The opinion
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAKE CHARLES DIVISION
LEGACY HOUSING CORP CASE NO. 2:24-CV-00460
VERSUS JUDGE JAMES D. CAIN, JR.
COUNTRY AIRE HOMES OF LA L L C MAGISTRATE JUDGE DAVID J. AYO
ET AL
MEMORANDUM RULING
Before the Court is “Individual Defendants’ Motion to Dismiss Complaint for Lack
of Personal Jurisdiction” (Doc. 23) filed by Defendants, Eric Wooten, Robert Hutson, and
Tony Hartsgrove. No opposition has been filed to this Motion, and the time for doing so
has lapsed.
BACKGROUND
This lawsuit involves mobile homes manufactured by Legacy Housing Corporation
(“Legacy”), a Texas Corporation.1 Some Defendants include limited liability companies
with members in various states—Mississippi, Louisiana, Florida (collectively referred to
as the LLC Defendants).2 Individual Defendants are William “Bill” Rodwell,3 a
domiciliary and citizen of Mississippi,4 Eric Wooten, a domiciliary and citizen of
1 Complaint, Doc. 1, ¶ 23.
2 Id. ¶ ¶ 2-11.
3 Even though it is alleged that Mr. Rodwell resides in Mississippi, counsel for Defendants note that he lives in Lake
Charles, Louisiana and therefore does not join in this motion.
4 Id. ¶ 13.
Mississippi,5 Robert Hutson, a domiciliary and citizen of Florida,6 and Tony Hartsgrove, a
domiciliary and citizen of Florida.7
The LLC Defendants purchased hundreds of homes from Legacy and financed them
by executing promissory notes in favor of Legacy.8 Legacy alleges it holds security
agreements that grant it a first-priority lien “not only in each of the homes that the
defendants bought” but also in “all proceeds and products thereof, including all rent and
proceeds of sale.”9
Legacy alleges that the LLC Defendants are in default under Loan 1977 (Country
Aire Homes of LA, LLC),10 Loan 1965 (Gulf Stream Homes of LA, LLC),11 Loan
20210326.4 (Gulf Stream Homes of LA, LLC, Gul Stream Homes of MS, LLC, Stellar GS
Homes LLC, SINOP GS Homes, LLC and Country Aire Homes of LA, LLC),12 Loan
20210326.1 (Gulf Stream Manor Phase 2 Homes, LLC),13 three (3) unspecified loans (Iowa
Homes,14 Loan 20210326.2 (Southern Pointe Homes, LLC),15 fifteen (15) unspecified
loans (Southern Pointe Investments, LLC),16 thirteen (13) unspecified loans (Southern
Pointe Investments, LLC ),17 and three (3) unspecified loans (Stellar GS Homes, LLC).18
5 Id. ¶ 14.
6 Id. ¶ 15.
7 Id. ¶ 16.
8 Id. ¶ 24.
9 Id. ¶ 25, 27.
10 Id. ¶ 31.
11 Id. ¶ 32.
12 Id. ¶ 33.
13 Id. ¶ 34.
14 Id. ¶ ¶ 35-39.
15 Id. ¶¶ 40-41.
16 Id. ¶ ¶ 42-58.
17 Id. ¶ ¶ 59-73.
18 Id. ¶ 74-78.
Legacy alleges that the Court has personal jurisdiction over the individual
Defendants, Hutson, Wooten, and Hartsgrove based on the individual Defendants’
domicile, they regularly conducted business in Louisiana, and/or the mobile homes are
located in Louisiana.19
Legacy’s Complaint asserts three causes of action: (1) Count I—Judgment of
Possessions of all Collateral (against LLC Defendants);20 Count II—Writ of Sequestration
(against LLC Defendants and Rodwell, Wooten, Hutson, and Hartsgrove;21 and Count
III—Alter Ego and Veil Piercing Liability (Alternatively, and against Rodwell, Wooten,
Hutson, and Hartsgrove).22
RULE 12(b)(2) STANDARD
The court may exercise jurisdiction over a non-resident only when the defendant
has sufficient minimum contacts with Louisiana such that the exercise of jurisdiction would
not offend “traditional notions of fair play and substantial justice.” International Shoe v.
Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158 (1945). These contacts must be of a
texture and quality such that the defendant would reasonably anticipate being haled into
court in Louisiana. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-75, 105 S.Ct. 2174
(1985).
Due process requires the defendant to have “purposefully availed himself of the
benefits and protections of the forum state by establishing minimum contacts with the
19 Id. ¶ ¶ 19-20.
20 Id. ¶ 30-101.
21 Id.
22 Id.
forum state, and the exercise of jurisdiction over that defendant does not offend traditional
notions of fair play and substantial justice.” Walk Haydel & Assoc., Inc. v. Coastal Power
Prod. Co., 517 F.3d 235, 243 (5th Cir. 2008). Jurisdiction may be general or specific.
Where a defendant has “continuous and systematic general business contacts” with
a forum state, the court may exercise general jurisdiction over any action brought against
that defendant. Luv N’ Care, Ltd v. Insta-Mix, Inc., et al, 438 F.3d 465 (5th Cir. 2006).
“Specific jurisdiction applies when a nonresident defendant has purposefully
directed its activities at the forum state and the litigation results from the alleged injuries
that arise out of or relate to those activities.” Walk Haydel, 517 F.3d at 243. Louisiana
Revised Statute 13:3201 requires a liberal interpretation in favor of finding jurisdiction.
Adcock v. Surety Research & Inv. Corp., 344 So.2d 969 (1977); Latham v. Ryan, 373 So.2d
242 (La.App. 3d Cir. 1979). A single act by the defendant directed at the forum state can
be enough to confer personal jurisdiction if that act gives rise to the claim being asserted.
Ham v. La Cienega Music Co., 4 F.3d 415, 415-16 (5th Cir. 1993); Dalton v. R & W
Marine, Inc., 897 F.2d 1359, 1361 (4th Cir. 1991).
The party invoking the jurisdiction of a federal court bears the burden of establishing
minimum contacts justifying the court’s jurisdiction over a non-resident defendant. Guidry
v. Tobacco Co. Inc., 188 F.3d 619 (5th Cir. 1999). The party seeking jurisdiction must
present a prima facie case that the defendant is subject to personal jurisdiction.
Freudensprung v. Offshore Tech. Servs, Inc., 379 F.3d 327, 342-43 (5th Cir. 2004). To
determine whether a prima facie case exists, “this Court must accept as true [the Plaintiff’s]
uncontroverted allegations and resolve in [its] favor all conflicts between the
[jurisdictional] facts contained in the parties’ affidavits and other documentation.” Id.
A federal court may exercise personal jurisdiction over an out-of-state defendant
only to the extent permitted by the long-arm statute of the state in which its sits and the
Fourteenth Amendment’s due process clause. Paz v. Brush Engineered Materials, Inc., 445
F.3d 809, 812 (5th Cir. 2006). The Louisiana long-arm statute provides that Louisiana courts
may exercise jurisdiction over non-residents. LA. STAT. ANN. § 13:3201. The Louisiana
long-arm statute is coextensive with the limits of due process. E.g., Laird v. Deep Marine
Technology, Inc., 2004 WL 2984282, *1 (E.D. La. Dec. 7, 2004).
Due process requires (1) minimum contacts purposefully directed at the forum state,
(2) a nexus between the contacts and the claims, and (3) that the exercise of jurisdiction
will be fair and reasonable. McFadin v. Gerber, 587 F.3d 753, 759-60 (5th Cir. 2009); see
also ITL Int’l, Inc. v. Constenla, S.A., 669 F.3d 493, 498 (5th Cir. 2012).
It is the plaintiff’s burden to satisfy the first two prongs, with the burden then
shifting to the movant to show that an exercise of jurisdiction would be unfair or
unreasonable. Seiferth v. Helicopteros, Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006).
To determine whether the “fair play” prong is met, the courts look to five factors: “(1) the
burden on the nonresident defendant, (2) the forum state’s interest, (3) the plaintiff’s
interest in securing relief, (4) the interest of the interstate judicial system in the efficient
administration of justice, and (5) the shared interest of the several states in furthering
fundamental social policies.” McFadin, 587 F.3d at 759-60. “It is rare to say the assertion
of jurisdiction is unfair after minimum contacts have been shown.” Johnston v. Multidata
Sys. Int’l Corp., 523 F.3d 602, 615 (5th Cir. 2008).
LAW AND ANALYSIS
The Individual Defendants argue they lack the minimum contacts necessary for this
Court to establish personal jurisdiction over a non-resident. As noted by the Individual
Defendants, they do not reside in Louisiana, nor is it alleged that they purchased the subject
homes from Legacy, or executed any promissory notes associated with the purchase of the
homes. Legacy does not allege that the security agreements contain an assignment of the
Individual Defendants or that the Individual Defendants are in default of the loans. Legacy
does not make any allegations against the Individual Defendants as to its Judgment of
Possessions.
The Individual Defendants argue that Legacy has not shown that they “reached out
beyond one state” to “purposefully direct” their activities at residents of Louisiana. Burger
King, 471 U.S. at 473. The Individual Defendants remark that their contacts are slim to
none and are more purposefully directed at Texas.
Legacy informs the Court that a lawsuit concerning the same Defendants and subject
matter has been filed in the Northern District of Texas—Legacy Housing Corp. v. Rodwell,
Civ. Action No. 4:24-00096 (N.D. Tex. April 1, 2024), wherein Legacy argues that Texas
has significant and an indispensable role in the parties’ relationships, and further alleges
that the Texas lawsuit also relies on a forum selection and choice-of-venue provisions that
mandates that the litigation proceed in the state or federal courts of Texas.23
“[A]n individual’s transaction of business within the state solely as a [entity] officer
does not create personal jurisdiction over that individual though the state has personam
jurisdiction over the [entity].” Stuart v. Spademan, 772 F.2d 1185, 1197 (5th Cir. 1985).
While the general rule is that jurisdiction over an individual cannot be predicated upon
jurisdiction over a corporation, courts have recognized an exception to this rule when the
corporation is the alter ego of the individual. Id.
Individual Defendants argue that Legacy’s allegations that they are alter egos of the
LLC Defendants are bare, unsubstantiated and conclusory. Legacy alleges that the
Individual Defendants are sole members of three of the ten LLC Defendants (and sole
members of two non-defendant LLCs that are themselves members in two of the other LLC
Defendants). Two of the Individual Defendants are the alter ego of those five LLCs.
Individual Defendants submit their Declarations24 and dispute that they are sole
members of any LLC, but maintain, that even if accepted as true, there is no support for a
prima facie case for alter ego. Veil piercing requires more than a bare allegation that an
LLC is the alter ego of its member or members and usually involves situations where fraud
or deceit has been practiced. Riggins v. Dixie Shoring Co., Inc., 590 So.2d 1164, 1168 (La.
1991). Under Louisiana law, “Piercing the veil of an LLC is justified to prevent the use of
the LLC form to defraud creditors.” Id. Similarly, under Florida LLC law, Legacy would
23 Civ. Action No. 4:24- 96, ECF doc. 57. The home were manufactured and shipped from Texas, and payment on
the loans were due and performable in Texas. Id.
24 Hartsgrove Declaration; Hutson Declaration and Wooten Declaration
need to allege that the relevant member “dominated and controlled the LLC to such an
extent that the LLC had no existence independent of” the member, “the LLC was the mere
instrumentality or alter-ego” of the member, the member “used the LLC’s [entity] form
fraudulently or for an improper purpose,” and the member’s “fraudulent or improper use
of the LLC’s [entity] form caused injury to” Legacy. Segal v. Forastero, Inc., 322 So.3d
159, 162-63 (Fla. 3d DCA 2021) (citations omitted).
Here, Legacy has failed to allege fraud as to creditors or that the relevant LLC’s
were dominated and controlled by any Individual Defendant to defraud creditors.
Under Mississippi law, “the breach of a contract, without more (i.e. showing of
fraud) does not justify the disregard of the [limited liability] entity.” Gray v. Edgewater
Landing, Inc.¸541 so.2d 1044, 1047 (Miss. 1989). Mississippi law also requires “flagrant
disregard of LLC formalities by the LLC members.” Brown v. Waldron, 186 so.3d 955,
960 (Miss. Ct. App. 2016) (quoting Restaurant of Hattiesburg, LLC v. Hotel & Restaurant
Supply, Inc., 84 So.3d 32, 39 (Miss. Ct. App. 2012)). Legacy has not alleged that any of
the Defendants disregarded any formalities, nor has it alleged fraud.
Under Texas law, to pierce the veil, courts look to factors such as
undercapitalization, Ledford v. Keen, 9 F.4th 335, 339-40 (5th Cir. 2021), and commingling
of member and LLC assets, Riggins, 590 So.2d at 1168; Century Hotels v. U.S., 952 F.2d
107, 110 (5th Cir. 1992); McCarthy v. Wani Venture, A.S., 251 S.W.3d 573, 591 (Tex.
App—Houston [1st dist.] 2007). Legacy has not alleged undercapitalization of any LLC or
commingling of member and LLC assets.
Considering the law under the various states where these entities were formed, and
the allegations in the Complaint, the Court finds that Legacy has failed to establish a claim
for alter ego and veil piercing.
Because none of the Defendants live in Louisiana, it would be burdensome for them
to litigate outside the state of their domicile. Legacy has filed suit in Texas and has argued
in the Texas suit that its interests in the Louisiana dispute are slight.?? Considering the
absence of supporting allegations as to piercing the veil and alter ego, the true parties in
this lawsuit are the LLCs themselves. Applying the factors to determine if exercising
personal jurisdiction over the Individual Defendants would be fair and reasonable, the
Court finds that it would offend the Due Process Clause’s requirement of “fair play and
substantial justice” to exercise personal jurisdiction over the Individual Defendants.
CONCLUSION
Considering the foregoing, and for the reasons explained herein, the Court will grant
Individual Defendants’ Motion to Dismiss Complaint for Lack of Personal Jurisdiction
(Doc. 23) filed by Defendants, Eric Wooten, Robert Hutson, and Tony Hartsgrove and
dismiss these Defendants.
THUS DONE AND SIGNED in Chambers on this 24th day of June, 2024.
UNITED STATES DISTRICT JUDGE
25 Legacy Housing Corp. v. Rodwell, No. 4:24-00096, ECF No. 57.
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