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Happy Photo Shoppes, Inc. v. Rivershore Charters, Inc.

United States District Court, E.D. Pennsylvania

July 6, 2017



          Gerald Austin McHugh United States District Judge.

         This case concerns a breach of contract action by a Pennsylvania Plaintiff against Defendants from Virginia. The question before me is whether, under Pennsylvania's long-arm statute, this Court can exercise personal jurisdiction over Defendants. Because I find that Defendants established constitutionally sufficient minimum contacts with Pennsylvania, I conclude that jurisdiction is proper.

         I. BACKGROUND

         In or around September 2012, Alfred Krawitz, president of Plaintiff of Happy Photo Shoppes, Inc. (Happy Photo), [1] placed an ad on the website of Boats and Harbors Magazine, offering the sale of the Riverloop, a commercial sight-seeing vessel that was then docked in Philadelphia. Krawitz's ad attracted the interest of Defendant Mark Perry, a commercial boat captain and the sole owner of Co-Defendant Rivershore Charters, Inc. (Rivershore). In September and again in November, Perry traveled from his home in Virginia to Philadelphia to inspect the Riverloop and discuss terms with Krawitz. Krawitz's asking price was too high, however, and the meetings failed to produce a deal. Nevertheless, Perry and Krawitz continued their discussions over the course of the next year-and-a-half through sporadic phone and e-mail communications. During this time, the City of Philadelphia revoked Krawitz's docking privileges, and Krawitz moved the Riverloop to a dock in Wilmington, Delaware. It was there, in April 2014, that Perry and Krawitz next met in person. By this time, Krawitz had abandoned his original plan of an outright sale of the Riverloop and had decided instead to lease the boat to Rivershore. In anticipation of a final lease agreement, Perry took possession of the Riverloop following the April meeting and piloted the vessel from Delaware first to a Coast Guard inspection station in Maryland and then to his dock in Virginia. After additional negotiations by email and phone, Perry and Krawitz agreed in May on a final set of terms, which were memorialized in a “Bareboat Boat Charter Agreement” (Agreement).

         The Agreement provided for a two-year renewable lease. Rivershore agreed to pay Happy Photo up to thirty percent of the gross receipts earned by the Riverloop, but in no event less than $25, 000 per year, in twelve monthly installments. Rivershore further agreed to replace and repair, “at the outset of the lease, . . . carpet, ceiling tiles, roof a/c, [and] toilet parts” and to provide Happy Photo with notice before doing so. Happy Photo retained the right to retake possession of the Riverloop if Rivershore missed a lease payment, and to terminate the Agreement (for any reason) upon thirty days' written notice. Though it contained no forum selection clause, the Agreement stipulated that it was to be enforced under to Pennsylvania law.

         Perry signed the Agreement in Virginia and mailed a completed copy to Krawitz in Philadelphia. Rivershore sent Happy Photo the first monthly payment due under the Agreement, but a short time later, Perry and Kraswitz disagreed over the cost of repairs to the Riverloop and no further payments were made. Pursuant to the Agreement's cancellation and termination provisions, Krawitz retook possession of the Riverloop in July or August, 2016, and later filed the instant breach of contract action. Perry and Rivershore, both residents of Virginia, now seek dismissal for lack of personal jurisdiction pursuant to Rule 12(b)(2).

         II. STANDARD

         “To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff bears the burden of establishing the court's jurisdiction over the moving defendants.” Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004). Where, as here, “the court does not hold an evidentiary hearing on the motion to dismiss, the plaintiff need only establish a prima facie case of personal jurisdiction and the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its favor.” Id.


         To determine whether personal jurisdiction is proper, a district court sitting in diversity applies the law of the forum state. Fed.R.Civ.P. 4(e). Pennsylvania's long-arm statute, 42 Pa. Cons. Stat. Ann. § 5322(b), has a reach coextensive with the limits of the Fourteenth Amendment's Due Process Clause. “Accordingly, in determining whether personal jurisdiction exists, we ask whether, under the Due Process Clause, the defendant has certain minimum contacts with Pennsylvania such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

         Personal jurisdiction may be either general or specific. The only question here is whether Pennsylvania can assert specific jurisdiction over Defendants.

The inquiry as to whether specific jurisdiction exists has three parts. First, the defendant must have purposefully directed its activities at the forum. Second, the litigation must arise out of or relate to at least one of those activities. And third, if the prior two requirements are met, a court may consider whether the exercise of jurisdiction otherwise comports with fair play and substantial justice.

Id. at 317 (citations omitted).

         A. ...

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