United States District Court, D. South Dakota, Western Division
ORDER DENYING MOTION TO DISMISS AND GRANTING MOTION TO STAY
KAREN E. SCHREIER, District Judge.
Defendants, Travis Lantis and Maverick Aviation, LLC, move the court to dismiss or stay this action based on a pending state-court action in Florida. Plaintiff, Chaz Aircraft, LLC, has not responded. For the following reasons, the court denies the motion to dismiss but grants the motion to stay.
Chaz Aircraft is a Florida limited liability company. Lantis is a South Dakota citizen. Maverick Aviation is a South Dakota limited liability company. In 2007, Lantis was president of Maverick Aviation. On December 18, 2007, Maverick Aviation and Chaz Aircraft entered into an aircraft purchase agreement in Florida, in which Maverick Aviation agreed to sell, and Chaz Aircraft agreed to purchase, a 1981 Conquest II airplane for $2, 075, 000. The airplane was located in Florida at all relevant times. The purchase closed on August 26, 2008.
Prior to closing, Maverick Aviation was to complete certain installations, inspections, and repairs. Mechanic Don Beaty and his business, Royal Atlantic Aviation, Inc., located in Melbourne, Florida, and Tony Fremo of Tri-State Avionics, LLC, located in Rapid City, South Dakota, both performed work on the airplane. Chaz Aircraft alleges that numerous misrepresentations were made, including inaccurate or fraudulent logbook entries and inaccurate or fraudulent Federal Aviation Administration forms and status reports.
Based on those alleged misrepresentations, Chaz Aircraft filed suit against Lantis, Maverick Aviation, Royal Atlantic, Beaty, Tri-State Avionics, and Fremo in Florida state court on August 21, 2009. That suit made the following claims: Count One: rescission, cancellation, and damages based on material misrepresentations of latent defects against Maverick Aviation and Lantis; Count Two: fraudulent misrepresentation against all defendants; Count Three: fraudulent inducement against all defendants; Count Four: negligent misrepresentation against Maverick Aviation and Lantis; Count Five: conspiracy against Lantis, Beaty, and Fremo; Count Six: violation of the Florida Deceptive and Unfair Trade Practices Act against all defendants; and an alternative count alleging breach of contract against Maverick Aviation.
Discovery was conducted from July 2010 through August 2014. On August 28, 2014, the Florida court held an evidentiary hearing on jurisdictional issues. On September 15, 2014, the Florida trial court judge dismissed Lantis based on a lack of personal jurisdiction. Docket 7-2 at 2-3 ("There was no evidence presented that Travis Lantis, individually, committed a tort in Florida, nor was there evidence sufficient to pierce the corporate veil of Defendant Maverick Aviation, LLC for jurisdictional purposes."). The Florida court found that it did have jurisdiction over Maverick Aviation. Docket 7-3 at 2. This court has no other information regarding the progress of the Florida action.
On August 22, 2014, Chaz Aircraft filed this action against Lantis and Maverick Aviation. The complaint alleges claims against Maverick Aviation and Lantis for fraudulent misrepresentation, fraudulent inducement, negligent misrepresentation, conspiracy, violation of the Florida Deceptive and Unfair Trade Practices Act, and breach of contract. The complaint also recites the same underlying facts set forth in the Florida state-court complaint.
Following service of the complaint in this action, Lantis and Maverick Aviation filed a motion to dismiss, or alternatively a motion to stay, this proceeding based on the pending state-court proceeding in Florida. Docket 7. Over two months have passed without a response from Chaz Aircraft.
In Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976), the Supreme Court addressed "principles... which govern in situations involving the contemporaneous exercise of concurrent jurisdictions, either by federal courts or by state and federal courts." Id. at 817. "These principles rest on consideration of [w]ise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.'" Id. (quoting Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183 (1952)). Although federal courts have a "virtually unflagging obligation... to exercise the jurisdiction given them, " exceptional circumstances permit a federal court to abstain from exercising jurisdiction when a concurrent state-court action is also pending. Id. at 817-18.
To determine whether exceptional circumstances exist, a court should evaluate the following factors:
(1) whether there is a res over which one court has established jurisdiction, (2) the inconvenience of the federal forum, (3) whether maintaining separate actions may result in piecemeal litigation, unless the relevant law would require piecemeal litigation and the federal court issue is easily severed, (4) which case has priority- not necessarily which case was filed first but a greater emphasis on the relative progress made in the cases, (5) whether state or federal law controls, especially favoring the exercise of jurisdiction where federal law controls, and (6) the adequacy of the state forum to protect the federal plaintiff's rights.
Mountain Pure, LLC v. Turner Holdings, LLC,
439 F.3d 920, 926 (8th Cir. 2006) (quotation marks omitted). "These factors are not intended to be exhaustive, nor are they mechanically applied." Id. When applying the Colorado River factors, "the balance [is] heavily weighted in favor of the exercise of jurisdiction.'" Id. (alteration in original) (quoting Moses H. Cone Mem. Hosp. v. Mercury Constr., 460 U.S. 1, 16 (1983)). Ultimately, a court's task "is not to find some substantial reason for the exercise of federal jurisdiction... rather, the task is to ascertain whether there exist exceptional' circumstances, the clearest of ...