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Unimaven, Inc. v. Texas TR, LLC

United States District Court, D. New Jersey

April 25, 2018

UNIMAVEN, INC., Plaintiff,
v.
TEXAS TR, LLC and SCHMAYA MARINOVSKY, Defendants.

          REPORT AND RECOMMENDATION

          LEDA DUNN WETTRE. UNITED STATES MAGISTRATE JUDGE

         This matter comes before the Court on defendants' motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), or, in the alternative, to dismiss Count III pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6). ECF No. 3. Plaintiff opposes the motion. ECF No. 6. The Honorable Susan Davis Wigenton, U.S.D.J., referred this motion to the undersigned for a Report and Recommendation. This motion is decided without oral argument pursuant to Federal Rule of Civil Procedure 78. Having considered the parties' written submissions and for good cause shown, the Court recommends that defendants' motion to dismiss for lack of personal jurisdiction be DENIED and that defendants' motion to dismiss Count III be GRANTED.

         I. BACKGROUND

         This is a breach of contract dispute concerning defendants' alleged failure to satisfy an outstanding balance of $159, 309.17 for plaintiffs fulfillment of purchase orders and shipment of electronic goods pursuant to an agreement between the parties. Plaintiff commenced this action in the Superior Court of New Jersey, Law Division, Bergen County in October 2017. Defendants timely removed the action to this Court on the grounds of diversity of citizenship jurisdiction pursuant to 28 U.S.C. § 1332. Plaintiff, a wholesale electronics distributor, is a New Jersey corporation with its principal place of business in New Jersey. Complaint ¶ 1, ECF No. 1-1. Defendant Texas TR, LLC ("TTR"), a wholesale distributor of electronic photograph and video supplies, is a Texas corporation with its principal place of business in Texas. Id. U 2. Defendant Schmaya Marinovsky is the owner of TTR, and is a resident of Texas. ECF No. 1 ¶ 5. The amount in controversy exceeds the $75, 000 jurisdictional threshold. Id. ¶ 4.

         Plaintiff alleges that in July 2016, defendants solicited one of its representatives to work with TTR to sell electronic products through Amazon. Id. ¶¶ 8-9. The Complaint alleges that defendants would receive orders through Amazon, send a purchase order for the products to plaintiff in New Jersey, and plaintiff would ship the items directly to Amazon. Id. ¶¶ 10-12. Pursuant to the contract, defendants were to pay plaintiff for the items. Id. ¶ 12. The Complaint alleges that the parties entered into an agreement and followed this process several times. Id. ¶14. Eventually, defendants allegedly failed to make timely payments, and ultimately ceased making payments entirely in March 2017. Id. ¶¶ 14-15. Defendants allegedly have an outstanding balance due to plaintiff of $159, 309.17. Id. f 17.[1]

         The Complaint asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, unjust enrichment, and piercing the corporate veil. See ECF No. 1. Defendants filed the instant motion to dismiss on December 13, 2017. ECF No. 3.

         II. DISCUSSION

         Defendants move to dismiss on the grounds that this Court lacks personal jurisdiction over them, or in the alternative to dismiss Count III of the Complaint for failure to state a claim. For the reasons set forth below, the undersigned recommends that the District Court find plaintiff has met its burden to show personal jurisdiction exists over defendants and that Count III should be dismissed.

         A. Personal Jurisdiction

         1. Legal Standard

         When a defendant challenges a Court's exercise of personal jurisdiction, the plaintiff bears the burden to prove that jurisdiction is proper. Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330-31 (3d Cir. 2009). Where the district court does not hold an evidentiary hearing, a plaintiff must establish only a prima facie case of personal jurisdiction. Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004). Under a prima facie standard, "the plaintiffs allegations are presumed true and all factual disputes are resolved in the plaintiffs favor." LaSala v. Marfin Popular Bank Pub. Co.. 410 Fed.Appx. 474, 476 (3d Cir. 2011). A plaintiff meets its burden by "establishing with reasonable particularity sufficient contacts between the defendant and the forum state." Display Works, LLC v. Bartley, 182 F.Supp.3d 166, 172 (D.N.J. 2016) (quoting Mellon Bank PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992)). Once the motion is made, however, and plaintiffs allegations are challenged by affidavits or other evidence, "plaintiff must respond with actual proofs, not mere allegations." Patterson by Patterson v. FBI, 893 F.2d 595, 604 (3d Cir. 1990) (citation omitted); see also Metcalfe, 566 F.3d at 330 ("'[O]nce a defendant has raised a jurisdictional defense, ' the plaintiff must 'prov[e] by affidavits or other competent evidence that jurisdiction is proper.'") (quoting Dayhoff Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1302 (3d Cir. 1996)). Plaintiff ultimately must prove the existence of jurisdiction by a preponderance of the evidence, although such a showing is unnecessary at the preliminary stages of litigation. LaSala, 410 Fed.Appx. at 476; Mellon Bank (E.) PSFS, Nat'l Ass 'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992); Display Works, LLC v. Bartley, 182 F.Supp.3d 166, 172 (D.N.J. 2016).

         This Court exercises jurisdiction to the extent permitted by New Jersey law. See Miller Yacht Sales, 384 F.3d at 96 (citing Fed.R.Civ.P. 4(e)). New Jersey's long-arm statute permits the exercise of jurisdiction over non-residents "to the uttermost limits permitted by the United States Constitution." Charles Gendler Co. v. Telecom Equity Corp., 102 N.J. 460, 469 (1986) (quoting Avdel Corp. v. Mecure, 58 N.J. 264, 268 (1971)). Therefore, "we ask whether, under the Due Process Clause, the defendant has certain minimum contacts with [New Jersey] 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) (internal quotation marks omitted).

         Personal jurisdiction may be based on either general or specific jurisdiction. Bristol-Myers Squibb Co. v. Super. Ct. of Cat, 137 S.Ct. 1773, 1780 (2017). "A court with general jurisdiction may hear any claim against that defendant, " id, and the defendant's "contacts need not relate to the subject matter of the litigation." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415, n.9 (1984). General jurisdiction over a defendant exists in the forum of an individual's domicile and the forum "in which [a] corporation is fairly regarded as at home." Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011).

         Specific personal jurisdiction, on the other hand, exists where the claims "aris[e] out of or relate[] to the defendant's contacts with the forum." Daimler AG v. Bauman,134 S.Ct. 746, 754 (2014) (quoting Helicopteros, 466 U.S. at 414, n.8). The Third Circuit has laid out a three-part test to determine whether specific jurisdiction exists: (1) the defendant must have "purposefully directed [its] activities at the forum"; (2) the litigation must "arise out of or relate to at least one of those activities"; and (3) if the first two requirements are met, the exercise ...


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