The opinion of the court was delivered by: William J. Martini, U.S.D.J.
MARTIN LUTHER KING JR. FEDERAL BLDG. & U. S. COURTHOUSE 50 WALNUT STREET, P. O. BOX 419 NEWARK, NJ 07101-0419 973) 645-6340
This matter comes before the Court upon two motions: (1) a Motion to Dismiss for Lack of In Personam Jurisdiction and Improper Venue filed by Defendants Singh, Lynch, and Leadreacer.com; and (2) a Motion for Sanctions filed by Domain Capital, LLC. Oral arguments were held on July 8, 2008. For the reasons stated below, the motions are DENIED.
This breach of contract and fraud case involves the purchase and development of certain internet businesses and their related websites. Plaintiff Keith Kiah, a resident of New Jersey, entered into several agreements with Defendants Singh, Lynch, and Leadracer.com, residents of Florida ("Florida Defendants"), for the acquisition of two internet businesses and the provision of consulting services related to the businesses. Although the Amended Complaint lays forth the details of the contract dispute, the Court will recite only the facts pertinent to the motions.
In May 2006, Plaintiff Kiah entered into a contract to purchase an internet business, "www.markesharefinancial.org," from Florida Defendants for approximately $25,000. Concurrently, Florida Defendants entered into a separate agreement with Plaintiff Kiah to provide internet consulting services related to the business. Although the parties dispute whether Plaintiff Kiah initiated the contact by responding to an internet advertisement regarding the sale of the business or whether Defendant Lynch solicited Plaintiff Kiah by email, it is clear that Plaintiff Kiah and Florida Defendants engaged in numerous discussions by email, telephone, fax, and mail to negotiate and execute the contract.
In July 2006, Plaintiff Kiah entered into an additional agreement with Florida Defendants for the purchase and development of a second business, "AmericanHomeTrustGroup.com," and its related website. Plaintiff Kiah asserts that he provided Florida Defendants with $15,000 as a down payment and entered into a financing arrangement with Florida Defendants for the balance of the purchase price. Again, the parties dispute whether Florida Defendants solicited Plaintiff Kiah or whether Plaintiff Kiah initiated the contact. It is similarly clear that the parties engaged in extensive communications and negotiations regarding the purchase and development of this business by email, telephone, fax, and mail.
It appears that the contract dispute among the parties arose out of difficulties in the development and finance of the businesses. Plaintiffs allege among others that Florida Defendants failed to provide consulting services as required under the agreements, breached the terms of the financing agreement for the purchase of "AmericanHomeTrustGroup.com" by accelerating the payment of the financed amount, and made unreasonable demands for access to Plaintiff Kiah's bank account. After Plaintiff Kiah failed to cooperate with Florida Defendants' demands, it is alleged that Florida Defendants shut down the websites related to the businesses and attempted to resell both businesses.
In January 2007, Plaintiffs filed this Complaint in the Superior Court of New Jersey alleging various state law claims, including breach of contract, tortious interference with business opportunities, defamation, libel, slander, racial discrimination, breach of warranties, consumer fraud, fraud, unjust enrichment, and theft by deception. On February 6, 2007, Florida Defendants removed the action to this Court based upon diversity jurisdiction. On May 15, 2007, Florida Defendants filed a motion to dismiss for lack of personal jurisdiction and improper venue. Plaintiffs then submitted an Amended Complaint, which included the addition of certain parties and claims. After several extensions, Plaintiffs filed an opposition to Florida Defendants' motion on June 20, 2007.*fn1 The additional defendants included in the Amended Complaint all moved for dismissal on various grounds. Defendant Domain Capital, LLC, also sought sanctions against Plaintiffs pursuant to Rule 11 and 28 U.S.C. § 1927. The Court held oral argument regarding these motions as well as other motions on July 8, 2008. During oral arguments, the Court granted various defendants' motions to dismiss the Amended Complaint and reserved on Florida Defendants' motion to dismiss and Domain Capital's motion for sanctions. These motions are now properly before the Court.
1. Florida Defendants' Motion to Dismiss
Florida Defendants have moved to dismiss the Amended Complaint for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2) and improper venue. First, they argue that they lack sufficient minimum contacts with New Jersey for this Court to exercise personal jurisdiction. Second, they assert that the contracts at issue in this action contain forum selection clauses ...