Opinion
99 Civ. 11556 (LAP)
September 29, 2000
MEMORANDUM AND ORDER
Plaintiff Michael Nader ("Nader") brings this diversity action for various state law claims including breach of contract, fraud, intentional infliction of emotional distress, negligence, breach of warranty, and civil conspiracy. Defendants Kurt Getschow ("Getschow") and Phillips, Getschow Company ("Phillips, Getschow") d/b/a G.B. Automotive Services, Inc. ("G.B. Automotive") move to dismiss plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(2), (3), and (6), for lack of personal jurisdiction, improper venue and failure to state a cause of action. Alternatively, defendants seek to have this action transferred to the Eastern District of Wisconsin pursuant to 28 U.S.C. § 1404(a) and 28 U.S.C. § 1406(a), based on forum non conveniens. For the reasons set forth below, defendants' motion to dismiss the complaint for lack of personal jurisdiction is granted.
Defendant Kurt Getschow, an individual, is being sued as "Kurt Getschaw." For purposes of this motion, I will use the correct spelling of his name.
Defendant Phillips, Getschow Company, a corporation, is being sued as "Phillip Getschaw, Inc." For purposes of this motion, I will use the correct corporate name.
Because I dismiss the case for lack of personal jurisdiction, it is unnecessary to address the other bases for dismissal or the request for transfer.
BACKGROUND
Nader, a New York resident, is the owner of a 1958 Duel-Ghia, No. 192, automobile, one of only 44 that remain in existence. (Compl. ¶¶ 7, 8.) Getschow is the president of Phillips, Getschow and G.B. Automotive. (Getschow Aff. ¶ 1.) Phillips, Getschow is an industrial contractor. (Compl. ¶ 3.)G.B. Automotive specializes in the restoration of high performance and vintage automobiles. (Compl. ¶ 4; Getschow Aff. ¶ 8.) Colin Ambrose ("Ambrose") is an acquaintance of Nader from Long Island, New York, where the two own homes and Ambrose owns a restaurant; Ambrose is also a childhood friend of Getschow.
Some time prior to November 1996, during a social conversation with Nader, Ambrose recommended G.B. Automotive to Nader for the restoration of Nader's Duel-Ghia. (Compl. ¶ 2; Ambrose Aff. ¶ 7.) At the time, Ambrose was having his own truck restored by G.B. Automotive in Wisconsin. (Nader Aff. ¶ 2.) At no time, however, was Ambrose an agent of defendants. (Ambrose Aff. ¶ 5.)
Nader alleges that he called Getschow in Wisconsin from New York and, in November 1996, he contracted with defendants for a "full 100 point concourse restoration" of his Duel-Ghia and arranged to have his car shipped from California to G.B. Automotive in Wisconsin. (Compl. ¶ 7; Nader Aff. ¶¶ 3, 4.)
Nader does not allege that the parties negotiated and signed a written contract.
Nader further claims that "the restoration was to be completed for the 1999 Connecticut Grand Concourse" and that defendants failed to complete the work on time, the work performed was of inferior quality, some work was not performed at all, and that the automobile now requires a complete restoration. (Compl. ¶¶ 7, 10.) Nader states that he paid defendants $81,200.18 between November 1996 and January 1999. (Compl. ¶ 9.)
Nader alleges that after he realized that the restoration work was not being done, he requested the return of his car, but defendants refused. (Compl. ¶¶ 26, 27.) Rather, he claims defendants "coerced [him] into signing a release" in order to regain possession of his car. (Compl. ¶ 27.) After signing the release, an agent of Nader's retrieved the car from defendants in Wisconsin. (Getschow Aff. ¶ 18.) Thereafter, Nader commenced the instant action against the defendants.
Certain background facts are not in dispute. The defendants are not incorporated in or residents of New York. Nader does not appear to contest defendants' representations that they are not "doing business" in New York. He does not dispute defendants' assertions that Phillips, Getschow and G.B. Automotive are not licensed to do business in New York; that defendants do not advertise in New York for business; or that defendants have no office, telephone number, bank account, employees, real estate or other asset, or any agency relationship with any entity in New York. (Getschow Aff. ¶¶ 6, 11, 12; Getschow Reply Aff. ¶¶ 6A, 6E.) Finally, it is undisputed that Getschow communicated with Nader via telephone and mail from Wisconsin and that the parties met only once in 1997 or 1998 while Getschow was on vacation visiting Ambrose in Long Island, New York.
Getschow is a resident of and domiciled in Wisconsin. Phillips, Getschow is incorporated in Illinois and is doing business in Wisconsin. G.B. Automotive is incorporated in Wisconsin and is doing business in Wisconsin. (Getschow Aff. ¶¶ 5, 6; Compl. ¶¶ 2, 3, 4, Pacheco Aff. ¶ 3.) The papers do not identify the corporations' principal places of business, but plaintiff does not claim either is New York. Plaintiff has sued Phillips, Getschow as doing business as G.B. Automotive. To establish whether Phillips, Getschow and G.B. Automotive are distinct corporations, plaintiff hired Julio Pacheco "to search the entities." (Pacheco Aff. ¶ 2.) Mr. Pacheco was able to find a listing for Phillips, Getschow, but was unable to find a listing for G.B. Automotive. (Pacheco Aff. ¶¶ 3, 4.) Mr. Pacheco thus concluded that G.B. Automotive "is a bogus fictitious name which is not lawfully registered and no entity may use said name." (Pacheco Aff. ¶ 4.) The Court does not take notice of this legal conclusion by the affiant Pacheco. The question of whether Phillips, Getschow and G.B. Automotive are distinct entities is one of fact and may not be resolved on a motion to dismiss. Nonetheless, the resolution of that fact either way would not change the disposition of the instant motion.
Contrary to the representations made in Nader's opposition brief that Getschow visited Nader and Ambrose "at Mr. Nader's Southern District of New York residence and office," (Opp. Brief, unnumbered p. 5), in his sworn affidavit, Nader describes Getschow's presence in New York on that one occasion as a visit "to deliver Colin's completed truck." (Nader Aff. ¶ 7.) Getschow and Ambrose describe the visit as a reunion vacation of a group of childhood friends at Ambrose's eastern Long Island, New York home. (Getschow Reply Aff. ¶¶ 8-9, Ambrose Aff. ¶¶ 8-9.) Nader does not dispute Getschow's assertion that during this visit the group stopped by his Long Island home uninvited and briefly spoke with Nader outside his home. (Getschow Reply Aff. 14-16.) Nader also does not contest that this was the first and last time the parties have met. (Getschow Aff. ¶ 17.)
In his affirmation, Nader's attorney states that Getschow "personally came to New York State for an appointment with Mr. Nader and Colin." (Vito Aff. ¶ 7.) The Court notes that the Vito affirmation describes facts of which Mr. Vito has no personal knowledge. Accordingly, the Court may not consider them.
DISCUSSION I. Standard Applicable to Motion to Dismiss
As a preliminary matter, I note that plaintiff bears the ultimate burden of establishing that the court has jurisdiction over a defendant. Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 240 (2d Cir. 1999); Metropolitan Life Ins. Co. V. Robertson Ceco-Corp., 84 F.3d 560, 566 (2d Cir. 1996). The burden of proof a plaintiff must meet varies with the procedural posture of the case. Prior to discovery, a plaintiff need only make a prima facie showing through its pleadings and affidavits that jurisdiction exists. Id., citing Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990). In determining whether the plaintiff has met this burden on a Rule 12(b)(2) motion, the court must assume that all of the plaintiff's factual allegations are true, and all "doubts are resolved in the plaintiff's favor, notwithstanding a controverting presentation by the moving party." A.I. Trade Fin., Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993).Ultimately, however, the plaintiff must establish personal jurisdiction by a preponderance of the evidence, either at an evidentiary hearing or at trial. Id. at 79.
II. Personal Jurisdiction
Personal jurisdiction in a diversity case is determined first by the law of the state in which the district court sits. Kernan, 175 F.3d at 240; Arrowsmith v. U.P.I., 320 F.2d 219, 223 (2d Cir. 1963). Then if jurisdiction is found under state law, the court must examine whether exercise of that jurisdiction "comports with the requisites of due process." Bensusan Restaurant Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997).
A. New York's Jurisdictional Statute
Plaintiff seeks to ground jurisdiction upon § 302(a)(1) and/or § 302(a)(3) of New York's long-arm statute. CPLR § 302(a)(1) states in relevant part:
In his opposition brief, plaintiff does not specify under which sections of 302(a) he is asserting jurisdiction. It appears plaintiff asserts jurisdiction pursuant to 302(a)(1) and (3). Therefore, it is unnecessary to address the other statutory provisions of 302(a). See Opp. Brief, unnumbered pp. 2-4.
As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:
1. transacts any business within the state
. . . .
A court may exercise jurisdiction under CPLR § 302(a)(3) over any nondomiciliary who:
commits a tortious act without the state causing injury to . . . property within the state provided that:
(i) the nondomiciliary 'regularly does or solicits business, or engages in any other persistent course of conduct, . . . 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.'
B. Due Process
Before a court may exercise personal jurisdiction it must satisfy an additional requirement and ensure that invoking jurisdiction "comports with the requisites of due process." Bensusan, 126 F.3d at 27. In this regard, the defendant's activities in New York must constitute "'some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum States, thus invoking the benefits and the protection of its laws.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174 (1985) (citations omitted). The exercise of jurisdiction must not offend "our traditional conception of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 320, 66 S. Ct. 154 (1945).
C. Application 1. Section 302(a)(1)
To establish jurisdiction under CPLR 302(a)(1), the plaintiff must show that the defendant transacted business within the state and that the cause of action arose from that transaction. Cutco Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986); St. Paul Fire and Marine Ins. Co. v. Eliahu Ins. Co., Ltd., No. 96 Civ. 7269, 1997 WL 357989, at *3 (S.D.N.Y. 1997), aff'd, 152 F.3d 920 (2d Cir. 1998). Under this standard, a defendant who "transacts business" in New York will be subject to jurisdiction "so long as the acts were purposeful and there is a substantial relationship between those acts and the plaintiff's claim." Semi Conductor Materials, Inc. v. Citibank Int'l, P.L.C., 969 F. Supp. 243, 246 (S.D.N.Y. 1997), citing Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 522 N.E.2d 40, 43 (1988); Cutco Indus., Inc., 806 F.2d at 365. Even "casual or sporadic acts within the state may form the basis of long-arm jurisdiction under CPLR 302(a)(1), provided the cause of action arises from the acts." National American Corp. v. Federal Republic of Nigeria, 425 F. Supp. 1365 (S.D.N.Y. 1977). A court must consider the totality of the defendant's acts to determine whether the defendant has performed purposeful acts in New York in connection with the transaction from which the cause of action arises. Pilates, Inc. v. Pilates Institute, Inc., 891 F. Supp. 175, 179 (S.D.N.Y. 1995).
In the instant case, Nader appears to base his claim of jurisdiction under 302(a)(1) on several facts including that defendants initiated numerous telephone calls from Wisconsin to New York to discuss Nader's car; defendants mailed invoices to New York for completed work; Nader issued checks from New York State to defendants and subcontractors in Wisconsin; and Getschow made a visit to New York in 1997 or 1998. (Nader Aff. ¶¶ 4-9.)
Nader cites no cases to support his claim that defendants' telephone and mail contacts with New York subject them to personal jurisdiction. Courts have recognized that "[g]enerally telephone and mail contacts do not provide a basis for jurisdiction under CPLR § 302(a)(1) unless the defendant projected himself by those means into New York in such a manner that he purposefully availed himself . . . of the benefits and protections of its laws." Wilhelmshaven Acquisition Corp. v. Asher, 810 F. Supp. 108, 112 (S.D.N.Y. 1993) (citations and internal quotation marks omitted). In those cases in which courts have found that telephone and mail contacts with New York alone are sufficient to confer jurisdiction over the defendant, courts have found that the "center of gravity" of the business transacted was in New York. See id., discussing Parke-Bernet Galleries, Inc. v. Franklyn, 308 N.Y.S.2d 337 (N.Y. 1970) and Otterbourg, Steindler, Houston Rosen, P.C. v. Shreve City Apts,, Ltd., 543 N.Y.S.2d 978 (1st Dep't 1989). In Parke-Bernet Galleries, the Court of Appeals held that the California defendant was subject to jurisdiction in New York because he "was receiving and transmitting bids over an open telephone line and was an active participant in an auction held [in New York]." 308 N.Y.S.2d at 340. The defendant "was subject to jurisdiction in New York not simply because he had telephoned New York, but rather because he thereby purposely positioned himself to participate in the activity going on in New York." Mayes v. Leipziger, 674 F.2d 178, 184 (2d Cir. 1982) (discussing Parke-Bernet Galleries).
As the Court in Wilhelmshaven Acquisition explained, long-arm jurisdiction in Otterbourg:
was based on numerous conferences with the New York attorney whom the defendant had retained to represent its interests in a bankruptcy proceeding in New York, as well as participation by telephone in settlement negotiations with the debtor who had filed an adversary proceeding against it in New York.810 F. Supp. at 112.
The instant action is more similar to the facts of Mayes, in which the Court of Appeals affirmed the dismissal of plaintiff's legal malpractice suit for lack of personal jurisdiction. The Court determined that Mayes did not present the "characteristics of the kind of purposeful activity in New York that is required by the courts of New York for the invocation of § 302(a)(1)." Id. at 184-85. The Court went on to explain that:
So far as we are aware, no court has extended § 302(a)(1) to reach a nondomiciliary who never entered New York, who was solicited outside of New York, to perform outside of New York such services as were performed, and who is alleged to have neglected to perform other services outside of New York. We do not believe that in these circumstances the New York courts would exercise jurisdiction solely on the basis that the defendants, from California, report to their New York client and sought the wherewithal (i.e., funds, authority, and information) by means of letters and calls to New York to perform their non-New York services.
Id. at 185.
As in Mayes, Getschow did not initiate contact with Nader; rather, Nader "solicited" a referral and telephone number for G.B. Automotive from Ambrose and then contacted defendants. (Ambrose Aff. ¶ 7.) The services were performed outside New York, and the causes of action arose from those services.
Getschow's phone and mail contacts with Nader in New York were incident to the restoration being performed in Wisconsin.
Additionally, Nader does not claim that the parties negotiated the terms of the restoration services in New York.
The mere fact that the parties may have discussed the terms of the services over the telephone while Nader was in New York, in and of itself, does not confer jurisdiction over defendants. See Wilhelmshaven Acquisition, 810 F. Supp. at 113 ("Defendants' correspondence, telephone calls and telefax transmissions did not project them into events taking place in New York," where contract negotiations were taking place simultaneously in New York and London and the center of gravity of the transaction was an oil refinery in Germany); Mayes, 674 F.2d at 184 ("The retainer agreement does not even appear to have been 'made' in New York," where the agreement was negotiated between a California attorney and a New York attorney via phone calls and mail). Cf. Anderson v. Indiana Black Expo, Inc., 81 F. Supp.2d 494, 502 (S.D.N.Y. 2000) (defendant's presence in New York to sign the contract was not itself sufficient to confer jurisdiction under § 302(a)(1) where the terms of the contract were negotiated and finalized outside New York and were to be performed outside New York). Here, the "center of gravity" of the business transaction (the restoration of the Duel-Ghia) was in Wisconsin, and Nader fails to show that "defendant's contacts with New York have been purposeful and designed to permit it to conduct activities within New York." Mayes, 674 F.2d at 184.
Lastly, the fact that Getschow and Nader met once in New York during the period the car was being restored does not alter the conclusion that Nader fails to meet the standard of § 302(a)(1). While "jurisdictional significance can be attached to a 'social' visit during which substantive business discussions take place," Wilhelmshaven Acquisition, 810 F. Supp. at 113, this meeting included no such substantive business discussions.
As discussed above, Getschow was visiting Ambrose when the two (and others) stopped by Nader's Long Island home uninvited. The group briefly met Nader outside his home at which time Getschow allegedly stated that the "car is going great." Such a comment, made in passing, cannot be construed as a substantive business discussion.
Accordingly, Nader fails to establish that the defendants performed purposeful acts in New York in connection with the restoration of Nader's Duel-Ghia that meet the standard of § 302(a)(1).
2. Section 302(a)(3)
Nader also fails to establish the propriety of exercising jurisdiction over the defendants pursuant to § 302(a)(3). Nader alleges that defendants committed various tortious acts in Wisconsin by which he was injured. (See Compl. ¶¶ 16-44.) As a preliminary matter, "[u]nder section 302(a)(3), an injury does not occur in New York merely because that is where the plaintiff is located or suffered economic harm." Family Internet, Inc. v. Cybernex, Inc., No. 98 Civ. 637, 1999 WL 796177, at *7 n. 1 (S.D.N.Y. 1999). However, even assuming that Nader suffered injury "within the state" of New York, neither the complaint nor Nader's affidavit satisfies the additional requirement of § 302(a)(3)(i) or (ii). Nader makes no claim that defendants regularly do or solicit business in New York.
Plaintiff attempts to demonstrate that Getschow solicited Nader's business by focusing on two statements Getschow allegedly made and Getschow's visit to New York. Nader alleges that during his initial phone call with Getschow in 1996, the two discussed the work Getschow was performing on Ambrose's truck and that Getschow "hoped for many more jobs from the Hamptons [Long Island, New York]." (Nader Aff. ¶ 3.) Nader further states at the time of Getschow's visit to Long Island in 1997 or 1998, Getschow commented that Nader's "'car is going great.'" (Nader Aff. ¶ 7.)
Even if such statements and Getschow's visit could be construed as "solicitation," they certainly do not rise to the level of "regular" solicitation under 302(a)(3)(i).
Similarly, Nader does not allege facts showing that defendants expected or should have reasonably expected the services they provided in Wisconsin to have consequences in New York as required under 302(a)(3)(ii). Nader had his car transported from California to Wisconsin and his agent recovered the car in Wisconsin. (Nader Aff. ¶ 4; Getschow Aff. ¶ 18.)
Nader does not claim that his car was returned to or used in New York, or that defendants had any such knowledge or reason to have such knowledge. In fact, Nader alleges that "[s]aid restoration was to be completed for the 1999 Connecticut Grand Concourse." (Compl. ¶ 7.) Defendants' should have only been aware of the car's connection with California and possibly Connecticut; defendants would not have expected and should not have reasonably expected the restoration work to have consequences in New York.
In his opposition brief, Nader states that Getschow promised to complete the restoration "in time for a Concourse at Newport, Rhode Island." (Opp. Brief, unnumbered p. 2.) In any event, the defendants were not made aware of or reasonably should have been aware of any connection between the car and New York.
Finally, Nader makes no allegation that defendants derive substantial revenue from interstate or international commerce.
Because there is no basis for invoking jurisdiction under either CPLR § 302(a)(1) or (3), I do not address the issue of due process.
CONCLUSION
For the reasons set forth above, defendants' motion to dismiss the complaint for lack of personal jurisdiction is granted.
The Clerk of the Court shall mark this action closed and all pending motions denied as moot.
SO ORDERED.