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MCA RECORDS, INC. v. HIGHLAND MUSIC

October 8, 1993

MCA RECORDS, INC., Plaintiff,
v.
HIGHLAND MUSIC, INC. and STEPHEN HAWKINS, Defendants.



The opinion of the court was delivered by: JOHN T. NIXON

 Pending before the Court is the Motion of Defendant Highland Music, Inc. to Dismiss Complaint or to Quash Motion (Doc. No. 11) and the Motion of Defendant Stephen Hawkins to Dismiss (Doc. No. 12). Upon review of the record and for the reasons stated below, the Court denies the Motion of Defendant Highland Music, Inc. and the Motion of Defendant Stephen Hawkins.

 I. Motion of Defendant Highland Music, Inc.

 Defendant Highland Music, Inc. ("Highland Music") moves for dismissal pursuant to Rule 12(b)(5) of the Federal Rules of Civil Procedure because of insufficient service of process. The Court concludes that Highland Music was properly served under Tennessee Code Annotated Sections 48-15-104(b) and 48-15-105(a). Pursuant to section 48-15-105 of the Tennessee Code, the secretary of state of Tennessee was served process as agent of Highland Music and the complaint and summons were mailed to Stephen Hawkins as incorporator of the defendant company. Such service to Highland Music was valid because the secretary of state is the proper agent for service when a foreign corporation has not filed a certificate of authority to transact business in the state. Tennessee Code Annotated Section 48-15-104(b) provides in part:

 According to the summons in this matter, Highland Music has done business in Tennessee without first procuring a certificate of authority to do so. Consequently, Highland Music is bound by the provisions of section 48-15-104(b) and proper service was effected.

 In the alternative, Highland Music requests that the plaintiff's motion for a hearing for a temporary restraining order and to set a date for the hearing of the preliminary injunction be quashed. Defendant's request is moot. The Court heard argument upon Plaintiff's Motion for Temporary Restraining Order and Preliminary Injunction on September 15, 1993 and granted Plaintiff's motion.

 II. Motion of Defendant Stephen Hawkins

 Defendant Stephen Hawkins ("Hawkins") moves this Court to dismiss this complaint against him because of lack of personal jurisdiction. Hawkins questions both the propriety of jurisdiction as well as the sufficiency of service of process. Hawkins contends that he is not a resident of this district and that he has not engaged in actions in his personal capacity within Tennessee to expose him to the jurisdiction of the court. Moreover, Hawkins argues that he was not properly served process. The Court rules that it has personal jurisdiction over Hawkins and that he was properly served process. Consequently, this action against him is not dismissed.

 A. Personal Jurisdiction

 Notwithstanding Hawkins' challenge that he has not acted in his personal capacity within Tennessee, this Court properly has personal jurisdiction over Hawkins pursuant to subsections (1) and (6) of Tennessee Code Annotated Section 20-2-214. Tennessee's long-arm statute provides in part:

 
Persons who are nonresidents of Tennessee . . . who are outside the state and cannot be personally served with process within the state are subject to the jurisdiction of the courts of this state as to any action or claim for relief arising from: (1) The transaction of any business within this state; . . . (6) Any basis not inconsistent with the constitution of this state or of the United States.

 Tenn. Code Ann. § 20-2-214 (Supp. 1993). Hawkins is a nonresident and has transacted business in Tennessee. Thus, he is within the class of persons to which subsection (1) of the long-arm statute applies. The statute implicitly authorizes this Court's personal jurisdiction over nonresidents as to causes of action arising from business conduct within the state. Hawkins need not show that he acted in a personal capacity for this Court to properly assert jurisdiction. On the contrary, it is Hawkins' business conduct which renders the personal jurisdiction of this Court proper.

 Hawkins also argues that he should be dismissed because this case concerns alleged wrongdoing by his corporation, Highland Music, and as a corporate officer he is protected from personal liability by the fiduciary shield doctrine. Defendant correctly notes that in general federal courts may not exercise personal jurisdiction over a nonresident officer based on jurisdiction over the corporation or actions done in a corporate capacity. 3A William M. Fletcher, Fletcher Cyclopedia of the Law of Private Corporations, § 1296.1 (perm. ed. rev. vol. 1986). Hawkins, however, neglects to ...


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