Kearns v. New York Community Bank

1

NOT DESIGNATED FOR PUBLICATION

No. 115,470

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

DARREN K. KEARNS,
Appellant,

v.

NEW YORK COMMUNITY BANK and
JAMES RICCA,
Appellees.


MEMORANDUM OPINION

Appeal from Johnson District Court; JAMES F. VANO, judge. Opinion filed March 24, 2017.
Affirmed.

Darren K. Kearns, pro se appellant.

Kenneth C. Jones, of Lewis Rice LLC, of Overland Park, for appellees.

Before GARDNER, P.J., POWELL, J., and HEBERT, S.J.

Per Curiam: Darren Kearns sued New York Community Bank (NYCB), James
Ricca, and First American Title Insurance Company for harm resulting from a New York
real estate transaction. First American settled almost immediately, but NYCB and Ricca
filed a preanswer motion to dismiss, arguing in part that the district court lacked personal
jurisdiction and Kansas was an inconvenient forum. After allowing Kearns to conduct
discovery on those two issues, the district court granted the motion. On appeal, Kearns
claims that the district court had personal jurisdiction, Kansas was a convenient forum,
and he was not given enough time to conduct discovery. We disagree and affirm.
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FACTUAL AND PROCEDURAL BACKGROUND

The heart of this dispute centers on property located in Flushing, New York, with
numerous lawsuits filed by Kearns based on the following events. Kearns and David
Sheldon purchased the property at a sheriff's sale in February 2006. The sheriff
distributed the proceeds of the sale to creditors who had an interest in the property, which
included a payment of $95,054.47 to NYCB, a mortgagee. Unfortunately, this payment
failed to satisfy the mortgage debt. NYCB contacted Sheldon and requested that he pay
the additional amounts of interest and fees. Apparently, the parties disputed over a period
of several months whether Sheldon owed NYCB any additional monies.

During the time of Sheldon's dispute with NYCB, on August 18, 2006, Sheldon
and Kearns entered into a listing agreement with Julie Wong and Winzone Realty, Inc. to
sell the property. Wong presented Tara Khanal as a potential buyer with a preliminary
offer to purchase the property for $675,000 and advised Sheldon and Kearns that Khanal
was prequalifed and could close within 30-45 days. In September 2006, Khanal, through
her attorney David Melo, negotiated a contract of sale and obtained a title policy for the
property. Khanal supposedly obtained a loan commitment from Network Mortgage, Inc.
and its broker, and she wrote a check for the down payment. Shortly before the sale was
to close in October 2006, Melo informed Sheldon and Kearns that Khanal did not have a
loan commitment; due to lack of financing, the closing date was delayed.

Ultimately, Khanal was unable to secure financing, and the sale was cancelled.
Sheldon and Kearns then advised the escrow agents that they objected to the release of
any escrowed funds to Khanal because they wanted liquidated damages. Khanal filed suit
seeking return of the $50,000 escrow deposit. The trial court ordered Sheldon and Kearns
to return the deposit. However, this order was overturned on appeal, with the appellate
court holding that the default judgment was improperly granted. See Sheldon v. Khanal,
No. 08-cv-3676 (KAM) (LB), 2009 WL 3233093, at *4 (E.D.N.Y. 2009) (unpublished
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opinion); Khanal v. Sheldon, 74 A.D.3d 894, 895, 904 N.Y.S.2d 453 (2010). Sheldon and
Kearns ultimately sold the property to a third party for $630,000. The buyer financed the
purchase through Wells Fargo Bank, and title insurance was obtained through First
American Title Insurance Company.

On October 1, 2006, NYCB filed suit against Sheldon and Kearns, along with the
original owners of the property, in the Supreme Court of New York (New York's state
trial court) in an attempt to obtain a second foreclosure of the property and thereby
collect its deficiency. Surprisingly, neither Sheldon nor Kearns filed an answer, and
NYCB obtained a default judgment in September 2008. Sheldon and Kearns sought to set
aside the default judgment in December 2008, but their motion was denied, and the denial
was upheld on appeal. New York Community Bank v. Vermonty, 68 A.D.3d 1074, 1075,
892 N.Y.S.2d 137 (2009).

In early 2007, Sheldon and Kearns brought suit in the United States District Court
for the District of Kansas. Sheldon v. Khanal, No. 07-2112-KHV, 2007 WL 4233628 (D.
Kan. 2007) (unpublished opinion). It appears they sued everyone associated with their
attempt to buy and then sell the New York property: NYCB; Khanal and her attorney,
Melo; Network Mortgage, Inc., and its broker; Wong, the realtor, and Winzone Realty;
another mortgage company, Option One Mortgage Corp.; Rosemarie Klie and the law
firm of Sweeney, Gallo, Reich, and Bolz, LLP (apparently the law firm that handled
Khanal's suit against Sheldon and Kearns for return of the escrowed funds); and James
Cantanno and the law firm of Forchelli, Curto, Schwartz, Mineo, Carlino and Cohn, LLP
(the firm that brought the second foreclosure suit on behalf of NYCB). Kearns
represented himself and Sheldon in the matter.

Sheldon and Kearns alleged numerous state law claims against the defendants,
including claims for breach of contract, bad faith performance, breach of fiduciary duty,
intentional abuse of process, negligent and intentional slander of title, and many other tort
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claims. More specifically, Sheldon and Kearns alleged that NYCB and its attorneys
negligently and intentionally abused the legal process by filing the second foreclosure
suit in New York and negligently and intentionally slandered the title to the property
through the suit. These defendants sought dismissal of the suit principally on personal
jurisdiction grounds. The court ruled that it lacked personal jurisdiction over NYCB and
its attorneys, dismissed the bulk of the remaining claims against the other defendants, and
ultimately transferred venue of the case to the United States District Court for the Eastern
District of New York. See Sheldon v. Khanal, 605 F. Supp. 2d 1179, 1184-87, 1189 (D.
Kan. 2008). That court ultimately dismissed Sheldon and Kearns' claims for numerous
reasons, including failure to state a claim upon which relief could be granted, lack of
subject-matter jurisdiction—they had failed to establish sufficient amounts in controversy
to meet the jurisdictional amount necessary for diversity jurisdiction—and res judicata.
Sheldon, 2009 WL 3233093, at *1. The Second Circuit Court of Appeals affirmed all of
the dismissals except the dismissal against Khanal. The court vacated the dismissal of the
breach of contract claim against Khanal and remanded, finding that the dismissal could
not be affirmed on res judicata grounds because the district court erroneously relied on
the state court judgment concerning the escrow money that was ultimately reversed.
Sheldon v. Khanal, 396 Fed. Appx. 737, 740 (2d Cir. 2010). On remand, the remaining
claims against Khanal were dismissed for lack of subject matter jurisdiction. Sheldon v.
Khanal, No. 08-cv-3676 (KAM) (LB), 2011 WL 3876970, at *10 (E.D.N.Y. 2011)
(unpublished opinion).

Kearns then tried to seek relief by filing suit against NYCB, First American, and
James Ricca—apparently another member of the law firm representing NYCB—in
Missouri state court, alleging various state law claims including breach of contract,
breach of fiduciary duty, and vexatious refusal to pay. NYCB and Ricca moved to
dismiss, inter alia, for lack of subject matter and personal jurisdiction and res judicata.
First American moved to dismiss for lack of personal jurisdiction and forum non
conveniens. The trial court granted those motions. Kearns appealed, but his appeal was
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dismissed on procedural grounds. Kearns v. New York Community Bank, 389 S.W.3d
294, 297 (Mo. App. 2013).

On January 2, 2015, Kearns filed a pro se petition in the district court of Johnson
County, Kansas. The petition named NYCB, with its principal place of business in New
York; Ricca, a New York resident; and First American, with its principal place of
business in California, as defendants. Kearns, a Missouri resident with a law office in
Overland Park, alleged claims of breach of contract, breach of fiduciary duty, fraud,
common-law conspiracy, refusal to pay without just cause or excuse, and breach of duty
to act in good faith and without negligence. These claims, according to Kearns, resulted
from a New York real estate transaction involving him, the defendants, and Sheldon.
Kearns also alleged that the district court had personal jurisdiction over the defendants
and Johnson County was the proper venue.

Shortly after Kearns filed the petition, First American settled and was dismissed
from the case. NYCB and Ricca, as they did in the Missouri litigation, filed a preanswer
motion to dismiss, arguing for dismissal based on lack of personal jurisdiction, forum non
conveniens, res judicata, collateral estoppel, and failure to state a claim. The district court
initially focused on the jurisdiction and forum issues and allowed limited discovery.
Kearns made several attempts to discover evidence through requests for admissions and
production of documents. NYCB and Ricca maintained that they had responded to the
requests honestly, that they could not produce documents that did not exist, and that some
of Kearns' requests were vague and confusing. The district court found that NYCB and
Ricca had responded and ultimately closed discovery, ordering Kearns to respond to their
motion.

Kearns filed a response, to which NYCB and Ricca replied, and the district court
held a hearing. In its memorandum decision, the district court found that the parties had
gone outside the pleadings and, pursuant to K.S.A. 2016 Supp. 60-212(d), treated NYCB
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and Ricca's motion as one for summary judgment under K.S.A. 2016 Supp. 60-256. After
discussing both general and specific jurisdiction, the district court determined that it
lacked personal jurisdiction over NYCB and Ricca. On the forum issue, the district court
concluded that New York was a more convenient forum and declined jurisdiction.

Kearns timely appeals.

ANALYSIS

Two preliminary issues need to be addressed. First, Kearns argues that the district
court had general and specific jurisdiction over First American, that Kansas was the
correct forum for a case involving First American, and that the district court raised
affirmative defenses for First American. However, Kearns dismissed First American after
settling with it, meaning that any issues involving First American are moot.

Second, Kearns acknowledges that in arguing the district court had personal
jurisdiction over NYCB and Ricca, he is relying on several statutes for the first time on
appeal. He invokes, however, two of the recognized exceptions to the rule that arguments
not presented to the district court cannot be raised for the first time on appeal, claiming
that his newly asserted theories involve only questions of law and their consideration "'is
necessary to serve the ends of justice or to prevent the denial of fundamental rights.'" See
State v. Godfrey, 301 Kan. 1041, 1043, 350 P.3d 1068 (2015); Supreme Court Rule
6.02(a)(5) (2017 Kan. S. Ct. R. 34). Because the question of whether jurisdiction exists is
one of law answerable for the first time on appeal, Kearns may raise these new
arguments. See Mid-Continent Specialists, Inc. v. Capital Homes, 279 Kan. 178, 185, 106
P.3d 483 (2005).

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DID THE DISTRICT COURT ERR IN DISMISSING THE CASE
FOR LACK OF PERSONAL JURISDICTION?

Kearns first claims the district court erred in finding that it lacked personal
jurisdiction over NYCB and Ricca. When a district court grants a motion to dismiss for
lack of personal jurisdiction, we review the decision under a de novo standard. Kluin v.
American Suzuki Motor Corp., 274 Kan. 888, 893, 56 P.3d 829 (2002). The burden of
establishing personal jurisdiction is on the plaintiff. Merriman v. Crompton Corp., 282
Kan. 433, 439, 146 P.3d 162 (2006). When the issue of personal jurisdiction is raised
before trial, the plaintiff only needs to make only a prima facie showing, and courts are to
resolve factual disputes in the plaintiff's favor. 282 Kan. at 439.

Because both parties went beyond the pleadings in addressing NYCB and Ricca's
motion, which also alleged that Kearns had failed to state a claim upon which relief could
be granted, K.S.A. 2016 Supp. 60-212(d) required the district court to treat the motion as
one for summary judgment, with all parties being "given a reasonable opportunity to
present all the material that is pertinent to the motion." A motion for summary judgment
should be granted when the pleadings and evidence show "there is no genuine issue as to
any material fact and that the movant is entitled to judgment as a matter of law." K.S.A.
2016 Supp. 60-256(c)(2). All facts and inferences reasonably drawn from the evidence
must be resolved in favor of the party against whom summary judgment is sought.
Bergstrom v. Noah, 266 Kan. 847, 871, 974 P.2d 531 (1999). The party opposing a
motion for summary judgment must present evidence showing that a material fact is
disputed. 266 Kan. at 871. If reasonable minds can come to different conclusions based
on the evidence, summary judgment must be denied. 266 Kan. at 871-72.

When considering whether it has personal jurisdiction over a defendant, a Kansas
court generally relies on a two-step analysis. Merriman, 282 Kan. at 440. First, the court
determines if a basis for jurisdiction exists under Kansas law. 282 Kan. at 440. If so, the
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court must then decide "'if the exercise of personal jurisdiction complies with the due
process requirements of the Fourteenth Amendment to the United States Constitution.'"
282 Kan. at 440 (quoting Kluin, 274 Kan. at 894). There are two types of personal
jurisdiction. Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414-15,
104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984). Specific jurisdiction applies when the lawsuit
arises from or is related to a defendant's conduct in a state. 466 U.S. at 414. Kansas' long-
arm statute, K.S.A. 2016 Supp. 60-308(b), states when Kansas courts may exercise
specific jurisdiction. General jurisdiction concerns a state's authority to exercise
jurisdiction over a certain defendant, no matter where the lawsuit arose. Helicopteros,
466 U.S. at 415; see Kluin, 274 Kan. at 895.

A. General jurisdiction over NYCB

Kearns asserts two bases for why the district court had general jurisdiction over
NYCB. First, under K.S.A. 2016 Supp. 17-7307(c) and K.S.A. 2016 Supp. 60-308(b)(2),
NYCB conducted "substantial ongoing business" in Kansas. Second, jurisdiction was
conferred through NYCB's wholly owned subsidiary, NYCB Mortgage Company, LLC
(NYCB Mortgage), by way of both implied consent under K.S.A. 2016 Supp. 17-7931
and NYCB Mortgage's substantial ongoing business in Kansas.

1. Substantial ongoing business in Kansas

K.S.A. 2016 Supp. 17-7307(c) provides in part that a person may sue a foreign
corporation "whether or not such corporation is qualified to do business in this state,
which cause of action arose in Kansas out of such corporation doing business in Kansas,
or arose while such corporation was doing business in Kansas." Kansas courts can
exercise general jurisdiction under K.S.A. 17-7307(c) as long as the foreign corporation
has "'continuous and systematic general business contacts.'" Merriman, 282 Kan. at 456
(quoting Helicopteros, 466 U.S. at 416). Those contacts must be "so 'continuous and
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systematic' as to render [the corporation] essentially at home in the forum State."
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S. Ct. 2846,
180 L. Ed. 2d 796 (2011) (quoting International Shoe Co. v. Washington, 326 U.S. 310,
317, 66 S. Ct. 154, 90 L. Ed. 95 [1945]). A foreign corporation is generally at home
where it is incorporated and where its principal place of business is located. Daimler AG
v. Bauman, 571 U.S. ___, 134 S. Ct. 746, 749, 187 L. Ed. 2d 624 (2014). General
jurisdiction can be, in the "exceptional case," available in other forums but only when the
corporation's affiliations with the forum are "so substantial and of such a nature as to
render the corporation at home." 134 S. Ct. at 761 n.19.

Kearns does not apply that standard. Instead, he argues that NYCB has conducted
"substantial ongoing business" in Kansas because NYCB obtained loans secured by
Kansas real estate; NYCB representatives had discussions with him; NYCB litigated
cases in Kansas; NYCB's customer service department told him that NYCB does
business in Kansas; and the vice president of NYCB did not deny in an affidavit that
NYCB does "business in Kansas for litigation purposes, bank accounts, certificates of
deposit and investments."

Even assuming Kearns' allegations are true, he fails to show that NYCB's
affiliations with Kansas are "so 'continuous and systematic' as to render [it] essentially at
home." See Goodyear, 564 U.S. at 919 (quoting International Shoe, 326 U.S. at 317).
First, Kearns does not provide any authority suggesting that NYCB's alleged contacts are
substantial enough to render it at home in Kansas. Second, if jurisdiction is found to exist
merely because NYCB had discussions with Kearns and litigated cases in Kansas, NYCB
would be subject to general jurisdiction in every state in which it has discussions with
someone or litigates cases. See Daimler, 134 S. Ct. at 761. Third, the burden to establish
jurisdiction is on Kearns, not NYCB. See Merriman, 282 Kan. at 439. Kearns cannot
fault NYCB's vice president for failing to deny in an affidavit allegations that Kearns did
not include in his petition and has not established.
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The only allegation worth our attention is NYCB's admission that it obtained loans
secured by Kansas real estate. But once again, if Kearns' argument is accepted, NYCB
would be subject to general jurisdiction anywhere the real estate securing one of its loans
is located. At least one federal court has found that a party's ownership of loans secured
by property in the forum state does not support general jurisdiction. Best Western
International, Inc. v. Coastline RE Holdings Corp., No. 2:10-cv-02290 JWS, 2011 WL
285846, at *2 (D. Ariz. 2011) (unpublished opinion). In short, owning loans secured by
Kansas real estate does not render NYCB at home in Kansas.

Kearns also claims that NYCB admitted to doing business in Kansas. Whether
Kearns is referring to NYCB obtaining loans secured by Kansas real estate or its
admission that it has recently begun soliciting mortgage lending in Kansas is unclear. If
he is referring to the latter, Kearns has again failed to show that such conduct renders
NYCB at home in Kansas. NYCB began soliciting mortgage lending in Kansas only 4
months after Kearns filed the lawsuit. The law in Kansas has long been that the existence
of jurisdiction must be based on facts existing "at or before the time such jurisdiction was
assumed or exercised." Carney v. Taylor, 4 Kan. 178, 182 (1867).

Moreover, Kearns' reliance on K.S.A. 2016 Supp. 60-308(b) in arguing that the
district court had general jurisdiction over NYCB based on its substantial ongoing
business is also misplaced because the statute's use is limited to specific jurisdiction. See
Kluin, 274 Kan. at 896. Kearns fails to provide any authority showing that K.S.A. 2016
Supp. 60-308(b) is relevant in determining the existence of general jurisdiction.

2. NYCB Mortgage Company, LLC

K.S.A. 2016 Supp. 17-7931(g) states in part that to do business in Kansas, a
corporation must submit to the secretary of state an application which includes "an
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irrevocable written consent of the foreign covered entity that actions may be commenced
against it in the proper court of any county where there is proper venue by the service of
process on the secretary of state." This statute can provide a basis for Kansas courts to
exercise general jurisdiction over foreign corporations. Merriman, 282 Kan. at 443-45,
450 (discussing K.S.A. 17-7301, now codified as K.S.A. 2016 Supp. 17-7931). When a
corporation applies to do business in Kansas, it consents to personal jurisdiction. 282
Kan. at 445. Consenting to jurisdiction in Kansas by applying to do business in the state
does not violate the requirements of due process. 282 Kan. at 455.

Here, Kearns argues that NYCB consented to general jurisdiction in Kansas when
its wholly owned subsidiary, NYCB Mortgage, registered with the Kansas Secretary of
State. But even assuming that NYCB Mortgage did in fact apply to do business in Kansas
under K.S.A. 2014 Supp. 17-7931(g), Kearns cannot use NYCB Mortgage's consent to
personal jurisdiction to confer jurisdiction over NYCB because NYCB Mortgage is not a
party to the lawsuit. In Merriman, the plaintiff sought general jurisdiction over a
corporation based on an affiliated corporation being registered in Kansas, arguing service
on the affiliated corporation would provide jurisdiction over the parent corporation under
the alter ego theory. But the court found that the plaintiff's argument was flawed because
the affiliated company was not a party to the lawsuit. 282 Kan. at 455-56. Kearns,
likewise, cannot use NYCB Mortgage's registration to do business in Kansas to create
jurisdiction over NYCB because NYCB Mortgage is a nonparty.

Kearns also argues that under K.S.A. 2016 Supp. 17-7307(c), Kansas courts have
general jurisdiction over NYCB because of NYCB Mortgage's substantial ongoing
business in Kansas. In support of his argument, Kearns appears to allege only two facts:
(1) NYCB Mortgage is registered to do business in Kansas; and (2) NYCB Mortgage has
serviced loans secured by Kansas real estate since 2010. But at least one federal court has
determined that being licensed to do business in a state does not make a corporation at
home in that state. See Henderson v. United Student Aid Funds, Inc., No. 13-CV-1845
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JLS (BLM), 2015 WL 12658485, at *3 (S.D. Cal. 2015) (unpublished opinion). And as
with NYCB's ownership, NYCB Mortgage's servicing of loans secured by Kansas real
estate is not a sufficient affiliation with Kansas because it would be subject to general
jurisdiction anywhere the real estate securing one of its loans is located.

As an aside, we note that Kearns does not argue on appeal that the district court
had general jurisdiction over Ricca. Because the issue was not briefed, we consider it
waived and abandoned. See Superior Boiler Works, Inc. v. Kimball, 292 Kan. 885, 889,
259 P.3d 676 (2011).

B. Specific jurisdiction over NYCB and Ricca

Kearns also claims that the district court had specific jurisdiction under K.S.A.
2016 Supp. 60-308(b), Kansas' long-arm statute. He argues that NYCB and Ricca (1)
transacted business in Kansas; (2) committed a tortious act in Kansas; (3) caused injury to
a person or property in Kansas through an act or omission outside of Kansas while
engaged in the solicitation or service activities in Kansas; and (4) entered into an express
or implied arrangement with a corporation or partnership residing or doing business in
Kansas. See K.S.A. 2016 Supp. 60-308(b)(1)(A), (B), (G)(i), and (K).

1. Long-arm statute

Kansas courts use, as mentioned, a two-step test to determine whether they have
personal jurisdiction over a defendant. Merriman, 282 Kan. at 440. When the issue is
whether a court has specific jurisdiction, the first step is determining whether the Kansas
long-arm statute, K.S.A. 2016 Supp. 60-308(b), provides a statutory basis for specific
jurisdiction. See 282 Kan. at 459-64. If so, the next step is to consider whether applying
Kansas' long-arm statute comports with the due process requirements. See 282 Kan. at
464-74. In determining whether jurisdiction exists, "K.S.A. 60-308(b) is to be liberally
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construed to assert personal jurisdiction over nonresident defendants to the full extent
permitted by the Due Process Clause of the United States Constitution." Kluin, 274 Kan.
at 894.

NYCB and Ricca do not strenuously contest Kearns' claim that Kansas' long-arm
statute applies, only arguing that a basis for specific jurisdiction does not exist because
Kearns failed to allege sufficient facts in the petition. While Kearns did not use the
phrases "transacted business" or "tortious act" or cite K.S.A. 2016 Supp. 60-308(b), the
arguments he makes in his petition are substantively the same. As discussed, Kearns'
reliance on K.S.A. 2016 Supp. 60-308(b) for the first time on appeal is permissible.
Because NYCB and Ricca do not argue why the provisions of K.S.A. 2016 Supp. 60-
308(b) do not apply, no further analysis is required. It seems that NYCB and Ricca would
rather we focus on whether exercising specific jurisdiction over NYCB and Ricca
violates due process.

2. Purposeful availment

To comport with the requirements of the Due Process Clause, courts can exercise
jurisdiction over a nonresident defendant only if the defendant has "certain minimum
contacts" with the state. International Shoe, 326 U.S. at 316; see Merriman, 282 Kan. at
464-65 (discussing International Shoe). In Kansas, due process mandates "a
demonstration that the nonresident defendant purposely established minimum contacts
with the forum state, thereby invoking the benefits and protections of its laws." In re
Hesston Corp., 254 Kan. 941, Syl. ¶ 3, 870 P.2d 17 (1994). "The requirement of
purposeful availment ensures that an out-of-state defendant will not be haled into a
jurisdiction as a result of the unilateral acts of another party." Loeffelbein v. Milberg
Weiss Bershad Hynes & Lerach, 33 Kan. App. 2d 593, 600, 106 P.3d 74, rev. denied 280
Kan. 983 (2005).

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More recently, the United State Supreme Court determined that in order "[f]or a
State to exercise jurisdiction consistent with due process, the defendant's suit-related
conduct must create a substantial connection with the forum State." Walden v. Fiore, 571
U.S. ___, 134 S. Ct. 1115, 1121, 188 L. Ed. 2d 12 (2014). When determining whether a
court has specific jurisdiction, the inquiry "'focuses on "the relationship among the
defendant, the forum, and the litigation."' [Citations omitted.]" 134 S. Ct. at 1123. That
relationship must be the result of contacts that defendant created with the state. 134 S. Ct.
at 1122. Courts also should consider a defendant's contacts with the state, not the
defendant's contacts with people residing there, and the defendant's only link to the state
cannot be the plaintiff. 134 S. Ct. at 1122.

Kearns first argues that NYCB and Ricca had multiple contacts with him at his
law office in Kansas. The contacts were made through phone calls, faxes, emails, and
letters. But these contacts are insufficient to confer specific jurisdiction over NYCB and
Ricca. First, the alleged contacts were not with Kansas but with a person—who is not
even a resident of the state. Second, jurisdiction cannot exist based merely based upon
NYCB and Ricca's contacts with Kearns, the plaintiff. See 134 S. Ct. at 1122. Third, "'[i]t
is well-established that phone calls and letters are not necessarily sufficient in themselves
to establish minimum contacts.'" Olsen v. Mapes, 139 Fed. Appx. 54, 57 (10th Cir. 2005)
(quoting Far West Capital, Inc. v. Towne, 46 F.3d 1071, 1077 [10th Cir. 1995]).

Kearns also argues that NYCB and Ricca had minimum contacts with Kansas
because they hired a Kansas process server to serve Kearns and hired a law firm to
litigate the case in Kansas. In Midwest Manufacturing, Inc. v. Ausland, 47 Kan. App. 2d
221, 273 P.3d 804 (2012), the plaintiff sued the defendants in Kansas for malicious
prosecution in a previous case in California. This court held that obtaining service over
the plaintiff in the previous lawsuit was not a sufficient enough contact with Kansas to
create specific jurisdiction. 47 Kan. App. 2d at 230. As a result, NYCB and Ricca's hiring
of a Kansas process server did not create any meaningful contact with Kansas. Similarly,
15

following this court's rationale in Ausland, hiring a law firm in previous cases does not
create meaningful contacts with a state. Also, Kearns has failed to show how this suit is
related to NYCB and Ricca's hiring of a law firm to litigate other cases in Kansas. See
Walden, 134 S. Ct. at 1121 (inquiry "'focuses on "the relationship among the defendant,
the forum, and the litigation"'").

Kearns next argues that both NYCB and Ricca have conducted business in
Kansas, filed lawsuits in Kansas, and have established contacts with Kansas through an
interactive website. But besides mentioning that NYCB and Ricca's ongoing banking
contacts with Kansas are commensurate with the banking business contact they had with
him, Kearns does not explain how NYCB and Ricca's banking business contacts,
previous Kansas lawsuits, and use of an interactive website are related to this lawsuit. As
mentioned, specific jurisdiction refers to the jurisdiction created when the lawsuit arises
from or is related to a defendant's conduct in a state. Helicopteros, 466 U.S. at 414.
Because Kearns has failed to make such a connection, NYCB and Ricca's business
contacts, previous lawsuits, and website are not meaningful contacts with Kansas.

Kearns finally argues that the funds in the escrow agreement are related to Kansas.
He suggests that initially NYCB and Ricca's allegedly improper action was directed at
him and Sheldon, but when the fraudulent charges were added years later the funds in the
escrow agreement were the target, and the focus of the action and any following actions
became Kansas. Kearns admits, however, that the escrow funds were held in Utah. So
even if the target of NYCB and Ricca's allegedly tortious conduct became the escrow
funds, the escrow funds had no connection to Kansas.

3. Calder effects test

In Calder v. Jones, 465 U.S. 783, 104 S. Ct. 1482, 79 L. Ed. 2d 804 (1984), the
United States Supreme Court determined whether a California court could exercise
16

personal jurisdiction over two Florida defendants who worked for a tabloid magazine and
had written and edited an allegedly libelous article about the plaintiff, a California
entertainer. After considering the defendants' various contacts with the state, the Court
held that California was the "focal point both of the story and of the harm suffered" and
jurisdiction was "proper in California based on the 'effects' of their Florida conduct in
California." 465 U.S. at 789.

Here, Kearns argues that the district court had specific jurisdiction over NYCB
and Ricca because their alleged conduct's injurious effects were felt by a Kansas business
and a Kansas resident (Sheldon). He also reiterates the different ways in which NYCB
and Ricca have had contacts with Kansas. But Calder does not "replace the need to
demonstrate minimum contacts that constitute purposeful availment, that is conduct by
the nonresident defendant that invoked the benefits and protections of the state or was
otherwise purposefully directed toward a state resident." Aeroflex Wichita, Inc. v.
Filardo, 294 Kan. 258, 282, 275 P.3d 869 (2012); see also Far West Capital, Inc. v.
Towne, 46 F.3d 1071, 1078 (10th Cir. 1995) ("[C]ourts finding personal jurisdiction
based upon an intentional tort analysis have not created a per se rule that an allegation of
an intentional tort creates personal jurisdiction. Instead, they have emphasized that the
defendant had additional contacts with the forum."). NYCB and Ricca's contacts with
Kansas, as previously mentioned, were insufficient to constitute purposeful availment.

4. Civil conspiracy

"[I]f one conspirator commits acts in Kansas in furtherance of the conspiracy and
that conspirator falls under [Kansas' long-arm statute], jurisdiction can be obtained as to
all conspirators." Merriman, 282 Kan. at 464. The elements of a civil conspiracy claim
are "(1) two or more persons; (2) an object to be accomplished; (3) a meeting of the
minds on the object or course of action; (4) one or more unlawful overt acts; and (5)
damages as the proximate result thereof." Citizens State Bank v. Gilmore, 226 Kan. 662,
17

671, 603 P.2d 605 (1979). For personal jurisdiction to exist on the basis of civil
conspiracy, the plaintiff cannot merely claim that a conspiracy existed but must allege
enough facts to make a prima facie showing. Melea, Ltd. v. Jawer SA, 511 F.3d 1060,
1069 (2007).

Here, Kearns claims a conspiracy existed between NYCB, Ricca, and First
American. The exact details of the alleged conspiracy are unclear, but it seems Kearns
believes that NYCB, Ricca, and First American conspired to add fraudulent charges to a
judgment action that occurred in New York, which charges First American paid with
escrow funds held in Utah. But Kearns has failed to show that a civil conspiracy actually
existed. First, Kearns has not alleged any facts that a conspiracy existed or that there was
a meeting of the minds, and the allegations in the petition are conclusory and do little to
support a conspiracy claim. Second, Kearns has not shown that NYCB, Ricca, or First
American committed any acts in Kansas to further the conspiracy.

NYCB and Ricca argue that assuming the district court could have exercised
jurisdiction over First American, Kearns cannot use First American to create jurisdiction
over them because he dismissed First American and it is no longer a party to the lawsuit.
But Kearns seems to be arguing that if jurisdiction is found to exist over one of the
defendants, then jurisdiction exists over all three because they were conspirators.
Although the district court determined that Kearns could not use First American to create
jurisdiction over NYCB and Ricca because First American was no longer a party, it did
not support its conclusion with any authority. On appeal, NYCB and Ricca merely quote
the district court. Nevertheless, this issue is immaterial because of Kearns' failure to
allege facts necessary to support a civil conspiracy claim.

Because the district court had neither general jurisdiction over NYCB nor specific
jurisdiction over NYCB or Ricca, the district court did not err in dismissing the case for
lack of personal jurisdiction.
18

DID THE DISTRICT COURT ERR IN DISMISSING THE CASE
BASED ON THE DOCTRINE OF FORUM NON CONVENIENS?

Kearns also claims that the district court erred in finding that Kansas was an
inconvenient forum. We will overturn a district court's forum non conveniens finding
only for an abuse of discretion. State v. Johnson, 261 Kan. 496, 501, 932 P.2d 380
(1997). "A district court abuses its discretion when: (1) no reasonable person would take
the view adopted by the trial judge; (2) the ruling is based on an error of law; or (3)
substantial competent evidence does not support [the] finding[s] of fact." Wiles v.
American Family Assurance Co., 302 Kan. 66, 74, 350 P.3d 1071 (2015).

Forum non conveniens is the "'power of the court to decline jurisdiction when
convenience of parties and ends of justice would be better served if action were brought
and tried in another forum.' Black's Law Dictionary 655 (6th ed. 1990)." Johnson, 261
Kan. at 501. District courts have the authority to dismiss a case under forum non
conveniens when the facts and circumstances of the case call for it to do so. Volt Delta
Resources, Inc. v. Devine, 241 Kan. 775, 781, 740 P.2d 1089 (1987). The factors a court
may consider include the

"'ease of access to the sources of proof, availability of compulsory process for attendance
of unwilling witnesses, and the cost of obtaining attendance of willing witnesses. Other
factors include the possibility of viewing the premises, . . . enforceability of a [foreign]
judgment . . . ; relative advantages and obstacles to a fair trial; and [other factors] that
make a trial . . . easy, expeditious, and inexpensive.' [Citation omitted.]" Environmental
Ventures, Inc. v. Alda Services Corp., 19 Kan. App. 2d 292, 299, 868 P.2d 540 (1994).

As the district court concluded, this lawsuit's connection with Kansas is weak.
Kearns' law office, where NYCB and Ricca communicated with him, is in Kansas.
Sheldon, a nonparty potential witness, is a resident of Kansas. But Kearns is a resident of
Missouri. NYCB's principal place of business is in New York. Ricca is a resident of New
19

York and is licensed to practice law in New York. The property involved in the real
estate transaction is located in New York. The sheriff's sale occurred in New York. The
foreclosure proceedings took place in New York. The action in which NYCB and Ricca
allegedly added fraudulent charges and provided false information was filed in New
York, and the escrow funds were held in Utah. The documents needed to prove some of
Kearns' claims are now in Arizona or Florida, and most of the potential witnesses are
located in California or New York. Based on such facts, because a reasonable person
could have reached the conclusion that Kansas was an inconvenient forum, the district
court did not abuse its discretion.

Kearns also argues that the district court erred in deciding that Kansas was not a
convenient forum when it had already concluded that it lacked personal jurisdiction over
NYCB and Ricca. Even if Kearns' argument has merit, the district court's error would not
be reversible because it found that it lacked personal jurisdiction, a separate and
independent ground for dismissing the case. The district court did not err in dismissing
the case based on the doctrine of forum non conveniens.

DID THE DISTRICT COURT ALLOW FOR SUFFICIENT DISCOVERY?

Finally, Kearns claims that the district court erred in failing to enforce substantive
discovery. District courts, in their discretion, control discovery, and a discovery order
will not be overturned on appeal unless the district court abused its discretion. Hill v.
Farm Bur. Mut. Ins. Co., 263 Kan. 703, 704, 952 P.2d 1286 (1998). As before, judicial
discretion is abused when (1) no reasonable person would take the view adopted by the
trial court; (2) the ruling is based on an error of law; or (3) the ruling is based on an
unsupported factual finding. Wiles, 302 Kan. at 74.

The record shows that the district court held at least four discovery conferences.
During discovery, which was limited to the jurisdiction and forum issues only, the district
20

court gave Kearns several opportunities to seek admissions and documents from NYCB
and Ricca. The district court also instructed NYCB and Ricca to respond to a specified
number of requests for admissions and production of documents and warned Kearns that
some of his requests appeared to go beyond the jurisdiction and forum issues. Counsel for
NYCB and Ricca stated that they responded to Kearns' requests honestly and could not
produce documents that did not exist. The district court agreed with NYCB and Ricca,
finding that it appeared that they had responded as directed. When NYCB and Ricca
complained that some of Kearns' requests were vague and confusing, the district court
gave him another opportunity to resubmit the requests.

Finally, though, the district court had enough and on June 29, 2015, told Kearns:

"Most of what I keep hearing is something very equivalent to Judge, we handed
them a request for admissions that they had done us wrong, and they won't answer it. It's
like they've taken a position that they haven't got anything to submit to jurisdiction. If
you think you've got it, you had ample time to discover it. You had ample time to
investigate all around getting it directly from them. You've had plenty of time to do this. I
have to agree with what [defendants' counsel] characterized. It seems like it's a moving
target that keeps getting redefined. It's like you're looking for some different version of
what you think is out there or something. Seems like to me we've had sufficient
opportunity to discover and investigate regarding the jurisdiction of forum non-
conveniens issues . . . . It's time to get a response on the motion to dismiss."

A reasonable person could have also decided that Kearns had been given enough time to
discover the necessary evidence. The district court allowed for sufficient discovery.

Affirmed.