United States Court of Appeals,

Eighth Circuit.

Kristen BROWN; A.B., by next friend Kristen Brown; R.B., by next friend Kristen Brown, Plaintiffs–Appellees

v.

Kenneth L. DAVIS, Jr., Defendant

William Davis; William Davis Logging, Inc., Defendants–Appellants.

No. 15–1009.

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Submitted: Dec. 15, 2015.

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Filed: Feb. 23, 2016.

 

 

Appeal from United States District Court for the Eastern District of Missouri—St. Louis.

Attorneys and Law Firms

Kenneth L. Halvachs, Belleville, IL, for appellants.

Richard Witzel, Michael A. Fisher, John B. Greenberg, David A Dimmitt, Saint Louis, MO., for appellees.

Before MURPHY, BENTON, and KELLY, Circuit Judges.

Opinion

MURPHY, Circuit Judge.

 

*1 Kyle Brown was killed on a bridge crossing the Mississippi River between Missouri and Illinois when a large “log skidder” tractor fell off a truck onto his car. The truck hauling the log skidder was being driven by Kenneth Davis, Jr. (Ken) for his uncle William Davis and William Davis Logging, Inc. (WDL). Brown’s wife Kristen brought this wrongful death action against Ken Davis, William Davis, and WDL on behalf of herself and her two children. The complaint asserted negligence based on Ken’s driving and William’s failure to block oncoming traffic. After the case was removed to federal court,1 it was tried before a jury which returned a $3 million verdict for the Browns. William Davis and WDL appeal. We affirm.

 

 

I.

On December 14, 2011 William Davis, the president of WDL, and his nephew Ken Davis, an independent contractor, set out from Atlas, Illinois to deliver a John Deere 540B log skidder owned by WDL to a buyer in Eolia, Missouri. In order to reach Eolia, the Davises planned to travel west across the Mississippi on the Champ Clark Bridge. That bridge is 20 feet wide and has two lanes. Since the log skidder was 10 feet wide, it would have had to cross the centerline and encroach on the eastbound lane of the bridge.

 

At trial Sheriff Paul Petty of Pike County, Illinois testified about a 20 year local practice for wide loads crossing the bridge. According to the sheriff, the practice was for a driver with a wide load to call a law enforcement agent and request that all oncoming bridge traffic be stopped. Although Ken was aware of this practice, he preferred to “close” the bridge himself by sending another driver across first to block the eastbound lane. Ken testified that he had hauled loads across the bridge for William “thousands” of times. Often William was with him and would cross first in his pickup truck to close the lane until Ken and his load were safely across to the west. Ken stated that William had closed the bridge for him hundreds of times. William also testified that he had blocked traffic on the bridge himself and sometimes had called law enforcement to close it.

 

At the west end of the bridge where plaintiffs allege William Davis was supposed to block traffic there is a four way stop at the first intersection. There are two gas stations on the eastern corners of that intersection, and between them and the west end of the bridge is a motel. A driver heading east from either gas station or the motel may turn directly onto the road which leads to the bridge and avoid the four way stop at the intersection. Because of these access points on the west side of the bridge, William would be ideally positioned close enough to the bridge to block oncoming vehicles either from the intersection or from the three adjacent properties. The day before the accident, Ken loaded the log skidder onto a flatbed trailer for William who owned both the trailer and the truck.

 

The next morning the two met for breakfast at the Atlas Cafe, then went to Ken’s lot, checked the trailer, and set off westbound for Missouri. William went first in the pickup. Ken followed with the log skidder and slowed as he approached the east end of the bridge and drove onto the shoulder to call William to check on any traffic. After William assured Ken that “the bridge was clear” and hung up, Ken drove west. As Ken passed under the first part of the bridge superstructure, he saw a car coming east over a rise in the center of the bridge. He “tried to move over because [it] was coming at [him] real quick,” but he “got over too far” and hit the bridge with the log skidder. On impact the skidder ripped loose from the trailer and struck the top of the oncoming car, killing its driver, Kyle Brown. The collision occurred on the Illinois side of the bridge about 500 feet east of its center.

 

*2 Ken Davis admitted that his negligence had caused the accident resulting in Brown’s death so the key contested issue for the jury related to William’s actions on the Missouri side of the bridge. Both William and another witness, Richard Brummell, testified about William’s location, using an aerial photograph of the scene to explain to the jury what happened. William testified that as he headed west over the bridge toward Missouri, Ken called and asked him “to look out for trucks.” William responded that “it’s all clear.” Then when William reached the Missouri side of the bridge, he stopped “a few car lengths” before the stop sign at the intersection ahead and “sat there for a few minutes” watching for oncoming traffic. William admitted at trial that from that location he would “probably not” have been able to stop traffic entering onto the road from the motel parking lot or the two gas stations closer to the bridge.

 

When William saw Richard Brummell’s pickup truck approaching the Missouri intersection, he “told [Brummell] that Ken was coming across the bridge with a wide load.” Brummell then stopped and waited. While he was waiting at the intersection, William looked in his rearview mirror and “could see the super structure of [the] truck … coming across the bridge.” Later, however, he stated that he could have been mistaken about whether he had in fact seen it. After he stopped Brummell, William said he “saw no traffic.” Apparently he believed Ken could safely proceed over the bridge at that point. William then crossed to the west side of the intersection to use the restroom in the Shell station. As he walked into the station, Ken called and said that there had been an accident.

 

Richard Brummell’s testimony was different in significant points. He explained that as he was driving east from Missouri to his farm in Illinois, he first saw William when they were both approaching the intersection at the west end of the bridge. Brummell testified that instead of waiting at the intersection to block traffic, William had proceeded through the crossing “just like you do at a normal stop sign” and gone over to the Shell station. Brummell did not see William give any signal for him to wait and “didn’t see nobody stop anybody.” Brummell continued onto the bridge and came to the scene of the accident where he saw Ken standing next to his truck calling for help on his cell phone. At that point Brummell backed up to the Missouri end of the bridge in order to block traffic coming from the two gas stations or the motel. Brummell did not see Kyle Brown’s car prior to the accident.

 

Kyle’s wife Kristen Brown filed a wrongful death action in state court which was subsequently removed to the United States District Court for the Eastern District of Missouri, see 28 U.S.C. §§ 1332(a), 1441(a). The case was tried to a jury which found in favor of Brown and her children. Damages of $3,000,000 were assessed against Ken, William, and WDL jointly and severally. After trial William and WDL filed a motion for judgment as a matter of law, claiming that there had been insufficient evidence to find William individually liable and that the WDL company was entitled to judgment on the vicarious liability claims. See Fed.R.Civ.P. 50. The district court concluded that there was sufficient evidence for the jury to find that William Davis was negligent and liable for Kyle Brown’s death, and WDL also responsible for William’s negligence. William and WDL now appeal.

 

 

II.

*3 [1] [2] [3] Appellants contend that the district court erred by denying their motion for judgment as a matter of law because there was insufficient evidence that William was negligent. We review de novo the denial of such a motion. Conseco Fin. Servicing Corp. v. N. Am. Mortg. Co., 381 F.3d 811, 818 (8th Cir.2004). We view the evidence “in the light most favorable to the verdict, giving the prevailing party the benefit of all reasonable inferences, and we will not judge the credibility of the witnesses or weigh the evidence.” Id. (citation omitted). We will not set aside the jury verdict “unless there is a complete absence of probative facts to support the verdict.” Id.

 

The collision which killed Kyle Brown occurred east of the boundary between Missouri and Illinois at the middle of the main channel of the Mississippi River. See 3 Stat. 545 (1820) (delineating the boundary). William’s actions on the west end of the bridge occurred in Missouri. The district court had jurisdiction based on the diversity of the parties and applied Missouri tort law under Missouri’s choice of law principles. See Am. Guar. & Liab. Ins. Co. v. U.S. Fid. & Guar. Co., 668 F.3d 991, 996 (8th Cir.2012). No party has challenged that determination, and we also apply Missouri tort law. See Lackawanna Chapter of the Ry. & Locomotive Historical Soc’y, Inc. v. St. Louis Cty., 497 F.3d 832, 835 (8th Cir.2007). See generally Gerhard v. Terminal R.R. Ass’n of St. Louis, 299 S.W.2d 866, 869–70 (Mo.1957) (per curiam) (discussing Missouri’s concurrent jurisdiction “on the river Mississippi” as applied to cases involving bridges).

 

[4] To prove a claim of negligence under Missouri law, “a plaintiff must establish that the defendant had a duty to protect the plaintiff from injury, the defendant failed to perform that duty, and the defendant’s failure proximately caused injury to the plaintiff.” Lesch v. United States, 612 F.3d 975, 981 (8th Cir.2010) (citing Lopez v. Three Rivers Elec. Co-op., 26 S.W.3d 151, 155 (Mo.2000)).

 

 

A.

[5] [6] [7] [8] Appellants first argue that the Browns did not present sufficient evidence to establish that William had a legal duty. “The duty to exercise care may be a duty imposed by common law under the circumstances of a given case.” Hoover’s Dairy, Inc. v. Mid–Am. Dairymen, Inc./Special Prods., Inc., 700 S.W.2d 426, 431 (Mo.1985) (quoting Zuber v. Clarkson Constr. Co., 363 Mo. 352, 251 S.W.2d 52, 55 (Mo.1952)). The extent of a duty “is generally measured by ‘whether or not a reasonably prudent person would have anticipated danger and provided against it.’ ” Id. (quoting Scheibel v. Hillis, 531 S.W.2d 285, 288 (Mo.1976)). The “paramount factor” in determining whether a duty exists is the foreseeability that some injury might result. Id. Whether the defendant “should have foreseen a risk in a given set of circumstances” depends on whether there was “some probability or likelihood of harm sufficiently serious that ordinary persons would take precautions to avoid it.” Lopez, 26 S.W.3d at 156.

 

*4 [9] There was ample evidence in the record for the jury to find that William should have foreseen the risks of transporting the log skidder across the bridge without first stopping traffic and that ordinary persons would have taken some precautions. An ordinary person would know that truckers must take special measures when hauling wide loads, especially on narrow roads. It would have appeared to a reasonably prudent person that the 10 foot wide log skidder required both of the two lanes in order to pass safely across the narrow Champ Clark Bridge. Given the risk of a collision, an ordinary reasonable person would have either called law enforcement to close the bridge from other traffic or blocked it himself. In fact, the normal practice for William and Ken was to close the bridge before crossing with a wide load. On this record, moreover, the evidence indicated that William directed each stage of the move and his role was to stop traffic during the bridge crossing and inform Ken once the bridge was clear. The record was sufficient to prove that William had a duty to take precautions against the risks involved in transporting the log skidder over the bridge.

 

Appellants argue however that William had no legal duty because he did not “gratuitously and voluntarily undertake” a duty to Kyle Brown. They cite the Restatement (Second) of Torts § 323 which imposes liability on a person “who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of the other’s person or things.” See Trader v. Blanz, 937 S.W.2d 325, 328 (Mo.Ct.App.1996). Section 323 of the Restatement is not applicable to this case, however. The jury found that William agreed to “participate in the process of transporting the log skidder over the Champ Clark bridge,” that he failed to stop oncoming traffic or to properly advise Ken of oncoming traffic, and that he was thereby negligent. In this case, William’s legal duty arose because a reasonably prudent person would have anticipated danger under the circumstances and provided against it, Hoover’s Dairy, Inc., 700 S.W.2d at 431 (Mo.1985), not because he was “render[ing] services” to Kyle Brown.

 

The district court used the language of a liability element under section 323 in one of its instructions, asking the jury to determine whether William’s negligence “increased the risk of harm.” See Restatement (Second) of Torts § 323 (1965). This was not however a “gratuitous undertaking” case. The district court added that element “to accommodate a belief by [William] that this would be some action that he is undertaking voluntarily,” but it explained that the jury could find William liable even if he “was not performing in a gratuitous manner.” Appellants’ objections to the jury instructions were denied, and the jury was never asked to determine whether William undertook to “render services” to Kyle Brown. The district court correctly instructed on general negligence principles, and there was sufficient evidence for the jury to find that William had a legal duty to take appropriate precautions.

 

 

B.

*5 [10] Appellants next argue that there was insufficient evidence for the jury to find that William breached his duty of care. The district court properly instructed the jury to determine whether William failed to use “the degree of care that an ordinarily careful person would use under the same or similar circumstances.” See Lopez, 26 S.W.3d at 158. There was ample evidence to support the jury’s finding that William failed to use ordinary care. Sheriff Petty’s testimony showed that closing the bridge was an ordinary practice in the community. See Wright v. Chicago, Burlington & Quincy R.R. Co., 392 S.W.2d 401, 405 (Mo.1965) (discussing the relevance of evidence of custom in determining what an ordinarily prudent person would do under the circumstances). William knew about the crossing procedure because on prior occasions he had called law enforcement to close the bridge or blocked the bridge himself. Ken testified that William had blocked the bridge hundreds of times when WDL was transporting wide loads. Brummell’s testimony, viewed in the light most favorable to the verdict, showed that on this record William did not warn others to stop. Instead of blocking traffic, William went to the Shell station. William testified that he called Ken and told him the bridge was “all clear” although he did not know in fact if it was.

 

Appellants point to William’s testimony about what he agreed to do the day of the bridge crossing, but the jury apparently believed Brummell’s version of the facts, and we cannot reweigh the evidence or the jury’s credibility findings. Conseco Fin. Servicing Corp., 381 F.3d at 818. Moreover, William’s own testimony showed that even if he did in fact stop and wait, he did so in a position that would not have prevented cars leaving the motel from turning on to the bridge. He therefore was not in a position to block traffic adequately. “Maybe I was a little too far forward,” William admitted. We conclude that the evidence of his failure to stop traffic and of his misleading signal to Ken was sufficient for the jury to find that William failed to exercise ordinary care.

 

 

C.

[11] [12] [13] Appellants also argue that William’s actions were not the proximate cause of Kyle Brown’s death. The general test for proximate cause “is whether an injury is the natural and probable consequence of the defendant’s negligence.” Stanley v. City of Independence, 995 S.W.2d 485, 488 (Mo.1999). Proximate cause “inquires into the scope of foreseeable risk created by the defendant’s act or omission.” Nail v. Husch Blackwell Sanders, LLP, 436 S.W.3d 556, 563 (Mo.2014). In this context, “foreseeability refers to whether a defendant could have anticipated a particular chain of events that resulted in injury or the scope of the risk that the defendant should have foreseen.” Lopez, 26 S.W.3d at 156. The defendant need not have anticipated the “exact manner” in which a particular injury would occur. Callahan v. Cardinal Glennon Hosp., 863 S.W.2d 852, 865 (Mo.1993) (quoting Tharp v. Monsees, 327 S.W.2d 889, 894 (Mo.1959)). Rather, the plaintiff must prove that the defendant “could foresee the person who would be injured” and that he “knew or ought to have known that there was an appreciable chance some injury would result.” Id. (quoting Tharp, 327 S.W.2d at 894).

 

*6 [14] Viewed in the light most favorable to the verdict, the evidence was sufficient for the jury to find that William’s actions were the proximate cause of the accident. Had William blocked traffic from entering the bridge, as an ordinarily careful person would have done, Kyle Brown’s car would not have been on the bridge at the same time as the truck carrying the log skidder. William knew that any person driving onto the bridge might be at risk and should have foreseen the risk of a collision.

 

[15] [16] Appellants nonetheless assert that Ken’s negligent driving on the bridge was the sole proximate cause of the accident. When two or more persons commit successive acts of negligence, the first person’s negligence is not the proximate cause of the injury when there is an “efficient, intervening cause.” Krause v. U.S. Truck Co., 787 S.W.2d 708, 710 (Mo.1990). “If some injury is reasonably to be anticipated or is reasonably probable as a result of the defendant’s act of negligence, then the added [negligent] act of a third person … does not break the chain of causation and defendant is liable; in such event the act of the third person is mere concurring negligence.” Dickerson v. St. Louis Pub. Serv. Co., 365 Mo. 738, 286 S.W.2d 820, 824 (Mo.1956). Here, Ken’s negligence did not “interrupt[ ] the chain of events” set in place by William’s negligence. See id. Ken’s driving error occurred after he was surprised to see another vehicle on the bridge after William had told him that the bridge was clear. The entire sequence of events was set in motion by William’s failure to stop Kyle Brown’s car from driving onto the bridge, and the problem was exacerbated by the negligent warning he gave to Ken.

 

We conclude that there was sufficient evidence to support the jury’s verdict that William Davis acted negligently and caused the death of Kyle Brown.

 

 

III.

[17] [18] Appellants’ final contention is that the district court erred by denying their motion for a new trial based upon what they allege was an improper comment in closing argument. When reviewing the denial of a motion for a new trial under Fed.R.Civ.P. 59(a), we give great deference to the district court’s ruling and will not reverse in the absence of a clear abuse of discretion. Bass v. Gen. Motors Corp., 150 F.3d 842, 845 (8th Cir.1998). “The key question is whether a new trial should have been granted to avoid a miscarriage of justice.” Id. (quoting McKnight v. Johnson Controls, Inc., 36 F.3d 1396, 1400 (8th Cir.1994)).

 

[19] Appellants claim that they were biased by the Browns’ attorney’s rebuttal statement that the defendants had agreed that although the Brown family had sustained damages of $700,000, “I think Kyle was worth more than that.” After appellants moved to strike, the district court told the jury to disregard the comment. Then appellants moved for a mistrial which was denied. Appellants renewed their argument that the comment was prejudicial in their post verdict motion for a new trial.

 

*7 [20] [21] The propriety of a statement in closing argument is a procedural question which we review under federal law. Sylla–Sawdon v. Uniroyal Goodrich Tire Co., 47 F.3d 277, 285 (8th Cir.1995). District courts have considerable discretion to control closing arguments, and we will not reverse unless counsel has made statements that were “plainly unwarranted and clearly injurious.” Id. (quoting Vanskike v. Union Pac. R.R., 725 F.2d 1146, 1149 (8th Cir.1984)). The Browns asked for a verdict of $8.5 million. Counsel for Ken Davis stated that the evidence showed $700,000 of damages and told the jury, “So, give them $700,000.” Counsel for William and WDL said he agreed with that calculation. Those statements opened the door for the allegedly prejudicial statement by the counsel for the Browns. See Crouch v. Teledyne Continental Motors, Inc., 511 F. App’x 822, 824 (11th Cir.2013) (per curiam) (concluding that defendant’s comments in opening and closing arguments were not reversible error where plaintiffs opened the door to the allegedly improper references). Moreover, the statement at issue was not unwarranted given the context, nor was it clearly injurious since the court instructed the jurors to disregard it. We conclude that the district court did not abuse its discretion in denying appellants’ motion for a new trial.

 

 

IV.

For these reasons we affirm the judgment of the district court.

 

All Citations

— F.3d —-, 2016 WL 711294

 

 

Footnotes

1

The Honorable Audrey G. Fleissig, United States District Judge for the Eastern District of Missouri, presiding.

United States District Court,

E.D. Missouri, Eastern Division.

Spirit Commercial Auto Risk Retention Group, Inc., Plaintiff,

v.

Mike Kailey dba Kailey Truck Lines, Vikram Shah, and Lisa Vasquez Kailey, Defendants.

No. 4:15CV01091 ERW

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Signed March 8, 2016

Attorneys and Law Firms

Suzanne R. Bruss, Franke And Schultz, P.C., Kansas City, MO, for Plaintiff.

Paul S. Padda, The Federal Defenders Law Group, LLC, Las Vegas, NV, Eric W. Hageman, Pritzker Olsen, P.A., Minneapolis, MN, Lanny H. Darr, Darr Firm, Alton, IL, for Defendant.

 

 

MEMORANDUM AND ORDER

1. RICHARD WEBBER, SENIOR UNITED STATES DISTRICT JUDGE

*1 This matter comes before the Court on Defendant Mike Kailey’s Motion to Dismiss the Complaint or, in the Alternative, to Transfer Venue to the District of Nevada (“Motion to Dismiss”) [ECF No. 21].

 

 

1. BACKGROUND

Plaintiff Spirit Commercial Auto Risk Retention Group, Inc. (“Plaintiff”) filed its Complaint for Declaratory Judgment (“Complaint”) with the Court on July 14, 2015. On October 25, 2015, Defendant Mike Kailey d/b/a Kailey Truck Lines (“Defendant Kailey”) filed the instant Motion to Dismiss on the basis of Rule 12(b)(1) of the Federal Rules of Civil Procedure and 28 U.S.C. § 1332(a)(1), claiming this Court lacks subject matter jurisdiction based on a lack of diversity of citizenship. Alternatively, Defendant Kailey prays for transfer to the District Court of Nevada pursuant to 28 U.S.C. § 1404(a) on the basis Nevada provides a more convenient forum to Defendant Kailey, a sole proprietor. Likewise, Defendant Kailey alleges that the appropriate choice-of-law for the interpretation of the Policy is Nevada law. To the contrary, Plaintiff asserts Missouri law, or alternatively California law should apply.

 

Plaintiff’s Complaint seeks declaratory judgment that the death of Gurpreet Kailey, who was killed when a commercial truck, owned by Defendant Kailey and driven by Vikram Shah, rolled over on I-44, falls within the exclusions of the Automobile Liability Insurance Policy numbered CAC0001201402CA (“Policy”) issued to Defendant Kailey by Plaintiff. Accordingly, Plaintiff’s Complaint asserts Plaintiff is not obligated to indemnify nor defend Defendant Kailey in the underlying negligence cause of action, filed in this Court, against Defendant Kailey in relation to the death of Gurpreet Kailey.

 

The Policy at issue in this suit was issued to Defendant Kailey, effective March 21, 2014, and lists 13150 Long Meadow St. Hesperia, California 92344 as Defendant Kailey’s address. [ECF No. 1, Ex. B, at SPIR 003]. Defendant Kailey does not challenge the Policy, incorporated into Plaintiff’s Complaint, is the agreement the parties executed. Plaintiff alleges, at all times relevant to its declaratory judgment suit, Defendant was a resident of California. Likewise, Plaintiff has submitted a copy of Defendant Kailey’s motor carrier registration listing an address for Defendant Kailey identical to that used for purposes of the Policy. [ECF No. 25, Ex. A].

 

It is uncontested Plaintiff is registered as a Nevada domestic corporation and is a citizen of Nevada. [ECF No. 21, Ex. A]. Defendant Kailey contests he is a California citizen, and has provided a declaration stating he is a thirty-year resident of Clark County, Nevada. [ECF No. 21, Ex. B]. Defendant Kailey further asserts that while he maintains a temporary office in Hesperia, California, he transacts the majority of his business in Nevada. Id.

 

 

1. LEGAL STANDARD

A party may move to dismiss a claim for lack of subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1); Blakley v. Schlumberger Tech. Corp., 648 F.3d 921, 931 (8th Cir. 2011). “Motions to dismiss for lack of subject-matter jurisdiction can be decided three ways: at the pleading stage, like a Rule 12(b)(6) motion; on undisputed facts, as with a summary judgment motion; and on disputed facts.” Jessie v. Potter, 516 F.3d 709, 712 (8th Cir. 2008). “In order to properly dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the complaint must be successfully challenged on its face or on the factual truthfulness of its averments.” Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993).

 

*2 In a factual attack, “the existence of subject matter jurisdiction [is challenged] in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered…Thus, the nonmoving party would not enjoy the benefit of the allegations in its pleadings being accepted as true by the reviewing court[.] …” Branson Label, Inc. v. City of Branson, Mo., 793 F.3d 910, 914-15 (8th Cir. 2015). The court may receive competent evidence such as affidavits and deposition testimony in order to determine the factual dispute. Titus, 4 F.3d at 593.

 

The existence of subject matter jurisdiction is a question of law appropriate for the Court. ABF Freight Syst., Inc. v. Int’l Bhd. of Teamsters, 645 F.3d 954, 958 (8th Cir. 2011). A district court has broad power in deciding whether it has the right to hear a case. Osborn v. United States, 918 F.2d 724, 729 (8th Cir. 1990). “Moreover, because jurisdiction is a threshold question, judicial economy demands that the issue be decided at the outset rather than deferring it until trial[.]” Id.

 

 

III. DISCUSSION

1. Subject Matter Jurisdiction—Diversity of Citizenship

Defendant Kailey argues diversity of citizenship is not complete, and subject matter jurisdiction is lacking, because both he and Plaintiff are Nevada citizens. While the parties do not dispute Plaintiff is a Nevada citizen, Plaintiff’s Complaint alleges Defendant Kailey is a California citizen. Based on the record, and the exhibits this Court may consider, the Court finds Defendant Kailey is a California citizen.

 

 

1. Plaintiff Spirit’s Burden to Establish Jurisdiction

Plaintiff, as the party seeking the federal forum, has the burden of establishing jurisdiction by a preponderance of the evidence. Blakemore v. Mo. Pac. R.R., 789 F.2d 616, 618 (8th Cir.1986); Yeldell v. Tutt, 913 F.2d 533, 537 (8th Cir. 1990). “[D]iversity jurisdiction does not exist unless each defendant is a citizen of a different State from each plaintiff.” Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978) (emphasis original); Yeldell, 913 F.2d at 537. “The existence of diversity of citizenship is determined at the time the suit is instituted, and not when the cause of action arose.” Yeldell, 913 F.2d at 537; see Smith v. Snerling, 354 U.S. 91, 93 n.1 (1957); Blakemore, 789 F.2d at 618. “A determination of citizenship for the purpose of diversity is a mixed question of law and fact, but mainly fact.” Blakemore, 789 F.2d at 618.

 

 

2. Domicile

The determinative issue with regard to Defendant Kailey’s citizenship for purposes of diversity is the location of Defendant Kailey’s domicile. “[O]ne may have only one domicile at a time and a domicile once established persists until a new one is acquired. (citations omitted). Once acquired, it is presumed to continue until it is shown to have been changed.” Janzen v. Goos, 302 F.2d 421, 425 (8th Cir. 1962).

To acquire a domicil[e] of choice, the law requires the physical presence of a person at the place of the domicil[e] claimed, coupled with the intention of making it his present home. When these two facts concur, the change in domicil [e] is instantaneous. Intention to live permanently at the claimed domicil[e] is not required. If a person capable of making his choice honestly regards a place as his present home, the motive prompting him is immaterial.

 

Janzen, 302 F.2d at 425 (quoting Spurgeon v. Mission State Bank, 151 F.2d 702, 705-06 (8th Cir. 1945)). “State citizenship, for diversity purpose [s], requires an individual’s physical presence in the state coupled with an indefinite intention there to remain.” Blakemore, 789 F.2d at 618; Holmes v. Sopuch, 639 F.2d 431, 433 (8th Cir. 1981).

 

*3 Although Plaintiff has the burden of establishing subject matter jurisdiction, the Court finds Plaintiff has met this burden, and Defendant Kailey has provided the Court with no evidence to rebut he is a citizen of California. The record before the Court contains no compelling evidence of Defendant Kailey’s physical presence in Nevada from which the Court could find Defendant Kailey’s domicile is Nevada. In determining citizenship for the purpose of diversity, the Court is not required to believe an interested witness’ uncontradicted testimony. Janzen, 302 F.2d at 427. Concluding there is a lack of sufficient evidence of Defendant Kailey’s physical presence in Nevada, the Court notes Defendant Kailey’s Exhibit B, “Declaration of Mike Kailey,” is an unsworn statement which states Defendant Kailey is a thirty-year resident of Clark County, Nevada. [ECF No. 21, Ex. B]. Conspicuously absent from this statement is Defendant Kailey’s Nevada address, a copy of a driver’s license, anything showing Nevada is the principal base of operations for Kailey Truck Lines, or any other indicia of reliability to make Defendant Kailey’s challenge to citizenship colorable. While Defendant Kailey is under no obligation to provide proof of his alleged Nevada residency, his failure to do so, in light of the evidence Plaintiff has provided in support of its burden to prove subject matter jurisdiction, is fatal.

 

Plaintiff has provided two documents: the Policy at issue in Plaintiff’s suit for declaratory judgment [ECF No. 1, Ex. B], and Defendant Kailey’s Motor Carrier Registration [ECF No. 25, Ex. A], each of which lists 13150 Long Meadow Street, Hesperia, California, 92344 as Defendant Kailey’s address. Defendant Kailey admits having a temporary office in Hesperia, California. Accordingly, the Court finds Defendant Kailey has established a physical presence in Hesperia, California. See Spurgeon, 151 F.2d at 705-06 (mandating domicile test requires physical presence). In consideration of Defendant Kailey’s ongoing use of his California address on all documents relating to Kailey Truck Lines, and Defendant Kailey’s lack of a Nevada address anywhere in the record to rebut the evidence provided by Plaintiff, this Court finds sufficient evidence to conclude Defendant Kailey has demonstrated his intent to make his home, or otherwise, to remain indefinitely, in Hesperia, California. See, e.g., Mitchell v. United States, 88 U.S. 350, 353 (1874) (concluding a place of business is evidence from which intent to make one’s home in the state, for purposes of domicile, may be presumed). Accordingly, Defendant Kailey’s state of domicile is California.

 

“It has long been held that, for purposes of determining diversity of citizenship, the controlling consideration is the domicile of the individual.” Jones v. Hadican, 552 F.2d 249, 250 (8th Cir. 1977). Because Defendant Kailey is a citizen of California, and Plaintiff is a Nevada citizen, the Court concludes it has subject-matter jurisdiction over this case on the basis of complete diversity between the parties.

 

 

1. Applicable State Law

The next issue raised by Defendant Kailey’s Motion to Dismiss is the choice-of-law that must be applied to the resolution of Plaintiff’s declaratory judgment action. Defendant Kailey maintains Nevada law applies to the interpretation of the Policy. The Court finds no choice-of-law clause in the Policy; therefore, the Court must apply choice-of-law rules. Plaintiff maintains Missouri law, on the basis of the Policy’s formation, or alternatively California law, should apply to the interpretation of the Policy in Plaintiff’s declaratory judgment action. For the reasons discussed herein, the Court finds the application of California law is proper.

 

“We apply the choice-of-law rules of the forum state in a diversity action.” John T. Jones Const. Co. v. Hoot Gen. Const. Co., 613 F.3d 778, 782 (8th Cir. 2010); Cicle v. Chase Bank USA, 583 F.3d 549, 553 (8th Cir. 2009); Whitney v. Guys, Inc., 700 F.3d 1118, 1123 (8th Cir. 2012). Here, because there is no choice of law clause to be found in the Policy, Missouri choice-of-law rules must be applied in order to determine the applicable law in this case.

 

“Missouri choice of law rules follow the ‘most significant relationship’ test of the Restatement (Second) of Conflicts of Laws, Section 188.” Superior Equip. Co. v. Md. Cas. Co.m 986 S.W.2d 477, 480 (Mo. Ct. App. 1998). The “most significant relationship” test requires the Court to examine the following factors to determine which state bears the most significant relationship to Plaintiff’s declaratory judgment action: “(a) the place of contracting; (b) the place of negotiation of the contract; (c) the place of performance; (d) the location of the subject matter of the contract; and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties.” Id. at 480-81. Missouri courts do not apply these factors by counting the factors for a bare majority, but instead evaluate the contacts based on their relative importance to the particular issue before the court. Dillard v. Shaughnessy, Fickel & Scott Architects, Inc., 943 S.W.2d 711, 715 (Mo. Ct. App. 1997). Certain factors may be entitled to more weight. Id.

 

*4 Considering only the record, the place of contracting memorialized in the Policy is 611 W. Fort Scott Street, Suite D., Butler, Missouri 64730 [ECF No. 1, Ex. B at SPIR 006-7]. While Plaintiff maintains the Policy was negotiated in Butler, Missouri, where it was signed, Defendant Kailey has also alleged he was solicited by an agent of Plaintiff in the State of Nevada. There is no dispositive evidence in the record that would suggest the Policy was negotiated in either state, rather than by long-distance negotiation. Thus, the Court finds the contract was negotiated in both Missouri and Nevada. It is less clear where the place of performance is with respect to an insurance policy for a motor carrier operating cross-country. In confronting these issues, the Court finds it necessary to turn to Missouri case law applying Restatement Section 188.

 

With respect to applying Missouri’s choice-of-law rules in a vehicle insurance context involving multiple states, the Missouri Court of Appeals, Western District case Accurso v. Amco Insurance Company, 295 S.W.3d 548 (Mo. Ct. App. 2009) is dispositive. In  Accurso, an estranged wife who lived in Kansas, was hit by an underinsured motorist in Missouri, and had coverage under two policies: 1) an Amco policy that listed the principal address on the policy as the husband’s Missouri law office, with a secondary garaging location for three of the vehicles at wife’s Kansas address; and 2) a policy through Mount Vernon for which the husband had switched the primary address on the policy to his new Missouri home. Id. at 549-50. Although the insured drivers all had Kansas driver’s licenses, all vehicles on the policies had recently had their registration switched to Missouri prior to wife’s accident. Id. at 550. For purposes of choice-of-law, the Accurso court gave varying weight to the factors in Restatement 188:

If the parties negotiate a contract remotely and no single place of negotiation and agreement exists, the place of the negotiation is less important…Likewise, the place of performance in this case is uncertain because the parties did not know where future law suits would be brought. [ ] “[T]he place of performance can bear little weight in the choice of the applicable law when…at the time of contracting it is either uncertain or unknown…” Moreover, the location of the subject matter of the contract in this case is less certain because the contract does not deal with “a specific physical thing,” nor does it “afford protection against a localized risk …”

Accurso, 295 S.W.3d at 553.

 

The Accurso court concluded, because Missouri was the principal address listed as the location of the insured risk under both the Amco and Mount Vernon policies prior to the accident, and because the vehicles were also registered in Missouri, those factors weighed most heavily in favor of finding Missouri law was the most appropriate choice-of-law. Id. at 553-54.

 

Other cases pertaining to Missouri choice-of-law rules concur “[i]n cases involving…casualty insurance…the most important factor is the state which the parties contemplated as the principal location of the insured risk.” Superior Equip. Co., 986 S.W.2d at 480-81; Hartzler v. Am. Family Mut. Ins. Co., 881 S.W.2d 653, 655 (Mo. App. 1994). “[T]he principal location of the insured risk [is] ‘the state where [the vehicle(s) ] will be during at least the major portion of the insurance period’ and…in [ ] [cases] of an automobile liability policy, ‘it is where the vehicle will be garaged during most of the period.’ ” Accurso, 295 S.W.3d at 551-52.

 

In this case, where the motor carrier(s) of Kailey Truck Lines are frequently en route across country, it is not readily apparent in determining where a vehicle will be physically garaged during most of the time period. However, the Court can reasonably conclude the official garaging location of Defendant Kailey’s motor carrier(s), when such vehicle(s) are not in service or between routes, is California, where Defendant Kailey maintains his motor carrier registration. Likewise, as in Accurso, Defendant Kailey’s use of the Hesperia, California, address for purposes of the Policy is dispositive in concluding Hesperia, California, should be considered the primary location of the insured risk.

 

*5 As in Accurso, this Court finds the place of performance is of little relevance to the choice-of-law determination, because as the proceedings for this Motion to Dismiss demonstrate, neither party could know with any certainty where a suit for the enforcement of the Policy might occur at the time of contracting. Likewise, as in Accurso, there is nothing to suggest the Policy was not negotiated remotely. Given the lack of evidence in the record, and the parties discord on this point, the Court attributes little weight to the place of negotiations.

 

Thus, for purposes of choice-of-law analysis, this Court weighs the parties’ entry into the Policy in the State of Missouri against the location of the insured risk in California.

 

Fortunately, Section 6(2) of the Restatement (Second) of Conflicts of Laws provides additional guidance in applying Missouri’s choice-of-law rules:

(2) When there is no such [statutory] directive, the factors relevant to the choice of the applicable rule of law include:

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field of law,

(f) certainty, predictability and uniformity of result, and

(g) ease in the determination and application of the law to be applied.

Dillard, 943 S.W.2d. at 715-16. Because the Policy lists the address for the insured risk, Defendant Kailey’s motor carrier(s), in Hesperia, California, and the Policy must be interpreted in the context of multiple California Policy riders, this Court concludes California law should be applied in this case. In making this decision, the Court considers the following Restatement factors to be persuasive: 1) the protection of the parties justified expectations; 2) the certainty, predictability and uniformity of the result; and 3) ease in the determination and application of the law to be applied in similar cases.

 

While the Court acknowledges it is at the juncture where it must follow Missouri choice-of-law rules precisely, because the parties did not contract for a choice-of-law provision in the Policy, the Court finds the importance which Missouri choice-of-law rules attach to the location of the insured risk, coupled with the use of California riders, demonstrates the parties would have a reasonable expectation that California law apply. For example, an excerpt from the “CALIFORNIA CHANGES” Policy rider affirms California is the contemplated location of the insured risk, and notes specific examples of changes in the Policy, made presumably for the purpose of tailoring the Policy to California requirements:

For a covered ‘auto‘ licensed or principally garaged in or ‘garage operations‘ conducted in California this endorsement modifies insurance provided under the following:

BUSINESS AUTO COVERAGE FORM

BUSINESS AUTO PHYSICAL DAMAGE COVERAGE FORM

GARAGE COVERAGE FORM

MOTOR CARRIER COVERAGE FORM

TRUCKERS COVERAGE FORM

With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by the endorsement.

[ECF No. 1, Ex. B, at SPIR 049].

 

Comment (g) to Restatement Section 6(2) speaks directly to the importance of the parties justified expectations in light of such Policy riders: “Generally speaking, it would be unfair and improper to hold a person liable under the local law of one state when he had justifiably molded his conduct to conform to the requirements of another state.” Restatement (Second) of Conflict of Laws § 6 (1971). Similarly, Comment (i) to Section 6(2) emphasizes the importance of the uniformity and predictability of the result, as well as the need to craft clear rules particularly where, as here, with Defendant Kailey’s interstate trucking operation, “the transfer of an aggregate of movables, situated in two or more states, is involved.” Id. Comment (j) regarding the ease of application of the choice-of-law merely comments on the straightforwardness of this factor as a goal to strive towards. Id. All three of these factors rationalize California law as the favorable choice-of-law in light of the Policy’s construction.

 

 

1. Transfer of Venue

*6 Defendant Kailey seeks transfer to the District Court of Nevada, or alternatively the Central District Court of California, pursuant to 28 U.S.C. § 1404(a) (2012). The statute states “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a).

 

Considering statutory construction, Section 1404(a) requires the Court to consider (1) the convenience of the parties, (2) the convenience of the witnesses, and (3) the interests of justice. Terra Int’l, Inc. v. Miss. Chem. Corp., 119 F.3d 688, 691 (8th Cir. 1997). However, the Court is not limited to these factors and should consider all other relevant factors on a case-by-case basis. Id.; See Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988).

 

On these factors, this Court will not transfer this case to either Nevada or California because to do so sacrifices the interests of the other defendants in Plaintiff’s Complaint. Neither Defendant Vikram Shah nor Defendant Lisa Vasquez-Kailey has challenged the subject-matter jurisdiction of this Court, and there is no reason to disbelieve these defendants are respectively residents of New York and New Jersey, as alleged in Plaintiff’s Complaint. If this case was transferred to California, these Defendants would have to traverse the entire continental United States to defend in a Western forum. Likewise, these defendants’ counsel have already sought and attained pro hac vice admission in this forum, and this Court is not willing to increase the cost burden on the other two defendants or lengthen the time necessary to defend this case by creating the additional procedural hurdles that such a transfer of venue would cause.

 

Further, Defendant Kailey and Defendant Vikram Shah are already involved, as defendants, in proceedings in this forum, brought by Lisa Vasquez-Kailey, as plaintiff, in relation to the death of her husband, Gurpreet Kailey. It is appropriate for this Court to withhold transfer to a foreign venue when the operative facts material to this case and the case brought by Lisa Vasquez-Kailey are substantially the same and when Defendant Kailey is already subject to proceedings in this state.

 

Likewise, the Court notes a change of venue in a diversity case would result in application of that forum’s laws:

When a diversity case is transferred from one federal court to another, the choice of law depends on the nature of the transfer. Transfer is allowed under 28 U.S.C. § 1404(a) for the convenience of the parties and witnesses, and the chance for unfair prejudice or forum shopping is minimized because the district court is required to consider the interests of all involved in deciding whether to allow a transfer. With a § 1404(a) transfer the law of the transferor court applies…

Wisland v. Admiral Beverage Corp., 119 F.3d 733, 735-36 (8th Cir. 1997).

 

While the Court notes transfer to the District Court of Nevada might be convenient for Plaintiff and Defendant Kailey, apart from the distance such a transfer would impose on the other named Defendants, transferring the case to the District of Nevada would result in the application of Nevada law, contrary to this Court’s finding California law appropriately governs the interpretation of the Policy in the absence of a choice-of-law clause.

 

*7 Accordingly, any transfer to either the Central District Court of California or the District Court of Nevada is inappropriate.

 

IT IS HEREBY ORDERED that Defendant MIKE KAILEY dba KAILEY TRUCK LINES’ Motion to Dismiss the Complaint or, in the Alternative, to Transfer Venue to the District of Nevada is DENIED.

 

So Ordered this 8th Day of March, 2016.