NEWMAN'S OWN ORGANICS - THE SECOND GENERATION v. FINGERMAN et al

Filing 14

MEMORANDUM OPINION. SIGNED BY HONORABLE JEFFREY L. SCHMEHL ON 12/11/2014. 12/12/2014 ENTERED AND COPIES E-MAILED.(lbs, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
NEWMAN’S OWN ORGANICS – THE
SECOND GENERATION,
Plaintiff,
CIVIL ACTION
NO. 14-3205

v.
DONALD FINGERMAN,
Defendant and Third Party Plaintiff,
v.
GERALD LITWIN,
Third Party Defendant
MEMORANDUM OPINION
Schmehl, J.

December 11, 2014

Before the Court is the Motion to Dismiss Pursuant to Fed.R.Civ. P. 12(b)(2) and
12(b)(6), or in the Alternative, for a More Definite Statement Pursuant to Fed.R.Civ.P.
12(e) filed by Third Party Defendant Gerald Litwin (“Litwin”) (Docket No. 6). Donald
Fingerman, Defendant and Third Party Plaintiff (“Fingerman”), has opposed the motion,
and Litwin has filed a reply. Having read the parties’ briefing, I will grant Litwin’s
Motion to Dismiss due to lack of personal jurisdiction. Accordingly, Litwin is dismissed
from this action.
I.

BACKGROUND
On February 20, 2014, Plaintiff filed the Complaint in this matter against

Defendant Donald Fingerman in the Court of Common Pleas of Lehigh County,

alleging breach of contract with respect to several promissory notes and a personal
guarantee. (Docket No. 1). On April 30, 2014, a complaint to join Litwin as an additional
defendant was filed by Fingerman in the Court of Common Pleas, alleging that Litwin
was liable to Fingerman or liable over to Plaintiff for the promissory notes, which Litwin
had advised Fingerman to sign. (Id.) On June 5, 2014, Litwin removed this matter to
federal court, then filed this Motion to Dismiss on July 7, 2014.
Plaintiff is a California corporation engaged in the business of selling and
distributing organic human and pet food. (Compl., ¶ 1.) Fingerman and Litwin were two
of the officers, shareholders and directors of Chenango Valley Pet Foods, Inc., a New
York corporation that packages and distributes pet food. (Compl. to Join Add’l Def., ¶¶ 3,
5.) The Complaint alleges that on September 19, 2011, Fingerman, on behalf of
Chenango Valley, executed and delivered three Promissory Notes to Plaintiff that totaled
a principal amount of $1,522,000. (Compl., ¶ 5.) Fingerman also executed a Personal
Guaranty for the current and future obligations of Chenango Valley to Plaintiff. (Compl.,
¶ 6.) In return, Plaintiff advanced $803,098.00 to Chenango Valley. (Compl., ¶ 7.)
Litwin, an attorney, reviewed the promissory notes and guarantee for Fingerman and
advised Fingerman to sign the documents. (Compl. to Join Add’l Def., ¶¶ 8-9.)
Plaintiff claims that Fingerman has defaulted on the Notes and Guarantee by
failing to make payments to Plaintiff, resulting in an amount due and owing to Plaintiff
from Fingerman of $2,325,098.00. (Compl., ¶ 10-11.)
II.

DISCUSSION
Litwin filed the instant Motion to Dismiss, alleging that, as a New Jersey resident,

2

he does not have sufficient minimum contacts with Pennsylvania to allow him to be sued
in this Court. For the reasons set forth below, I agree that Litwin lacks sufficient
minimum contacts with Pennsylvania that he could anticipate being sued in this venue.
Accordingly, I grant Litwin’s Motion and dismiss him from this matter.
A. Jurisdiction
Rule 4(e) of the Federal Rules of Civil Procedure grants district courts personal
jurisdiction over non-resident defendants to the extent permitted by the law of the state in
which the district court sits. See Fed. R. Civ. P. 4(e). In Pennsylvania, the applicable
long-arm statute authorizes personal jurisdiction over non-resident defendants to be
exercised to the “fullest extent allowed under the Constitution of the United States.” 42
Pa. C.S.A. § 5322(b). A district court has personal jurisdiction over a non-resident so
long as the defendant has “certain minimum contacts with [the forum] such that the
maintenance of the suit does not offend traditional notions of fair play and substantial
justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Although a third-party
defendant has the initial burden of raising the defense of lack of personal jurisdiction,
once such a defense is raised, the burden shifts to the third-party plaintiff to demonstrate
facts that suffice to support an exercise of personal jurisdiction. Brown & Brown, Inc. v.
Cola, 745 F. Supp. 2d 588, 602 (E.D. Pa. 2010), citing Provident Nat. Bank v. Cal. Fed.
Sav. & Loan Ass'n., 819 F.2d 434, 437 (3d Cir.1987); Cumberland Truck Equip. Co. v.
Detroit Diesel Corp., 401 F.Supp.2d 415, 418 (E.D.Pa.2005). A third-party plaintiff may
meet this burden through affidavits or other competent evidence that show sufficient
contacts with the forum state to establish personal jurisdiction. De Lage Landen Fin.
Servs., Inc. v. Rasa Floors, LP, No. 08–0533, 2008 WL 4822033 (E.D.Pa. Nov. 4, 2008).

3

There are two types of personal jurisdiction: general and specific. Helicopteros
Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 414 (1984). General jurisdiction
requires the defendant to have maintained “continuous and systematic” contacts with the
forum state. Reliance Steel Products Co. v. Watson, Ess, Marshall & Enggas, 675 F.2d
587, 588 (3d Cir. 1982). In order for a district court to have specific jurisdiction over a
defendant, the defendant’s contacts with the forum state must be such that defendant
“should reasonably anticipate being haled into court there.” World-Wide Volkswagen
Corp. v. Woodson, 444 U.S. 286, 297 (1980). In order for a district court to properly
exercise specific jurisdiction, the plaintiff must satisfy a two-part test. First, the plaintiff
must show that the defendant has constitutionally sufficient “minimum contacts” with the
forum. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985). Second, the
court must determine whether the exercise of jurisdiction “would comport with
‘traditional notions of fair play and substantial justice.’ ” See Vetrotex Certainteed Corp.
v. Consolidated Fiber Glass Products Co., 75 F.3d 147, 150–51 (3d Cir. 1996) (citing
International Shoe Co. v. Washington, 326 U.S. 310 (1945)). To satisfy the first prong of
the test and show sufficient minimum contacts with the forum state, Plaintiff must show
that Defendants have “purposefully directed [their] activities” at the forum. See Burger
King, 471 U.S. at 472.
1. Fingerman’s Failure to Provide Competent Evidence
As discussed above, once Litwin raised the defense of lack of personal
jurisdiction, the burden then shifted to Fingerman to demonstrate facts to support an
exercise of personal jurisdiction over Litwin. See Brown & Brown, Inc. v. Cola, 745 F.
Supp. 2d at 602. Fingerman may meet this burden through affidavits or other competent

4

evidence that show sufficient contacts with the forum state to establish personal
jurisdiction.
In the instant matter, Fingerman has failed to present the court with an affidavit
or other competent evidence that sets forth details as to Litwin’s contacts with
Pennsylvania. The only evidence presented in this matter is an affidavit from Litwin, not
Fingerman. Fingerman has provided this court with absolutely no evidence to prove that
Litwin had sufficient contacts with Pennsylvania so as to establish personal jurisdiction
over Litwin. Fingerman’s brief in opposition to Litwin’s Motion to Dismiss contains
statements and assertions by Fingerman’s counsel as to Litwin’s contacts with this forum,
but these representations are insufficient to meet Fingerman’s burden to establish that
Litwin had sufficient contacts with Pennsylvania that make it appropriate for him to be
sued in this venue. Accordingly, I find Fingerman has failed to meet his burden in this
matter and will grant Litwin’s motion to dismiss. Therefore, Litwin is dismissed from this
action.
2. Jurisdictional Analysis
Even if the representations contained in Fingerman’s opposition to Litwin’s
motion to dismiss were proper, I find that Fingerman still cannot meet his burden of
proving that Pennsylvania has personal jurisdiction over Litwin.
a. General Jurisdiction
As stated above, general jurisdiction requires the defendant to have
maintained “continuous and systematic” contacts with the forum state. Reliance Steel
Products Co. v. Watson, Ess, Marshall & Enggas, 675 F.2d 587, 588 (3d Cir. 1982).
Proof of such contact requires a showing of “extensive and pervasive” activity in the

5

forum state. Id. The defendant's contacts need not be related to the cause of action being
litigated. McMullen v. European Adoption Consultants, Inc., 109 F.Supp.2d 417, 418
(W.D.Pa.2000).
When claiming personal jurisdiction over Litwin, Fingerman argues that “Litwin
has a long history of interaction with this forum and Fingerman in particular…Litwin and
Fingerman were in business together, and routinely did business together over a period of
decades, including at or near Fingerman’s home in this district.” (Fingerman’s Memo in
Opposition to Mtn to Dismiss, p. 5.) Fingerman further alleges that Litwin has
“purposefully directed” his activities at a resident of Pennsylvania “with respect to the
contracts specifically at issue in this litigation.” (Id.) Lastly, Fingerman claims that
Fingerman was located in Pennsylvania when Litwin directed him to sign the contracts at
issue, and that the contracts are located in Pennsylvania and Litwin’s wrongful conduct of
instructing Fingerman to sign them was directed at Litwin in Pennsylvania. (Id. at 5-6.)
In response, Litwin submitted an affidavit that alleges as follows: Litwin is an
attorney in New Jersey and New York and resides in New Jersey. (Litwin Aff., ¶¶ 1-2.)
Litwin owns no real or personal property in Pennsylvania.(Id. ¶ 2.) Litwin is a personal
friend of Fingerman and over the past 20 years, he believes that he has visited
Fingerman’s residence in Pennsylvania once or twice and visited Fingerman’s office 15
to 20 times on an irregular basis. (Id. ¶ 4.) Litwin and Fingerman, along with others not
included in this action, own stock in Chenango Valley Pet Foods, Inc., a New York
corporation whose plant and principal office is located in Sherburne, New York. (Id. ¶¶ 3,
5.) Occasionally, Fingerman and Litwin would meet in Scranton, Pennsylvania, leave a

6

car there, and travel together to Sherburne, New York. (Id. ¶ 5.) When Litwin and
Fingerman discussed business matter, it was primarily by telephone. (Id.)
Clearly, Litwin’s two visits to Fingerman’s Pennsylvania home, twenty visits to
Fingerman’s Pennsylvania office and occasional car pools from Scranton, Pennsylvania
over the last twenty years do not equate to “continuous and substantial” contacts with
Pennsylvania so as to satisfy the standard for general jurisdiction over Litwin. If
jurisdiction exists in this district over Litwin, it would be specific and not general
jurisdiction.
b. Specific Jurisdiction
As discussed above, specific jurisdiction exists only when the third party plaintiff
can show that the third party defendant has constitutionally sufficient “minimum
contacts” with the forum, see Burger King Corp., 471 U.S. at 474, and the exercise of
jurisdiction “would comport with ‘traditional notions of fair play and substantial
justice.’” See Vetrotex Certainteed Corp., 75 F.3d at 150–51.
Fingerman cannot establish that Litwin has sufficient contacts with Pennsylvania
to exercise personal jurisdiction over him. The third party complaint brought by
Fingerman against Litwin states that Litwin advised Fingerman to sign the promissory
notes and personal guarantee and that Fingerman did so upon Litwin’s advice as his
counsel. (Third-Party Compl., ¶¶ 9-10.) The Third Party Complaint does not plead that
Litwin placed telephone calls to Fingerman in Pennsylvania, that Litwin provided legal
advice to Fingerman in Pennsylvania, or that Litwin provided legal advice to Fingerman
via telephone while Fingerman was in Pennsylvania. Further, Litwin provided an
affidavit that clearly states his contact with Fingerman in Pennsylvania was irregular and

7

infrequent. Accordingly, in light of Litwin’s lack of contacts with the forum state,
Fingerman has failed to satisfy his burden of setting forth a prima facie case that Litwin
intentionally directed his activities at Pennsylvania. As I have found that Litwin did not
have minimum contacts with Pennsylvania, it is unnecessary for me to conduct any
further analysis to determine whether this court has specific jurisdiction over Litwin. For
the reasons discussed above, I find that this court lacks specific jurisdiction over Litwin
and he is dismissed from this matter.
III.

CONCLUSION
For the foregoing reasons, Third Party Defendant’s Motion to Dismiss is granted,

and Third Party Defendant, Gerald H. Litwin, is dismissed from this matter.

8