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Central Wyoming Neurosurgery, LLC v. Barta-Iso Aviation

United States District Court, Tenth Circuit

June 6, 2013



ALAN B. JOHNSON, District Judge.

Central Wyoming Neurosurgery contracted with Barta-Iso Aviation to buy an airplane. Under the contract, the parties agreed to use Jetstream Escrow & Title Service (an Oklahoma company) as their escrow agent. When Jetstream allegedly disbursed funds from the escrow account without authorization, CWN sued Jetstream for breach of contract. Jetstream has now moved to dismiss for lack of personal jurisdiction. Because Jetstream lacks minimum contacts with Wyoming, the Court agrees that it lacks personal jurisdiction over Jetstream and therefore GRANTS Jetstream's motion.


Central Wyoming Neurosurgery (CWN) is a Wyoming limited liability company with its principal place of business in Wyoming. It's a medical practice comprised of doctors who frequently travel great distances to treat a variety of brain, spinal cord, spinal column, peripheral nerve, and carotid artery abnormalities. Because the doctors travel so much, CWN wanted to buy an airplane.

To that end, CWN contracted with Barta-Iso Aviation to buy one. Specifically, CWN agreed to pay Barta-Iso $750, 000 for a 1980 King Air 200, and it agreed to pay an additional $345, 000 for Barta-Iso to make repairs to the King Air. The parties also agreed to use Jetstream Escrow & Title Service as their escrow agent. Jetstream is an Oklahoma corporation with its principal place of business in Oklahoma.

The other salient terms of the contract are these. After signing the contract, CWN agreed to wire $125, 000 to Jetstream to be held in escrow. CWN would then conduct a logbook review of the King Air and, if satisfied, would notify Barta-Iso that it accepted the King Air. At that point, Barta-Iso would have ninety days to complete the repairs called for under the contract. Once those repairs were finished, the parties agreed that within five days CWN would make full payment, including release of the funds from escrow, and Barta-Iso would deliver the King Air.

Initially, everything went smoothly. After CWN signed the contract, Jetstream sent CWN wire transfer instructions and CWN wired $125, 000 to Jetstream. CWN also conducted the logbook review of the King Air and notified Barta-Iso of its acceptance. But then things went haywire. Barta-Iso allegedly failed to make the repairs within the ninety-day deadline and failed to deliver the King Air. Further, Jetstream released the $125, 000 to Barta-Iso even though, according to CWN, the conditions precedent to that release were not satisfied. On that score, CWN brought suit against Jetstream for breach of contract, alleging Jetstream disbursed the escrow funds without authorization.

Jetstream has now filed a motion to dismiss for lack of personal jurisdiction, arguing that this Court cannot exercise personal jurisdiction over it because it lacks minimum contacts with Wyoming. CWN argues that the following contacts between Jetstream and Wyoming are sufficient to sustain personal jurisdiction: (1) Jetstream contracted with CWN, a Wyoming company; (2) Jetstream received $125, 000 wired from Wyoming; and (3) Jetstream and CWN communicated on a handful occasions regarding the escrow account. In the alternative, CWN has asked the Court to allow limited jurisdictional discovery before ruling on Jetstream's motion.

The Court will discuss the rules governing personal jurisdiction before turning to their application in this case. Next, the Court will discuss CWN's request for jurisdictional discovery. A brief conclusion follows.


I. The Law of Personal Jurisdiction

The plaintiff bears the burden of establishing personal jurisdiction. Far W Capital, Inc. v. Towne, 46 F.3d 1071, 1075 (10th Cir. 1995). But the plaintiff need only make a prima facie showing of personal jurisdiction if the district court entertains the motion based on the complaint, affidavits, and other written materials. OMI Holdings, Inc. v. Royal Ins. Co. of Can., 149 F.3d 1086, 1091 (10th Cir. 1998). The plaintiff can make such a showing by demonstrating facts that if true would support jurisdiction over the defendant. AST Sports Sci., Inc. v. CLF Distribution, Ltd., 514 F.3d 1054, 1057 (10th Cir. 2008). The court takes as true all well-pleaded facts in the complaint and resolves all factual disputes in the plaintiffs favor. Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008).

In a diversity action, to establish that a court has personal jurisdiction over a nonresident defendant, the plaintiff must show that the court's exercise of personal jurisdiction would be consistent with both the forum state's long-arm statute and the Due Process Clause. Marcus Food Co. v. DiPanfilo, 671 F.3d 1159, 1166 (10th Cir. 2011). But because Wyoming's long-arm statute confers the maximum jurisdiction permissible consistent with due process, here the personal jurisdiction issue collapses into a single analysis under the Due Process Clause. Emp'rs Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1159 (10th Cir. 2010).

Regarding the limits due process imposes on a court's exercise of personal jurisdiction, the Supreme Court has held that "a court may exercise personal jurisdiction over a nonresident defendant only so long as there exist minimum contacts' between the defendant and the forum state." World-Wide Volkswagen Corp. v. Woodson, 444 U.S.' 286, 291 (1980) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). A nonresident defendant's contacts with the forum state can ...

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