the UMB account of Ward Kraft, a Kansas corporation and
(Doc. 11, at ¶ 4.) In its motion to dismiss, Triumph
Bank claims that all its offices and branches are located in
Tennessee. It does not own any property in Kansas; it has no
employees in Kansas; it conducts no business in Kansas; and
it does not engage in any marketing in Kansas. To the best of
its knowledge, none of its account holders are residents of
Kansas. (Doc. 30, at ¶¶ 9-12.) These assertions are
included in an affidavit, sworn and attested to by Triumph
Bank's executive vice president, and attached to the
bank's memorandum as an exhibit. (Doc. 30, Ex. 1.)
forth in greater detail in the court's order in this case
(Doc. 56) on the motion to dismiss brought by Farris Bobango,
a plaintiff has the burden to establish that the court's
exercise of personal jurisdiction over a defendant is proper.
OMI Holdings, Inc. v. Royal Ins. Of Canada, 149 F.3d
1086, 1091 (10th Cir. 2005). In connection with the present
motion, that burden falls on third-party plaintiff UMB. The
court must assume the allegations in the complaint are true
to the extent they are not controverted, and will resolve any
factual disputes in UMB's favor. Shrader v.
Biddinger, 633 F.3d 1235, 1239 (10th Cir. 2011). To
defeat a motion to dismiss, the plaintiff need only make a
prima facie showing that personal jurisdiction exists by
demonstrating facts that, if true, would support
jurisdiction. Id.; OMI Holdings, 149 F.3d
at 1091. In order to overcome this prima facie showing, the
defendant “must present a compelling case demonstrating
‘that the presence of some other considerations would
render jurisdiction unreasonable.'” Id.
(quoting Burger King Corp. v. Rudzewicz, 471 U.S.
462, 477 (1985)).
Kansas' long-arm statute, Kan. Stat. Ann. §
60-308(b), extends the reach of Kansas courts to the full
extent permitted by the due process clause of the federal
constitution, the court may proceed directly to a
determination of whether the court's exercise of
jurisdiction is consistent with due process. Marcus Food
Co. v. DiPanfilo, 671 F.3d 1159, 1166 (10th Cir. 2011).
This is a two-step process: first the court must identify
minimum contacts between the defendant and the forum state,
Burger King, 471 U.S. at 471-72 (quoting
Int'l Shoe Co. v. Washington, 326 U.S. 310, 319
(1945)); and second, if those contacts are demonstrated, the
court must ensure “that the maintenance of the suit
does not offend traditional notions of fair play and
substantial justice.” Int'l Shoe, 326 U.S.
at 316 (internal quotations omitted). Specific personal
jurisdiction, as alleged here by UMB, requires that the
defendant has purposefully directed activities at the forum
state and the lawsuit arises from those contacts. OMI
Holdings, 149 F.3d at 1091.
argues that Triumph Bank intentionally directed its conduct
into Kansas by accepting a check for deposit that was drawn
on the account of a Kansas company. However, Triumph Bank
points out that the check was deposited in Tennessee by its
account holder, Tennessee law firm Farris Bobango. Triumph
Bank presented the check for payment to UMB in Missouri. On
receipt of the funds, Triumph Bank wired them to the
purported sellers of the excavator. There is no evidence to
show that these recipients were in Kansas. Beyond this, based
on Triumph Bank's affidavit, the bank has no other
connections with Kansas. Moreover, any alleged harm to UMB
that may have been caused by Triumph Bank took place in
Missouri, where UMB is based.
law indicates that a finding of purposeful direction to a
forum state requires more than a bank's acceptance of a
check that originated in the forum. See Froning &
Deppe, Inc, v. Cont'l Ill. Nat'l Bank &
Trust, 695 F.2d 289, 291-92 (7th Cir. 1982) (“. .
. the fundamentals of substantial justice . . . would be
offended by basing jurisdiction over a non-resident bank upon
the bank's mere acceptance of a check which indicates on
its face its origin in the forum state.”); Leney v.
Plum Grove Bank, 670 F.2d 878, 880 (10th Cir. 1982);
Eferakeya v. Twin City State Bank, 766 P.2d 837, 848
(Kan. App. Ct. 1988) (collecting cases). Based on the facts
alleged by UMB, Triumph Bank's affidavit, and the law,
the court determines that Triumph Bank does not have the
requisite minimum contacts with Kansas to support the
court's exercise of personal jurisdiction. As a result,
it is not necessary for the court to reach the second,
reasonableness step of the jurisdictional analysis.
alternative to finding that Triumph Bank is subject to
personal jurisdiction in Kansas, UMB moves the court to
transfer the case in its entirety to the Western District of
Tennessee, pursuant to its discretionary powers under 28
U.S.C. § 1404(a), “[f]or the convenience of
parties and witnesses, in the interest of justice.”
(Doc. 45.) However, the court declines to undertake this
course of action. Plaintiffs filed this lawsuit in Kansas,
and did not include any claims against Triumph Bank.
Generally, the plaintiff has the right to select its forum.
Amerada Petroleum Corp. v. Rio Oil Co., 225 F.Supp.
907, 910 (D. Wyo. 1964). Given the facts of this case as they
presently stand, the court does not deem it appropriate to
transfer the matter from Kansas.
IS THEREFORE ORDERED that Triumph Bank's motion
to dismiss the third-party complaint for lack of personal
jurisdiction is granted. (Doc. 29.) UMB's alternative
request contained in Doc. 45 to ...