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Freedman v. Peck

September 21, 2010

LEONARD FREEDMAN, AN INDIVIDUAL, PLAINTIFF,
v.
DEBORAH PECK, INDIVIDUALLY AND IN HER CAPACITY AS TRUSTEE OF BGI 3 TRUST; BGI TRUST, A DUBAI TRUST; BGI 3 LIFE, INC., A FLORIDA CORPORATION; AND PHILLIP LIAN, INDIVIDUALLY, DEFENDANTS.



The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

[Motion filed on 08-13-10 #12]

Presently before the court is Defendants Deborah Peck, BGI 3 Trust, and BGI 3 Life, Inc.'s motion to dismiss for lack of personal jurisdiction. After reviewing the parties' moving papers and hearing oral argument, the court denies the motion and adopts the following order.

I. Background

Plaintiff Leonard Freedman ("Freedman") is an eighty-three year-old resident of California. (Compl. ¶ 1.) Freedman owned two life insurance policies, and offered to sell the policies to Parcside Equity LLC, an entity controlled by Defendant Phillip Lian ("Lian"), a resident of New Jersey. (Id. ¶¶ 5,9,10.) Freedman later revoked the offer. (Id. ¶ 13.) Nevertheless, Lian executed the offer contract, obtained at least one of the policies, and transferred the policy to Defendant BGI Trust, a Florida trust.*fn1

(Id. ¶¶ 17, 20-21.) Defendant Peck is the Trustee of BGI Trust. (Id. ¶ 3.) Defendant Peck is also the sole officer, director, and agent of BGI Life 3, Inc., which is located and has its principal place of business in Florida. (Id. ¶¶ 4,40.)

Freedman and Parcside Equity LLC disputed ownership of the second life insurance policy in New York state court. (Id. ¶ 21.) When settlement discussions in the New York litigation broke down in May 2010, Lian and Peck transferred both policies to BGI 3 Life Inc. "in an attempt to frustrate the rescissionary relief sought by Freedman." (Id. ¶ 31.)

Freedman filed suit in this court on June 16, 2010, alleging conversion of his life insurance policies against Peck, BGI Trust, and BGI Life 3, Inc. (collectively, the "Peck Defendants). (Id. ¶¶ 37, 45.) The complaint also alleges that Lian aided and abetted the other defendants' wrongful acts. (Id. ¶¶ 50, 51.) The Peck Defendants now move to dismiss Freedman's complaint for lack of personal jurisdiction.

II. Legal Standard

Federal Rule of Civil Procedure 12(b)(2) provides that a court may dismiss a suit for lack of personal jurisdiction. The plaintiff has the burden of establishing that jurisdiction exists, but need only make "a prima facie showing of jurisdictional facts to withstand the motion to dismiss." Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006). "[U]ncontroverted allegations in [the plaintiff's] complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in [the plaintiff's] favor." Rio Props., Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002).

District courts have the power to exercise personal jurisdiction to the extent authorized by the law of the state in which they sit. Fed. R. Civ. P. 4(k)(1)(A); Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998). Because California's long-arm statute authorizes personal jurisdiction coextensive with the Due Process Clause of the United States Constitution, see Cal. Civ. Code § 410.10, this Court may exercise personal jurisdiction over a nonresident defendant when that defendant has "at least 'minimum contacts' with the relevant forum such that the exercise of jurisdiction 'does not offend traditional notions of fair play and substantial justice.'" Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800-01 (9th Cir. 2004) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). The contacts must be of such a quality and nature that the defendants could reasonably expect "being haled into court there." World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297 (1980).

III. DISCUSSION

Personal jurisdiction may be asserted on the basis of either general jurisdiction or specific jurisdiction. General jurisdiction exists over a non resident defendant when "the defendant engages in 'continuous and systematic general business contacts' that 'approximate physical presence' in the forum state." Schwarzenegger, 374 F.3d at 801. Where a defendant is subject to a state's general jurisdiction, he "can be haled into court in that state in any action, even if the action is unrelated to those contacts." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415 (1984). "Factors to be taken into consideration are whether the defendant makes sales, solicits or engages in business in the state, serves the state's markets, designates an agent for service of process, holds a license, or is incorporated there." Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1086 (9th Cir. 2000).

The Peck Defendants do not reside or do business in California. Memorandum in Support of Motion ("Mot.") at 1. Plaintiff implicitly concedes that general jurisdiction is lacking. Opposition to Motion to Dismiss ("Opp.), Dkt. No. 15 at 4.

Specific jurisdiction exists where a case arises out of forum-related acts. The Ninth Circuit analyzes specific jurisdiction according to a three-prong test:

(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the ...


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