Oceanside Auto Center, Inc. v. Pearl Associates Auto Sales LLC et al

Filing 27

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
---------------------------------------X
OCEANSIDE AUTO CENTER, INC.,
Plaintiff,

MEMORANDUM & ORDER
13-CV-4977(JS)(AKT)

-againstPEARL ASSOCIATES AUTO SALES LLC and
ALAN LEVENTHAL,
Defendants.
---------------------------------------X
APPEARANCES
For Plaintiff:
Kenneth Adam Novikoff, Esq.
Scott Green, Esq.
Tamika N. Hardy, Esq.
Rivkin Radler LLP
926 RXR Plaza
Uniondale, NY 11556
For Defendants:

Joseph Tripodi, Esq.
Kranjac Tripodi & Partners LLP
30 Wall Street, 12th Floor
New York, NY 10005

SEYBERT, District Judge:
Plaintiff
originally

Oceanside

commenced

this

Auto

breach

Center,
of

Inc.

contract

(“Plaintiff”)

action

against

defendants Pearl Associates Auto Sales LLC (“Pearl Associates”)
and

Alan

Leventhal

(“Leventhal,”

and

together

Associates, “Defendants”) on September 6, 2013.
an Amended Complaint on November 4, 2013.

with

Pearl

Plaintiff filed

Currently pending

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.

BACKGROUND1
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,
New Jersey.

(Am. Compl. ¶ 5.)

Leventhal is an individual

residing in New Jersey and the sole owner and proprietor of
Pearl Associates.

(Am. Compl. ¶¶ 6-7.)

Plaintiff and Pearl

Associates are wholesale and retail sellers of automobiles, with
a

long

history

of

business

together.

(Am.

Compl.

¶¶

8-9.)

Generally, Plaintiff would purchase used automobiles from Pearl
Associates for resale.
In
Plaintiff’s

February
owner,

purchase

2013,

Michael

business arrangement.
would

(Am. Compl. ¶ 9.)
though,

Heller

Leventhal

(“Heller”),

(Am. Compl. ¶ 10.)

automobiles

from

another

contacted

about

a

new

Pearl Associates
dealer--Towne

Auto

Center (“Towne”)--in New Jersey, Plaintiff would pay Towne, and
then

Pearl

Associates

(Am. Compl. ¶ 10.)
it

would

Plaintiff

use
paid

the
to

would

sell

the

purchased

automobiles.

After Pearl Associates completed the sale,
proceeds
Towne

to

and

pay

the

profits or losses on a 50/50 basis.

Plaintiff

parties

back

would

the

share

amount
in

the

(Am. Compl. ¶ 10.)

The following facts are presumed to be true for the purposes of
this Memorandum and Order.
1

2

Under

the

First

Cause

of

Action,

Plaintiff

alleges

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.
¶¶ 12-13.)

“However,

Pearl

Associates

has

(Am. Compl.

breached

their

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.)

Plaintiff has

made a demand for $863,200.00, but to no avail.
¶ 14.)

Moreover,

acknowledged

that

Leventhal
he

is

has

liable

interest from August 6, 2013.

personally

for

the

(Am. Compl.

guaranteed

requested

sum,

and
with

(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.”
No

part

Plaintiff

of

that

again

sum

to

been

reiterates

guaranteed the amount.
As

has

paid.

that

(Am. Compl. ¶ 17.)

(Am.

Leventhal

Compl.
has

¶

18.)

personally

(Am. Compl. ¶ 19.)

personal

jurisdiction

over

Defendants,

the

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
is

a

substantial

and

direct

relationship

transactions and the claims asserted.”

between

the

(Am. Compl. ¶ 3.)

DISCUSSION
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
Defendants’ motion.
I. Legal Standard
“A

plaintiff

bears

the

burden

of

demonstrating

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).
has

“considerable

procedural

leeway”

in

resolving

motion to dismiss for lack of jurisdiction:

The Court
a

pretrial

it may decide the

motion on the basis of the parties’ affidavits by themselves,
“permit discovery in aid of the motion[,] or . . . conduct an
evidentiary

hearing

on

the

merits

of

the

motion.”

Marine

Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981)
(citations omitted).

A plaintiff’s precise burden depends on

how the Court elects to address the jurisdictional issue.

Id.

Short of a “full-blown evidentiary hearing on the motion, the
plaintiff need make only a prima facie showing of jurisdiction
4

through

its

own

affidavits

and

supporting

materials.”

Id.

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.”

Id.

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).
II. Analysis
Defendants assert that Plaintiff has failed to allege
this

Court’s

personal

jurisdiction

over

them.

Whether

a

defendant is subject to personal jurisdiction involves a twopart analysis by a federal district court sitting in diversity.
First,

the

Court

asks

whether

it

has

jurisdiction

defendant under the laws of the forum state.

over

the

See Grand River

Enters. Six Nations, Ltd. v. Pryor, 425 F.3d 158, 165 (2d Cir.
2005).

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
Constitution.

See id.

Here, Plaintiff alleges that the Court has personal
jurisdiction

over

Defendants

pursuant
5

to

N.Y.

C.P.L.R.

302(a)(1).

A court will have personal jurisdiction over an out-

of-state defendant pursuant to C.P.L.R. 302(a)(1) if “[1] that
party ‘transacts any business within the state’ and [2] 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)).
New

York

courts

define

transacting

business

as

“purposeful

activity--‘some act by which the defendant purposefully avails
itself

of

the

privilege

of

conducting

activities

within

the

forum State, thus invoking the benefits and protections of its
laws.’”

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
(1967)).

However,

physically

present

C.P.L.R.

302(a)(1).

an
in

out-of-state
New

York

Chloé

v.

to

defendant
transact

Queen

Bee

of

“need

not

be

business”

under

Beverly

Hills,

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
York:
“[1] whether the defendant has an on-going
contractual relationship with a New York
corporation; [2] 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
6

for the purpose of meeting with parties to
the contract regarding the relationship;
[3] what the choice-of-law clause is in any
such contract; and [4] 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
circumstances.”

Id.

(internal

quotation

marks

and

citation

omitted).
As
contested

to

the

that

the

relationship.

first

factor,

parties

had

(Am. Compl. ¶ 9.)

not dispositive.

it
a

does

not

appear

long-standing

to

be

business

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.”).
The

second

factor

is

somewhat

more

complicated.

Notably, the Amended Complaint--filed after Defendants moved to
dismiss the original Complaint on personal jurisdiction grounds-

7

-provides

few,

negotiations.
2013,

if

any,

details

regarding

contractual

Plaintiff alleges that “[i]n or about February of

Leventhal

contacted

Plaintiff’s

owner,

(‘Heller’) with a new business proposition.”

Michael

Heller

(Am. Compl. ¶ 10.)

Neither the Amended Complaint nor the affidavits submitted by
either party discuss the negotiations further.

Plaintiff does

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.
Moreover,
transaction,

Plaintiff

even

if

the

is

generally

defendant

did

correct

not

enter

state, may be sufficient to confer jurisdiction.
Opp.

Br.,

Docket

Entry

19,

at

2

(citing

PDK

cites

to

Leventhal’s

actions

in

the

one

forum

(See Pl.’s

Labs,

Friedlander, 103 F.3d 1005, 1109 (2d Cir. 1997).)
Plaintiff

that

Inc.

v.

In support,

contacting

it.

However, telephonic or electronic negotiations with a party in
New York can provide a basis for jurisdiction if the defendant
“projected

himself”

into

“‘purposefully’

availed

protections

its

of

New

York

himself

laws.’”

in

‘of

.

such
.

a

.

Parke–Bernet

manner

the

that

benefits

Galleries,

Inc.

he
and
v.

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
(1958)).
“projected”

Courts
itself

typically
into

find
New
8

that
York

a

defendant

“despite

has

not

substantial

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
Jersey

and

sold

Decl.,

Docket

oversee

the

in

states

Entry

sales

18-2,

in

other
Ex.

any

than

2,

way,

¶

nor

New

York.

6.)
did

(Leventhal

Plaintiff

reports or seek any input from Plaintiff.

not

make

Defendants

did

any

See Popolizio v.

Schmit, No. 11-CV-1329, 2013 WL 316545, at *6 (N.D.N.Y. Jan. 28,
2013)

(finding

defendant

that

where,

there

was

although

no

there

personal
was

an

jurisdiction

ongoing

over

contractual

relationship, “Defendant . . . had no obligation to consult
Plaintiff

about

any

business

dealings

arising

from

the

transaction or communicate with Plaintiff in any way; Defendant
. . . was merely required to share profits with Plaintiff”).
Accordingly,

the

“center

Defendants’

single

relationship

does

of

gravity”

communication
not

weigh

jurisdiction of Defendants.2

in

was

not

regarding
favor

of

a

New

York,

new

exercising

and

business
personal

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
2

9

“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.
Finally,
presumably

were

to

as
make

to

the

payments

fourth
to

factor,

Plaintiff

Defendants

in

New

York.

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
confer

personal

jurisdiction);

see

also

On

Line

Mktg.

Inc.,

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).
10

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
finds

that

Plaintiff

personal jurisdiction.

has

not

made

a

prima

facie

showing

of

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
plaintiffs’ actions”).
CONCLUSION
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.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
DATED:

May
7 , 2014
Central Islip, New York

11