RULING ON MOTION TO DISMISS
Before the Court is a motion to dismiss (Doc. 76) filed by defendants Reliant Heating & Air Conditioning of Louisiana, LLC (“Reliantr-LA”) and Reliant Heating & Air
I. Factual and Procedural Background
On November 21, 2006, plaintiff purchased a new home constructed by D.R. Horton, Inc. The air conditioning and heating system was installed by Reliant-LA and allegedly designed by Relianh-TX. After plaintiff took possession of his home, he discovered the heating and cooling system did not have the capacity to effectively maintain an appropriate temperature.
On July 9, 2007, plaintiff made written demand upon D.R. Horton to repair the system. Multiple attempts were made by D.R. Horton and Reliant-LA to repair the cooling system during summer 2007, but the problems persisted.
Plaintiff filed suit against D.R. Hоrton, Reliant-LA, and Reliant-TX in state court on August 22, 2008. The matter was removed to this Court on September 23, 2008. Plaintiff later filed an amended complaint, making class allegations on behalf of himself and other homeowners in the Forest Ridge subdivision in Livingston Parish, Louisiana, all of whom Gines alleges have similarly inadequate heating and cooling systems through the fault of the same defendants.
On July 28, 2011,
With D.R. Horton dismissed from the case, Reliant-LA and Reliant-TX (collectively, “Reliant” or “defendants”) were both permitted leave to file a new round of motions. (Order of Magistrate Judge, Doc. 73). In response to the motion to dismiss filed by Reliant, Gines clarified that he does not seek redhibition claims against either entity and that the dismissal of the NHWA claim against Reliant-LA applies equally to Reliant-TX. (Memo, in Opp., Doc. 79, p. 3). Further, he also agrees that he has not made a contractual claim against either entity. (Id.). Thus, only three claims remain against each Reliant defendant: (1) a claim for poor quality workmanship under La. C.C. art. 2762; (2) a claim for non-compliance of contraсt under La. C.C. art. 2769; and (3) a tort claim for negligent design and construction under La. C.C. arts. 2315 and 2316. Moreover, Gines contends that his pending motion for default judgment against Reliant-TX should be granted because no jurisdictional or service-related problems bar such a default judgment.
II. Motion to Dismiss Standard
Pursuant to Fed. Rule Civ. P. 12(b)(6), on a motion to dismiss for failure to state a claim, the Court accepts all well-pleaded, non-conclusory facts in the complaint as true. Ashcroft v. Iqbal,
A complaint that pleads facts merely consistent with a defendant’s liability “stops short of the line between possibility and plausibility.” Id. at 557,
III. Law and Analysis
Reliant-TX asserts it has never established any contacts — specific or general— in Louisiana which would subject it to personal jurisdiction in this Court under traditional notions of fair play and substantial justice. Gines argues that Reliant-TX has defaulted on the liability issues presented by its well-pleaded facts, which bars their litigation hеre.
A.
Rule 55 of the Federal Rules of Civil Procedure provides for default judgments against parties who do not defend actions brought against them. In this case, the clerk of court made an entry of default against Reliant-TX under Rule 55(a). (Doc. 53). Gines has moved for this Court to enter judgment on that entry of default under Rule 55(b)(2). (Doc. 54; see also Order, Doc. 62 (deferring ruling on motion for default judgment)). Rule 55 provides in pertinent part:
(a) Entering a Default. When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, аnd that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.
(b) Entering a Default Judgment.
(2) By the Court. In all other cases, the party must apply to the court for a default judgment.... If the party against whom a default judgment is sought has appeared personally or by a representative, that party or its representative must be served with written notice of the application at least 7 days before the hearing. The court may conduct hearings or make referrals — preserving any federal statutory*829 right to a jury trial — when, to enter or effectuate judgment, it needs to:
(A) conduct an accounting;
(B) determine the amount of damages;
(C) establish the truth of any allegation by evidence; or
(D) investigate any other matter.
(c) Setting Aside a Default or a Default Judgment. The Court may set aside an entry of default for good cause, and it may set aside a default judgment under Rule 60(b).
Fed. Rule Civ. P. 55.
Because an entry of default has already been entered under Rule 55(a), the Court may set aside that entry only for good cause. Fed. Rule Civ. P. 55(c). Likewise, the Court may enter a default judgment only when there is “a sufficient basis in the pleadings for the judgment entered.... The defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.” Nishimatsu Const. Co., Ltd. v. Houston Nat’l Bank,
Beсause binding case law compels this Court to address issues of personal jurisdiction, notice and service, and the sufficiency of the claims, even in the face of an entry of default, the Court will treat each in turn.
1. Personal Jurisdiction over Reliant-TX
Reliant-TX claims the Court lacks personal jurisdiction over it under either specific or general jurisdiction. Gines argues the Fifth Circuit’s decision in Hargrave v. Fibreboard Corp.,
In diversity actions, federal courts may exercise jurisdiction over a non-rеsident only to the extent that a state court within the federal court’s district could properly exercise jurisdiction. Thompson v. Chrysler Motors Corp.,
As interpreted by the Supreme Court, the Fourteenth Amendment Due Process clause' requires satisfaction of a two-prоng test in order for a federal court to properly exercise jurisdiction: (1) the nonresident must have minimum contacts with the forum state, and (2) subjecting the nonresident to jurisdiction must be consistent with “traditional notions of fair play and substantial justice.” Asarco,
Plaintiffs need only make a prima facie showing of jurisdiction if a district court declines to hold an evidentiary hearing, and proof by a preponderance of the evidence is not required. Johnston v. Multidata Systems Int'l Corp.,
Plaintiff did not file a jurisdictional affidavit. Reliant-TX, on the other hand, filed a jurisdictional affidavit submitted by its president, Charles Riner. (Riner Aff., Doc. 76-2). If Riner’s affidavit assertions foreclose the possibility of jurisdiction, then under the authority of Johnston and Asarco the Court must accept those assertions for purposes of determining minimum contacts of Reliant-TX itself. Riner’s affidavit is comprehensive and conclusive of the matter as it relates to Reliant-TX’s contacts in Louisiana. Riner’s affidavit establishes that Reliant-TX renders no services, conducts no business, has no employees, owns no real property and maintains no bank accounts in Louisiana. (Id., ¶¶ 7-15). While the amended complaint alleges Relianh-TX designed the cooling system for the houses, (Doc. 36, ¶ 9), plaintiff has not introduced a jurisdictional affidavit to controvert Riner’s assertions. Riner’s uncontroverted jurisdictional assertions suffice to show lack of minimum contacts with Louisiana sufficient to еxercise personal jurisdiction over Reliant-TX under either specific or general jurisdiction principles.
Gines nonetheless contends that because Reliant-TX owned and dominated Reliant-LA, the relevant contacts of Reliant-LA as a wholly-owned subsidiary should be imputed to Reliant-TX, the parent corporation. This calls for an analysis under Hargrave.
In determining whether to maintain corporate separateness of contacts, this Court must look to several non-exhaustive factors:
(1) The amount of stock owned by the parent of the subsidiary;
(2) Whether the entities have separate headquarters, directors, and officers;
(3) Whether corporate formalities are observed;
(4) Whether the entities maintain separate accounting systems; and
(5) Whether the parent exercises cоmplete control over the subsidiary’s general policies or daily activities.
Freudensprung v. Offshore Technical Services, Inc.,
While proof of the amount of Reliant-LA stock owned by Reliant-TX is presumed to be 100% because of both companies’ clear admissions throughout this litigation that Reliant-TX is the sole member of Reliant-LA, there is simply nothing in the record (or even in Gines’ allegations) speaking to the issues of corporate formalities, accounting separateness, and the degree of control. Gines’ conclusory allegations regarding these factors, (see Memo, in Opp., Doc. 79, p. 18), simply fail to establish the documentary proof the Fifth Circuit requires to rebut the presumption of corporate separateness. Freudensprung,
For these reasons, plaintiff has failed to controvert defendants’ affidavit assertions on jurisdictional facts and failed to establish the applicability of the Hargrave factors. Therefore, exercising personal jurisdiction over Reliant-TX would be improper, and ■ the Court must dismiss it from this case.
Having concluded that dismissal of Reliant-TX from this litigation is required, the Court must now proceed to RelianL-LA’s motion to dismiss for failure to state a claim under Fed. Rule Civ. P. 12(b)(6).
1. Gines’ Claim for Poor Quality Workmanship under La. C.C. art. 2762
In count six of his amended complaint, Gines asserts that Reliant used negligent workmanship in the installation of his air conditioning system. Article 2762 of the Louisiana Civil Code provides:
If a building, which an architect or other workman has undertaken to make by the job, should fall to ruin either in whole or in part, on account of the badness of the workmanship, the architect or undertaker shall bear the loss if the building falls to ruin in the course of ten years, if it be a stone or brick building, and of five years if it be built in wood or with frames filled with bricks.
Reliant argues that the “fall to ruin” language in article 2762 requires actual physical damage, citing caselaw construing a similar provision, La. C.C. art. 2322, which imposes liability on a building owner “for the damage occasioned by its ruin” caused by neglected repairs or vices in the original construction.
In Davis v. Royal-Globe Ins. Companies,
Gines argues that some interpretations of “ruin” have gone beyond the limiting language of those two cases. For instance, he argues Dunn v. Tedesco,
As the foregoing cases illustrate, Gines simply cannot fit his alleged injury within the parameters of “ruin” as defined in article 2322. Despite Gines’ protestations to the contrary, no reason exists why this definition would not equally apply to article 2762. Both articles deal speak of “ruin” in similar terms: 2322 is concerned with an owner’s liability while 2762 speaks
Davis establishes a high hurdle for showing ruin which Gines cannot overcome. While an inadequately-sized air conditioning unit certainly diminishes the value of a home, it does not on those facts alone effect physical damage upon the building which the “fall to ruin” language requires for purposes of article 2762. Gines’ claim under La. C.C. article 2762 must therefore be dismissed.
2. Gines’ Claim for Non-Compliance of Contract under La. C.C. art. 2769
Despite openly acknowledging that he does not have a contractual relationship with Reliant (Memo, in Opp., Doc. 79, p. 14), Gines nonetheless brings a claim agаinst it for noncompliance with contract under La. C.C. art. 2769. Article 2769 provides:
If an undertaker fails to do the work he has contracted to do, or if he does not execute it in the manner and at the time he has agreed to do it, he shall be liable in damages for the losses that may ensue from his non-compliance with his contract.
The case of Washington v. Degelos,
Gines admits to having no contractual relationship with Reliant, and he does not urge a third-party beneficiary theory of contractual liability regarding a potential contract between D.R. Horton and Reliant. While this Court is not strictly bound by the intermediate appellate decisions of Louisiana state courts under Erie, the Court finds the reasoning in Washington persuasive. Accordingly, because Gines
3. Gines’ Tort Claim for Negligent Installation of the Cooling System under La. C.C. art. 2315 and 2316.
Finally, Gines brings a tort claim for negligence against Reliant under La. C.C. art. 2315 and 2316. Reliant does not contest the sufficiency of his allegations but instead argues that his cause of action under this section has prescribed.
In Louisiana, liberative prescription operates in much the same way a statute of limitations applies in common law jurisdictions. Similarly, peremptive periods operate as statutes of repose. While prescription is measured based on the date a cause of action accrues (i.e., the date of injury), peremption is calculated based on the occurrence of a certain event, which usually is the causative act of the defendant rather than the date plaintiff suffers injury. Louisiana applies a one year liberative prescriptive period to torts. La. C.C. art. 3492. For damage to immovable property, the period begins running from the day the owner knew or should have known of the damage. La. C.C. art. 3493. This Court has already determined that the prescriptive period began running on July 24, 2007, and Gines filed suit on August 23, 2008, too late to satisfy the one year period. (See Order, Doc. 62, p. 19 (dismissing fraud claims under one yeаr prescriptive period)).
Gines primarily argues that the ten year prescriptive period of La. C.C. art. 3500 applies to this action. It provides that “[a]n action against a contractor or an architect on account of defects of construction, renovation, or repair of buildings and
other works is subject to a liberative prescription period of ten years.” Reliant is neither an architect nor, according the Louisiana jurisprudence, a contractor for purposes of this statute.
Gines additionally argues that La. R.S. 9:2772 supersedes La. C.C. art. 3492 in this case because it is the more particular provision. However, the provisions do not conflict because section 9:2772 is addressed to peremptive periods (a statute of repose) whereas article 3492 is addressed to prescriptive periods (a statute of limitations). Thus, no conflict exists and article 3492 applies to prescribe Gines’ claim.
Accordingly, defendants’ motion to dismiss (Doc. 76) is GRANTED. The Court does not have personal jurisdiction over Reliant Heating & Air Conditioning, Inc. Gines’ remaining claims against Reliant Heating and Air Conditioning, LLC under La. C.C. arts. 2762 and 2769 fail to meet the required elements, and his tort сlaim has prescribed.
Notes
. Reliant-TX also denies that it designed the cooling systems at issue. Rather, it asserts that Reliant-LA conducted all the designing, but when D.R. Horton sought from Reliant-LA the load calculations used in designing the system, Reliant-LA could not locate its records. Therefore, Reliant-TX says it re-calculated the appropriate measurements after this litigation commenced. (Riner Aff., Doc. 76-2, ¶¶ 23-33).
. Gines also attempts to assert judicial estoppel as a basis for jurisdiction. He claims that Reliant-LA's removal of this action relied on the corporate unity of the Reliant entities for purposes of diversity of citizenship should es-top Reliant-TX from arguing corporate separateness for purposes of minimum contacts. This argument has no merit as Reliant-TX made no previous assertions in this litigation, and therefore as a separate party from Reliant-LA it cannot be estopped on the basis of another party’s argument. See In re Coastal Plains, Inc.,
. Presumably, this statement meant that since third party contractual beneficiaries must be еxpressly provided for in the relevant contract, any "third party beneficiary-type” argument absent a contractual provision so providing really goes to a tort duty undertaken rather than an obligation contractually imposed.
. Article 3500 cross-references articles 2322 and 2762, the two provisions regarding "ruin” of works by architects or undertakers discussed above.
. Gines also claims the longer prescriptive period of article 2762 applies, but as discussed above, Gines cannot avail himself of article 2762.