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Sky Motor Cars v. Auto Sport Designs

July 23, 2012

SKY MOTOR CARS
v.
AUTO SPORT DESIGNS, INC.



The opinion of the court was delivered by: Surrick, J.

MEMORANDUM

Presently before the Court is Defendant Auto Sport Designs, Inc.'s Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(2). *fn1 (ECF No. 13.) For the following reasons, Defendant's Motion will be denied.

I. BACKGROUND *fn2

Plaintiff Sky Motor Cars, an automotive retailer, is incorporated and based in the Commonwealth of Pennsylvania. (Compl. ¶¶ 1, 6, ECF No. 1.) Defendant, an automotive business specializing in the sales service, and restoration of exotic cars, is incorporated and based in the State of New York. ( Id. at ¶¶ 2, 7.) In September 2008, Plaintiff bought a 2003 Aston Martin automobile intending to resell it at a profit. ( Id. at ¶ 9.) The Aston Martin was in good condition except for a clicking sound that occurred when the engine was operating. ( Id. at ¶ 10.) In October 2008, Plaintiff entered into a contract with Defendant in New York in order to investigate and remedy the clicking sound problem. ( Id. at ¶ 11.) The Aston Martin was sent to Defendant via flatbed truck on October 21, 2008. ( Id. at ¶ 12.) *fn3 After receiving the vehicle, Defendant used a "trial and error" method in an attempt to fix the engine noise. ( See Compl. ¶ 14.) Plaintiff and Defendant communicated with each other on a regular basis by both telephone and e-mail during the four months that Defendant was working on the vehicle. ( See Sholder Aff. ¶¶ 6-23, Pl.'s Opp. Ex. 3, ECF No. 16.)

In March of 2009, Defendant's general manager took the car for a test drive. (Compl. ¶ 22.) During the test drive, the engine caught fire. ( Id. at ¶ 23.) As a result of the damage to the vehicle, the Aston Martin was a total loss. ( See id. at ¶ 25.) Plaintiff filed a Complaint against Defendant on September 4, 2009. ( Id. at ¶¶ 27-38.) Plaintiff asserts the following claims: breach of contract (Count I), negligence (Count II) and unjust enrichment (Count III). On January 8, 2010, Defendant filed an Answer to Plaintiff's Complaint. (Answer, ECF No. 4.) In the Answer, Defendant asserts as an affirmative defense that it is not subject to personal jurisdiction in this Court. ( Id. at ¶ 40.) On April 1, 2010, Defendant filed the instant Motion to Dismiss, seeking dismissal of the case for lack of personal jurisdiction. (Def.'s Mot., ECF No. 13.)

II. LEGAL STANDARD

A federal district court may assert personal jurisdiction over a nonresident of the state in which the court sits to the extent authorized by law of such state. Fed. Rules Civ. Proc. 4(k)(1)(A). The Pennsylvania long-arm statute provides for the exercise of jurisdiction over non-resident defendants. 42 Pa. Cons. Stat. Ann. §§ 5301, 5322; Resnick v. Manfredy , 52 F. Supp. 2d 462, 466 (E.D. Pa. 1999). A defendant may be subject to personal jurisdiction under the theory of "general jurisdiction" if the defendant had maintained continuous and systematic contacts with the forum. Resnick , 52 F. Supp. 2d at 466. A defendant may be subject to personal jurisdiction under the "specific jurisdiction" theory if the plaintiff's cause of action arises out of the defendant's activities, such that the defendant should reasonably anticipate being haled into court in the forum state. Id. (quoting World-Wide Volkswagen Corp. v. Woodson , 444 U.S. 286, 297 (1980).

In deciding a motion to dismiss, any factual disputes should be resolved in favor of the plaintiff. Colburn v. Upper Darby Twp. , 838 F.2d 663, 665-66 (3d Cir. 1988); Z-Man Painting, LLC v. Generation Builders, Inc ., No. 04-4489, 2006 WL 47378, at *2 (E.D. Pa. Jan. 6, 2006). Moreover, all allegations made by a plaintiff in the complaint will be regarded as true. Brown v. AST Sports Science, Inc. , No. 02-2682, 2002 WL 32345935, at *2 n.1 (E.D. Pa. June 28, 2002) (citing Carteret Sav. Bank, F.A. v. Shushan , 954 F.2d 141, 142 n.1 (3d Cir. 1992) ("We are satisfied that courts 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"). However, a plaintiff may not rely on the bare pleadings alone in order to withstand a defendant's Rule 12(b)(2) motion. Patterson v. F.B.I. , 893 F.2d 595, 603-04 (3d Cir. 1990) (citing Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 67 n.9 (3d Cir. 1984)). Once a defendant makes a 12(b)(2) motion, the plaintiff must sustain its burden of proof in establishing jurisdictional facts through sworn affidavits or other competent evidence. Id. at 604.

III. DISCUSSION

A. General Jurisdiction

To establish general jurisdiction, the plaintiff must demonstrate that the defendant has maintained continuous and systematic contacts with the forum. Vetrotex Certainteed Corp. v. Consol. Fiber Glass Prods. Co. , 75 F.3d 147, 151 (3d Cir. 1996). For a court to find that it has general personal jurisdiction under 42 Pa. Cons. Stat. Ann. § 5301(a)(2)(iii), the plaintiff must show that the defendant maintains "a continuous and systematic part of its general business within this Commonwealth." 42 Pa. Cons. Stat. Ann. § 5301(a)(2)(iii); see also Gehling v. St. George's School of Medicine, Ltd. , 773 F.2d 539, 541 (3d Cir. 1985); Davis v. PGNI Charles Town Gaming, LLC, No 07-2352, 2007 WL 4553695, at *2 (E.D. Pa. Dec. 26, 2007) (finding that "only when the 'continuous corporate operation within a state [is] thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities' may a court assert general jurisdiction over a corporate defendant") (quoting Nichols v. G.D. Searle & Co., 991 F.2d 1195, 1199 (4th Cir.1993)). The "continuous and systematic contacts" standard for general jurisdiction is "not an easy one to meet." Surgical Laser Tech., Inc. v. C.R. Bard, Inc., 921 F. Supp. 281, 284 (E.D. Pa. 1996); see also Brown, 2002 WL 32345935, at *4 (establishing that "a defendant's forum activities must be 'extensive and pervasive' in order to be considered continuous and substantial"). For example, in Gehling, the Third Circuit held that the court could not exercise general jurisdiction over a defendant school with regard to the plaintiff's contract and tort claims, even though the school advertised in two newspapers circulated extensively in Pennsylvania, had six percent of its students from Pennsylvania, advertised on Philadelphia radio and television, and entered into a long-term arrangement with a Pennsylvania school. 773 F.2d at 542.

In the instant case, Plaintiff has not produced sufficient evidence to establish continuous and systematic contacts to the extent necessary to establish general jurisdiction. Plaintiff relies almost exclusively on the case of Resnick v. Manfredy in support of its assertion that there is general personal jurisdiction over Defendant. In Resnick, the court found that it had general personal jurisdiction over a defendant law firm that had no "office or affiliate" in Pennsylvania. 52 F. Supp. 2d at 467. Significantly, however, even though the firm's attorneys worked exclusively from another state, the firm had fifty-four past and present clients who were Pennsylvania residents. Here, Plaintiff has provided evidence that, since February 2008, Defendant has on at least sixteen occasions contracted with at least two Pennsylvania clients to service at least eleven cars. Even though Defendant has collected approximately $200,000 in fees from these two clients, the amount of income received is not a deciding factor in the general jurisdiction analysis. See Brown, 2002 WL 32345935, at *7 (finding that "in analyzing the contacts between a defendant and the forum state, the size of any income or percentage of sales derived from Pennsylvania is 'irrelevant'" (quoting Gehling, 773 F.2d at 543)). Clearly, Defendant's activities in Pennsylvania are not "extensive or pervasive." Plaintiff has proffered no evidence that Defendant's employees ever entered Pennsylvania to do business, or that they ever advertised in Pennsylvania by publication, mailings, or otherwise. Having only two Pennsylvania clients in addition to Plaintiff, out of over 1000 clients, does not establish the continuous and systematic contacts necessary for the exercise of general jurisdiction.

B. Specific Personal Jurisdiction

The Third Circuit has set forth a three-part inquiry for deciding whether specific personal jurisdiction exists. See D'Jamoos ex rel. Estate of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94, 102 (3d Cir. 2009); O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 317 (3d Cir. 2007). First, the defendant must have "purposely directed its activities toward the forum." Pilatus Aircraft, 566 F.3d at 102 (internal quotation marks omitted). Second, the litigation must arise out of or relate to at least one of those activities. Shaffer v. Heitner, 433 U.S. 186, 204 (1977) (noting that in determining whether minimum contacts are present, courts focus on "the relationship among the defendant, the forum, and the litigation"). These two steps involve proving the necessary "minimum contacts," which means establishing "'some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'" Asahi Metal Indus. Co., Ltd. v. Superior Court of California, 480 U.S. 102, 109 (1987) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). Third, if the first two requirements are met, the court must determine whether the exercise of jurisdiction otherwise "comport[s] with 'fair play and substantial ...


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