Subject Matter Jurisdiction
Section 1332(a) of Title 28 of the United States Code empowers a federal district court to hear a lawsuit between a citizen of a state and a citizen or subject of a foreign nation if the amount in controversy, excluding interest and costs, exceeds $ 10,000. The defendant admits that he is a citizen of Switzerland and that the plaintiff resides in Pennsylvania. He asserts, however, that the amount in controversy does not exceed $ 10,000.
A district court may not dismiss a complaint for failure to satisfy the jurisdictional amount requirement unless it appears to a legal certainty that the value of the claim is $ 10,000 or less. See St. Paul Mercury Indemnity Co. v. Red Cab Company, 303 U.S. 283, 288-89, 58 S. Ct. 586, 82 L. Ed. 845 (1938); Nelson v. Keefer, 451 F.2d 289, 292-93 (3d Cir. 1971). The plaintiff attached to her complaint a detailed list of the items that allegedly are covered by the Agreement. After carefully reviewing the list, we cannot say that the plaintiff acted in bad faith by assessing the value of the property at more than $ 10,000 or that the property definitely is not worth more than $ 10,000. We believe that a hearing on the question of jurisdictional amount, at which both parties undoubtedly would parade their respective appraisers before the Court, would serve no benefit. Therefore, we hold that the plaintiff has satisfied the jurisdictional amount requirement of section 1332(a).
Jurisdiction Over the Person
For the purpose of addressing the defendant's motion to dismiss for lack of jurisdiction over the person, we will take the allegations set forth in the plaintiff's complaint as true and we will accept certain indisputable facts. See Marketing Showcase, Inc. v. Alberto-Culver Co., 445 F. Supp. 755, 760 (S.D.N.Y.1978). The plaintiff must rely on the Pennsylvania long-arm statute, 42 Pa.Cons.Stat.Ann. § 5322 (Purdon's 1979 Pamphlet), to obtain personal jurisdiction over the defendant. In addition to specifying a limited number of particular bases of personal jurisdiction, section 5322(b) permits a Pennsylvania court to exercise personal jurisdiction over a person "to the fullest extent allowed under the Constitution of the United States."
At the core of this case lies a possible breach of contract. We will not recognize the attempt by the plaintiff to bring this case within the Pennsylvania long-arm statute by recasting a failure to comply with the contract as a conversion. Moreover, any conversion would have occurred in Switzerland, not in Pennsylvania, because the plaintiff maintains that the goods remain with the defendant in Switzerland. We also decline to accept the characterization of a simple acknowledgment of existing obligations under the Agreement as a fraudulent misrepresentation. The defendant admits that he entered into a contract. He either fulfilled that contract or he breached it. On the facts alleged in the complaint, the plaintiff can prosecute only an action for a breach of contract.
Support for our rejection of Counts Two and Three of the complaint as bases for personal jurisdiction comes from Judge Weinstein's opinion in Stanat Manufacturing Co. v. Imperial Metal Finishing Co., 325 F. Supp. 794 (E.D.N.Y.1971). The plaintiff in Stanat Manufacturing, a New York corporation, filed suit in the Eastern District of New York against a California corporation. The defendant had ordered a machine from plaintiff to be used in California. All negotiations occurred in California and the defendant accepted the plaintiff's offer in California. The defendant was not licensed to conduct business in New York, and it did not do any business in New York.
After the parties had signed the contract, but before shipment of the equipment, the defendant telephoned the plaintiff in New York and "obtained a modification of the terms of payment in the contract. Instead of payment of sixty percent of the purchase price prior to shipment of the machinery, twenty percent was to be paid prior to shipment and forty percent was to be paid immediately upon delivery." 325 F. Supp. at 795. Subsequently, the plaintiff delivered the machine but the defendant failed to pay the forty percent. The plaintiff filed suit to obtain the money. The defendant moved to dismiss for lack of jurisdiction over the person.
Under the New York long-arm statute, the plaintiff could only obtain personal jurisdiction over the defendant if the court could find that the defendant had committed a tortious act within New York. In its complaint, the plaintiff alleged "that at the time of the renegotiation of the payment terms defendant never intended to pay the forty percent upon delivery and, in effect, committed a fraud by inducing shipment on the basis of a promise never intended to be kept." Id. Judge Weinstein granted the defendant's motion to dismiss, stating:
If a plaintiff could, merely by alleging that a contracting party never intended to fulfill his promise, create a tortious action in fraud, there would be no effective way of preventing almost every contract case from being converted to a tort for jurisdictional purposes. . . .
The plaintiff's lawyer almost always alleges fraud in good faith; for, by the time of the falling out between contracting parties, a prospective plaintiff will usually have some grounds for believing that his opponent never intended to deal with him faithfully. Protestations of the defendant will be met by the argument that they are self-serving. Because it would make little sense to try this threshold issue separately, the allegation of fraud would have to be assumed to be true in every case.