Ronald L. Hanks v. Kinetics Group, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

WCW 03-1354

RONALD L. HANKS

VERSUS

KINETICS GROUP, INC.

**********

APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - # 3
PARISH OF CALCASIEU, NO. 02-05904
CHARLOTTE A. L. BUSHNELL, WORKERS’ COMPENSATION JUDGE

**********

BILLY HOWARD EZELL
JUDGE

**********

Court composed of Sylvia R. Cooks, Elizabeth A. Pickett, and Billy Howard Ezell,
Judges.

REVERSED.

James Ray Morris
Attorney at Law
4350 Nelson Road
Lake Charles, LA 70606
(337) 478-8595
Counsel for: Plaintiff/Respondent
Ronald L. Hanks

Kirk Lindsay Landry
Aaron James Chaisson, Jr.
Keogh, Cox, & Wilson
P. O. Box 1151
Baton Rouge, LA 70821
(225) 583-3796
Counsel for: Defendant/Applicant
Kinetics Systems Caribe, Inc.

EZELL, JUDGE.

This is a workers’ compensation matter. In this case, Kinetics Systems Caribe

seeks supervisory writs from a decision of the workers’ compensation judge denying

its exceptions of lack of subject matter jurisdiction and lack of personal jurisdiction.

For the following reasons, we grant writs and reverse the ruling of the workers’

compensation judge as to the exception of lack of in personam jurisdiction.

This proceeding arises out of a work-related injury Ronald Hanks alleges he

sustained while employed by Kinetics in Puerto Rico. Hanks was first employed by

Kinetics as a welder and detailer in Texas in 1996. He later worked for Kinetics

and/or its branches in several places throughout the United States on a contract basis.

However, he never performed any work for Kinetics in Louisiana. Before every

change of location, a relocation agreement was signed by Hanks setting forth, among

other things, his wages and any benefits.

While performing work for Kinetics in North Carolina, Hanks was made aware

of a possible job opening in Puerto Rico following the completion of his then current

job. After the North Carolina job was completed, Hanks drove the travel trailer he was

living in back to his permanent residence in Louisiana, so that he could leave it there

while in Puerto Rico. While in Louisiana, he received, via email, a relocation

agreement setting forth the rate of pay for his employment in Puerto Rico and benefits,

such as trips home. On June 1, 2001, Hanks printed out the relocation agreement,

made alterations to it and faxed it back to Kinetics. Subsequently, he was sent to

Puerto Rico to begin his new job.

On September 22, 2001, Hanks was replacing mechanical piping on a rack

while standing on a ladder. While reaching for a piece of piping, Hanks felt a pop in

his back and pain in his right leg. He immediately informed his supervisor. Hanks

continued his employment with Kinetics, performing light-duty work until March 20,

1

2002, at which time he was laid off as part of a reduction in force. Hanks then filed

this workers’ compensation claim.

Kinetics answered the claim, asserting exceptions of lack of subject matter

jurisdiction, lack of in personam jurisdiction, and lack of proper service and citation.

The workers’ compensation judge granted the exceptions of insufficiency of service

and citation and ordered Hanks to attempt proper service. The exceptions of lack of

subject matter jurisdiction and in personam jurisdiction were denied. From that

decision, Kinetics sought supervisory writs.

We will first deal with Kinetics’ claim that the workers’ compensation judge

erred in denying its exception of lack of subject matter jurisdiction. We disagree with

this assertion.

Louisiana Revised Statutes 23:1035.1 states, in pertinent part:

(1) If an employee, while working outside the territorial limits of
this state, suffers an injury on account of which he, or in the event of his
death, his dependents, would have been entitled to the benefits provided
by this Chapter had such injury occurred within this state, such
employee, or in the event of his death resulting from such injury, his
dependents, shall be entitled to the benefits provided by this Chapter,
provided that at the time of such injury

(a) his employment is principally localized in this state, or

(b) he is working under a contract of hire made in this state.

Since it is undisputed that Hanks’ employment was not principally located in

Louisiana, our first concern is whether he was working under a contract of hire made

in this state. The conclusion reached by the workers’ compensation judge, as a factual

determination, may not be disturbed on appeal in the absence of a showing of manifest

error. Chaisson v. Cajun Bag & Supply Co., 97-1225 (La. 3/4/98), 708 So.2d 375.

In applying the manifest error-clearly wrong standard, the appellate court must

determine not whether the trier of fact was right or wrong, but whether the fact

finder’s conclusion was a reasonable one. Id.

2

In denying Kinetics’ exception, the workers’ compensation judge found that

pursuant to La. R.S. 23:1035.1, Hanks was working under a contract of hire made in

Louisiana. We find no error in this ruling.

A relocation agreement was sent to Hanks before each time he changed

locations to work for Kinetics. These agreements set forth the rate of pay he was to

receive and the length of the job, as well as any additional benefits, such as

transportation to the job, and trips home. Hanks testified that the pay went up on

almost every relocation agreement he had signed, depending on where he would be

located. The relocation agreement for the Puerto Rico job not only set forth his pay

for that particular job, but also established that he would receive trips back to

Louisiana as part of his compensation. This contract was sent by Kinetics to

Louisiana, where it was altered by Hanks. The altered contract was sent back to and

accepted by Kinetics. Based on the facts before us, we find no error in the workers’

compensation judge’s determination that the relocation agreement signed by Hanks

was a contract for hire made in Louisiana. Accordingly, we find that the workers’

compensation judge was clearly reasonable in denying Kinetics’ exception of lack of

subject matter jurisdiction based upon La.R.S. 23:1035.1.

While we find that the workers’ compensation court did have proper subject

matter jurisdiction to hear this case, we also find that Kinetics has insufficient contacts

with Louisiana to force it to defend itself in this state.

While Hanks alleges that there are many divisions or branches of Kinetics

Corporations throughout the world, Kinetics Caribe is a nonresident corporation

principally located in Puerto Rico. Therefore, to determine if the Louisiana Workers’

Compensation Court has personal jurisdiction over it, we must apply the Louisiana

Long Arm Statute, La. R.S. 13:3201, which provides, in pertinent part:

A. A court may exercise personal jurisdiction over a nonresident,

3

who acts directly or by an agent, as to a cause of action arising from any
one of the following activities performed by the nonresident:

(1) Transacting any business in this state.

(2) Contracting to supply services or things in this state.

(3) Causing injury or damage by an offense or quasi offense
committed through an act or omission in this state.

(4) Causing injury or damage in this state by an offense or quasi
offense committed through an act or omission outside of this state if he
regularly does or solicits business, or engages in any other persistent
course of conduct, or derives revenue from goods used or consumed or
services rendered in this state.

(5) Having an interest in, using or possessing a real right on
immovable property in this state.

....

B. In addition to the provisions of Subsection A, a court of this
state may exercise personal jurisdiction over a nonresident on any basis
consistent with the constitution of this state and of the Constitution of the
United States.

“In accordance with La. R.S. 13:3201(B), we must inquire into whether or not

the exercise of jurisdiction complies with constitutional due process.” Hallaron v.

Jacob’s Eng’g Group, Inc., 02-903 (La.App. 5 Cir. 2/11/03), 839 So.2d 952, 954, writ

denied, 03-1844 (La. 10/31/03), 857 So.2d 478. “Due process requires that in order

to subject a nonresident defendant to a personal judgment, the defendant must have

certain minimum contacts with the forum state such that the maintenance of the suit

does not offend traditional notions of fair play and substantial justice.” Id. (citing de

Reyes v. Marine Management and Consulting, Ltd., 90-2214 (La.1991), 586 So.2d

103, and International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, (1945)).

Under the minimum contacts/fair-play factors analysis set forth in International

Shoe, we find that the Louisiana Workers’ Compensation Court does not have

personal jurisdiction over Kinetics. It is undisputed that Kinetics did not do business

in Louisiana, nor did it have offices in this state. It did not contract to supply services

4

or things in this state. The work performed by Hanks was performed in Puerto Rico

and the injury occurred there as well. In fact, Hanks had never performed any work

for Kinetics in Louisiana. The only contacts Kinetics had with Louisiana whatsoever

was the email sent to Hanks at his Louisiana residence. We find that Kinetics did not

have sufficient minimum contacts with Louisiana. Therefore, to subject them to the

personal jurisdiction of a Louisiana court would offend the traditional notions of fair

play and substantial justice.

For the reasons set forth, the writ is granted. The workers’ compensation ruling

denying the exception of lack of personal jurisdiction is reversed, and judgment is

rendered in Kinetics’ favor, granting the exception and, thereby, dismissing Kinetics

as a defendant. Costs of this appeal are to be split between the parties.

REVERSED.

5