Opinion
No. CV 09-5007190 S
October 8, 2009
MEMORANDUM OF DECISION
This is a decision on the defendant's motion to dismiss, dated May 21, 2009. On April 8, 2009, the plaintiff, Technipower, LLC, a limited liability company with its principal place of business in Connecticut, filed a complaint alleging that the defendant, Mustang Vacuum Systems, LLC, a limited liability company with its principal place of business in Florida, breached a supplier agreement by failing to pay for goods received. Submitted with the complaint were the following exhibits: a copy of the supplier agreement and two invoices of goods sold to the defendant.
On May 21, 2009, the defendant filed a motion to dismiss on the ground that the court lacks personal jurisdiction. The motion is accompanied by a memorandum in support, an affidavit from Richard Greenwell, president of the defendant LLC, a copy of the supplier agreement and two copies of purchase orders sent to the plaintiff. The plaintiff then filed a memorandum in opposition on June 18, 2009, attaching an affidavit of John Corsi, the plaintiff's director of sales and marketing, copies of numerous purchase orders and a copy of the supplier agreement. Both the defendant and the plaintiff filed a reply memorandum of law.
I.
"A motion to dismiss . . . properly attacks the jurisdiction of the court . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Caruso v. Bridgeport, 285 Conn. 618, 627, 941 A.2d 266 (2008). "The motion to dismiss . . . admits all facts which are well pleaded, invokes the existing record and must be decided upon that alone . . . Where, however . . . the motion is accompanied by supporting affidavits containing undisputed facts, the court may look to their content for determination of the jurisdictional issue . . ." (Internal quotation marks omitted.) Cogswell v. American Transit Ins. Co., 282 Conn. 505, 516, 923 A.2d 638 (2007).
"If the defendant challenging the court's personal jurisdiction is a foreign corporation or a nonresident individual, it is the plaintiff's burden to prove the court's jurisdiction." Cogswell v. American Transit Ins. Co., supra, 282 Conn. 515. In this context, "the court must undertake a two part inquiry to determine the propriety of its exercising such jurisdiction over the defendant. The trial court must first decide whether the applicable state long-arm statute authorizes the assertion of jurisdiction over the [defendant]. If the statutory requirements [are] met, its second obligation [is] then to decide whether the exercise of jurisdiction over the [defendant] would violate constitutional principles of due process." (Internal quotation marks omitted.) Kenny v. Banks, 289 Conn. 529, 533, 958 A.2d 750 (2008).
II.
The defendant argues there is no personal jurisdiction pursuant to General Statutes §§ 52-59b or 33-929(f), as it has not engaged in any of the conduct governed by these longarm statutes. In support, the defendant states it does not own realty in Connecticut, maintains no offices here, pays no taxes, owns no licenses, produces no goods, provides no services, and generally does not conduct business in Connecticut. The negotiations were conducted outside Connecticut and the defendant never entered Connecticut in connection with this agreement.
The plaintiff argues that both §§ 52-59b and 33-929(f) are applicable to the defendant. Specifically, the defendant was transacting business as contemplated by § 52-59b because the defendant ordered goods from the plaintiff in Connecticut, the goods were made in Connecticut, the defendant sent written communications and made several telephone calls to Connecticut, the defendant made payments to the plaintiff's bank account in Connecticut and the risk of loss passed to the defendant while the goods were still in Connecticut pursuant to the terms of the supplier agreement. Furthermore, the plaintiff argues personal jurisdiction is appropriate under § 33-929(f) because the supplier agreement was fully performed in Connecticut. The plaintiff's performance obligation was to make and then ship the goods "F.O.B. Danbury." It is the plaintiff's argument that performance was completed as soon as the risk of loss passed to the defendant. Thus, the agreement was fully performed in Connecticut and personal jurisdiction is appropriate under § 33-929(f).
"This court has previously held that [§] 52-59b applies to limited liability companies . . . although the question is not free from doubt." Lauria v. Mennes, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 07 5003950 (October 2, 2007, Adams J.). "Whereas Connecticut corporation law includes a special long-arm statute applicable to foreign corporations [§ 33-929(f)], there is no comparable provision in the Connecticut Limited Liability Company Act, [ §§ 34-100 through 34-242]. [Section] 52-59b confers long-arm jurisdiction over `non resident individuals and foreign partnerships.' The phrase `foreign partnership' could include within its meaning a foreign limited liability company . . ." In 1995, the Connecticut General Assembly enacted Public Act 95-79 which included `limited liability company' within the meaning of `person' as used in many places throughout the General Statutes, including the general interpretation provision, codified at [§] 1-1(k). However, there was no such amendment applicable to [§] 52-59b." (Citation omitted.) Nadler v. Grayson Construction Co., judicial district of Stamford-Norwalk at Stamford, Docket No. CV 02 0190015 (April 15, 2003, Adams, J.) ( 34 Conn. L. Rptr. 482).
Section 52-59b(a) provides in relevant part, "[A] court may exercise personal jurisdiction over any nonresident individual, foreign partnership or foreign voluntary association . . . who in person or through an agent: (1) Transacts any business within the state . . ." "The General Statutes do not define what the phrase `transacts any business' means in the context of § 52-59b . . . [W]e construe the term `transacts any business' to embrace a single purposeful business transaction." (Citations omitted.) Zartolas v. Nisenfeld, 184 Conn. 471, 474, 440 A.2d 179 (1981). "In determining whether the [plaintiff's] cause of action arose from the defendants' transaction of business within this state we do not resort to a rigid formula. Rather, we balance considerations of public policy, common sense, and the chronology and geography of the relevant factors." (Internal quotation marks omitted.) Ryan v. Cerullo, 282 Conn. 109, 122, 918 A.2d 867 (2007).
"While [ New England National LLC v. Kabro, judicial district of New London, Docket No. CV 00 550014 (February 16, 2003, Martin J.)] supports the application of § 52-59b(a) to an LLC, it does not hold that § 33-929(f) . . . [is] necessarily inapplicable." Hartford Fire Ins. Co. v. United Restoration LLC., judicial district of Hartford, Docket No. CV 02 0813517 (April 4, 2003, Booth J.). Section 33-929(f) provides "[e]very foreign corporation shall be subject to suit in this state . . . on any cause of action arising as follows: (1) out of any contract made in this state or to be performed in this state . . ." (Emphasis added). "[T]he phrase `to be performed in this state' does not require performance in this state by the party over whom jurisdiction is sought . . ." Id. Section 33-929(f) has been found applicable to a defendant limited liability company when it used corporate designations and "the plaintiff [corporation had] engaged in performance of the agreement within the state of Connecticut." Id. In the absence of the parties pleading a statutory basis, "the only statute apparently applicable [to an LLC] is . . . § 52-59b." New England National LLC v. Kabro, supra, Superior Court, Docket No. CV 00 550014.
Both parties have provided authority to support the application of § 52-59b to a limited liability company and personal jurisdiction as to this defendant is proper under this provision. The defendant was engaged in a business transaction from the beginning by ordering goods from a Connecticut entity that made the goods here through the course of performance by staying in touch via telephone and written word as well as accepting responsibility for loss as the goods were shipped from Connecticut until the end when payment was sent directly to Connecticut. All these facts indicate that the defendant has actively participated in a business transaction in Connecticut.
On the other hand, the plaintiff has failed to provide any authority to support the application of § 33-929(f) to a limited liability company and failed to demonstrate that the defendant should be considered a "foreign corporation." The plain language of § 33-929(f) addresses a "foreign corporation." The only authority the plaintiff supplied that supports finding personal jurisdiction under § 33-929(f) in a case involving a foreign limited liability company applied this provision to the plaintiff corporation reasoning the requirement that a "contract . . . be performed in this state" is applicable to the performance of either party. Hartford Fire Ins. Co. v. United Restoration LLC., supra, Superior Court, Docket No. CV 02 0813517. Considering both parties in the present case are limited liability companies, application of § 33-929(f), a corporate longarm statute, is inappropriate; nonetheless, the court finds that jurisdiction has been established pursuant to § 52-59b.
III.
Next, the defendant argues subjecting it to personal jurisdiction would violate due process because it maintained no minimum contacts and it was not reasonably foreseeable it would be hauled into this forum. The defendant claims it lacks contacts by virtue of it not maintaining offices here, owning no realty, paying no taxes, the negotiations were conducted outside Connecticut and the plaintiff visited the defendant in Florida whereas the defendant never entered Connecticut in connection with this agreement. Furthermore, the defendant argues the plaintiff's position rests solely on the risk of loss clause to establish jurisdiction, which lacks authority because the seminal case in the line of cases on which the plaintiff relies have been harshly criticized. Lastly, the defendant argues that Florida is the proper forum for this action because the plaintiff solicited the business of the defendant and visited the defendant in Florida.
In its memorandum of law, the defendant argues the plaintiff relies on several cases, which all rely on Electric Regulator Corp. v. Sterling Extruder Corp., 280 F.Sup. 550 (D.Conn 1968), for the proposition that a free on board clause establishes personal jurisdiction. The defendant argues that Electric Regulators relied on Agrashell v. Bernard Sirotta Co., 344 F.2d 583 (2d Cir. 1965), which has since been treated negatively on this point of law. The plaintiff counters that Electric Regulator does not rely on Agrashell and the negative treatment of Agrashell only pertains to an interpretation of the New York longarm statute. It should be noted that Electric Regulators does rely on Agrashell for its authority that a free on board clause supports personal jurisdiction. Furthermore, the existing negative treatment of Agrashell is only directed at the court's interpretation of the New York longarm statute. Regardless, the plaintiff relied upon Plastic Assembly v. Rodgers Finishing, judicial district of New Haven, Docket No. CV 08 5019328 (September 26, 2008, Robinson, J.) [ 46 Conn. L. Rptr. 358] in its argument. While Plastic Assembly cites to Richardson Co. v. Rotuba Extruders, Inc., 36 Conn.Sup. 262, 417 A.2d 944 (1980), which in turn cites to Electric Regulator, the court in Plastic Assembly provided its own analysis and included other factors in its determination of minimum contacts rather than relying purely on the free on board clause as the court did in Agrashell. As a result, Plastic Assembly remains good law today.
The plaintiff argues that the defendant maintained minimum contacts and it was foreseeable that the defendant could be hauled into court in Connecticut. Specifically, the plaintiff claims there were multiple orders, the goods were made in Connecticut, payment was made directly to Connecticut, the defendant sent written communications and made telephone calls to Connecticut and the risk of loss passed in Connecticut. Furthermore, the plaintiff puts emphasis on the "F.O.B. Danbury" clause, arguing that the defendant's assumption of the risk of loss while the goods were still in Connecticut made it foreseeable that it would be subject to suit here.
"[I]n order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he [must] have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice . . . The due process test for personal jurisdiction has two related components: the `minimum contacts' inquiry and the `reasonableness' inquiry . . ." (Citation omitted; internal quotation marks omitted.) Cogswell v. American Transit Ins. Co., supra, 282 Conn. 523-24. "The twin touchstones of [the] due process analysis under the minimum contacts doctrine are foreseeability and fairness. [T]he foreseeability that is critical to due process analysis . . . is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being hauled into court there." (Internal quotation marks omitted.) United States Trust Co. v. Bohart, 197 Conn. 34, 41, 495 A.2d 1034 (1985). Minimum contacts are satisfied where "[t]he transaction . . . was not an isolated or single purchase. Rather it was a series of purchases, over a period of time, that had been specifically negotiated by the parties. The defendant knew that [goods] would be manufactured in Connecticut by a Connecticut [entity], and then shipped from Connecticut for its benefit and use." Plastic Assembly v. Rodgers Finishing, judicial district of New Haven, Docket No. CV 08 5019328 (September 26, 2008, Robinson, J.). As a result, "it [would be] reasonably foreseeable to the defendant that it would be hauled into Connecticut courts." Id.
"[W]hile the exercise of jurisdiction is favored where the plaintiff has made a threshold showing of minimum contacts at the first stage of the inquiry, it may be defeated where the defendant presents `a compelling case that the presence of some other considerations would render jurisdiction unreasonable.'" (Internal quotation marks omitted.) Cogswell v. American Transit Ins. Co., supra, 282 Conn. 525. "[T]he court must evaluate the following factors as part of this reasonableness analysis: (1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states in furthering substantive social policies." (Internal quotation marks omitted.) Panganiban v. Panganiban, 54 Conn.App. 634, 640, 736 A.2d 190, cert. denied, 251 Conn. 920, 742 A.2d 359 (1999).
The defendant's argument that the free on board clause alone is insufficient to subject it to personal jurisdiction in Connecticut is unpersuasive because the plaintiff has supplied other contacts for the court to consider. The supplier agreement shows an intent to enter into multiple transactions over a period of "three years" and is "renewable." The agreement states that Mustang "desires to secure" products made in Connecticut. The parties specifically noted "Mustang intends to place an additional order . . . and all such orders shall be covered by this agreement." Mustang assumed responsibility for the goods each time while they traveled in Connecticut to the defendant in Florida. The language of the supplier agreement shows this was not a single isolated agreement, but intentional and repeated contacts sufficient to make jurisdiction in Connecticut foreseeable.
Additionally, the defendant has not provided "compelling" evidence to suggest that subjecting it to personal jurisdiction in Connecticut would be unreasonable under the second prong of the due process analysis. The defendant has only shown that the plaintiff solicited the business of the defendant and visited the defendant in Florida. This alone is not the "compelling" evidence required for the defendant to meet its burden. As a result, it is fair to hold the defendants to jurisdiction in Connecticut.
For the foregoing reasons, the motion to dismiss is denied.