Oceanside Auto Center, Inc. v. Pearl Associates Auto Sales LLC et al
MEMORANDUM & ORDER granting 18 Motion to Dismiss for Lack of Jurisdiction; For the foregoing reasons, Defendants' motion to dismiss for lack of personal jurisdiction is GRANTED, and the Amended Complaint is DISMISSED WITH PREJUDICE. The Clerk of the Court is directed to mark this matter CLOSED. So Ordered by Judge Joanna Seybert on 5/7/2014. C/ECF (Valle, Christine)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
OCEANSIDE AUTO CENTER, INC.,
MEMORANDUM & ORDER
-againstPEARL ASSOCIATES AUTO SALES LLC and
Kenneth Adam Novikoff, Esq.
Scott Green, Esq.
Tamika N. Hardy, Esq.
Rivkin Radler LLP
926 RXR Plaza
Uniondale, NY 11556
Joseph Tripodi, Esq.
Kranjac Tripodi & Partners LLP
30 Wall Street, 12th Floor
New York, NY 10005
SEYBERT, District Judge:
defendants Pearl Associates Auto Sales LLC (“Pearl Associates”)
Associates, “Defendants”) on September 6, 2013.
an Amended Complaint on November 4, 2013.
before the Court is Defendants’ motion to dismiss the Amended
Complaint for lack of personal jurisdiction (Docket Entry 18).
For the following reasons, Defendants’ motion is GRANTED.
Plaintiff is a New York corporation with offices in
Deer Park, New York.
(Am. Compl. ¶ 4.)
Pearl Associates is a
New Jersey corporation with its corporate offices in Teterboro,
(Am. Compl. ¶ 5.)
Leventhal is an individual
residing in New Jersey and the sole owner and proprietor of
(Am. Compl. ¶¶ 6-7.)
Plaintiff and Pearl
Associates are wholesale and retail sellers of automobiles, with
Generally, Plaintiff would purchase used automobiles from Pearl
Associates for resale.
(Am. Compl. ¶ 9.)
(Am. Compl. ¶ 10.)
Center (“Towne”)--in New Jersey, Plaintiff would pay Towne, and
(Am. Compl. ¶ 10.)
After Pearl Associates completed the sale,
profits or losses on a 50/50 basis.
(Am. Compl. ¶ 10.)
The following facts are presumed to be true for the purposes of
this Memorandum and Order.
that Pearl Associates purchased thirty-eight vehicles between
April 1, 2013 and July 22, 2013 on behalf of Plaintiff pursuant
to the agreement.
(Am. Compl. ¶ 11.)
Plaintiff paid Towne for
those vehicles and Pearl Associates has sold them.
agreement by failing to pay Plaintiff the purchase price of the
automobiles and has also failed to pay any profits earned in
connection with the sales.”
(Am. Compl. ¶ 13.)
made a demand for $863,200.00, but to no avail.
interest from August 6, 2013.
(Am. Compl. ¶ 15.)
Under the Second Cause of Action, Plaintiff alleges
“[t]hat an account was taken and stated between the Plaintiff
and Pearl Associates which showed a balance of eight hundred
sixty three thousand two hundred dollars ($863,200.00) due and
owing by Pearl Associates to the Plaintiff.”
guaranteed the amount.
(Am. Compl. ¶ 17.)
(Am. Compl. ¶ 19.)
Amended Complaint alleges: “This Court maintains jurisdiction
over the nondomicilliary Defendants pursuant to New York’s long3
arm statute N.Y. CPLR 302(a)(1).
Defendants engaged in a series
of business transactions within the State of New York and there
transactions and the claims asserted.”
(Am. Compl. ¶ 3.)
Defendants now move to dismiss the Amended Complaint
for lack of personal jurisdiction.
The Court will first address
the applicable legal standard before turning to the merits of
I. Legal Standard
personal jurisdiction over a person or entity against whom it
seeks to bring suit.”
Penguin Grp. (USA) Inc. v. Am. Buddha,
609 F.3d 30, 34 (2d Cir. 2010) (citation omitted).
motion to dismiss for lack of jurisdiction:
it may decide the
motion on the basis of the parties’ affidavits by themselves,
“permit discovery in aid of the motion[,] or . . . conduct an
Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981)
A plaintiff’s precise burden depends on
how the Court elects to address the jurisdictional issue.
Short of a “full-blown evidentiary hearing on the motion, the
plaintiff need make only a prima facie showing of jurisdiction
While a plaintiff will still have to establish jurisdiction by a
preponderance of the evidence at trial or a pretrial evidentiary
hearing, “until such a hearing is held, a prima facie showing
suffices, notwithstanding any controverting presentation by the
moving party, to defeat the motion.”
Thus, in considering
a Rule 12(b)(2) motion, the Court construes the pleadings and
affidavits in the light most favorable to the plaintiff and
resolves all doubts in plaintiff’s favor.
DiStefano v. Carozzi
N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001).
Defendants assert that Plaintiff has failed to allege
defendant is subject to personal jurisdiction involves a twopart analysis by a federal district court sitting in diversity.
defendant under the laws of the forum state.
See Grand River
Enters. Six Nations, Ltd. v. Pryor, 425 F.3d 158, 165 (2d Cir.
Second, if the Court has jurisdiction under state law,
the Court must then determine whether such exercise would be
consistent with the due process guarantees of the United States
Here, Plaintiff alleges that the Court has personal
A court will have personal jurisdiction over an out-
of-state defendant pursuant to C.P.L.R. 302(a)(1) if “ that
party ‘transacts any business within the state’ and  if the
claim arises from these business contacts.”
D.H. Blair & Co. v.
Gottdiener, 462 F.3d 95, 104 (2d. Cir. 2006) (quoting CutCo
Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986)).
activity--‘some act by which the defendant purposefully avails
forum State, thus invoking the benefits and protections of its
Best Van Lines, Inc. v. Walker, 490 F.3d 239, 246-47
(2d Cir. 2007) (quoting McKee Elec. Co. v. Rauland-Borg Corp.,
20 N.Y.2d 377, 382, 229 N.E.2d 604, 607, 283 N.Y.S.2d 34, 37-38
L.L.C., 616 F.3d 158, 169 (2d Cir. 2010).
Courts consider the following factors in determining
whether an out-of-state defendant has transacted business in New
“ whether the defendant has an on-going
contractual relationship with a New York
corporation;  whether the contract with a
New York corporation was negotiated or
executed in New York and whether, after
executing a contract with a New York
business, the defendant has visited New York
for the purpose of meeting with parties to
the contract regarding the relationship;
 what the choice-of-law clause is in any
such contract; and  whether the contract
requires [defendant] to send notices and
payments into the forum state or subjects
them to supervision by the corporation in
the forum state.”
Walden v. Lorcom Techs., Inc., No. 05-CV-3600, 2009 WL 799955,
at *5-6 (E.D.N.Y. Mar. 24, 2009) (quoting Sunward Elecs., Inc.
v. McDonald, 362 F.3d 17, 22 (2d Cir. 2004)).
All of these
factors are relevant, but “no one factor is dispositive and
other factors may be considered.”
Sunward, 362 F.3d at 23.
“[T]he ultimate determination is based on the totality of the
(Am. Compl. ¶ 9.)
This factor alone, however, is
See Stein Fibers, Ltd. v. Bondex Telas Sin
Tejar, No. 08-CV-0210, 2009 WL 385412, at *3 (N.D.N.Y. Feb. 10,
2009) (“Jurisdiction is proper only when the ongoing contractual
relationship is augmented by other significant contacts by the
defendant with the forum state.”).
Notably, the Amended Complaint--filed after Defendants moved to
dismiss the original Complaint on personal jurisdiction grounds-
Plaintiff alleges that “[i]n or about February of
(‘Heller’) with a new business proposition.”
(Am. Compl. ¶ 10.)
Neither the Amended Complaint nor the affidavits submitted by
either party discuss the negotiations further.
not allege that Leventhal, or anyone from Pearl Associates, came
to New York or made any travel arrangements to New York for the
purposes of negotiations or the contractual arrangement.
state, may be sufficient to confer jurisdiction.
Friedlander, 103 F.3d 1005, 1109 (2d Cir. 1997).)
However, telephonic or electronic negotiations with a party in
New York can provide a basis for jurisdiction if the defendant
Franklyn, 26 N.Y.2d 13, 18, 256 N.E.2d 506, 508-09, 308 N.Y.S.2d
337, 340 (1970) (quoting Hanson v. Denckla, 357 U.S. 235, 253
communication by telephone, fax and mail between defendant and
parties in New York in the course of contract negotiations-where the ‘center of gravity’ of the transaction was elsewhere.”
Fishbach Corp. v. United Power Ass’n, Inc., No. 93-CV-5373, 1995
WL 505582, at *2 (S.D.N.Y. Aug. 24, 1995) (collecting cases).
Here, the automobiles in question were bought in New
reports or seek any input from Plaintiff.
See Popolizio v.
Schmit, No. 11-CV-1329, 2013 WL 316545, at *6 (N.D.N.Y. Jan. 28,
relationship, “Defendant . . . had no obligation to consult
transaction or communicate with Plaintiff in any way; Defendant
. . . was merely required to share profits with Plaintiff”).
jurisdiction of Defendants.2
See id. at *7 (finding that the
Although Plaintiff points to certificates of sales involving
payment of New York taxes for the subject vehicles (Pl.’s Opp.
Br. at 3-4), Plaintiff’s allegations do not show that Defendants
had such communications with Plaintiff so as to purposefully
“center of gravity” was where the cattle, the property subject
to the contract, was housed and bred); see also Stein Fibers,
Ltd., 2009 WL 385412, at *4 (“‘[N]egotiation of the contractual
terms by phone, fax or mail with the New York party is generally
insufficient to support a finding of the transaction of business
in New York’ . . . .” (quoting United Computer Capital Corp. v.
Secure Prods., L.P., 218 F. Supp. 2d 273, 278 (N.D.N.Y. 2002))).
As to the third factor, Plaintiff has not alleged that
there was a choice-of-law clause in the contract.
In fact, it
is wholly unclear whether the parties had a written contract at
all, and its terms have only been summarized by the parties.
Thus, this factor also does not weigh in favor of finding a
transaction of business by Defendants.
This, even in conjunction with a business relationship, though,
is not enough.
See Stein Fibers, Ltd., 2009 WL 385412, at *4;
Roper Starch Worldwide, Inc. v. Reymer & Assocs., Inc., 2 F.
Supp. 2d 470, 474 (S.D.N.Y. 1998) (payments to New York, even
assuming an ongoing business relationship, are insufficient to
2000 WL 426426, at *3 (“Although defendant was to send payment
avail themselves of the benefits of New York. See On Line Mktg.
Inc. v. Thompson Outfitters, Inc., No. 99-CV-10411, 2000 WL
426426, at *3 (S.D.N.Y. Apr. 20, 2000).
to plaintiffs in New York if it accepted plaintiffs’ proposal,
the Agreement did not require defendant to provide any notices
or reports to plaintiffs here in New York.”).
Given the totality of circumstances here, the Court
See On Line Mtkg. Inc., 2000 WL 426426,
at *3 (noting that the proper focus “is on what the defendant
did in New York in connection with the cause of action, not on
dismiss for lack of personal jurisdiction is GRANTED, and the
Amended Complaint is DISMISSED WITH PREJUDICE.
The Clerk of the Court is directed to mark this matter
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
7 , 2014
Central Islip, New York
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