Robert L. WENZ, Plaintiff-Appellant,
v.
MEMERY CRYSTAL, a partnership organized under the laws of
England and Wales; Peter M. Crystal; D. Harvey Rands;
Jonathan P. Davies; Douglas L. Robertson; Lesley A.
Gregory; Andrew G. St. J. Newman; David A. Connick; and
John Does 1 through 20, Defendants-Appellees.
No. 94-1259.
United States Court of Appeals,
Tenth Circuit.
May 31, 1995.
William R. Rapson of Robinson, Waters, O'Dorisio and Rapson, Denver, CO, for plaintiff-appellant.
Joseph P. McMahon, Jr. (Neil Peck with him on the brief) Davis, Graham & Stubbs, Denver, CO, for defendants-appellees.
Before SEYMOUR, Chief Circuit Judge, ANDERSON, Circuit Judge, and SHADUR,* District Judge.
STEPHEN H. ANDERSON, Circuit Judge.
Plaintiff, Robert L. Wenz, appeals the dismissal of his action against defendants, a London law firm and several of its partners, for lack of personal jurisdiction. We affirm.
BACKGROUND
We note at the outset that when the court's jurisdiction is contested, the plaintiff has the burden of proving jurisdiction exists. McNutt v. General Motors,
Moreover, because the district court's determination involves an application of the law to the facts as set forth in the affidavits and complaint as well as a determination оf the legal sufficiency of plaintiff's jurisdictional allegations in light of the facts presented, we review the district court's decision de novo, and consider only those written submissions of the parties before the district court when it rendered the decision. Rambo v. American S. Ins. Co.,
In light of these guidelines, we consider the following relevant facts. The defendants in this action include the London, England law firm of Memery Crystal, six of its present partners, and one of its former partners, David Conniсk. The plaintiff, Robert L. Wenz, maintained a residence in London, England from August 1985 to July 1991, Wenz Aff. p 1, during which time he became a client of Memery Crystal and engaged in some business transactions with the assistance of David Connick. Crystal Aff. p 12; Connick Aff. pp 5-6; Wenz Aff. p 2. However, as of August 1991, Mr. Wenz became a resident of Colorado. Wenz Aff. p 2.
The instаnt suit arose from the following transaction. Sometime during October 1991 David Connick phoned from London to Mr. Wenz's residence in Colorado informing Wenz of an investment opportunity in London. Specifically, Connick told Wenz that certain London investors, Norris and Brooke-Taylor, were seeking funds for investment purposes. Wenz сlaims that Connick suggested that Wenz wire money to London to be placed in Wenz's client trust account at Memery Crystal. Wenz Aff. pp 3-4. Wenz then wired to Connick $200,000 from his bank in Colorado and $225,000 from Barclay's Bank. Id. p 5. Wenz alleges that it was "expressly or impliedly understood," however, that Memery Crystal would not disburse funds from his account without his authorization. Compl. p 12. Wenz claims that during October and November 1991 he and Connick continued to be in telephone contact regarding the transfer of funds, and that these phone calls were initiated by both Wenz and Connick. Wenz Aff. p 7.
Additionally, on approximately November 3, 1991, Wenz travelled to London where he met with Connick, Norris, and Brooke-Taylor, and engaged in discussions regarding the investors' plans. See Appellant's App. at 118; see also Wenz Aff. p 13; Connick Aff. p 13. Although the precise subject matter of their negotiations is disputed, Wenz alleges that at no time during the negotiations or otherwise did he instruct Connick or anyone at Memеry Crystal to disburse or use the funds in his trust account. Wenz Aff. p 8; see Appellant's App. at 118. Despite the alleged lack of authorization, however, in approximately mid-November, Memery Crystal began withdrawing funds from Wenz's trust account. Compl. pp 13-16, 18, 19. Wenz claims he was unaware that the funds in his trust account had been depleted until mid-1992. Wеnz Aff. p 12. At that time, and again in mid-1993, Wenz contacted Connick and Memery Crystal in an effort to recover the "funds that had been converted without [his] authorization." Id. When both of these attempts proved unsuccessful Wenz filed the present action. Id.1
According to the complaint, the sole dispute is over Memery Crystal's disbursal of funds frоm Wenz's client trust account located in London. The complaint alleges that Memery Crystal disbursed the funds without Wenz's "knowledge, consent or authorization," Compl. pp 12, 14, 16, 19, and that such wrongful disbursal constitutes negligence, breach of fiduciary duty, breach of contract, fraud, and theft. Id. pp 22, 26, 28-30, 32, 37. In response, the defendants filed а motion to dismiss for lack of personal jurisdiction claiming that they have not transacted business in Colorado, nor have they committed a tort in Colorado, and in any event the exercise of personal jurisdiction over them would violate the constitutional standard of due process. After hearing oral argument, the district court granted the motion and dismissed the case without prejudice. Appellant's App. at 148.
DISCUSSION
Jurisdiction of the district court over a nonresident defendant in a suit based on diversity is determined by the law of the forum state. See Fed.R.Civ.P. 4(e); see also Omni Capital International v. Rudolf Wolff & Co.,
Our first inquiry, therefore, is whether the Colorado long-arm statute sanctions jurisdiction over the defendants. On appeal, Wenz argues that the long-arm statute provides two different bases for the exercise of personal jurisdiction--the commission of a tortious act in Colorado and the transaction of business in Colorado.
A. Commission of a Tortious Act
The tort provision of the long-arm statute provides that, by the commission of a tortious act within Colorado, a person submits to the jurisdiction of Colorado courts concerning any cause of action arising from that act. Colo.Rev.Stat. Sec. 13-1-124(1)(b) (Supp.1994). In defining the contours of subsection (1)(b), the Colorado Supreme Court has stated that "in order to satisfy the statutory standard for assertion of long arm jurisdiction ... it is not necessary that both the tortious conduct constituting the cause and the injury constituting the effect take place in Colorado." Classic Auto Sales,
First, Wenz has failed to allege any tortious conduct occurring in Colorado. Wenz repeatedly frames the transaction at issue as one in which he voluntarily sent money to London, and then after the money was placed in his client account in London, the defendants tortiously disbursed the funds. The general allegations in Wenz's complaint explicitly provide that the "tоrtious conduct" complained of consisted exclusively of the defendants' "disbursement of funds ... without Mr. Wenz's knowledge, consent or authorization." See Compl. pp 14, 16, 19 (emphasis added). Additionally, each of Wenz's claims for relief-negligence, breach of fiduciary duty, breach of contract, fraud, theft--also list, as the sоle basis for recovery, the defendants' wrongful disbursal of funds in the London account. See id. pp 22, 26, 30, 32, 37; see also Plaintiff's Resp. to Defs' Mot. to Dismiss at 2 (including in what plaintiff entitles the "only relevant facts" the allegation that "[t]he funds were then intentionally disbursed ... without authorization from Wenz. These intentional disbursements from Wenz' client trust acсount constituted not only theft of Wenz' property, but fraud upon Wenz and a breach of the fiduciary duty owed to Wenz by Connick and the Defendant law firm" (emphasis added)). Moreover, Wenz's affidavit also focuses exclusively on the defendants' lack of authorization to disburse the funds in his account. See Wenz Aff. p 8 ("At no time ... did I instruct Cоnnick or anyone else a Memery Crystal to disburse or otherwise utilize the funds placed in my client trust account.").
Even looking at Wenz's factual allegations in the best light they demonstrate that this was a tort caused by unauthorized disbursements from a London account. Consequently, the alleged wrongful conduct--the tortious disbursal--occurred in London, not Colorado. Therefore, we conclude that Wenz has failed to allege that the defendants engaged in any tortious conduct in Colorado.
Second, not only has Wenz failed to allege any tortious conduct in Colorado, he has also failed to demonstrate that he suffered an injury in Cоlorado that is sufficient to invoke long-arm jurisdiction under subsection (1)(b). Not all alleged "injuries" that result from tortious conduct in a foreign state will trigger long-arm jurisdiction. See McAvoy v. District Court,
Accepting Wenz's allegations as true, the unauthorized disbursals оccurred in London and were from a London account, not a Colorado account. Accordingly, the loss or injury occurred in London where the account was located, not in Colorado. That Wenz may be economically impacted in Colorado, simply because he lives there, is insufficient tо establish personal jurisdiction under subsection (1)(b) of the Colorado long-arm statute. See McAvoy,
B. Transaction of Business
Although the court below, as well as the parties both below and on appeal, focused primarily on the "tortious act" provision, Wenz also claims that Colorado courts may exercise jurisdiction over the defendants pursuant to the "transaction of business" subsection of the long-arm statute. See Colo.Rev.Stat. Sec. 13-1-124(1)(a) (Supp.1992). After reviewing the pleadings and supporting affidavits, hоwever, we are unable to find factual allegations sufficient to support Wenz's claim.
In the complaint, Wenz simply makes the allegation that "all Defendants have transacted business in the State of Colorado." Compl. p 6. The defendants then challenged this allegation in their motion to dismiss and their supporting affidаvits. See Crystal Aff. pp 3-11; Connick Aff. p 4; Mem. in Supp. of Defs' Mot. to Dismiss at 3-4, 13-17. We have previously stated: "The plaintiff has the duty to support jurisdictional allegations in a complaint by competent proof of the supporting facts if the jurisdictional allegations are challenged by an appropriate pleаding." Pytlik v. Professional Resources, Ltd.,
Wenz's complaint fails to allege any facts in support of his conclusory statement thаt the "defendants transacted business" in Colorado. Moreover, Wenz's affidavit and response to the motion to dismiss do not contain any additional facts which would sufficiently support jurisdiction.2 Consequently, Wenz has also failed to make a prima facie showing of personal jurisdiction under the transaction of business subsection of the long-arm statute.
Inasmuch as we have concluded that the Colorado long-arm statute cannot be used to assert jurisdiction over the defendants, we need not address whether the exercise of jurisdiction comports with due process.
The judgment of the district court is AFFIRMED.
Notes
The Honorable Milton I. Shadur, Senior District Judge, United States District Cоurt for the Northern District of Illinois, sitting by designation
Wenz filed suit in the District Court, Jefferson County, State of Colorado. The defendants removed the action to the United States District Court for the District of Colorado based on diversity of citizenship pursuant to 28 U.S.C. Sec. 1441. See Notice of Removal to Federal Court (Dec. 14, 1993); Defendants-Appellees' Motion Pursuant to 28 U.S.C. Sec. 1653 (Mar. 7, 1995)
Any defects in defendants' Notice of Removal, raising questions as to the existence of subject matter jurisdiction, have been cured on appeal. Appellants' motion pursuant to 28 U.S.C. Sec. 1653 is GRANTED.
Wenz's argument is further undercut by the fact that he travelled to London on approximately November 3, 1991, just after the funds were transferred to London, and engaged in some kind of negotiations with Connick and the London investors. See Connick Aff. pp 13-14; Appellant's App. at 118. Moreover, at oral argument before the district court, Wenz's counsel conceded that these "lengthy negotiations" included discussions about the funds at issue and "what their plans were," id., but maintained that the critical point was that during these negotiations "under no circumstances did [Wenz] ever agree that one nickel of the money that he had in Memery Crystal could be released." Id. Consequently, although the context of these negotiations is contested, it appears that any dispute arose from the discussion, negotiation, or transaction that occurred in London