Alessi Equipment, Inc. v. American Piledriving Equipment, Inc.

Filing 57

OPINION AND ORDER re: 46 THIRD PARTY MOTION to Dismiss for Lack of Jurisdiction filed by John L. White, 47 THIRD PARTY MOTION to Dismiss for Lack of Jurisdiction Memorandum of Law filed by John L. White. The motion to dismiss the third-party complaint is GRANTED. The Clerk is directed to terminate the motion (Docs. ##46, 47) and terminate third-party defendant John L. White. John L. White terminated. (Signed by Judge Vincent L. Briccetti on 9/13/2019) (mml)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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ALESSI EQUIPMENT, INC.,
:
Plaintiff,
:
v.
:
:
AMERICAN PILEDRIVING EQUIPMENT,
:
INC.,
:
Defendant.
:
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AMERICAN PILEDRIVING EQUIPMENT,
:
INC.,
:
:
Third-Party Plaintiff,
v.
:
:
:
JOHN L. WHITE,
Third-Party Defendant.
:
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OPINION AND ORDER
18 CV 3976 (VB)

Briccetti, J.:
Plaintiff Alessi Equipment, Inc. (“Alessi”), brings this action against defendant American
Piledriving Equipment, Inc. (“APE”), asserting state law claims stemming from alleged
agreements between the parties in 1996, 2004, and 2012. By Opinion and Order dated February
20, 2019, the Court allowed Alessi’s claim for breach of contract, and in the alternative, unjust
enrichment, to proceed to discovery. (Doc. #31).
On April 16, 2019, APE filed its answer, counterclaims against plaintiff, and a third-party
complaint against third-party defendant John L. White, APE’s former president, who allegedly
negotiated and signed two of the agreements at issue.
Before the Court is White’s motion to dismiss APE’s third-party complaint for lack of
subject matter jurisdiction, lack of personal jurisdiction, and failure to state a claim, pursuant to
Rules 12(b)(1), 12(b)(2), and 12(b)(6). (Docs. ##46, 47).
For the reasons set forth below, the motion is GRANTED.

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BACKGROUND
For the purpose of ruling on the motion to dismiss, the Court accepts as true all wellpleaded factual allegations in the third-party complaint and draws all reasonable inferences in
APE’s favor, as summarized below.
APE and White are both citizens of Washington State.
In 1992, APE was founded to develop, manufacture, sell, and lease heavy construction
equipment. White was named its president.
In 2012, White allegedly “notified APE of his intention to resign from his position with
APE, sell his shares in the company, and cease his employment with APE.” (Doc. #36 (“Third
Party Compl.”) ¶ 16). In May 2012, during the final days of his tenure, White allegedly bound
APE to an agreement with Alessi against the express instructions of Dan Collins, the incoming
president. He resigned effective June 15, 2012.
Despite these instructions, APE alleges White, on APE’s behalf, entered into an exclusive
distribution agreement with Alessi, which precluded APE from directly selling or leasing some
products in a certain territory. According to APE, White failed to seek approval or disclose the
existence of this agreement. In doing so, APE alleges White breached his fiduciary duties to
APE and benefitted personally.
DISCUSSION
I.

Standard of Review
On a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2), “plaintiff

bears the burden of showing that the court has jurisdiction over the defendant.” In re Magnetic
Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir. 2003). Prior to discovery, a plaintiff may
defeat a motion to dismiss “by pleading in good faith legally sufficient allegations of

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jurisdiction.” Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990)
(internal citation omitted).
The Court must resolve the question of personal jurisdiction with reference to New York
law, the forum in which the district court sits. Eades v. Kennedy, PC Law Offices, 799 F.3d 161,
168 (2d Cir. 2015). CPLR Section 302(a), New York’s long-arm statute, provides, in pertinent
part, that “[a] court may exercise personal jurisdiction over any non-domiciliary . . . 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). To determine the existence of
jurisdiction under Section 302(a)(1), “a court must decide (1) whether the defendant “transacts
any business” in New York and, if so, (2) whether the cause of action “aris[es] from” such a
business transaction.” Best Van Lines, Inc. v. Walker, 490 F.3d 239, 246 (2d Cir. 2007) (quoting
Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., 7 N.Y.3d 65, 71 (2006)). “As for the second
part of the test, a suit will be deemed to have arisen out of a party’s activities in New York if
there is an articulable nexus, or a substantial relationship, between the claim asserted and the
actions that occurred in New York.” Id. (quoting Henderson v. INS, 157 F.3d 106, 123 (2d Cir.
1998)). “A connection that is ‘merely coincidental’ is insufficient to support jurisdiction.” Sole
Resort, S.A. de C.V. v. Allure Resorts Mgmt., LLC, 450 F.3d 100, 103 (2d Cir. 2006) (citing
Johnson v. Ward, 4 N.Y.3d 516, 520 (2005)). If the state’s long-arm statute permits personal
jurisdiction, the Court analyzes whether personal jurisdiction comports with constitutional due
process. Eades v. Kennedy, PC Law Offices, 799 F.3d at 168.

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II.

Personal Jurisdiction over White
White argues APE’s complaint against him should be dismissed for lack of personal

jurisdiction. 1
The Court agrees.
Simply put, APE’s claim against White does not arise out of activities in New York. As
alleged, APE’s claim against White arises from conduct in and contacts with Washington State,
not New York. APE, a Washington corporation, brings this indemnification and contribution
claim against White, its former president and Washington resident, for wrongfully entering into a
contract in Washington, which was allegedly prohibited after a discussion in Washington, and
purportedly concealed from colleagues in Washington, exposing APE to injury in Washington.
In short, APE’s claim against White “arises not from a breach of the [contract with New
York contacts] but from a breach of [his fiduciary duties to APE], which, it is conceded, had no
connection with New York.” See Sole Resort, S.A. de C.V. v. Allure Resorts Mgmt., LLC, 450
F.3d at 105 (first alternation in original). White could have breached these duties through
unauthorized negotiations with a company from any state—that White allegedly did so with a
New York-based company is “merely coincidental.” See id. at 103; Johnson v. Ward, 4 N.Y.3d
at 520.
APE’s argument that the Court may exercise jurisdiction because of White’s contacts
with Alessi is unpersuasive.

The Court does not reach White’s argument that the Court lacks subject matter
jurisdiction to hear APE’s claims or that APE fails to state a claim, because a federal court has
leeway to choose among threshold grounds for denying audience to a case on the merits.
Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 588 (1999) (finding a court may determine
personal jurisdiction before turning to subject matter jurisdiction).
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Although the allegations may provide jurisdiction over White for a claim asserted by
Alessi, a finding of jurisdiction in those circumstances has no bearing on APE’s claim against
White. Indeed, “the mere fact that other plaintiffs could bring suit . . . does not allow the State to
assert specific jurisdiction over the nonresidents’ claims. As we have explained, ‘a defendant’s
relationship with a . . . third party, standing alone, is an insufficient basis for jurisdiction.’”
Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773, 1781 (2017) (quoting
Walden v. Fiore, 571 U.S. 277, 286 (2014)).
Furthermore, New York courts have found that events that “trigger[ed]” a party’s
indemnification claim do not provide personal jurisdiction over an out-of-state defendant. Media
Corp. of Am. v. Motif Mfg. Co., 524 F. Supp. 86, 87 (S.D.N.Y. 1981). For instance, in Media
Corp. of America v. Motif Manufacturing Co., the court dismissed plaintiff’s indemnification
claim against an out-of-state defendant for lack of personal jurisdiction, because the out-of-state
agreement between them did not arise from the parties’ contacts with New York. 524 F. Supp. at
87. The court found that although “the underlying events that trigger[ed] the indemnification
occur[red] in New York,” those events did not provide sufficient contacts with New York for the
purposes of personal jurisdiction. Id.; see also Yukos Capital S.A.R.L. v. Feldman, 2016 WL
1118754, at *1 (S.D.N.Y. Feb. 25, 2016) (dismissing for lack of personal jurisdiction, and noting
Media Corp.’s “ruling was sound then, and it is sound now”).
For these reasons, the Court finds it lacks personal jurisdiction over White in order to
adjudicate APE’s third-party indemnification and contribution claim against him. 2

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Of course, this ruling does not prevent APE from bringing its claims against White in
Washington State.
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CONCLUSION
The motion to dismiss the third-party complaint is GRANTED.
The Clerk is directed to terminate the motion (Docs. ##46, 47) and terminate third-party
defendant John L. White.
Dated: September 13, 2019
White Plains, NY
SO ORDERED:

____________________________
Vincent L. Briccetti
United States District Judge

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