The opinion of the court was delivered by: Judge Nora Barry Fischer
This case is a diversity action arising out of Plaintiff Mark J. Rychel's suit against Defendant Lane Yates and Michael Quickel, Jr. alleging breach of contract and fraud in the inducement to form a contract. (See Docket No. 20). Plaintiff is a resident of Pennsylvania, and Defendants are residents of North Carolina. (Id. at ¶¶ 2-4).
Presently before the Court is a jurisdictional dispute concerning Defendants' argument that this Court lacks personal jurisdiction over them, such that Plaintiff's claims should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(2). For the reasons that follow, this Court finds that it does not have personal jurisdiction over Defendants. Rather than dismiss the case outright, however, the Court will exercise its discretion and transfer this matter to the Western District of North Carolina for further consideration.
II. PROCEDURAL BACKGROUND
On November 12, 2009, Plaintiff initiated the instant action by filing his original Complaint in the Western District of Pennsylvania. (Docket No. 1). Defendants each filed Motions to Dismiss for lack of jurisdiction, improper venue, and failure to state a claim upon which relief can be granted. (Docket Nos. 10, 13). Plaintiff was granted leave to file an Amended Complaint on March 19, 2010, and filed his Amended Complaint on April 5, 2010. (Docket Nos. 19, 20). In response, Defendants again filed Motions to Dismiss based on the grounds stated in their original Motions to Dismiss. (Docket Nos. 21, 23).
After briefing had concluded on these later motions, the Court issued
a Memorandum Opinion and Order on June 9, 2010, which denied
Defendants' Motions to Dismiss the Amended Complaint, without
prejudice. (Docket Nos. 28, 29). As part of its holding, the Court
ordered limited discovery on issues related to the question of
personal jurisdiction to occur in the next ninety days.*fn1
(Id.). The opinion also permitted Defendants to renew their
respective motions once said discovery was complete. (Docket No. 28 at
On September 13, 2010, having been advised that jurisdictional discovery had been completed by the September 10, 2010 deadline, the Court convened a status conference with counsel for the parties. (See Docket No. 32). At this conference, Defendants stated their intent to renew their respective motions to dismiss due to an alleged lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). Plaintiff then proposed, given the circumstances of the parties' dispute, that an evidentiary hearing was required to aid the Court in its determination, to which both Defendants objected. (See Id.). The Court ordered the parties to brief the issue and said briefing concluded on October 5, 2010. (Dockets No. 34, 36, 39). After considering the arguments presented, the Court exercised its discretion and granted Plaintiff's Motion for an Evidentiary Hearing. (Docket No. 40).
Subsequently, beginning on December 2, 2010, and continuing on December 15, 2010, this Court held an evidentiary hearing on whether the Court has personal jurisdiction over Defendants. (See Docket Nos. 44, 46). Transcripts were prepared, (Docket Nos. 45, 48), and the parties have filed their proposed findings of fact and conclusions of law, (Docket Nos. 49, 50, 51, 52, 53). Thus, this disputed matter has been fully briefed and is ripe for disposition on the issue of jurisdiction.
A. Plaintiff's Introduction to Sailview
Plaintiff is a certified financial planner who manages his own firm in Allegheny County, Pennsylvania. (Docket No. 45 at 6-7). In June 2005, a client of Plaintiff's financial planning business sought Plaintiff's assessment of a potential real estate development in the Turks & Caicos Islands. (Id. at 7-8). For this purpose, Plaintiff was introduced to Sergio Radovcic, who he initially hosted at an investment presentation held at Plaintiff's office located in Wexford, Pennsylvania. (Id. at 7-9). At the time, Mr. Radovcic maintained a business in Green Tree, Pennsylvania. (Id. at 16, 22). During the presentation, Mr. Radovcic described an alternative real estate investment opportunity, which was also to be sited in the Turks & Caicos Islands. (Id. at 9). The name of this development project was "Sailview Development Ltd."*fn2 ("Sailview"). (Id.).
Although neither he nor his client became involved in the original investment opportunity, Plaintiff was interested in investing from his own account with respect to Sailview and met with Mr. Radovcic in connection with this interest on multiple occasions in July 2005. (See Id. at 7-10). Plaintiff expressed his personal interest in Sailview to Mr. Radovcic and the two men discussed the development project throughout their meetings, which occurred at Plaintiff's office and at his residence in Sewickley, Pennsylvania. (Id. at 9-10). Mr. Radovcic did not distribute written materials focused on Sailview as part of these discussions. (Id. at 99). All together, Plaintiff and Mr. Radovcic had three or four face-to-face meetings. (Id. at 10).
B. Pre-Contract Negotiations
During their communications, Mr. Radovcic presented Sailview to Plaintiff as a unique opportunity in the Turks & Caicos Islands because, unlike other similarly located real estate investments, a purchaser in Sailview would have the ability to finance his or her purchase, as opposed to simply paying cash for the property. (Id. at 14-15). Mr. Radovcic did not have an employment or agency agreement with Sailview, nor was he engaged by either Defendant in a personal capacity. (Docket No. 48 at 38, 99). Instead, Mr. Radovcic presented himself to Sailview as someone in the banking and brokering business. (See Id. at 37, 101). Through Mr. Radovcic, Plaintiff came to know Defendants. (Docket No. 45 at 12-13; see also Docket No. 48 at 57-58, 118). Despite his representations to the contrary, Mr. Radovcic never obtained funding for Sailview, nor was he able to provide financing for any Sailview purchaser. (Docket No. 48 at 38, 103-04). In fact, through their respective interactions with him, both Plaintiff and Defendants became uncomfortable with Mr. Radovcic based on what they learned of his prior relationships. (Docket No. 45 at 21-22, 112-13). Notably, Sailview did not direct Mr. Radovcic to locate purchasers for its development and, consequently, he was never paid a commission or any other payment by the company. (Docket No. 48 at 38-39, 114).
Defendants were not seeking investors for Sailview in July 2005. (Docket No. 48 at 58). Yet, on July 19, 2005, Plaintiff, Defendants, as well as Anthony Agostinelli, participated in a telephone conference call wherein Plaintiff expressed an interest in purchasing a condominium unit in Sailview. (Docket Nos. 45 at 25-26, 48 at 104-05). During this call, Defendants discussed Sailview's design elements, projected design, construction and development schedules, and future marketing plans. (Docket No. 48 at 12). Defendants also discussed financing and sales for the project, including the price and location of Plaintiff's desired unit. (Id. at 125). Mr. Radovcic and the parties' physical locations, however, were not discussed during the call. (Id. at 12-14). The phone conversation lasted between seventy-five and ninety minutes. (Id. at 12).
Shortly after the conclusion of the July 19, 2005 phone call, Defendant Quickel sent an email to Plaintiff and Mr. Agostinelli, carbon copy to Defendant Rychel, which stated:
Gentlemen, Thank you for the time tonight. If we can do anything to help your diligence let us know.
Regards, Bo (Pl.'s Ex. 1).*fn3 Attached to said email were four portable document files ("pdf") depicting the first conceptual drawings of Sailview. (See Id.; see also Docket No. 48 at 15). The drawings were prepared by an architect firm based out of North Carolina and included the following:
Sales Information: Sailview Limited, Inc. Bo Quickel. Lane Yates. 249 Williamson Road. Suite 101. Mooresville, North Carolina. 28117. T: 704.425.1600. F: 704.696.2663.
(Pl.'s Ex. 1; Docket No. 48 at 16). Ultimately, neither Plaintiff nor Mr. Agostinelli responded to Defendants' offer of assistance with respect to their diligence. (Docket No. 48 at 15).
Subsequent to the initial conference call, there were four or five additional conference calls between Plaintiff and Defendant Yates. (Docket Nos. 45 at 25, 48 at 17, 106). These calls were initiated by Plaintiff. (Docket No. 48 at 106). Daniel Costa, a partner in Plaintiff's financial planning business, was present for some of these calls, along with Mr. Agostinelli. (Docket No. 45 at 145-48). In addition, Plaintiff's wife and brother, who resided in Illinois, were also present for at least one call. (Id. at 146-48).
After the completion of his investigation of Defendants and Sailview, Plaintiff determined that he wanted to move forward with the purchase of a condominium unit in Sailview. (See Id. at 26). Thus, on July 21, 2005, Defendant Quickel sent an email to Plaintiff, carbon copy to Defendant Yates, wherein he references two attachments. (Pl.'s Ex. 2). Specifically, the documents attached to the July 21, 2005 email were: (1) wire instructions for Misick & Stanbrook,*fn4 which instructed Plaintiff how he should transmit the first payment for his intended purchase, and (2) a reservation agreement for a penthouse unit at Sailview. (Id.; see Docket No. 48 at 17). The next day, Plaintiff forwarded the email to Leilani Costa, who is an attorney located in Pittsburgh, Pennsylvania and the wife of Plaintiff's business partner. (Pl.'s Ex. 2). It is unclear if she reviewed the documents or if she offered any proposed changes. (See Docket No. 45 at 150-51).
Subsequently, Defendant Quickel faxed Plaintiff a copy of a reservation agreement between Plaintiff and Sailview, which was dated July 23, 2005 and was addressed to Plaintiff's business location in Wexford, Pennsylvania.*fn5 (Pl.'s Ex. 3). Misick & Stanbrook handled the negotiation of said agreement on behalf of Sailview and drafted the document. (Docket No. 48 at 20-21). The agreement was then sent from the law firm to Defendant Quickel via email, who signed the document in his capacity as a director of Sailview before sending the aforementioned fax to Plaintiff. (Id. at 19-20). According to the written agreement, because no sale and purchase agreement for the penthouse unit had been executed at that time, in consideration of Plaintiff's advance of $250,000, Sailview agreed to give Plaintiff a 30% discount on the published price for penthouse units, the total cost of which would not exceed $953,000.*fn6 (Pl.'s Ex. 3). This sum of money was needed for the acquisition of the land on which Sailview was to be constructed. (Docket No. 45 at 30, 173).
C. Original Option Agreement
One week after the parties' initial telephone conference call,
Defendant Quickel faxed a second document to Plaintiff, which was
entitled "Option Agreement" and was dated July 25, 2005.*fn7
(Pl.'s Ex. 4). Similar to the reservation agreement, Misick &
Stanbrook drafted the document, which was then emailed to Defendant
Quickel, who signed the agreement prior to its transmission to
Plaintiff. (Docket No. 48 at 21-22). Although identified by the text
of the document as a party to the agreement, Defendant Yates did not sign the
(Pl.'s Ex. 4). Defendants had limited involvement in the negotiation of said agreement. (Docket No. 48 at 21, 109). In fact, but for Defendants' offer made during the July 19, 2005 conference call to discount the price of Plaintiff's condominium purchase, the negotiation of the Option Agreement was handled entirely by Misick & Stanbrook. (Docket No. 48 at 21, 109, 125).
According to the provisions of the Option Agreement, "[i]n consideration of the making of the Advance to Sailview by [Plaintiff] at the request of [Defendants], [Defendants] do hereby grant the Put Option to [Plaintiff]." (Pl.'s Ex. 4). "Advance" and "Put Option" are defined terms within the agreement. (Id.). Specifically, pursuant to section 1.1, "Advance" was defined to be the payment of $953,000 to be made by Plaintiff to Sailview. (Id.). Likewise, pursuant to sections 1.8 and 2.2, respectively, under the "Put Option," Plaintiff was provided with a period of time within which to require Defendants to either repay the Advance, if Plaintiff and Sailview had not yet entered into a "Sale and Purchase Agreement," or to take an assignment of said "Sale and Purchase Agreement" if one had been executed.*fn9 (Id.). In the event that Plaintiff and Sailview entered into a purchase agreement related to the penthouse unit, the Option Agreement provided that "the Advance shall be deemed to be applied in payment of the full purchase price under the Sale and Purchase Agreement." (Id.). The Option Agreement stated that "[a]ll monies to be paid hereunder or pursuant to the exercise of the Put Option shall be funds immediately negotiable at par in the Turks & Caicos Islands." (Id.). Finally, as indicated in section 5.1, the obligations of each Defendant under the Option Agreement were to be "joint and several." (Id.).
When Defendant Quickel faxed the Option Agreement to Plaintiff, there were no handwritten changes displayed on the document. (Docket No. 48 at 23). Thereafter, the typed language of section 1.1, which defined "Advance," was revised by handwritten notations to set forth four installment payments to be made in July 2005, on September 15, 2005, on May 15, 2006, and on July 15, 2006, the sum of which totaled $953,000. (Pl.'s Ex. 4). In addition, the "Option Period" set forth in section 1.6 was expanded from 12 to 24 months and the option granted to Plaintiff in section 2.2 was amended to permit Plaintiff to recover interest at the U.S. prime lending rate, in addition to the Advance. (Id.). Lastly, the choice-of-law provision contained in section 3.1 electing the application of Turks & Caicos law was crossed out and replaced with Pennsylvania. (See Id.).
Plaintiff initialed the handwritten revisions in the Option Agreement and signed the document. (Id.; Docket No. 45 at 34-36). Plaintiff did not, however, transmit his acceptance of the agreement to Defendant Quickel or Yates or send the signed agreement to either of them. (See Docket No. 45 at 36). Instead, Plaintiff gave the signed Option Agreement to Mr. Agostinelli, as well as a check for $250,000 representing the initial installment of the Advance under the handwritten terms of the agreement, and decided, along with his co-investors, that Mr. Agostinelli would travel to the Turks & Caicos Islands carrying same.*fn10 (Id. at 32-33, 36, 167-68, 170-71, 177; Docket No. 48 at 23). Once in the Turks & Caicos, Mr. Agostinelli was supposed to make a final determination of whether to go forward with the ...