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DION v. ARI KIEV

July 5, 1983

KENNETH B. DION
v.
ARI KIEV, M.D. and LEO GOLDNER



The opinion of the court was delivered by: BECHTLE

 BECHTLE, J.

 This is a defamation action brought by plaintiff Kenneth B. Dion against defendants Ari Kiev and Leo Goldner. On Sunday, October 31, 1982, an article entitled "Out of Shape, Club Nautilus Faces Financial Collapse" appeared in The Philadelphia Inquirer. The article alleged that plaintiff mismanaged the various clubs known as "Club Nautilus." Presently before the Court is the motion of defendant Goldner to dismiss for failure to state a cause of action and for lack of personal jurisdiction. For the reasons which follow, defendant's motion will be denied.

 I. FACTS

 Plaintiff organized a group of fitness clubs trading under the name "Club Nautilus." Defendants Goldner and Kiev were investors in a Maryland corporation known as "Club Nautilus Sports Training and Medical Fitness Centers of White Marsh, Inc.," located in a shopping mall in White Marsh, Maryland ("White Marsh Club"). Goldner owned 16.67% of the stock and Kiev owned 6.67% of the stock. On March 12, 1981, the White Marsh Club entered into a management contract with Total Management Corporation ("Total"). Total was a Delaware corporation but maintained its principal offices in Pennsylvania. Under the contract, plaintiff was assigned management responsibilities for the White Marsh Club. Ultimately, the club failed and closed its doors.

 On Sunday, October 31, 1982, the article entitled "Out of Shape, Club Nautilus Faces Financial Collapse" appeared in The Philadelphia Inquirer. The article contained the following excerpt:

 
Leo Goldner, a Manhattan stock broker who invested in one of the clubs, said the clubs would not have done well regardless of how much money was invested. "They were totally mismanaged," he said.

 On January 26, 1983, this suit for defamation was filed.

 II. DISCUSSION

 A. Motion to Dismiss for Failure to State a Cause of Action

 Defendant Goldner contends that the language attributable to him is not defamatory as a matter of law and that, if defamatory, the defamation extends against the corporation or corporations which operate the clubs, and not plaintiff. In Pennsylvania to state a cause of action for defamation, the plaintiff must allege the following: (1) the defamatory character of the communication; (2) the communication refers to the plaintiff; (3) the third party's understanding of the communication as defamatory in character and its reference to the plaintiff; and, (4) injury to plaintiff. Corabi v. Curtis Publishing Co., 441 Pa. 432, 273 A.2d 899 (1971). In the present case, the article on its face speaks to mismanagement by plaintiff himself which may be defamatory. Defendant Goldner is quoted in the article as saying, "They [the clubs] were totally mismanaged." Moreover, the words of Goldner when read within the context of the entire article can readily be understood to refer to plaintiff. For these reasons, defendant's motion to dismiss for failure to state a cause of action must be denied.

 B. Motion to Dismiss for Lack of Personal Jurisdiction

 Defendant Goldner contends that he has no contacts with Pennsylvania and that there is no personal jurisdiction over him. Affidavit of No Jurisdiction of Leo Goldner. In a diversity action, a federal court must undertake a two-part test to determine if the exercise of personal jurisdiction over a non-resident defendant is proper. First, defendant's conduct must bring him within the requirements of the forum state's long-arm statute. Controlled Metals, Inc. v. Non-Ferrous International Corp., 410 F. Supp. 339, 341 (E.D. Pa. 1976); Donner v. Tams-Witmark Music Library Inc., 480 F. Supp. 1229, 1231-1232 (E.D. Pa. 1979). Second, assuming that the requirements of the long-arm statute are fulfilled, it must be established that the defendant had such minimal contacts with the forum that the exercise of personal jurisdiction will not ...


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