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ROSEN v. SOLOMON

April 18, 1974

Ruben P. ROSEN
v.
Irwin SOLOMON and John A. Coe, Jr.


Troutman, District Judge.


The opinion of the court was delivered by: TROUTMAN

TROUTMAN, District Judge.

Plaintiff and defendants, Solomon and Coe, entered into a stock option agreement. Upon notice by the plaintiff that he intended to exercise the option, defendants allegedly defaulted. Thereafter, plaintiff commenced this action and defendant Coe has moved to dismiss the complaint for lack of jurisdiction over the person pursuant to F.R. Civ. P. 12(b) (2) and for insufficiency of service of process pursuant to F.R. Civ. P. 12(b) (5). The relevant facts as they pertain to this motion are as follows:

 On August 31, 1971, defendants' attorney met with plaintiff's attorney in Philadelphia in order to negotiate the agreement in issue. As a result of the negotiations, the agreement was prepared in Philadelphia and forwarded to defendants' attorney in New York for execution by the defendants. Upon the return of the agreement, it was signed by plaintiff in Philadelphia. The agreement provided in paragraph 9:

 
"This agreement, made and to be performed in the Commonwealth of Pennsylvania, comprises the entire agreement among the parties with respect to the subject matter hereof. This agreement shall be construed in accordance with the laws of the Commonwealth of Pennsylvania . . .".

 Plaintiff subsequently exercised the "put" option, scheduling the closing in Philadelphia. The exercise of the option was continued by agreement, but on January 16, 1973, plaintiff finally exercised the option.

 In defendant Coe's affidavit, he indicates that he has been a California resident since 1969 and from that date to the present, he has not been in Pennsylvania nor has he transacted any business in Pennsylvania. He further avers that he was not present in Pennsylvania for the negotiation of the agreement or any transaction in connection therewith and that he executed the agreement in California. In addition, he avers that he is not engaged in business in Pennsylvania and has authorized no agent to represent him in Pennsylvania. Finally, the affidavit states that since 1969, he did no acts in Pennsylvania for the purpose of realizing pecuniary benefit; that he has shipped no merchandise directly or indirectly into Pennsylvania; and that he owns no real estate in Pennsylvania.

 In his complaint, plaintiff alleges that personal jurisdiction over the defendants is founded upon the recently enacted Pennsylvania long arm statute, 42 P.S. § 8301 et seq. Defendants were served pursuant to 42 U.S.C. §§ 8307, 8308.

 A. The Pennsylvania Act

 The relevant portions of the Pennsylvania Act with which we are concerned are 42 P.S. §§ 8303-8305. Section 8303 is clearly inapplicable, since no tortious act is alleged and we are concerned with an action alleging breach of contract. Plaintiff contends that Section 8304 is applicable and its provisions have been satisfied in that Coe through his agent did business in Pennsylvania. Section 8304 provides in pertinent part:

 
"§ 8304. Doing business by individuals
 
"Any nonresident of this Commonwealth who, acting individually under or through a fictitious business name, or through an agent, servant or employee, shall have done any business in this Commonwealth on or after August 30, 1970 . . . shall be conclusively presumed to have designated the Department of State as his agent for the receipt of service of process in any civil action or proceeding instituted in the courts of this Commonwealth against such individual . . .".

 Thus, the threshold question is whether defendant through his attorney agent was "doing business" in Pennsylvania within the meaning of Section 8309. Section 8309 provides:

 
"§ 8309. Acts affecting jurisdiction
 
"(a) General rule. Any of the following shall constitute 'doing business' for the ...

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