Opinion
Civil Action No. 03-1328 (JBS).
July 22, 2004
Edward F. Borden, Jr., Esq., EARP COHN, PC, Cherry Hill, NJ, Attorney for Plaintiff.
Daniel P. McNerney, Esq., McNERNEY McAULIFFE, ESQS., Hackensack, NJ, Attorney for Defendants.
OPINION
Flurin von Planta and Global Research AG ("GRAG"), two of the defendants in this case, file this motion to dismiss the complaint for failure to state a claim upon which relief can be granted, pursuant to Fed.R.Civ.P. 12(b)(6), for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2), and based on forum non conveniens, under 28 U.S.C. § 1404(a). Mr. von Planta and GRAG's motion to dismiss the complaint for lack of personal jurisdiction is granted, because the Plaintiff has not shown the necessary minimum contacts to establish specific jurisdiction. Mr. von Planta and GRAG's motion to dismiss the complaint for failure to state a claim upon which relief can be granted is dismissed as moot in light of the disposition of the Rule 12(b)(2) motion. Likewise, Mr. von Planta and GRAG's motion to dismiss the complaint based on forum non conveniens is also dismissed as moot.
I. BACKGROUND
A. Facts
In early 1999, Mr. Fiscus, a New Jersey resident, was in possession of more than 2,000,000 shares of eVentures stock that were not registered under United States securities laws. He began to seek a buyer in Switzerland willing to agree to purchase his shares in eVentures, subject to restrictions imposed by the securities laws. (Pl. at Brief at 2)
Mr. Fiscus, who occasionally served as an officer of eVentures, asked eVentures' Chief Financial Officer Steve Roebling and Peter Schnellman, who assisted in the accounting office of eVentures, if they knew anyone who might be interested in purchasing part of his ownership interest. (Pl. Cert. ¶ 3,5) Prior to Mr. Fiscus's departure from his employment with eVentures, Peter Schnellman notified Mr. Fiscus that his brother, Rolf Schnellman might be interested in purchasing some shares. (Pl. Cert. ¶ 7) Mr. Fiscus and Mr. Schnellman met in New York City to discuss the possibility of negotiating a sale, after which they had a number of phone conversations about it. (Pl. Cert. ¶ 8)
From late 1999 until May 2002, Mr. Fiscus negotiated the sale of a large quantity of his shares in eVentures with Swiss defendants ComBus Finance AG ("ComBus"), Rolf Schnellman, Multiforum AG ("Multi"), and Rolf Haenni. (Pl. Brief at 2) Initially Mr. Fiscus was given the impression that Mr. Haenni and Multiforum would make the purchase. This transaction did not, at that time, involve Mr. von Planta. Around March 2000, however, Mr. Schnellman telephoned Mr. Fiscus to tell him that there were problems with Mr. Haenni, and that the sale would be made with GRAG instead of Multi as the escrow agent. (Pl. Brief at 3) Mr. von Planta, a Swiss citizen and resident, as GRAG's sole officer and director, provided legal advice and assistance for Mr. Schnellman regarding the transaction between ComBus and Mr. Fiscus. (Def. Brief at 2)
Mr. von Planta emailed Mr. Fiscus's attorney in California on May 17, 2000, introducing himself as counsel for Mr. Schnellman and ComBus, and suggested termination of the old Escrow Agreement with Multi and its replacement by an Escrow Agreement with GRAG. (Def. Brief at 2)
According to Mr. von Planta and GRAG, the new Escrow Agreement was exchanged between Mr. Fiscus's attorney in California and Mr. von Planta and Mr. Schnellman, and contained a forum selection clause whereby they agreed to accept the exclusive jurisdiction of Swiss courts and the application of Swiss law. (Def. Brief at 3) Mr. von Planta and GRAG have provided, as evidence, a copy of an Escrow Agreement with signatures appearing to belong to Mr. von Planta and Mr. Fiscus. (Def. Ex. D) Mr. von Planta points to the following clause as an indication that the parties are subject to Swiss law:
This Agreement is governed by Swiss law. The place of performance of all obligations of the Trustee is Zurich. The parties hereto accept the jurisdiction of the ordinary courts of Zurich with the right of appeal to the Swiss Federal Court.
(Def. Ex. D, ¶ 10)
Mr. von Planta has also provided a Sales Representative Agreement appearing to be signed by Mr. Fiscus. (Def. Ex. E) Mr. von Planta notes that the Escrow Agreement (¶ 3) incorporates the Sales Representative Agreement. He points to the language of the agreement that says "This Agreement is subject to Swiss Law. Exclusive place of jurisdiction for both parties is Zurich." (Def. Ex. E, ¶ 12)
Mr. Fiscus, however, denies having signed any contract containing this forum selection clause, claiming rather that the only contract he signed provides for the application of Delaware law. (Pl. Brief at 3-4) He has provided a copy of the only contract he believes to govern the controversy (Pl. Cert. ¶ 21), which appears to be signed by Mr. von Planta and Mr. Fiscus. (Pl. Ex. A) The relevant clause says that "[t]his Letter Agreement shall be governed by and construed in accordance with the laws of the State of Delaware." (Pl. Ex. A, page 4, ¶ b)
Mr. Fiscus alleges that during the negotiations, the defendants, including Mr. Schnellman and Mr. von Planta, made multiple representations, which Mr. Fiscus later discovered to be false, about GRAG's ability to complete the transaction. On May 17, 2000, the parties agreed, in the contract provided by Mr. Fiscus, to the sale of 100,000 shares of the stock for $1,000,000. (Pl. Brief at 2-3)
Mr. Fiscus tendered the shares, but he never received any payment for the sale. Mr. Schnellman and Mr. von Planta contacted him by telephone, email, and mail, in New Jersey and elsewhere in the United States, explaining the delay in the purchase and reassuring Mr. Fiscus that they would complete the transaction shortly, but they failed to complete it. (Pl. Cert. ¶¶ 14-15) Mr. Schnellman and Mr. von Planta communicated with Mr. Fiscus a few times in New Jersey by fax, email and telephone in response to Mr. Fiscus's concerns regarding his payment for the tendered shares, (Pl. Brief at 3) though it is unclear exactly how many times either defendant contacted Mr. Fiscus in New Jersey.
B. Procedural History
On March 26, 2003, Mr. Fiscus filed a complaint, naming several defendants, including moving parties Mr. von Planta and GRAG. Mr. Fiscus alleges securities fraud, common law fraud, breach of contract, breach of fiduciary duty, and negligence against all defendants. He alleges personal liability of Mr. von Planta and Mr. Schnellman for corporate acts and a corporate officer participating in tort. On February 17, 2004, Mr. von Planta and GRAG moved to dismiss for failure to state a claim upon which relief can be granted, lack of personal jurisdiction, and forum non conveniens.
II. DISCUSSION
A. Motion to Dismiss Under Fed.R.Civ.P. 12(b)(2)
Once the defendant raises a defense of the court's lack of personal jurisdiction, the burden to establish personal jurisdiction lies with the plaintiff. Mellon Bank (East) P.S.F.S. v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992). Mr. Fiscus must, therefore, show that the Court may properly exercise jurisdiction over Mr. von Planta and GRAG.
Under Fed.R.Civ.P. 4(e), "district courts have personal jurisdiction over nonresident defendants to the extent authorized under the law of the forum state in which the district court sits." Sunbelt Corp. V. Noble, Denton Associates, Inc., 5 F.3d 28, 31 (3d Cir. 1993). New Jersey's long-arm statute extends personal jurisdiction to the boundaries of the Fourteenth Amendment. N.J. Ct. R. 4:4-4. Thus the only analysis is the constitutionality of the assertion of personal jurisdiction over the defendants.
Personal jurisdiction over a nonresident defendant may be asserted if the court possesses either general or specific jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 (1984). "General jurisdiction exists when a defendant has maintained such continuous and systematic contacts with the forum state that the defendant is generally subject to the exercise of a court's jurisdiction there without regard to the relationship between the court action and the forum." MoneyGram Payment Sys. v. Consorcio Oriental, S.A., 65 Fed. Appx. 844, 849 (3d Cir. 2003) (citing Helicopteros, 466 U.S. at 414-15).
Specific jurisdiction is narrower than general jurisdiction.MoneyGram, 65 Fed. Appx. at 849. For an assertion of specific jurisdiction, the claim must be related to or arise out of the defendant's contacts with the forum. Dollar Sav. Bank v. First Sec. Bank of Utah, 746 F.2d 208, 211.
The issue here is specific, not general jurisdiction, as Mr. von Planta and GRAG are foreign defendants who are not alleged to have engaged in "systematic and continuous" activities in New Jersey, as required for general jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 (1984). Mr. Fiscus alleges that his claim arises out of Mr. von Planta and GRAG's contacts within New Jersey, thus making an analysis under the "minimum contacts" framework appropriate.
The relevant consideration requires a two-part analysis. The plaintiff must establish that the defendant has made the necessary "minimum contacts" for the assertion of jurisdiction, and those contacts must be deemed reasonable, such that the assertion of jurisdiction "would comport with 'fair play and substantial justice.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 320 (1945)).
Deciding whether a defendant has the minimum contacts with the forum state requires a determination that "the defendant purposefully avails itself of the privilege of conducting activities with the forum State, thus invoking the benefits and protection of its laws." Hanson v. Denckla, 357 U.S. 235, 253 (1958). "A single, unsolicited contact, random or fortuitous acts or the unilateral acts of others (including the plaintiff) do not constitute a purposeful connection between the defendant and the forum state." Osteotech v. Gensci Regeneration Sciences, Inc., 6 F. Supp. 52, 56 (D.N.J. 1998) (citing Burger King, 471 U.S. at 476). "The Third Circuit has held that telephone communications or mail sent by a defendant does not trigger personal jurisdiction if they 'do not show purposeful availment.'" Barrett v. Catacombs Press, 44 F. Supp. 2d 717, 729 (E.D.Pa. 1999) (citing Mellon Bank (EAST) PSFS v. DiVeronica Bros., Inc., 983 F.2d 551, 556 (3d Cir. 1993)).
The plaintiff bears the burden of demonstrating sufficient contacts within the forum state to give the court personal jurisdiction over the defendant. Compagnie des Bauxites de Guinee v. L'Union Atlantique S.A. D'Assurances, 723 F.2d 357, 362 (3d Cir. 1983). The plaintiff only needs to make out a prima facie case of minimum contacts. See Grand Entertainment Group v. Star Media Sales, 988 F.2d 476, 483 (3d Cir. 1993) (stating that after the plaintiff makes out a prima facie case of purposeful availment, the defendant must present a compelling case that the assertion of jurisdiction would be unreasonable).
Mr. Fiscus seeks to establish jurisdiction over Mr. von Planta and GRAG, who acted as counsel and escrow agent for Mr. Schnellman in the transaction that gave rise to the dispute before the Court. Though the Third Circuit does not directly address the exact situation at hand, there is some case law addressing the assertion of personal jurisdiction over attorneys and other professionals.
Since the Third Circuit has not specifically addressed the issue outside of the class action context, the rulings of other courts are examined as persuasive authority, infra.
In Poole v. Sasson, where a plaintiff alleged that the defendant accountant had negligently prepared the plaintiff's federal and state tax returns, the court held that the bare existence of a professional-client relationship did not support specific jurisdiction without further contact. 122 F. Supp. 2d 556 (E.D.Pa. 2000) (citing Trinity Indus., Inc. v. Myers Assocs., Ltd., 41 F.3d 229, 230-31 (5th Cir. 1995)). The First and Fifth Circuits have also held that the mere existence of an attorney-client relationship, unaccompanied by other sufficient contacts with the forum, is insufficient to establish personal jurisdiction over the non-resident in the forum state. See Sawtelle v. Farrell, 70 F.3d 1381, 1392 (1st Cir. 1995),Trinity, 41 F.3d at 230-31.
In Salisbury Cove Assoc., Inc. v. Indicon Design, Ltd., a case notably similar to the present case, the court interpreted the First Circuit's decision in Sawtelle, holding that "the existence of an attorney-client relationship with a non-forum attorney solicited by the forum based client coupled with written and telephonic communications to the client in the forum state is insufficient to establish voluntary purposeful availment." 211 F.Supp. 2d 184, 195 (D.Me. 2002). In that case, the plaintiff, a Maine company, sought to transact with a Canadian producer. In the lawsuit, the plaintiff named both the Canadian producer and its Canadian attorney whom the producer had suggested the parties use as an escrow agent. Regarding the transaction, the attorney had communicated with the plaintiff via four facsimiles, and acted as an escrow agent. Id. at 187-90. The court dismissed the complaint for lack of personal jurisdiction. Id. at 196.
The court in Wartsila NSD North America, Inc. v. Hill International, Inc., however, found that an ongoing attorney-client relationship was significant. 269 F.Supp. 2d 547, 556 (D.N.J. 2003). The court said that a class action suit decided by the Third Circuit suggested that personal jurisdiction could be asserted over an attorney on the basis of an attorney-client privilege. Id. (quoting In Re: Prudential Ins. Co. of America Sales Practices Litig., 314 F.3d 99 (3d Cir. 1999)). Though Wartsila was not a class action lawsuit, the court found that the reasoning of In Re: Prudential applied "with equal, if not greater force," because of additional activity in New Jersey supporting the assertion of jurisdiction. Wartsila 269 F. Supp. 2d at 557. The attorney inWartsila "not only 'purport[ed] to represent and act on behalf' of his client with respect to claims over which the court possessed personal jurisdiction," but also applied for and was granted pro hac vice admission to act as counsel for his client in that court, was actively involved in assisting his client by "a steady exchange of correspondence and telephonic communication" with the client's New Jersey counsel, and traveled to New Jersey several times to take and defend the deposition of witnesses for this client. Id. In short, a foreign attorney who had clearly availed himself of the privilege of appearing in a New Jersey Court with respect to the claims at issue could easily be shown to have had substantial contacts with New Jersey.
The circumstances of this case for analyzing personal jurisdiction are quite similar to Salisbury Cove and distinguishable from Wartsila. Here, as in Salisbury Cove, the foreign defendant client chose the defendant attorney to assist in the transaction. In both cases, the attorney acted as an escrow agent and communicated with the plaintiff regarding the transaction. The number of written and telephonic communications in the two cases, which include telephone, email, and facsimile communications in the case at hand, appears to be similar. Mr. von Planta did not become involved in the transaction until May 17, 2000, when he sent an email to Mr. Fiscus's attorney in California. Mr Fiscus and the Defendants negotiated, though Mr. Fiscus does not allege that the negotiations occurred in New Jersey, and does not specify the amount of participation by Mr. von Planta, as opposed to Mr. Schnellman. The parties then entered an agreement, whether it is the one presented by Mr. Fiscus, the one presented by Mr. von Planta and GRAG, or both, with the expectation that Mr. von Planta and GRAG would act as the escrow agent for the transaction between Mr. Schnellman and Mr. Fiscus. When Mr. Fiscus was anxious about the completion of the transaction, he alleges that "the defendants (and particularly defendant von Planta) made a series of 'lulling' communications by fax, email and telephone" to him in New Jersey, but provides no specific information about which defendant made any particular communication. (Pl. Brief at 3) Since Mr. Fiscus has the burden of establishing personal jurisdiction, the Court can not construe these ambiguities, which blur the extent of the communications, in Mr. Fiscus' favor. Thus it is not assumed that the extent of the communications in this case is greater than in Salisbury Cove. Furthermore, "'some minimal correspondence alone will not satisfy minimum contacts.'"IMO Industries, Inc. v. Kiekert AG, 155 F.3d 254, 260 n. 3 (3d Cir. 1998) (quoting Cartaret Sav. Bank, F.A. v. Shushan, 954 F.2d 141, 149 (3d Cir. 1992). Mr. Fiscus has provided facts supporting no more than minimal correspondence between Mr. von Planta and himself in New Jersey or his attorney in California.
The case at hand is distinguished from Wartsila, because this case lacks the factors in addition to the attorney-client relationship used by the court in Wartsila to establish personal jurisdiction over the attorney. Mr. von Planta, unlike the attorney in Wartsila, did not apply for pro hac vice admission to this Court. While in Wartsila the defendant attorney maintained a "steady exchange of correspondence and telephonic communication" in the forum state, Mr. Fiscus has provided insufficient facts to establish a steady exchange of communication between himself and Mr. von Planta in New Jersey. Furthermore, the attorney in Wartsila traveled several times to the forum state for matters related to the representation of his client, but Mr. von Planta has never traveled to New Jersey for anything related to the transaction between Mr. Fiscus and Mr. Schnellman. The differences between Mr. Fiscus's complaint and the Wartsila case again highlight the absence of sufficient contacts that would be necessary for this Court to assert jurisdiction. Thus the allegation that Mr. von Planta's contacts with Mr. Fiscus in New Jersey satisfy the requisite "minimum contacts" is unsupported, since the relevant case law indicates that the mere existence of an attorney-client relationship between a foreign lawyer and a foreign client, without other sufficient contacts in New Jersey, can not be the basis for an assertion of personal jurisdiction.
Mr. Fiscus argues a conspiracy theory to establish jurisdiction over Mr. von Planta and GRAG. Though conspiracy may be the basis for an exercise of jurisdiction, a plaintiff may not rely solely upon a "bland assertion of conspiracy to establish personal jurisdiction over a nonresident defendant . . . [T]he plaintiff must: (1) make a prima facie showing of conspiracy; (2) allege specific facts warranting the inference that the defendant was a member of the conspiracy; and (3) show that the defendant's co-conspirator committed a tortious act in [the forum state] during and pursuant to the conspiracy." Wortham v. KarstadtQuelle AG, 2004 U.S. Dist. LEXIS 10396, 45 (D.N.J. 2004).
First, it must be determined whether Mr. Fiscus has made a prima facie showing of conspiracy. Because Mr. Fiscus argues that Delaware law applies to this case, his showing of conspiracy should be analyzed under Delaware law. Although there is some discrepancy as to whether Swiss law or Delaware law applies to this case, it is not necessary to address the prima facie showing of conspiracy under Swiss law, because even addressed under the law of Mr. Fiscus's choice, Delaware law, Mr. Fiscus has not made a prima facie showing of conspiracy. "To constitute a civil conspiracy [under Delaware law] there must be: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful overt acts; and (5) damages as the proximate result thereof."Tuckman v. Aerosonic Corp., 1981 WL 7622 (Del.Ch. 1981) (unpublished opinion) (citing 16 AM. JUR. 2d, Conspiracy §§ 49-56).
Additionally, if Swiss law is found to govern this case, then it would appear that the forum selection clause governs as well. Thus if the Escrow Agreement provided by Mr. von Planta is found to govern, the complaint would be dismissed to enforce the forum selection clause, and the Court would not need to reach the issue of personal jurisdiction.
Mr. Fiscus satisfies the first prong of the prima facie case of conspiracy, in that he claims the conspiracy to occur between two persons, Mr. Schnellman and Mr. von Planta. He alleges that the object to be accomplished was to mislead him and to perpetrate a fraud. Mr. Fiscus claims that the defendants
employed a scheme, device and artifice to defraud the plaintiff; made untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances in which they were made, not misleading; and engaged in an act, practice or course of business which perpetrated a fraud upon the plaintiff.
(Complaint at 5) Mr. Fiscus's allegations may satisfy the second prong. He fails, however, to allege a meeting of minds on the object or course of action. He has not shown, or even alleged, any sort of agreement between the alleged conspirators to mislead him or to perpetrate a fraud. Thus he has not established a prima facie case of conspiracy, indicating that he has not satisfied the first requirement for an assertion of jurisdiction on the basis of a conspiracy.
Once a plaintiff establishes a prima facie showing of purposeful availment, the defendant must present a compelling case that an assertion of jurisdiction would be unreasonable.Grand Entertainment Group, 988 F.2d at 483. Here, however, Mr. Fiscus has not made out a prima facie showing of purposeful availment, so analysis of the reasonableness of asserting personal jurisdiction is superfluous. Because Mr. Fiscus has not established the necessary minimum contacts between these two defendants and New Jersey, the complaint is dismissed as to Defendants Flurin von Planta and GRAG for lack of personal jurisdiction.
B. Motions to Dismiss Under Fed.R.Civ.P. 12(b)(6) and for Forum Non Conveniens
Because this Court dismisses Mr. Fiscus' complaint as to the moving parties, Mr. von Planta and GRAG, for lack of personal jurisdiction, it is unnecessary to decide the alternate motions. They are therefore dismissed as moot in light of the disposition of the motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2).
III. CONCLUSION
Mr. von Planta and GRAG's motion to dismiss for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2), is granted, because Mr. von Planta and GRAG did not purposefully avail themselves of the privilege of doing business in New Jersey. Mr. von Planta and GRAG's motion to dismiss for failure to state a claim upon which relief can be granted, pursuant to Fed.R.Civ.P. 12(b)(6), is dismissed as moot, and the motion to dismiss on the grounds of forum non conveniens is dismissed as moot.
The accompanying Order is entered.