E-Alert Case Updates

Maryland District Court Holds that Jurisdiction Could Not Be Exercised by Maryland Courts Based on Personal Jurisdiction Over a Different Defendant

Vasyl Yakovets v. Sidney Carl Bailin
Case No. JKB-13-3439 (January 23, 2014)
by Jhanelle A. Graham, Associate
Semmes, Bowen & Semmes (www.semmes.com)

In Vasyl Yakovets v. Sidney Carl Bailin, et al., the United States District Court for the District of Maryland was asked to apply the Federal Rules of Civil Procedure to determine whether venue was proper as to one (1) defendant in the District of Columbia, and whether jurisdiction could be exercised by Maryland courts based on personal jurisdiction over a different defendant. Plaintiff Vasyl Yakovets filed a complaint in the United States District Court for the District of Maryland, alleging that Defendant, Sidney Carl Bailin, was liable to Yakovets for injuries he sustained in a car accident that occurred on July 20, 2012, in the District of Columbia. Yakovets alleged Bailin was at fault when Bailin changed lanes without yielding the right of way to Yakovets’s vehicle. In addition to the negligence claim against Bailin, Yakovets brought a breach of contract claim against his insurance company, Safeco Insurance (“Safeco”), for alleged failure to pay damages caused by the negligence of an underinsured motorist. Yakovets claimed to be a Maryland resident, and Bailin’s last known address was alleged to be in Washington, D.C.

The case proceeded as follows: After Yakovets filed his complaint, Bailin simultaneously filed a motion to dismiss for lack of personal jurisdiction and an answer, in which he raised, inter alia, the defense of lack of personal jurisdiction. Yakovets then filed an amended complaint that added Tower Insurance Company of New York (“Tower”) as a third defendant, also on a theory of breach of contract for alleged failure to pay damages caused by the negligence of an underinsured motorist. In this amended complaint, Yakovets alleged that complete diversity existed among the parties since Safeco was a citizen of Massachusetts and Tower was a citizen of New York. Tower further alleged that venue was proper in Maryland. Shortly thereafter, Yakovets filed a response in opposition to Bailin’s motion to dismiss for lack of personal jurisdiction, arguing that venue was proper in Maryland and, if not, the case should be transferred to the federal district court in Washington, D.C. Bailin then filed a motion to dismiss the amended complaint for lack of personal jurisdiction and improper venue and an answer to the amended complaint, raising the same affirmative defense. Yakovets voluntarily dismissed Safeco and filed a response in opposition to Bailin’s motion to dismiss the amended complaint (hereinafter, the “complaint”). After consideration, the Maryland district court granted Bailin’s dispositive motion and transferred the case to the District of Columbia.

First, the district court addressed the applicable legal standard. Because Bailin’s motion to dismiss was filed simultaneously with his answer to the complaint, the district court treated the motion as having been filed under Federal Rule of Civil Procedure 12(c), requesting judgment on the pleadings. See Walker v. Kelly, 589 F.3d 127, 139 (4th Cir. 2009) (treating a motion to dismiss for failure to state claim under Rule 12(b)(6), filed simultaneously with an answer, as a motion for judgment on pleadings under Rule 12(c)). The court continued to explain that the assertion by a federal district court of personal jurisdiction over a nonresident defendant is proper when two (2) conditions are satisfied: “(1) the exercise of jurisdiction must be authorized under the state’s long-arm statute; and (2) the exercise of jurisdiction must comport with the due process requirements of the Fourteenth Amendment.” Carefirst of Maryland, Inc. v. Carefirst Pregnancy Centers, Inc., 334 F.3d 390, 396 (4th Cir. 2003). Under Maryland law, the exercise of long-arm jurisdiction is permitted by statute to the extent such jurisdiction is consistent with the Fourteenth Amendment’s due process requirements; thus, the “statutory inquiry merges with[the] constitutional examination.” Kortobi v. Kass, 978 A.2d 247, 256-57 (Md. 2009). Based on the constitutional requirement of “minimum contacts,” Maryland courts inquire whether the state has either “general jurisdiction” - where the cause of action is unrelated to the defendant’s contact with Maryland but the defendant has engaged in continuous and systematic conduct in the state—or “specific jurisdiction” - where the cause of action arises out of the defendant’s contacts with Maryland. Id. at 257.

In assessing the instant case, the district court agreed that Yakovets’s complaint failed to allege facts establishing that the Maryland court had personal jurisdiction over him. Specifically, the court stated that general jurisdiction was not appropriate where Yakovets did not allege any conduct by Bailin in Maryland that could be considered continuous and systematic. And under the alternative concept of specific jurisdiction, the court opined, any cause of action asserted by Yakovets against Bailin arose from the vehicle accident that occurred in the District of Columbia. See Kortobi, 978 A.2d at 259-60 (no specific jurisdiction in Maryland over defendant personal representative whose decedent allegedly caused plaintiff injury in vehicle accident in District of Columbia).

The Court noted that both of Yakovets’s arguments confused venue with personal jurisdiction, which are related yet distinct concepts. According to the court, all defendants were not residents of Maryland since Bailin resided in the District of Columbia. Because the vehicle accident occurred in the District of Columbia, the court deemed that venue was proper in the District of Columbia under subsection FED. R. CIV. P. § 1391 (b)(2). Finally, the district court agreed with Yakovets’s argument that transfer to an appropriate venue was a more desirable course of action than dismissal of his claim against Bailin. Fourth Circuit case law has interpreted 28 U.S.C. § 1406(a) to allow “transfer of a case to any district, which would have had venue if the case were originally brought there, for any reason which constitutes an impediment to a decision on the merits in the transferor district but would not be an impediment in the transferee district.” Porter v. Groat, 840 F.2d 255, 258 (4th Cir. 1988); see also In re Carefirst of Maryland, Inc., 305 F.3d 253, 255-56 (4th Cir. 2002). Therefore, the district court held that Yakovets’s claim against Bailin may be litigated in the District of Columbia, and in keeping with Yakovets’s alternative suggestion, the case was ordered to be transferred there.