Rosenblatt v. Coutts & Co. AG et al

Filing 24

OPINION AND ORDER GRANTING DEFENDANT'S MOTION TO DISMISS THE COMPLAINT re: 13 MOTION to Dismiss, filed by Coutts & Co. AG, Royal Bank of Scotland plc. Defendants' motion to dismiss the complaint for lack of personal jurisdicti on is granted. Because the Court lacks personal jurisdiction over both defendants, I need not address whether the doctrine of forum non conveniens applies or whether dismissal is also warranted under Rule 12(b)(6) for failure to state a claim. The Clerk shall terminate the motion (Dkt. No. 13) and mark the case closed. (Signed by Judge Alvin K. Hellerstein on 8/14/2017) (ras)

l

USDCSDNY
DOCUMENT
fl
ELECTRONICALLY FILED,;
..
·J
-DOC#:
,
1

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

~ATE FILED::§}JiJo.

-------------------------------------------------------------- )(
MARVIN ROSENBLATT,

OPINION AND ORDER
GRANTING DEFENDANT'S
MOTION TO DISMISS THE
COMPLAINT

Plaintiff,
-againstCOUTTS & CO. AG and THE ROY AL BANK OF
SCOTLAND PLC,

17 Civ. 3528 (AKH)

Defendants.

--------------------------------------------------------------

,;

:j

)(

AL VIN K. HELLERSTEIN, U.S.D.J.:
Plaintiff Marvin Rosenblatt ("Rosenblatt") brings this action alleging breach of
contract and promissory estoppel claims against defendant Coutts & Co. AG ("Coutts"), and a
claim for tortious interference with contract against defendant Royal Bank of Scotland PLC
("RBS"). Defendants move to dismiss the complaint pursuant to Rule 12(b)(2) and (b)(6) for
lack of personal jurisdiction, under the doctrine of forum non conveniens, and for failure to state
a claim. For the reasons discussed below, I hold that the Court lacks personal jurisdiction over
both defendants. Defendants' motion is granted.

STATEMENT OF FACTS
Rosenblatt is an American citizen residing in New York. Compl.

~

4. Coutts is a

Swiss corporation with headquarters in Zurich. It has no offices, operations or employees in the
United States. Trippel Deel. ~ 2. RBS is a U .K. corporation with headquarters in Edinburgh,
Scotland. It has a minimal presence in the United States, but has no offices, operations or
employees in New York. Trippel Deel. ~~ 2, 5.
In 2003, Rosenblatt purchased a property in Saanen, Switzerland, which he sought
to turn into a center for a charitable foundation called the Gstaad Institute for the Humanities and

Humanitarian ("GIHH"). Compl. ~ir 10-12. In 2008 and 2010, Rosenblatt entered into two
mortgage loan agreements with Coutts that were secured by Rosenblatt's property in Saanen.
Compl. ~ii 17-21. Rosenblatt alleges that in 2012, Coutts made a clear promise to support GIHH
financially by increasing its loan to Rosenblatt, and that following this promise, Rosenblatt
entered into a new mortgage loan agreement with Coutts and began to invest money into the
property. Compl.

iii! 27-28, 33.

Both Rosenblatt and Coutts executed the 2012 loan agreement in Switzerland; on
the signature page, Coutts identified the place of the agreement as Zurich, Switzerland, and
Rosenblatt identified the place of the agreement as Saanen, Switzerland. Compl. Ex. A at 4.
Regarding choice of law and jurisdiction, the agreement provided as follows: "The Contract is
governed by Swiss law. Place of performance and place of legal proceedings against the Client
domiciled abroad, as well as the exclusive place of jurisdiction is Zurich. The Bank shall
however, be entitled to commence any legal proceedings against the Client in any competent
court at his domicile or in any other court of competent jurisdiction." Compl. Ex. D at 2. The
agreement listed Rosenblatt's address in New York, not Switzerland. Compl. Ex. A at 1.
Prior to entering the 2012 agreement, Rosenblatt had several discussions with
Coutts representatives regarding both GIHH and the terms of the agreement. For the majority of
those discussions, which occurred over both phone and email, Rosenblatt was located in New
York. Rosenblatt Deel.

if 7; Compl. iii! 25, 34. For example, on April 30, 2012, a Coutts

employee named David Woolley exchanged multiple emails with Rosenblatt while Rosenblatt
was in New York. Woolley also called Rosenblatt as his New York telephone number.
Rosenblatt Deel.~~ 10-11. Woolley and Rosenblatt engaged in additional email and phone
correspondence during the spring of 2012. Id.

if~

12-16. Coutts also emailed an unexecuted

copy of the agreement to Rosenblatt while he was in New York. Compl.

2

~

35.

Per the agreement, Coutts debited Rosenblatt's loan payments from a bank
account that Rosenblatt maintained in Switzerland. Compl. Ex. A at 3. Coutts sent
correspondence regarding the servicing of the loan to Rosenblatt's property in Switzerland.
Trippel Deel. ii 7; Compl. Exs. Band C. However, Rosenblatt alleges that Coutts also sent
copies of this correspondence to his address in New York, and also sent email correspondence
relating to the loan to Rosenblatt while he was residing in New York. Rosenblatt Deel. ~ii 17-20.
Rosenblatt also identifies two occasions on which Coutts transferred funds and stocks held by
Coutts on Rosenblatt's behalf to accounts maintained by Rosenblatt in New York. Rosenblatt
Deel.

ii~

21-22.
In November 2015, Coutts terminated the loan and demanded repayment. Compl.

ii 57.

The decision to terminate the agreement was made by Coutts' employees located in

Switzerland, and the termination letter was sent to Rosenblatt's address in Switzerland. Trippel
Deel.

~

8; Compl. Ex. E. Throughout this entire period, both before and after the execution of

the 2012 agreement, no employees or representatives from Coutts or RBS ever came to New
York in relation to Coutts' business with Rosenblatt.
Rosenblatt alleges that Coutts breached the 2012 agreement by terminating the
loan. Rosenblatt also asserts a claim for promissory estoppel against Coutts on the theory that
Coutts' representatives promised Rosenblatt that Coutts would support GIHH by providing a
bigger loan, and that Rosenblatt relied on that promise by investing money to improve the
property. Lastly, Rosenblatt asserts a claim for tortious interference with contract against RBS,
Coutts' indirect parent company, on the theory that RBS "induced" Coutts to terminate the loan
agreement with Rosenblatt specifically because Rosenblatt is an American citizen. Compl.
71-90.

3

fl~

DISCUSSION

I.

Legal Standard

"A plaintiff bears the burden of demonstrating personal jurisdiction over a person
or entity against whom it seeks to bring suit. In order to survive a motion to dismiss for lack of
personal jurisdiction, a plaintiff must make a prima facie showing that jurisdiction exists. Such a
showing entails making legally sufficient allegations of jurisdiction, including an averment of
facts that, if credited[,] would suffice to establish jurisdiction over the defendant." Penguin Grp.
(USA) Inc. v. Am. Buddha, 609 F.3d 30, 34-35 (2d Cir. 2010) (internal quotation marks and
citations omitted). The "pleadings and affidavits must be viewed in the light most favorable to
the plaintiff, with all doubts resolved in its favor." Alpha Capital Anstalt v. Oxysure Sys., Inc.,
2017 WL 2271518, at *2 (S.D.N.Y. May 8, 2017). However, courts "will not draw
argumentative inferences in the plaintiffs favor," and are not required "to accept as true a legal
conclusion couched as a factual allegation." Licci ex rel. Licci v. Lebanese Canadian Bank, SAL,
673 F.3d 50, 59 (2d Cir. 2012) (internal quotation marks omitted). "A plaintiff must establish
the court's jurisdiction with respect to each claim asserted." Sunward Elecs., Inc. v. McDonald,
362 F.3d 17, 24 (2d Cir. 2004).

II.

The Court Lacks Personal Jurisdiction Over Coutts

Rosenblatt concedes that Coutts is not subject to general jurisdiction in New
York, but contends that there is specific jurisdiction over Coutts pursuant to Section 302(a)(l) of
the CPLR, which provides that "a court may exercise personal jurisdiction over any nondomiciliary ... who ... transacts any business within the state or contracts anywhere to supply
goods or services in the state." CPLR § 302(a)(l). "For a court to exercise jurisdiction under
this provision, the claim must 'arise from' the transaction of business within the state." Agency
Rent A Car Sys., Inc. v. Grand Rent A Car Corp., 98 F.3d 25, 29 (2d Cir. 1996). "The New York
4

Court of Appeals has explained that 'the overriding criterion necessary to establish a transaction
of business is some act by which the defendant purposefully avails itself of the privilege of
conducting activities within New York,' thereby 'invoking the benefits and protections of its
laws.'" Licci, 673 F .3d at 61 (internal citations omitted). Additionally, in a "breach of contract
case, the pivotal inquiry is whether the defendant has performed purposeful acts in New York in
relation to the contract." Bonsey v. Kates, 2013 WL 4494678, at *4 (S.D.N.Y. Aug. 21, 2013)
(internal quotation marks omitted).
In assessing whether a defendant "transacts any business" in New York, courts
should consider the following factors:
(i) whether the defendant has an on-going contractual relationship
with a New Yark corporation; (ii) whether the contract was
negotiated or executed in New York and whether, after executing a
contract with a New York business, the defendant has visited New
Yark for the purpose of meeting with parties to the contract
regarding the relationship; (iii) what the choice-of-law clause is in
any such contract; and (iv) whether the contract requires franchisees
to send notices and payments into the forum state or subjects them
to supervision by the corporation in the forum state.
Sunward Elecs., 362 F.3d at 22 (citation omitted). "In determining personal jurisdiction under
Section 302(a)(l ),"courts "look to the totality of the defendants' contacts with the forum state."
Banker v. Esperanza Health Sys., Ltd, 201 F. App'x 13, 15 (2d Cir. 2006).
Rosenblatt has failed to meet his burden to make a prima facie case that
jurisdiction over Coutts exists. Both parties executed the agreement in Switzerland. The
agreement concerned property in Switzerland, and specified that Swiss law would apply in any
dispute between the parties. Coutts also originated and serviced the loan from Switzerland. The
only connection this case has to New York is the fact that Rosenblatt resides here, but Rosenblatt
alleges no facts showing that Coutts "purposefully availed itself of the privilege of conducting
activities within New York." Licci, 673 F.3d at 61.

5

Rosenblatt's jurisdictional allegations thus boil down to the following facts: (i)
Coutts spoke on the phone and emailed with Rosenblatt regarding the agreement while
Rosenblatt was in New York; (ii) Coutts entered into the agreement with the knowledge that
Rosenblatt was a resident of New York; and (iii) Coutts transferred funds and assets to
Rosenblatt's New York bank account. These allegations are insufficient to confer personal
jurisdiction over Coutts.
Most significantly, "[t ]elephone calls and correspondence sent into New York, by
a non-domiciliary defendant who is outside New York, generally are insufficient to establish
personal jurisdiction." Int 'l Customs Assocs., Inc. v. Ford Motor Co., 893 F. Supp. 1251, 1261
(S.D.N.Y. 1995) (collecting cases); see also Giuliano v. Barch, 2017 WL 1234042, at *9
(S.D.N.Y. Mar. 31, 2017) ("[C]ourts are generally loath to upholdjurisdiction under the
transaction in New York prong of CPLR 302(a)(l) ifthe contract at issue was negotiated solely
by mail, telephone, and fax without any New York presence by the defendant." (internal
quotation marks and citation omitted)); Maranga v. Vira, 386 F. Supp. 2d 299, 306 (S.D.N.Y.
2005) ("New York courts have consistently refused to sustain section 302(a)(l) jurisdiction
solely on the basis of defendant's communication from another locale with a party in New
York." (quoting Beacon Enterprises, Inc. v. Menzies, 715 F.2d 757, 766 (2d Cir. 1983))).
Rosenblatt concedes that no Coutts representative ever visited New York in connection with the
transaction at issue.
It is true that under certain circumstances, "proof of one transaction in New York

is sufficient to invoke jurisdiction, even though the defendant never enters New York[.]" Chloe
v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 170 (2d Cir. 2010) (citation omitted).
However, this is only "so long as the defendant's activities here were purposeful and there is a

6

substantial relationship between the transaction and the claim asserted." Id. Thus,
"communications into New York will only be sufficient to establish personal jurisdiction if they
were related to some transaction that had its 'center of gravity' inside New York, into which a
defendant 'projected himself."' Maranga v. Vira, 386 F. Supp. 2d 299, 306 (S.D.N.Y. 2005)
(citations omitted). Here, however, Coutts' connection to New York is entirely incidental, not
purposeful, and the transaction's "center of gravity" was Switzerland, not New York.
Nor is Coutts' awareness that Rosenblatt was a New York resident relevant to the
question of personal jurisdiction. Rosenblatt argues that by including Rosenblatt' s New York
address in the agreement, Coutts 'projected' itself into New York for the purpose of transacting
business with a New York resident. But a defendant's "mere knowledge that a plaintiff resides
in a specific jurisdiction would be insufficient to subject a defendant to specific jurisdiction in
that jurisdiction ifthe defendant does nothing in connection with the [claim] in thatjurisdiction."

Waldman v. Palestine Liberation Org., 835 F.3d 317, 338 (2d Cir. 2016). To the extent there is
any connection between Coutts and New York, that connection was solely a function of
Rosenblatt's decision to reside there. But a plaintiff "cannot be the only link between the
defendant and the forum," for "it is the defendant's conduct that must form the necessary
connection with the forum State that is the basis for its jurisdiction over him." Walden v. Fiore,
134 S. Ct. 1115, 1122 (2014).
Lastly, the fact that Coutts transferred money into Rosenblatt's New York bank
account does not move the transactions' 'center of gravity' from Switzerland to New York.
Although these transfers involved funds and assets that Rosenblatt obtained through his loan
from Coutts, the transfers themselves had no connection to the agreement and are irrelevant to
Rosenblatt's current claim. But even if these transfers occurred pursuant to the agreement at

7

issue, the "sending of monies into New York [is] not sufficient to establish personal jurisdiction
without the defendant having 'projected' itself into New York for the purposes of conducting
business there." Hau Yin To v. HSBC Holdings PLC, 2017 WL 816136, at *5 (S.D.N.Y. Mar. 1,
2017); see also Roper Starch Worldwide, Inc. v. Reymer & Assocs., Inc., 2 F. Supp. 2d 470, 475
(S.D.N.Y. 1998) ("[M]erely sending payment to New York is not sufficient to establish personal
jurisdiction over a defendant under§ 302(a)(l ).").

III.

The Court Lacks Personal Jurisdiction Over RBS

Rosenblatt concedes that RBS is not subject to general jurisdiction in New York,
but contends that there is specific jurisdiction over RBS pursuant to Section 302(a)(3) of the
CPLR, which provides that "a court may exercise personal jurisdiction over any non-domiciliary
... who ... commits a tortious act without the state ... if he (i) regularly does or solicits business,
or engages in any other persistent course of conduct, or derives substantial revenue from goods
used or consumed or services rendered 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." CPLR § 302(a)(3).
To establish jurisdiction over a defendant under Section 302(a)(3), in addition to
showing that either clause (i) or (ii) has been satisfied, a plaintiff must also show that an injury
occurred within the state. NewMarkets Partners LLC v. Oppenheim, 638 F. Supp. 2d 394, 403
(S.D.N.Y. 2009) (citing Ingraham v. Carroll, 90 N.Y.2d 592, 596 (N.Y. 1997)). Rosenblatt
argues that he has been injured in New York because in order to repay the loan following Coutts'
termination, he would have to use New Y erk-based funds because "it can be inferred that he
cannot possibly satisfy such a demand from funds that he has in Switzerland." Putting aside the
fact that Rosenblatt has alleged no facts that would allow the Court to infer that Rosenblatt lacks
sufficient funds in Switzerland, this argument fails because the "occurrence of financial
8

consequences in New York due to the fortuitous location of plaintiffs in New York is not a
sufficient basis for jurisdiction under§ 302(a)(3) where the underlying events took place outside
New York." NewMarkets Partners LLC, 638 F. Supp. 2d at 403 (quoting Whitaker v. Am.

Telecasting, Inc., 261F.3d196, 209 (2d Cir. 2001)); see also Energy Brands Inc. v. Spiritual
Brands, Inc., 571 F. Supp. 2d 458, 467 (S.D.N.Y. 2008) ("It is firmly established that the
domicile or residence of an injured party within New York is not enough to establish personal
jurisdiction-rather, a more direct injury must have occurred within New York State."). Here,
the injury occurred in Switzerland because the agreement was executed in Switzerland,
concerned property and funds in Switzerland, and was subject to Swiss law. Rosenblatt does not
allege that RBS had any interactions with Rosenblatt in New York, or that RBS's alleged
interference with his agreement with Coutts had any connection to New York. Because
Rosenblatt's injury occurred in Switzerland, not New York, Section 302(a)(3) cannot serve as a
basis for jurisdiction over RBS.

CONCLUSION
For these reasons, Defendants' motion to dismiss the complaint for lack of
personal jurisdiction is granted. Because the Court lacks personal jurisdiction over both
defendants, I need not address whether the doctrine offorum non conveniens applies or whether
dismissal is also warranted under Rule 12(b(6) for failure to state a claim. The Clerk shall
terminate the motion (Dkt. No. 13) and mark the case closed.

£fk k YJ@-n~ -

SO ORDERED.
Dated:

August tj_, 2017
New York, New York

: HELLERSTEIN
United States District Judge

9