Duff & Phelps Securities, LLC v. Wisniewski et al
OPINION & ORDER re: 15 FIRST MOTION to Dismiss for Lack of Jurisdiction filed by Patricia Wisniewski, Raymond Wisniewski. For the foregoing reasons, the Court holds that this Court lacks personal jurisdiction over the Defendants. Pl aintiff's request for jurisdictional discovery is DENIED because the Plaintiff's proposed discovery appears to be a fishing expedition unlikely to uncover any material facts that would alter this Courts conclusion. Plaintiff seeks to depose the Wisniewskis and Usatine, but those individuals have already submitted detailed sworn testimony stating that they did not have any contacts with New York in connection with the Agreement. Plaintiff offers no evidence in support of its speculative assertion that other attorneys at Cole Schotz may have performed work in New York on behalf of the Wisniewkis. Because the parties consent to transfer this case to New Jersey, this case is hereby TRANSFERRED to the District of New Jersey. See 28 U.S .C. § 1631. The Clerk of Court is respectfully directed to terminate Docket Entry No. 15 and transfer this case to the District of New Jersey. Pursuant to Rule 83.1, the Clerk's Office will wait seven days to transfer this case. (Signed by Judge Valerie E. Caproni on 7/5/2017) (mml)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
DUFF & PHELPS SECURITIES, LLC,
PATRICIA WISNIEWSKI and RAYMOND
DATE FILED: 7/5/2017
OPINION & ORDER
VALERIE CAPRONI, United States District Judge:
Plaintiff Duff & Phelps Securities LLC (“D&P”), a New York investment bank, has sued
Defendants Patricia and Raymond Wisniewski (collectively, the “Wisniewskis” or
“Defendants”), New Jersey residents, for breach of contract. Compl. ¶¶ 1-3, 52-58.1 The
Wisniewskis move to dismiss for lack of personal jurisdiction, arguing that they never entered or
purposefully directed any activities towards New York in connection with the disputed contract.
Dkt. 15. For the following reasons, the Court holds that it lacks personal jurisdiction over the
Defendants and therefore TRANSFERS this case to the District of New Jersey.
The Court uses the following abbreviations herein: Complaint (“Compl.”), Dkt. 1; Memorandum of Law in
Support of Defendants Patricia and Raymond Wisniewski’s Motion to Dismiss Pursuant to Federal Rule of Civil
Procedure 12(b)(2) (“Mem.”), Dkt. 16; Declaration of Patricia Wisniewski in Support of Motion to Dismiss
(“Patricia Decl.”), Dkt. 17; Declaration of Raymond Wisniewski in Support of Motion to Dismiss (“Raymond
Decl.”), Dkt. 18; Declaration of Warren A. Usatine, Esq. in Support of Defendants’ Motion to Dismiss (“Usatine
Decl.”), Dkt. 19; Plaintiff’s Response in Opposition to Defendants’ Motion to Dismiss Pursuant to Federal Rule of
Civil Procedure 12(b)(2) (“Opp.”), Dkt. 22; Declaration of Jon C. Melzer in Support of Plaintiff’s Response in
Opposition to Defendants’ Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(2) (“Melzer
Decl.”), Dkt. 23.
In Fall 2015, the Wisniewskis sought to sell Ms. Wisniewski’s thirty percent ownership
interest, or acquire additional ownership interest, in National Retail Systems, Inc. (“NRS”), a
New Jersey company. Patricia Decl. ¶¶ 2, 5; Raymond Decl. ¶¶ 2, 5; Usatine Decl. ¶ 2. The
Wisniewskis’ attorney, Warren Usatine of the law firm Cole Schotz, contacted various
investment banks, including D&P. Usatine Decl. ¶ 3. In advance of a meeting at Cole Schotz’s
New Jersey office, Usatine Decl. ¶ 4, D&P sent Usatine an overview of D&P’s qualifications and
biographies of its employees, all of whom were disclosed as working in D&P’s New York office.
Melzer Decl. ¶ 5. D&P also prepared a non-disclosure agreement for NRS’ confidential
information, which D&P and NRS executed, and a fee proposal for D&P’s services, which the
Wisniewskis declined to accept. Melzer Decl. ¶¶ 6-8.
Five months later, Usatine again contacted D&P to renew discussions about a potential
engagement by the Wisniewskis. Usatine Decl. ¶ 8; Melzer Decl. ¶ 9. D&P submitted a revised
proposal, which D&P converted into an engagement letter (“Agreement”) at Usatine’s request.
Melzer Decl. ¶¶ 9-13; Compl. ¶¶ 17-19. Defendants do not dispute that D&P drafted and
prepared these documents in New York.
Pursuant to the Agreement, the Wisniewskis agreed to retain D&P “to act as their
exclusive financial advisor in connection with the potential sale of their interest in NRS.”
Compl. ¶ 23 (quoting Compl. Ex. A (hereafter, “Agreement”) ¶ 1). The Agreement was divided
into two phases: during Phase 1, D&P would advise on an auction process for the potential sale;
in Phase 2, D&P would provide specified services related to the sale. Compl. ¶¶ 26-27 (citing
All facts are taken from the pleadings and affidavits and are viewed in the light most favorable to Plaintiff,
with all doubts resolved in Plaintiff’s favor. DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001) (per
Agreement ¶¶ 1, 2). The initial term of the Agreement was six months, after which the
Agreement was automatically extended on a month-to-month basis, absent thirty days written
notice of termination by either party. Compl. ¶ 25 (citing Agreement ¶ 13). In March 2016, the
parties executed the Agreement—D&P from New York and the Wisniewskis from New Jersey.
Compl. ¶¶ 21-22; Patricia Decl. ¶ 7; Raymond Decl. ¶ 7.
In connection with Phase 1, D&P prepared a proposed auction process for the potential
sale transaction. Melzer Decl. ¶¶ 18-21. D&P met with Mr. Wisniewski and Cole Schotz
attorneys in New Jersey to discuss and finalize the auction process proposal. Melzer Decl. ¶ 20.
D&P provided additional advice on the auction process through conference calls with the
Wisniewskis and Cole Schotz. Melzer Decl. ¶ 21. Defendants do not dispute that, aside from its
attendance at the New Jersey meeting, D&P performed all of its work in New York.
In May 2016, the Wisniewskis abandoned the auction process. Compl. ¶ 42. Plaintiff
alleges that the Wisniewskis violated the Agreement by continuing negotiations to sell their
interest in NRS without informing D&P. Compl. ¶ 46. Plaintiff further alleges that the
Wisniewskis sold their NRS ownership interest in August 2016 and that D&P is entitled to a
transaction fee of at least $750,000 under the Agreement. Compl. ¶¶ 48-51.
Defendants move to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2),
arguing that New York’s long-arm statute does not support the exercise of personal jurisdiction
over Defendants. Plaintiff argues that Defendants’ deliberate engagement of a New York firm
subjects them to personal jurisdiction in New York. For the following reasons, the Court agrees
with Defendants and TRANSFERS this case to the District of New Jersey pursuant to
28 U.S.C. § 1631.
“‘Prior to trial,  when a motion to dismiss for lack of jurisdiction is decided on the
basis of affidavits and other written materials, the plaintiff need only make a prima facie
showing.’” MacDermid, Inc. v. Deiter, 702 F.3d 725, 727 (2d Cir. 2012) (quoting Seetransport
Wiking Trader Schiffarhtsgesellschaft MBH & Co., Kommanditgesellschaft v. Navimpex
Centrala Navala, 989 F.2d 572, 580 (2d Cir. 1993)). “With exceptions not relevant here, a
district court sitting in a diversity action such as this may exercise personal jurisdiction to the
same extent as the courts of general jurisdiction of the state in which it sits.” Bank Brussels
Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d Cir. 2002) (citing Fed. R. Civ.
P. 4(k)(1)(A)). Accordingly, the Court engages in a familiar two-step analysis, first determining
whether plaintiffs have made a prima facie showing that defendants would be subject to personal
jurisdiction under the laws of the forum state and then determining whether this exercise of
jurisdiction would comport with the Due Process Clause of the Fourteenth Amendment. Id.
“There are two types of personal jurisdiction: specific and general.” Sonera Holding B.V.
v. Çukurova Holding A. ., 750 F.3d 221, 225 (2d Cir. 2014) (per curiam). Plaintiff here does not
allege general personal jurisdiction but asserts that the Court has jurisdiction pursuant to N.Y.
C.P.L.R. § 302(a)(1). That statute confers personal jurisdiction “over any nondomiciliary . . . who in person or through an agent transacts any business within the state or
contracts anywhere to supply goods or services in the state.” N.Y. C.P.L.R. § 302(a)(1).
Jurisdiction under section 302(a)(1) may be “proper ‘even though the defendant[s] never enter
New York, so long as the defendant[s’] activities here were purposeful and there is a substantial
relationship between the transaction and the claim asserted.’” Fischbarg v. Doucet, 880 N.E.2d
22, 26 (N.Y. 2007) (quoting Deutsche Bank Sec., Inc. v. Mont. Bd. of Invs., 850 N.E.2d 1140,
1142 (N.Y. 2006)). No single event connecting a defendant to the forum state is dispositive.
CutCo Indus. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986). The Court must consider the
totality of the defendant’s contacts with the forum state to determine whether jurisdiction is
proper. Id. Although this “is an objective inquiry, it always requires a court to closely examine
the defendant[s’] contacts for their quality.” Licci v. Lebanese Canadian Bank, 984 N.E.2d 893,
899-900 (N.Y. 2012).
In evaluating a claim of personal jurisdiction under C.P.L.R. 302(a)(1), courts consider
the so-called Agency Rent a Car factors: (i) does the defendant have an ongoing contractual
relationship with a New York person or entity; (ii) was the contract at issue negotiated or
executed in New York, and did the defendant visit New York for the purpose of meeting with
parties to the contract regarding the relationship, after the contract was executed; (iii) is there a
choice-of-law clause in the contract; and (iv) does the contract require the defendant to send
notices and payments into New York or subject the defendant to supervision in New York.
Agency Rent A Car Sys., Inc. v. Grand Rent A Car Corp., 98 F.3d 25, 29 (2d Cir. 1996); Sunward
Elecs., Inc. v. McDonald, 362 F.3d 17, 22–23 (2d Cir. 2004) (same). “Although all factors are
relevant, no one factor is dispositive and other factors may be considered.” Sunward, 362 F.3d at
23. Ultimately, the existence vel non of personal jurisdiction is based on the totality of the
Ongoing Contractual Relationship
Plaintiff argues that the Agreement created an ongoing contractual relationship between
the parties that lasted at least until September 2016, when the initial six-month term expired, and
should be viewed as continuing until May 2017, the date by which the Wisniewskis were
allegedly required to pay a transaction fee under the Agreement.3 Opp. 13-14. Defendants
counter that their contractual relationship with D&P lasted only two months because the
Defendants decided to abandon the auction process in May 2016, two months after they executed
the Agreement. Mem. 16. The Court concludes that the Agreement did not establish an ongoing
contractual relationship weighing in favor of the exercise of personal jurisdiction.
Regardless of whether the contractual obligations under the Agreement extended over a
period of two months (Defendants’ theory) or fourteen months (Plaintiff’s theory), the only basis
for the contractual relationship is the disputed Agreement itself. Courts within the Second
Circuit have repeatedly concluded there is no “ongoing contractual relationship” where the
contract at issue is the only transaction between the parties. Sandoval v. Abaco Club on Winding
Bay, 507 F. Supp. 2d 312, 317 (S.D.N.Y. 2007) (collecting cases); see also Gordian Group, LLC
v. Syringa Exploration, Inc., 168 F. Supp.3d 575, 585 (S.D.N.Y. 2016) (“Because the Agreement
is the only source of contractual obligations between the parties, it is therefore properly
characterized as a single short-term contract and not the foundation of an ongoing contractual
Relying on Deutsche Bank Securities, Inc. v. Montana Board of Investments, 850 N.E.2d
1140 (N.Y. 2006), and Fischbarg v. Doucet, 880 N.E.2d 22 (N.Y. 2007), Plaintiff argues that a
several-month contract may provide a basis for exercising personal jurisdiction. Plaintiff,
however, plucks convenient facts from those cases and ignores the totality of the circumstances.
Although both Deutsche Bank and Fischbarg involved thirteen-month contractual relationships,
what was key to the Court of Appeals’ finding of personal jurisdiction was that the defendants
Plaintiff also notes that D&P, at the Wisniewskis’ request, signed a Non-Disclosure Agreement with NRS
to keep information confidential for two years. Opp. 14-15. This Non-Disclosure Agreement, however, was
between D&P and NRS, not the Wisniewskis. Therefore, the NRS Non-Disclosure Agreement does not establish an
“ongoing contractual relationship” between D&P and the Wisniewskis.
had purposefully directed their activities towards New York. In Deutsche Bank, the out-of-state
defendant engaged in multiple bond transactions with the plaintiff in New York, and the
defendant communicated directly with the New York office multiple times in furtherance of
those transactions. Deutsche Bank, 850 N.E.2d at 1143. In Fischbarg, the out-of-state defendant
purposefully “attempt[ed] to establish an attorney-client relationship” with the plaintiff, a New
York attorney, and “direct[ly] participat[ed] in that relationship via calls, faxes and emails that
they projected into [New York] over many months.” Fischbarg, 880 N.E.2d at 26.4
The circumstances in this case are far different. Here, the Wisniewskis never sent any
payments to, attended any meetings in, made any phone calls to, or otherwise engaged in any
activities in New York. Raymond Decl. ¶¶ 8-11; Patricia Decl. ¶¶ 9-11. Indeed, the only
meetings and conference calls in which the Wisniewskis and their attorney Usatine participated
were in New Jersey. Raymond Decl. ¶¶ 9-11; Patricia Decl. ¶¶ 10-11; Usatine Decl. ¶¶ 13-14,
16, 20. Although Usatine’s telephone calls to D&P may be attributed to the Wisniewskis, the
factual record does not reflect that Usatine placed any calls to New York after the execution of
the Agreement; Usatine’s pre-Agreement phone calls to D&P to inquire about D&P’s interest in
the potential sale transaction are insufficient to establish personal jurisdiction. See Lamco Grp.,
Inc. v. Universal Life Ins. Co., 903 F. Supp. 612, 613 (S.D.N.Y. 1995) (out-of-state defendant’s
pre-contract telephonic communications to the New York plaintiff did not establish personal
jurisdiction); see also PaineWebber Inc. v. WHV, Inc., No. 95 CIV. 0052 (LMM), 1995 WL
296398, at *3 (S.D.N.Y. May 16, 1995) (same).
Plaintiff also cites the contract in Hd Brous & Co. v. Synthesys Secure Technologies, Inc., 229 F. Supp. 2d
191 (E.D.N.Y. 2002), which Plaintiff asserts “lasted only a matter of months.” Opp. 15. Hd Brous, however, does
not include a discussion of how long the disputed contract lasted or even a discussion of whether the parties had an
“ongoing contractual relationship.” Rather, the court concluded that the exercise of personal jurisdiction was proper
based on other factors, including the defendant’s frequent communications with the plaintiff in New York.
D&P relies heavily on the fact that D&P performed services on the Defendants’ behalf
from its New York office, but that argument is “inappropriately focused on [the plaintiff’s] own
activities in New York and not [the defendants’].” Centerboard Secs., LLC v. Benefuel, Inc., No.
15 Civ. 00071 (PAC), 2015 WL 4622588, at *2 (S.D.N.Y. Aug. 3, 2015). Centerboard
Securities concluded that the fact that the plaintiff had meetings and conference calls in New
York at the defendants’ direction did not establish that the defendants themselves had
purposefully directed any activities toward New York. Id. Where, as here, the only activities
evidencing any connection with New York are undertaken by the plaintiff, the Court does not
find the exercise of personal jurisdiction to be proper.
Gordion Group, LLC v. Syringa Exploration, Inc., 168 F. Supp. 3d 575 (S.D.N.Y. 2016)
is instructive. In Gordion Group, a New York investment bank brought a breach of contract
action against an out-of-state defendant. The court concluded that where the disputed contract
was the only transaction between the parties, the contract was not executed in New York, and the
contract provided for the investment bank’s retention “without reference to any transaction in
New York,” New York did not have personal jurisdiction over the defendant. 168 F. Supp. 3d at
584-87. Like here, the investment bank had performed services on the defendant’s behalf from
its New York office, but the court found that fact insufficient to establish personal jurisdiction.
Id. at 587 (“Although Plaintiff alleges it performed its obligations from New York, nothing in the
Agreement required it to do so.”). This Court, too, finds that the plaintiff’s performance in New
York, while relevant, is not sufficient by itself to establish a prima facie case of personal
jurisdiction in New York.5
Indeed, the case for personal jurisdiction was stronger in Gordion Group than it is here. In Gordion Group,
a representative of the defendant attended a meeting in New York, which would weigh in favor of finding personal
jurisdiction in New York. Gordion Group nevertheless concluded that that the exercise of personal jurisdiction
would be improper. Gordion Group, 168 F. Supp. 3d at 587-88.
Plaintiff argues that this Court has personal jurisdiction over the Wisniewskis because the
Wisniewskis deliberately engaged a New York investment bank, knowing that D&P “would
perform the bulk of the work in New York.” Although the fact that “Defendants deliberately
engaged a New York entity for the purpose of conducting activities on their behalf in New York
may be sufficient for personal jurisdiction under C.P.L.R. 302(a)(1),” Gramercy Advisors, LLC
v. Ripley, No. 13-CV-9070 (VEC), 2014 WL 4188099, at *5 (S.D.N.Y. Aug. 25, 2014), it is not
per se sufficient.6 Plaintiff relies on Fischbarg, but, as discussed above, in Fischbarg there were
extensive communications between the out-of-state defendants and the New York lawyer.
Fischbarg found the fact that the defendant was invoking the “benefit and protections of the”
New York attorney-client relationship to be critical to its decision to uphold the exercise of
personal jurisdiction. Fischbarg, 9 N.Y.3d at 382; Gordion Grp., 168 F. Supp. 3d at 585-86
(discussing same). No analogous circumstances exist here: the Wisniewskis did not
communicate with D&P in New York or invoke any kind of New York fiduciary relationship.
Plaintiff also cites this Court’s decision in Gramercy Advisors, LLC v. Ripley, No. 13CV-9070 (VEC), 2014 WL 4188099 (S.D.N.Y. Aug. 25, 2014), but Gramercy Advisors also fails
to support the assertion of personal jurisdiction in this case. Although Gramercy Advisors
concluded that the defendants’ engagement of a New York investment manager subjected them
to personal jurisdiction in New York, there were a number of factors weighing in favor of the
exercise of jurisdiction, including that the parties attended a meeting in New York, that the
Citing Hd Brous, Plaintiff asserts that the defendant’s knowledge that the plaintiff’s performance of the
contract would occur in New York is “a factor that weighs heavily in favor of jurisdiction.” Opp. 21 (citing Hd
Brous, 229 F. Supp. 2d at 194). Although this factor is certainly considered in the jurisdictional analysis, this Court
has not found any case saying that it is a factor weighing “heavily” in favor of jurisdiction. Neither Hd Brous nor
the case it cites, Nat’l Westminster Bank PLC v. Retirement Care Assoc., Inc., No. 98 CIV. 6023(JSM), 1999 WL
239677 (S.D.N.Y. 1999), supports Plaintiff’s assertion. See HD Brous, 229 F. Supp. 2d at 194-95. Rather, it is a
factor that is considered like all other factors in the totality of the circumstances analysis. See Nat’l Westminster
Bank PLC, 1999 WL 239677, at **2-3.
defendants “called, wrote or emailed the Plaintiffs in New York,” that the defendants transferred
considerable sums of money pursuant to the contract into New York, and that the contracts were
executed in New York. 2014 WL 4188099, at *6. That confluence of factors is not present here.
Where, as here, the parties’ only relationship was a single short-term contract that is the
subject of this dispute, and there are no facts tending to show that the defendants engaged in any
activities directed towards New York, the Court concludes that the first Agency Rent A Car
factor—the existence of an ongoing contractual relationship—does not support the exercise of
personal jurisdiction over the Wisniewskis.
Other Agency Rent A Car Factors
The remaining factors may be disposed of fairly quickly. The second factor (where the
contract was negotiated or executed and whether the Defendants have visited New York in
relation to the contract) tilts against the exercise of personal jurisdiction. The Wisniewskis
executed the Agreement in New Jersey, and they never visited New York in connection with the
Agreement. Patricia Decl. ¶¶ 7, 11; Raymond Decl. ¶¶ 7, 11. The third factor (whether the
contract has a choice of law provision) weighs in favor of finding personal jurisdiction because
the Agreement does have a New York choice-of-law provision, Agreement § 17. That factor
alone, however, “simply does [not] carry enough weight for plaintiff to meet its burden.”
Premier Lending Servs., Inc. v. J.L.J. Associates, 924 F. Supp. 13, 17 (S.D.N.Y. 1996), if no
other factor weighs in favor of there being jurisdiction. The fourth factor (whether the contract
required notices, payments or supervision in New York) weighs against finding personal
jurisdiction because no provision in the Agreement required D&P to send notices or payments
into New York or subjected D&P to supervision in New York. Berkshire Capital Grp., LLC v.
Palmet Ventures, LLC, No. 06 CIV. 13009 (PAC), 2007 WL 2757116, at *4 (S.D.N.Y. Sept. 21,
2007), aff’d, 307 F. App’x 479 (2d Cir. 2008); see also Three Five Compounds, Inc. v. Scram
Techs., Inc., No. 11 CIV. 1616 RJH, 2011 WL 5838697, at *6 (S.D.N.Y. Nov. 21, 2011).
Considering the totality of the circumstances, Plaintiff has not established a prima facie
case supporting the exercise of personal jurisdiction over Defendants under New York’s longarm statute.
For the foregoing reasons, the Court holds that this Court lacks personal jurisdiction over
the Defendants. Plaintiff’s request for jurisdictional discovery is DENIED because the
Plaintiff’s proposed discovery appears to be a fishing expedition unlikely to uncover any
material facts that would alter this Court’s conclusion. Plaintiff seeks to depose the Wisniewskis
and Usatine, but those individuals have already submitted detailed sworn testimony stating that
they did not have any contacts with New York in connection with the Agreement. Plaintiff
offers no evidence in support of its speculative assertion that other attorneys at Cole Schotz may
have performed work in New York on behalf of the Wisniewkis.
Because the parties consent to transfer this case to New Jersey, this case is hereby
TRANSFERRED to the District of New Jersey. See 28 U.S.C. § 1631. The Clerk of Court is
respectfully directed to terminate Docket Entry No. 15 and transfer this case to the District of
United States District Judge
Date: July 5, 2017
New York, New York
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