The opinion of the court was delivered by: Dalzell, J.
Plaintiff law firm Cozen O'Connor, P.C. ("Cozen"), filed this breach of contract action against former partner Richard Fischbein ("Fischbein") for allegedly failing to repay $250,000 in loans that the firm made to him while he was with Cozen. Fischbein moves to dismiss Cozen's complaint for lack of personal jurisdiction and/or improper venue, or, alternatively, to transfer the case to the Southern District of New York. For the reasons set forth below, we will grant defendant's motion in part, deny it in part, and transfer this action to the Southern District of New York.
On or about March 21, 2005, defendant Fischbein became a "Senior Member" of Cozen, a Pennsylvania professional corporation, pursuant to the terms of a March 15, 2005 employment agreement (the "Agreement"), which was negotiated in Pennsylvania.*fn1 Compl. at ¶ 5. Fischbein was to work in the Business Litigation Department of the firm's "soon to be opened office" at the 909 Third Avenue address in New York City where Fischbein's former law office was. Mot. to Dismiss Ex. B at 1.
During Fischbein's first two fiscal years of employment, Cozen agreed to extend loans to him up to $500,000 subject to the terms set forth in the Agreement. Compl. at ¶ 7. In each of Fischbein's first two years at the firm, Cozen could loan him up to $250,000, as he requested. Compl. at ¶ 8. Under the Agreement, Fischbein would either repay the loan through a setoff against any performance bonuses he earned in the year in which Cozen lent him money, or, if the amount of his performance bonuses did not repay the loan in full, then the unpaid balance would become a three-year term loan. The three-year term loan would be payable in thirty-six equal monthly installments, together with interest on the unpaid balance at the prime rate, as published on the first business day of each month in The Wall Street Journal, accruing from the date the loan would have been repaid out of Fischbein's performance bonus for that year. Compl. at ¶ 9.
During 2005, his first year at Cozen, Fischbein borrowed $250,000 from the firm. Compl. at ¶ 10. Fischbein requested "draws" of $50,000 as personal loans under the Agreement on May 3, June 1, July 13, August 11, and September 12, 2005. Compl. at ¶¶ 11, 13, 15, 17, 19. On May 4, June 6, July 20, August 15, and September 16, 2005 Cozen issued $50,000 checks to Fischbein, which Fischbein cashed and accepted. Compl. at ¶¶ 12, 14, 16, 18, 20.
On June 2 of the following year, Cozen terminated Fischbein's employment with the firm. Compl. at ¶ 21. On August 31, 2006, Cozen notified Fischbein that since no performance bonus was due to him, the loan -- which at that point totaled $250,000 in principal -- was due to be repaid in thirty-six installments with the first installment due by July 1, 2006. Compl. at ¶¶ 22-23. Fischbein never paid that, or any other, installment on the loan. Compl. at ¶¶ 25, 27. The outstanding balance on the loan, including principal and interest as of October 1, 2009, was $313,873.33. Compl. at ¶ 31. Cozen alleges breach of contract against Fischbein. Compl. at ¶¶ 32-37.
As noted, Fischbein moves to dismiss Cozen's claim pursuant to Fed. R. Civ. P. 12(b)(2) and (3) or, in the alternative, to transfer this action to the Southern District of New York pursuant to 28 U.S.C. § 1404.
Pursuant to Rule 12(b)(2), once a defendant has raised a jurisdictional defense, the plaintiff bears the burden of demonstrating a prima facie case that defendant has sufficient contacts with the forum state to establish personal jurisdiction. North Penn Gas v. Corning Natural Gas Corp., 897 F.2d 687, 689 (3d Cir. 1990). "The plaintiff must sustain its burden of proof through sworn affidavits or other competent evidence." Id. (internal quotation marks omitted). A court "reviewing a motion to dismiss a case for lack of in personam jurisdiction must accept all of the plaintiff's allegations as true and construe disputed facts in favor of the plaintiff." Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir. 1992), see also Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002).
A plaintiff may not rely on bare pleadings, however, but must respond with actual proof once the motion is made. Patterson v. Fed. Bureau of Investigation, 893 F.2d 595, 603-4 (3d Cir. 1990).
Rule 4(e) of the Federal Rules of Civil Procedure authorizes a district court to exercise personal jurisdiction over a non-resident defendant to the extent allowed by the long-arm statute of the state in which the court sits. Provident Nat'l Bank v. Cal. Fed. Sav. and Loan Ass'n, 819 F.2d 434, 436 (3d Cir. 1987). Pennsylvania's long-arm statute establishes personal jurisdiction over a non-resident defendant to the fullest extent the Due Process Clause of the Fourteenth Amendment allows. Remick v. Manfredy, 238 F.3d 248, 255 (3d Cir. 2001).
Personal jurisdiction may exist under either general jurisdiction or specific jurisdiction. General jurisdiction exists where a defendant has had "continuous and systematic" contacts with the forum state. Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 416 (1984). Specific jurisdiction exists where the plaintiff's cause of action arises out of the defendant's contact with the forum state such that the defendant "should reasonably ...