United States District Court, D. Colorado
ORDER AND RECOMMENDATION OF UNITED STATES MAGISTRATE
JUDGE
Nina
Y. Wang United States Magistrate Judge
This
matter comes before the court on the following motions:
(1) Defendant Adrian Barrett's Motion to Dismiss Pursuant
to Fed.R.Civ.P 12(b)(2) (“Motion to Dismiss”),
filed October 19, 2018, [#19];
(2) Plaintiff Service First Permits, LLC's Motion for
Leave to Conduct Jurisdictional Discovery in Support of
Opposition to Motion to Dismiss (“Motion for
Jurisdictional Discovery”), filed November 14, 2018,
[#30]; and
(3) The Parties' Stipulated Motion to Stay Proceedings
Pending Resolution of Motion to Dismiss (Dkt. 19)
(“Motion to Stay”), filed December 14, 2018,
[#45].
The
undersigned considers the Motions pursuant to 28 U.S.C.
§ 636(b), Rule 72 of the Federal Rules of Civil
Procedure, and the memoranda dated October 22, 2018 [#20],
November 15, 2018 [#31], and December 17, 2018 [#46]. This
court concludes that oral argument will not materially assist
in the resolution of this matter. Accordingly, having
reviewed the Motions and associated briefing, the applicable
case law, and the entire case file, this court respectfully
RECOMMENDS that the Motion to Dismiss be
DENIED, and this court further
ORDERS that the Motion for Jurisdictional
Discovery and Motion to Stay are DENIED.
BACKGROUND
This
court draws the following facts from the Complaint and
presumes they are true for purposes of the instant Motions.
Plaintiff Service First Permits, LLC (“Plaintiff”
or “Service First”) is a Colorado limited
liability company that “provides personalized
construction permit management services to its clients,
” including “services rang[ing] from commercial
construction permitting to due diligence to regulatory
processes, among others.” [#1 at 2, 3]. About June 20,
2017, Plaintiff signed an agreement with Defendants Adrian
Barrett (“Defendant Barrett”) and Lightmaker
Vancouver (Internet), Inc. (“Lightmaker
Vancouver”) for Defendant Barrett and Lightmaker
Vancouver's development of a minimal viable product
(“MVP”)-“a simpler version of a website
that is functional but does not contain all of the features
of the final product”-for Service First. See
[id. at 4]. “The parties agreed to a six-month
timeline with the final stage being the quality assurance,
beta testing, and launch of the MVP. Service First agreed to
pay Lightmaker [Vancouver] $30, 000 per month for a total of
$180, 000 over this six-month period in return for a
functional MVP.” [Id.]. Then, sometime in
“late June 2017, ” Defendant Barrett traveled to
Colorado to meet at Service First's principal offices to
begin the “discovery” phase of the development
process; this lasted several days. See [id.
at 5].
Service
First alleges that development of the MVP did not proceed
according to schedule, resulting in a three-month extension
of the agreement, through March 2018, for an additional $30,
000 per month. See [#1 at 5]. As of March 2018,
Defendant Barrett and Lightmaker Vancouver were not near
completion of the MVP so Defendant Barrett transferred
Plaintiff's project to its United Kingdom affiliate
Lightmaker UK Ltd. (“Lightmaker UK”, and
collectively with Defendant Barrett and Lightmaker Vancouver,
“Defendants”) and extended the agreement a second
time. See [id. at 5-6]. About June 2018,
near the conclusion of the second extension, the MVP was not
complete or functional. See [id. at 6].
Defendants claimed that they needed more time and money to
continue work on the MVP; Plaintiff refused, however, and
terminated the relationship. See [id.].
Plaintiff then sought return from Defendants of the $282, 000
Plaintiff had paid for the MVP, to which Defendant Barrett
responded that he had dissolved Lightmaker UK due in part to
its work with Service First and generally denied any
wrongdoing. See [id. at 7].
Plaintiff
initiated this action on August 16, 2018. [#1]. Plaintiff
asserts several claims against Defendants based on their
failure to develop a functional MVP. These include: (1)
breach of contract against Lightmaker Vancouver and
Lightmaker UK; (2) breach of the implied covenant of good
faith and fair dealing against Lightmaker Vancouver and
Lightmaker UK; (3) breach of an implied contract against
Defendants; (4) promissory estoppel against Defendants; (5)
unjust enrichment against Defendants; and (6) alter ego
liability against Defendants. See generally
[id.].
On
September 26, 2018, Lightmaker Vancouver filed an Answer and
Counterclaim in response to the Complaint. See
[#10]. Defendant Barrett filed his Motion to Dismiss on
October 19, 2018, arguing that Plaintiff fails to plead
Defendant Barrett's minimum contacts with Colorado
sufficient for this court to exercise personal jurisdiction
over him. See [#19]. Service First opposes the
Motion to Dismiss, arguing that it adequately pleads
Defendant Barrett's minimum contacts with Colorado;
alternatively, in its Response to the Motion to Dismiss and
in its Motion for Jurisdictional Discovery, Plaintiff
requests limited jurisdictional discovery on the issue of
personal jurisdiction over Defendant Barrett. See
[#27; #30]. On December 14, 2018, the Parties filed the
Motion to Stay, requesting that the court stay this matter
pending its resolution of the Motion to Dismiss. See
[#45]. The Motions are now ripe for consideration, and I turn
to each below.
LEGAL
STANDARDS
I.
Rule 12(b)(2)
Rule
12(b)(2) of the Federal Rules of Civil Procedure allows a
defendant to challenge the court's personal jurisdiction
over the named parties. Fed.R.Civ.P. 12(b)(2). Plaintiff
bears the burden of demonstrating that the court has personal
jurisdiction over Defendant Barrett. See Dudnikov v.
Chalk & Vermilion Fine Arts, 514 F.3d 1063, 1069
(10th Cir. 2008). When, as here, the district court decides a
Rule 12(b)(2) motion to dismiss without holding an
evidentiary hearing, “the plaintiff need only make a
prima facie showing of personal jurisdiction to defeat the
motion.” AST Sports Sci., Inc. v. CLF Distrib.
Ltd., 514 F.3d 1054, 1057 (10th Cir. 2008). “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.” OMI
Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d
1086, 1091 (10th Cir. 1998). The court's focus is upon
Defendant Barrett's relationship with the District of
Colorado and this litigation; so long as it creates a
substantial connection” with this District, even a
single act can support jurisdiction. Leachman Cattle of
Colorado, LLC v. Am. Simmental Ass'n, 66 F.Supp.3d
1327, 1336 (D. Colo. 2014). In considering whether Defendant
Barrett has sufficient contacts with this District to support
the court's exercise of personal jurisdiction, the court
must accept all well pleaded facts and must resolve any
factual disputes in favor of Plaintiff. See Wenz v.
Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995).
A.
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