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
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