Opinion
No. 01 Civ. 9323 (LTS)(THK)
August 20, 2003
Robert J. Hantman, Esq., HANTMAN ASSOCIATES for Plaintiff
Kenneth W. Taber, Esq. Jane E. Manning, Esq., SALANS for Defendant Dominique Casta
Daniel F. Markham, Esq., McELROY, DEUTSCH MULVANEY, LLP for Defendants Fintage Talent B.V. and Fintage House
MEMORANDUM OPINION AND ORDER
Madison Models, Inc. ("Plaintiff" or "Madison") brings this action, asserting causes of action for breach of contract and conversion of funds, against Fintage Talent B.V. ("FT"), Fintage House ("FH" and, with FT, "Fintage") and Dominique Casta ("DC") (collectively "Moving Defendants"), as well as against Laetitia Casta ("LC"). This matter comes before the Court on the Moving Defendants' motions to dismiss the complaint pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction. DC has also moved for dismissal of the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief may be granted.
Plaintiff asserts that the Court has jurisdiction of this matter pursuant to 28 U.S.C. § 1332.
The Court has considered thoroughly all submissions related to these motions. For the following reasons, the motion to dismiss for lack of personal jurisdiction is granted as to the Moving Defendants. Given the Court's disposition of the Rule 12(b)(2) aspect of the instant motion practice, the Court will not address DC's motion to dismiss the complaint pursuant to Rule 12(b)(6).
FACTS
The following facts are alleged in the Complaint. Plaintiff is a corporation organized on or about October 3, 1997 under the laws of the State of New York with its principal office located in New York, New York. (Compl. ¶ 5.) Plaintiff is affiliated with Madison Models Paris and is in the business of providing managerial and professional services for models. (Id. ¶ 6.) FT and FH (which Plaintiff refers to collectively as "Fintage" throughout its complaint and papers in connection with this motion) are "a" (sic) Netherlands limited liability company (with a principal place of business in the Netherlands and offices in "Hungary, Australia, Japan, Spain and . . . Tennessee") that "prepared invoices for and on behalf of defendant LC for services rendered by her for Victoria's Secret." (Id. ¶¶ 15-16.) Fintage is a subsidiary of Meespierson Company; "both" (sic) Ado business within the Southern District of New York." (Id. ¶ 18.) Defendant Dominique Casta is father to and purported agent of Defendant Laetitia Casta and resides in France. (Id. ¶ 19.)
The November 22, 2002 affidavit of Veronique Tuil, submitted by Plaintiff in opposition to DC's motion to dismiss the complaint, identifies Madison Models SA as a French corporation that is the parent company of Plaintiff Madison. (Id. at ¶ 1.)
Laetitia Casta has not moved to dismiss the complaint.
In consideration of Plaintiff Madison's services to FH's alleged predecessor LC and/or Fintage, and in accordance with an agreement reached on or about June 11, 1998, Madison was entitled to receive 33 1/3% of all fees earned by LC for Victoria's Secret modeling assignments and/or campaigns in the United States, out of the gross fees received by LC, DC and/or entities working on their behalf. (Id. ¶ 20.) It was expressly agreed that Fintage would invoice Victoria's Secret directly, and then, out of the gross amount received, Fintage would be responsible for making wire transfers to "Madison New York" (presumably, the Plaintiff entity) for the agreed-upon commissions upon receipt of an invoice from Plaintiff. (Id. ¶ 21.)
Plaintiff alleges that, on or about March 1, 2001, Defendants wrongfully terminated the agency agreement between Fintage and Madison SA (Paris) as of June 1, 2001, without cause and in breach of previously existing promises, commitments and obligations. In spite of repeated requests by Madison, no additional monies have been paId. (Id. ¶¶ 23, 24.) The termination of the agency agreement was in breach of, inter alia, the obligation of all defendants to "pay outstanding commission payments to plaintiff Madison in New York, for services rendered by LC in the United States." (Id. 23.) The Complaint does not, however, allege that plaintiff Madison was a party to this agency agreement.
The Complaint asserts eight causes of action. In the First, which alleges breach of a contract to pay commissions for services rendered by Madison "for 1999," Plaintiff alleges that the 33 1/3% commission was provided for in a written agreement between plaintiff and a Fintage predecessor, and that LC was "working as an employee of first Belstar [(the predecessor)] and then Fintage." (Id. ¶¶ 27-29) The Second Cause of Action alleges breach of a contract to pay commissions for services rendered by plaintiff "for 2000," and incorporates by reference the preceding allegations. (Id. ¶¶ 31-33). The Third alleges, on the same basis, breach of contract to pay commissions for services Afor 2001," and the Fourth the same as to 2002. (Id. ¶¶ 34-39.) The Fifth alleges that "defendants" wrongfully terminated "their [sic] contracts with Madison S.A. and Madison." (Id. ¶¶ 40-42.) In the Sixth, Plaintiff alleges that it rendered services "for Defendants" and that "Defendants" have been unjustly enriched by reason of nonpayment of commissions to Plaintiff. (Id. ¶¶ 44-48.) In the Seventh, Plaintiff alleges that "Defendants" are liable for conversion by reason of failure "to pay and distribute monies to Plaintiff as outlined herein" (Id. ¶¶ 49-51), and in the Eighth Plaintiff asserts a need for provisional remedies. (Id. ¶¶ 52-55.)
DISCUSSION
Motion to Dismiss Pursuant to Rule 12(b)(2)A federal court sitting in diversity jurisdiction may exercise personal jurisdiction to the same extent as courts of general jurisdiction in the state in which it sits. See Bank Brussels Lambert v. Fiddler Gonzalez Rodriguez, 305 F.3d 120, 124 (2d Cir. 2002); Fed.R.Civ.P. 4(k)(1)(A). Federal courts sitting in New York thus engage in a two-step analysis, examining first whether New York law would support the exercise of personal jurisdiction and, if so, turning to the question of whether New York's extension of jurisdiction would, under the circumstances, be permissible under the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States. Bank Brussels Lambert, 305 F.3d at 124.
A plaintiff opposing a motion to dismiss under Rule 12(b)(2) for lack of personal jurisdiction has the burden of establishing that the court has jurisdiction over the defendant. Bank Brussels Lambert v. Fiddler Gonzalez Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). Where, as here, no discovery has been had and no evidentiary hearing held, the plaintiff can satisfy its burden by making allegations sufficient to establish a prima facie case for the exercise of jurisdiction. All such allegations are taken as true for purposes of determination of the motion and all inferences are drawn in favor of the plaintiff. See In re Sumitomo Copper Litigation, 120 F. Supp.2d 328, 335 (S.D.N.Y. 2000);Drucker Cornell v. Assicuranzioni Generali S.P.A., No. 97 Civ. 2262 (MBM), No. 98 Civ. 9186 (MBM), 2000 WL 284222 at *1 (S.D.N.Y. March 16, 2000).
As a threshold matter, Plaintiff argues that the Court should deem all of the Defendants alter egos of each other for purposes of determining whether the complaint should be dismissed as to any of them for lack of personal jurisdiction. See Pl.'s Mem. in Opp'n to Mot. to Dismiss at 18-20. Plaintiff has not cited, and the Court is not aware of any, authority for application of an alter ego or veil-piercing analysis for this purpose outside of the corporate context. Nor has Plaintiff even alleged any facts tending to show that Defendants acted as a single entity in connection with the matters complained of. The Court will, accordingly, analyze Plaintiff's jurisdictional contentions as to each Moving Defendant separately.
CPLR Section 301Plaintiff asserts that the Court is authorized to exercise personal jurisdiction over defendants DC and Fintage by New York CPLR section 301, which permits New York courts to exercise general jurisdiction over a corporation that is "doing business" in the state. See N.Y.C.P.L.R. § 301 (McKinney 2001); Jacobs v. Felix Bloch Erben Verlag fur Buhne Film und Funk KG, 160 F. Supp.2d 722, 731 (S.D.N.Y. 2001). "The 'doing business' standard is a stringent one because a corporation which is amenable to the Court's general jurisdiction 'may be sued in New York on causes of action wholly unrelated to the acts done in New York.' . . . The rule is that 'a corporation is 'doing business' and is therefore 'present' in New York . . . if it does business in New York not occasionally or casually, but with a fair measure of permanence and continuity.'" Jacobs, 160 F. Supp.2d at 731. The Second Circuit has explained the "doing business" standard by stating that it "requires a showing of 'continuous, permanent, and substantial activity in New York.'" Id. (quoting Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 95 (2d Cir. 2000)).
New York courts have, however, held that, while the mere solicitation of business in New York does not constitute "doing business" in New York by a corporation, "activities of substance in addition to solicitation" do. Laufer v. Ostrow, 55 N.Y.2d 305, 310 (N.Y. 1982). In support of its claim of CPLR 301 jurisdiction over Fintage,, Plaintiff asserts that LC's New York alleged activities (including entry into the Victoria's Secret contract in New York, obtaining a visa through plaintiff Madison, earning income through work for Victoria's Secret (a New York-based company) on which the subject commissions were to be paid, rendering modeling services in New York, working with New York photographers, being party to the VS contract, which contains New York choice of law and consent to jurisdiction provisions, and appearing in magazines published in New York) are attributable to Fintage based on Plaintiff's general allegation that LC was an employee of Fintage. (See Decl. of Robert Hantman ("Hantman Decl.") at ¶¶ 7-8.) Most, if not all, of the activities cited by Plaintiff relate to LC's entry into and performance of the contract with Victoria's Secret. A copy of the contract is appended to the Hantman Declaration as Exhibit B ("VS Contract"). This December 24, 1998 contract names as parties only LC and Victoria's Secret entities, and includes representations that LC has the exclusive right to enter into the agreement and is the only party entitled to receive remuneration thereunder. (VS Contract at opening paragraph and §§ 5.4, 6.3; see also Id. at §§ 5.3, 6.8.) In light of the specific provisions of the contract proffered by Plaintiff, general allegations that LC performed the activities as an employee of Fintage are insufficient to support a reasonable inference that the activities were so undertaken. Accordingly, the Court does not impute LC's activities to Fintage for purposes of evaluating whether Plaintiff has proffered allegations sufficient to make a prima facie case for the exercise of personal jurisdiction over either of the Fintage entities.
Plaintiff also asserts that FH's admission that its representatives "travel to New York approximately twice a year regarding new or potential business for its subsidiaries," documentation indicating that FH was involved in a 1999 release of funds to a Brooklyn, New York, bank account maintained by an entity, Seagal-Nasso, which is unrelated to the transactions that are the subject of the instant complaint, evidence that FH sent marketing materials to Seagal-Nasso,, and a website allegedly indicating that Fintage has an office "in the United States," are sufficient to support a finding of general personal jurisdiction over one or both Fintage entities pursuant to section 301 of the CPLR. See, e.g., Hantman Dec. at ¶¶ 10-18. These alleged contacts are plainly insufficient to meet Plaintiff's burden of showing continuous, permanent and substantial activity in New York, nor do they show activities of substance in New York in addition to solicitation. Plaintiff has thus failed to sustain its burden as to Fintage with respect to CPLR section 301jurisdiction.
Plaintiff has failed entirely to proffer factual allegations supporting the exercise of general personal jurisdiction over defendant DC pursuant to section 301 of the CPLR. It has therefore failed to make a prima facie showing of general section 301 jurisdiction over DC.
Long-Arm Jurisdiction CPLR § 302(a)
Plaintiff also asserts that the Court is authorized to exercise personal jurisdiction over Moving Defendants by the following provisions of New York CPLR section 302(a), which, in relevant part, permit New York courts to exercise jurisdiction, as to "a cause of action arising from any of the acts enumerated in this section," over any "non-domiciliary, or his executor or administrator, who in person or through an agent":
1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or
2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or
3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he
(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or
(ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce. . . .
N.Y.C.P.L.R. § 302 (McKinney 2001). Jurisdiction under the long arm provisions is "qualitative rather than quantitative," and a single transaction is sufficient to support personal jurisdiction as long as the defendant's activities were purposeful and there is a substantial nexus between the activities and the claim. See Agency Rent A Car System v. Grant Rent A Car Corp., 98 F.3d 25, 31 (2d Cir. 1996); Jerge v. Potter, No. 99 Civ. 0312E(F), 2000 WL 1160459 (W.D.N.Y. Aug. 11, 2000).
Courts look at "the totality of circumstances" in determining whether a party has "transacted business" under section 302(a)(1), including the following:
(1) whether the defendant has an ongoing contractual relationship with a New York corporation; (2) whether the contract was negotiated or executed in New York; (3) whether the contract contains a New York choice-of-law, forum-selection or consent to jurisdiction clause; and (4) whether the contract requires notices or payments to be sent to New York or requires supervision by the corporation in New York.ESI, Inc. v. The Coastal Corp., 61 F. Supp.2d 35, 57 (S.D.N.Y. 1997).
Plaintiff asserts that Fintage transacted business in New York State when it advertised its services on its website, sent representatives to New York twice a year, sent invoices on LC's behalf to Victoria's Secret, wired money into Plaintiff's account and conducted the above-described dealings with Seagal-Nasso. Plaintiff further alleges that Fintage directly or indirectly wired money to Madison's New York bank in connection with LC's Victoria's Secret work. Plaintiff asserts that the exercise of jurisdiction over DC pursuant to section 302(a)(1) is appropriate because DC professes to have led the negotiations with Victoria's Secret. Plaintiff admits, however, that the Victoria's Secret negotiations took place in Paris. (Tuil Dec. at ¶ 6.)
Plaintiff's allegations are insufficient to make out a prima facie case for personal jurisdiction over DC and/or Fintage pursuant to CPLR section 301(a)(1). Plaintiff has not proffered allegations or evidence of a contract by any of the Moving Defendants to supply goods or services in New York, nor do the activities cited constitute the transaction of business relevant to the claim Plaintiff asserts here. Plaintiff acknowledges that the Seagal-Nasso dealings are entirely unrelated to the Casta service and commission issues. Mere promotion via a website is insufficient to constitute transacting business within the meaning of the statute. Fintage's website is not even alleged to be "interactive" in the relevant sense: there is no allegation or proffer that Fintage does business over its website by allowing customers to purchase items or services on-line. A finding of personal jurisdiction thus is not warranted based on maintenance of the website. See Hsin Ten Enter. v. Clark Enter., 138 F. Supp.2d 449, 456 (S.D.N.Y. 2000) (websites that permit viewers to purchase devices online and are "highly interactive" generally support a finding of personal jurisdiction over the defendant). Nor is there any allegation that Fintage's representatives= twice-yearly visits to New York have anything to do with Casta or Madison. Furthermore, none of the Moving Defendants is a party to the VS Contract which was, in any event, negotiated outside New York. Plaintiff's proffer is thus insufficient to support a prima facie case for the exercise of jurisdiction under CPLR section 302(a)(1).
CPLR sections 302(a)(2) and 302(a)(3) premise the exercise of jurisdiction, respectively, on the commission of a tort within New York state or outside New York state where the act causes injury within the state, where certain commercial criteria are met. Section 302(a)(2) is irrelevant because none of the Moving Defendants is alleged to have committed a tortious act within New York. Section 302(a)(3) is also inapplicable here. In order to satisfy section 302(a)(3), Plaintiff has to aver facts constituting "a tort under the law of the pertinent jurisdiction." Bank Brussels Lambert, 171 F.3d at 792. In order to maintain an action for conversion — the only tort alleged —, a plaintiff must allege legal ownership or immediate superior right of possession to property and defendant's unauthorized interference with plaintiff's ownership or possession of such property. Weizmann Institute of Science v. Neschis, 229 F. Supp.2d 234, 253 (S.D.N.Y. 2002) (citation omitted). Plaintiff's "conversion" cause of action does not lay out the elements of a prima facie case for conversion as to Moving Defendants and alleges no affirmative act by the Moving Defendants that would constitute conversion. Plaintiff alleges facts consistent with a breach of contract claim, namely that Defendants refused to pay amounts owed to Plaintiff that Defendants were allegedly obligated to pay under a contract. Plaintiff's papers in opposition to the motion to dismiss do nothing further to elucidate any tort element of the claim. Plaintiff has thus failed to come forward with allegations sufficient to support a prima facie case for exercise of tort-based special jurisdiction.
Because the Court finds no basis for the exercise of personal jurisdiction over the Moving Defendants pursuant to New York law, it is unnecessary for the Court to undertake a minimum contacts analysis. Accordingly, the Moving Defendants' motion to dismiss the complaint for lack of personal jurisdiction is granted.
Additional Discovery
Plaintiff also seeks to be afforded permission to conduct discovery prior to the Court's ruling on the motion to dismiss for lack of personal jurisdiction. Jurisdictional discovery is inappropriate where, as in the instant case, a plaintiff has failed entirely even to allege facts from which a court properly could infer the existence of jurisdiction. Daval Steel Products v. M.V. Juraj Dalmatinac, 718 F. Supp. 159, 162 (S.D.N.Y. 1989). The application for further discovery is, therefore, denied. Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6)
DC has moved pursuant to Rule 12(b)(6) to dismiss the complaint for failure to state a claim on which relief can be granted. In light of the Court's disposition of his motion pursuant to Rule 12(b)(2), the Court does not reach his motion under Rule 12(b)(6).
CONCLUSION
For the foregoing reasons, the motion to dismiss the Complaint for lack of personal jurisdiction is granted as to defendants Dominique Casta, Fintage Talent B.V. and Fintage House. The parties shall contact Magistrate Judge Katz's chambers promptly to schedule further proceedings.
SO ORDERED.
In making its jurisdictional arguments, Plaintiff does not distinguish between FH and FT, arguing that further discovery would be necessary to make differentiations as to the roles played by each. For purposes of this motion, the Court construes Plaintiff's factual allegations regarding "Fintage" to have been made as against each of FH and FT separately.
The Court notes that, while Plaintiff's papers argue that the Seagal-Nasso correspondence is plainly indicative of marketing and related activities in New York, fax cover sheets included in Plaintiff's exhibits indicate that the communications were faxed within Los Angeles and between Los Angeles and the Netherlands. See Exhibit C to Hantman Decl.