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BELLANTE, CLAUSS, MILLER & PTNRS. v. SHEIKH HUSSEI

December 20, 1985

BELLANTE, CLAUSS, MILLER & PARTNERS, formerly known as BELLANTE, CLAUSS, MILLER & NOLAN, Plaintiff
v.
SHEIKH HUSSEIN ALIREZA and HAJI HUSSEIN ALIREZA CO., LTD., Defendants


Plaintiff, Bellante, Clauss, Miller & Partners, ("Bellante") a partnership organized and existing under the laws of Pennsylvania, having a principal place of business in Pennsylvania, brought this breach of contract action against Defendants, Sheikh Hussein Alireza ("Sheikh") and Haji Alireza Co. ("Haji") on December 5, 1984. Defendant Sheikh is a citizen and subject of Saudi Arabia. Defendant Haji is a foreign corporation duly organized and existing under the laws of Saudi Arabia, having a principal place of business in Saudi Arabia. See Complaint at Document 1 of the Record and Defendants' Motion to Dismiss Complaint at Document 6 of the Record. The Complaint seeks in excess of ten thousand ($10,000.00) dollars, exclusive of interest and costs. Therefore, this court has jurisdiction pursuant to 28 U.S.C. § 1332. Venue of this court is proper because plaintiff has its principal place of business within the venue of the Middle District of Pennsylvania. See 28 U.S.C. § 1391.

On March 14, 1985, defendants filed a Motion to Dismiss the Complaint for lack of personal jurisdiction over defendants or, in the alternative, based on the principles of forum non conveniens. Along with the motion, defendants filed a supporting brief and Affidavit of Defendant Sheikh. Plaintiff responded to this motion by filing an Initial Pretrial Memorandum and an Affidavit in Opposition on March 29, 1985. Also, plaintiff filed a Memorandum of Law on March 29, 1985. Plaintiff supplemented its response to defendants' motion by filing an Affidavit of Lawrence Bellante and an Affirmation dated May 22, 1985. Defendants filed a reply to plaintiff's Affidavit and Affirmation on June 18, 1985. Defendants also requested permission to file counter affidavits in response to plaintiff's affidavits but subsequently informed the court by letter dated August 7, 1985 that such affidavits would not be forthcoming and that defendants had no objection to a decision being rendered based on the existing record. Oral argument was held on September 18, 1985. The court raised questions concerning the accurate factual background, see Transcript of Oral Argument, Document 19 of the Record at 2, and it was indicated that the Record would be supplemented in response to the court's inquiries. The parties were given twenty (20) days to file supplemental briefs and/or affidavits in support of their positions. *fn1" Plaintiff responded by filing a Brief in Opposition to Defendants' Motion to Dismiss on November 29, 1985. See Document 21 of the Record. The matter is now ripe for disposition. For the reasons set forth below, the Motion to Dismiss will be granted.

FACTUAL BACKGROUND

 On or about February 25, 1978, the Sheikh contracted with Bellante to obtain design services in connection with the construction of the Sheikh's primary residence in Saudi Arabia ("Villa"). A second contract, entered into on or about February 25, 1978, involved design services in connection with the construction of a commercial center for Defendant Haji in Saudi Arabia. Therefore, both contracts concerned the performance of design services for structures located in Saudi Arabia.

 Both contracts were negotiated between the Sheikh and L. G. Vastardis. The contracts were offered and submitted on behalf of Bellante by L. G. Vastardis and signed by Vastardis, a duly authorized representative of Bellante. See Complaint at Document 1 of the Record and Brief in Support of Defendants' Motion to Dismiss at Document 6 of the Record. In fact, the court made specific inquiries concerning Vastardis' relationship with Bellante. See Transcript of Oral Argument, Document 19 of the Record at 2-5. Copies of both contracts have been submitted to the court. The contracts show that the Sheikh executed the contract regarding his own villa and also executed the contract on behalf of Haji. The Sheikh is the Managing Director of Haji, a position he has held for approximately twenty-five years. See Document 6 of the Record. In their Motion to Dismiss, defendants allege that they lack the "minimal contacts" with this forum necessary to assert personal jurisdiction. See Document 6 of the Record. In support, defendants allege that all contract negotiations took place in Jeddah, Saudi Arabia. See Affidavit of Hussein Alireza at para. 6, Document 6 of the Record. Plaintiff apparently does not contest this. Plaintiff, however, alleges that Vastardis negotiated the contracts in Saudi Arabia, but that he kept in touch with Bellante in Pennsylvania. Assuming arguendo that this is true, there is no indication that the Sheikh negotiated with anyone other than Vastardis. See Transcript of Oral Argument, Document 19 of the Record at 5. Furthermore, there is no indication in the Record that the Sheikh knew that Vastardis was "getting instructions" concerning contract terms from Bellante in Pennsylvania. Id. at 22. Both contracts are prepared on the letterhead of Bellante, Clauss, Miller, Nolan & Vastardis which includes an address of Korai Three, Athens, Greece. See Exhibits A and B of Defendants' Brief in Support of Defendants' Motion to Dismiss, Document 6 of the Record. *fn2" The Athens address is the only address mentioned in either contract. Any Pennsylvania address Bellante may use is not disclosed in the contract documents. Defendants contend that at no time during the contract negotiations did the Sheikh have communications, either oral or written, with any partner, representative or agent of Bellante in Pennsylvania. Defendants further allege that the Sheikh has never been to Pennsylvania and Haji has no offices, agents, representatives or employees in Pennsylvania. Apparently, plaintiff does not contest this. See Document 6 of the Record at 3 and Affirmation of plaintiff at Document 15 of the Record at 2. Defendants also assert that the Sheikh does not own or possess any assets or real property in Pennsylvania nor has he ever solicited or transacted any business in Pennsylvania. Similarly, defendants allege that Haji does not own or possess any assets or real property in Pennsylvania, nor does it solicit or transact any business in Pennsylvania. On the other hand, plaintiff contends that jurisdiction is proper because defendants collectively or individually knew that plaintiff was a Pennsylvania concern and that the design, creation and use of intellectual expertise were intended to be done in Pennsylvania. See Documents 8, 9, 14 and 15 of the Record. With this factual background in mind, the court now turns to the merits of the motion.

 DISCUSSION

 Rule 4(e) of the Federal Rules of Civil Procedure permits a district court to assert personal jurisdiction over a non-resident to the extent allowed under the law of the state where the district court sits. See Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61 (3d Cir. 1984). Plaintiff claims that jurisdiction is proper pursuant to Pennsylvania's Long Arm Statute. See Initial Pretrial Memorandum at Document 7 of the Record. The Pennsylvania Long Arm Statute, Pa. Stat. Ann. tit. 42, § 5322(b) (Purdon 1981), allows a court to exercise jurisdiction over a person "to the fullest extent allowed under the Constitution of the United States and may be based on the most minimum contact with this Commonwealth allowed under the Constitution of the United States." Therefore, the reach of the Pennsylvania statute is coextensive with the due process clause of the United States Constitution. *fn3" See Time Share Vacation Club v. Atlantic Resorts, Ltd., supra.

 In general, "the central concern of a jurisdictional inquiry is the relationship among the defendant, the forum and the litigation." Max Daetwyler Corp. v. R. Meyer, Corp., 762 F.2d 290, 293 (3d Cir. 1985), cert. denied, 474 U.S. 980, 106 S. Ct. 383, 88 L. Ed. 2d 336 (1985). Under the due process clause, a court may not exercise personal jurisdiction over a non-resident defendant unless there are certain minimum contacts between the defendant and the forum state. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 62 L. Ed. 2d 490, 100 S. Ct. 559 (1980). Essentially, in determining the jurisdictional issue, a court must ask whether "the quality and nature of the defendant's activity is such that it is reasonable and fair to require that it conduct its defense in that state." Kulko v. Superior Court of California, 436 U.S. 84, 92, 56 L. Ed. 2d 132, 98 S. Ct. 1690 (1978) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316-17, 90 L. Ed. 95, 66 S. Ct. 154 (1940)). In order for a non-resident defendant to be subject to the jurisdiction of the court, it must have "purposefully availed itself of the privilege of acting within the forum state." Hanson v. Denckla, 357 U.S. 235, 253, 2 L. Ed. 2d 1283, 78 S. Ct. 1228 (1958). Once the jurisdictional defense has been raised, plaintiff bears the burden of demonstrating contacts with the forum state sufficient to give the court in personam jurisdiction under this analysis. See Time Share Vacation Club v. Atlantic Resorts, Ltd., supra. Plaintiff must establish in personam jurisdiction over defendants and ordinarily discovery is permitted in order to aid plaintiff in discharging this burden. See Compagnie Des Bauxites DeGuinee v. L'Union, 723 F.2d 357 (3d Cir. 1983). In the present case, plaintiff has been given ample opportunity to establish facts sufficient to confer in personam jurisdiction over defendants. See supra, n.1 at 521. Therefore, the court finds that plaintiff had sufficient time to show the requisite jurisdictional facts. The issue concerning both defendants is whether plaintiff has established that defendants had sufficient contact with the Commonwealth of Pennsylvania such that this court may properly exercise jurisdiction over them.

 In undertaking the due process analysis for determining jurisdiction, the status of the parties should not be determinative. See Dollar Savings Bank v. First Security Bank of Utah, 746 F.2d 208 (3d Cir. 1984). "It is questionable judicial policy to apply a different jurisdictional rule to individuals than to corporations. . . ." Id. at 214. While a corporation may have greater contacts with a forum in a great number of cases, in the present case the factual contacts for both defendants are similar. Therefore, the same analysis applies to both defendants.

 The Third Circuit has undertaken a two step analysis to determine if personal jurisdiction over a non-resident defendant is proper. *fn4" As the Third Circuit Court of Appeals has noted:

 
The initial determination that must be made is whether the claim or cause of action which is being pursued arises from the defendant's forum related activities or from non-forum related activities.

 Reliance Steel Products Co. v. Watson, Ess, Marshall and Enggas, 675 F.2d 587, 588 (3d Cir. 1982). This step corresponds to the second step of the Pennsylvania courts' analysis. See supra, n.4 at 523. The present case clearly involves a claim which arises from the defendants' forum related activities. *fn5"

 Secondly, the court must determine whether there are enough contacts with the forum arising out of that transaction in order to justify the assertion of jurisdiction over the out-of-state defendant. See Reliance Steel Products Co. v. Watson, Ess, Marshall and Enggas, supra. In this step, a court must determine if a defendant has "purposefully availed itself of doing business in the forum" and if it is reasonable to assert jurisdiction over that defendant. In other words, "the defendant's conduct and connection with the forum State . . . [must be] such that he should reasonably anticipate being haled into court there." Gehling v. St. George's School of Medicine, Ltd., 773 F.2d 539, 541 (3d Cir. 1985) citing World-Wide Volkswagen Corp. v. Woodson, supra. The nature of this analysis is such that there is no consistent rule to be applied in every case. Thus, each fact must be independently examined in light of this analysis.

 Defendants are residents of Saudi Arabia. Defendants' only contact with this jurisdiction, as alleged by Bellante, concerns the present contracts before the court. Both contracts were executed by the Sheikh in Jeddah, Saudi Arabia on February 25, 1978. L. G. Vastardis, who operated the office in Athens, Greece, executed both contracts on behalf of Bellante. Bellante does not allege that any part of the contracts was negotiated in this jurisdiction. See supra, ...


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