Lachapelle v. Torres

• Citation: 1 F.Supp.3d 163
• Decision Date: 28 February 2014
• Docket Number: No. 12 Civ. 09362(AJN).,12 Civ. 09362(AJN).
• Parties: David LaCHAPELLE, et al., Plaintiffs, v. Fred TORRES, et al., Defendant.
• Court: U.S. District Court — Southern District of New York

1 F.Supp.3d 163

David LaCHAPELLE, et al., Plaintiffs,

v.Fred TORRES, et al., Defendant.

No. 12 Civ. 09362(AJN).

United States District Court, S.D. New York.

Signed Feb. 28, 2014.

Lauren J. Wachtler, Paul D. Montclare, Mitchell Silberberg & Knupp LLP, Bruce Allen Schoenberg, Schrader & Schoenberg, LLP, New York, NY, Patricia H. Benson, Gilbert S. Lee, Mitchell Silberberg & Knupp LLP, Los Angeles, CA, for Plaintiffs.

Benjamin Suess, Scuraoer & Schoenberg, LLP, Bruce Allen Schoenberg, Schrader & Schoenberg, LLP, New York, NY, for Defendant.

MEMORANDUM AND ORDER

ALISON J. NATHAN, District Judge:

Before the Court are Third–Party Defendants Michael Anderson and Ghretta Hynd's motions to dismiss the third-party claims against them in this action due to lack of personal jurisdiction. According to the Counterclaims, Torres is the owner of Fine Art Account, Inc, doing business as Fred Torres Collaborations (“FTC”), a New York corporation with its principal place of business in New York City. (Counterclaims at ¶¶ 1–2). FTC operates an art gallery and acts as an artist agent and manager, formerly representing pop-culture photographer David LaChapelle and David LaChapelle Studios, Inc. (“DLC Studios”). (Counterclaims ¶¶ 1, 17, 19, 65). Specifically, in 2008, FTC entered into a representation agreement with DLC Studios and LaChapelle which provided that FTC would act as LaChapelle's exclusive agent. (Counterclaims ¶¶ 19–20). At some point, the relationship between Torres and LaChapelle deteriorated and, according to the Counterclaims, in mid–2012 DLC Studios and LaChapelle allegedly took a number of steps to steal FTC's business and to improperly terminate the representation agreement. (Counterclaims ¶¶ 50–72). The claims against Anderson and Hynd are related to this primary dispute, particularly in that they are alleged to have wrongfully interfered with FTC's business and misappropriated certain confidential information from Torres and FTC.

I. LEGAL STANDARD

Hynd and Anderson move to dismiss, claiming that they are not subject to personal jurisdiction under New York's long-arm statute and that, even if they were, the exercise of such jurisdiction would violate due process. Thus, the Court engages in a two-step inquiry in which it first examines whether Hynd and Anderson are subject to jurisdiction under the law of New York and then considers whether jurisdiction comports with due process under the United States Constitution.¹See Licci v. Lebanese Canadian Bank, 732 F.3d 161, 168 (2d Cir.2013).

To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing that jurisdiction exists. Id. at 167. On this procedural posture, the Court construes the pleadings and any supporting materials in the light most favorable to the plaintiffs, resolving any doubts in favor of jurisdiction. Id.; Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 59 (2d Cir.2012); see also Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d 81, 85 (2d Cir.2013) (“At that preliminary stage, the plaintiffs prima facie showing may be established solely by allegations.”); Southern New Eng. Tel. Co. v. Global NAPs Inc., 624 F.3d 123, 138 (2d Cir.2010) (explaining that a plaintiff may satisfy the requirement of a prima facie showing by providing an averment of facts that, if credited, would suffice to establish jurisdiction). However, the Court does not draw “argumentative inferences” in plaintiff's favor nor does it accept as true a legal conclusion couched as a factual allegation. Licci, 673 F.3d at 59.

II. PERSONAL JURISDICTION UNDER NEW YORK LAW: HYND

Torres and FTC claim that jurisdiction exists over Hynd through C.P.L.R. §§ 302(a)(2) and (3) based on her alleged tortious conduct against FTC.

A. Hynd's Role in the Alleged Tortious Conduct and Contacts with New York

Among other things, the Counterclaims in this action allege that Hynd, an employee of DLC Studios, a New York corporation, “converted FTC's customer's lists and other proprietary data from FTC's computers and files.” (Counterclaims ¶¶ 3, 5, 53). Specifically, Torres claims that in late November 2012, Counterclaim Defendants Kumi Tanimura (a DLC Studios employee then working in FTC's office) and Michael Mockler (a former FTC employee now working for DLC Studios) stole a computer server with three separate databases containing information on FTC's sales of artwork, FTC's client list, and Torres's personal rolodex. (Counterclaims ¶¶ 6–7; Torres/Hynd Decl. ¶ 6). ² Torres then called LaChapelle, who called Hynd on his cellphone, placing the call on speakerphone so that Torres could hear. (Torres/Hynd Decl. ¶ 7). On this call, Hynd “admitted that she had directed the theft of [the server] but claimed that the taking of [two of the databases] was a ‘mistake’ and that they would be returned.” (Torres/Hynd Decl. ¶ 7). These materials were never returned. (Torres/Hynd Decl. ¶ 8).

According to the Counterclaims, Hynd also directed several of FTC's employees—whom DLC Studios had offered employment—to steal certain artworks that FTC had fabricated as well as other property being stored at Cirkers, a fine art storage facility in New York City. (Counterclaims ¶ 56; Torres/Hynd Decl. ¶ 10). Torres has submitted emails as an exhibit to his declaration that suggest that Hynd did coordinate with at least one FTC employee regarding the removal of artwork from the Cirker's facility and in which that employee refers to “stalling” Torres to hear what Hynd wanted to do regarding the storage facilities. (Torres/Hynd Decl. ¶ 10 & Ex. B). Viewed in the light most favorable to Torres, this email may corroborate his allegations of Hynd's role in this claimed theft. Likewise, Torres claims that Hynd instructed at least one individual whom had been loaned artwork by FTC to return that artwork to DLC Studios rather than FTC. (Torres/Hynd Decl. ¶ 11 & Exs. C, D).

Finally, the Counterclaims allege that certain of the Counterclaim Defendants directed certain of FTC's customers to remit payment to DLC Studios rather than to FTC. (Counterclaims ¶¶ 41–43, 51, 60). Torres claims in his declaration that he “believe[s] that Hynd has been involved” in this alleged wrongdoing, but submits no evidence in support of this claim. (Torres/Hynd Decl. ¶ 12).

In response, Hynd claims she cannot be subject to personal jurisdiction in New York because of her limited contacts with the state: she is an Oregon resident where she votes, pays taxes, works, and holds a drivers license. (Hynd Decl. ¶ 2). She claims she has no personal contact with New York, including that she pays no New York taxes; does not own property in state; is not registered to vote in New York; does not receive government benefits from New York; does not have a New York bank account, address, driver's license, or telephone number; does not operate businesses in New York; and has not availed herself of the New York court system. (Hynd Decl. ¶ 3). As for her employment with DLC Studios, she notes that she is the “controller” of that New York-based entity, which pays her a set salary, and that her responsibilities include payroll, human resources, and certain financial activities. (Hynd Decl. ¶¶ 4–5). She further claims, however, that she is not an officer or director of DLC Studios and has limited authority to act on DLC Studios behalf. (Hynd Decl. ¶¶ 4–5).

In response, Torres attests that, in his experience, Hynd was extensively involved in the day-to-day operations of DLC Studios and that “there was not a single major decision at DLC with which Ms. Hynd was not involved.” (Torres/Hynd Decl. ¶ 3). Indeed, the Counterclaims allege that “[u]pon information and belief, Hynd is the CFO or its equivalent at DLC Studios.” (Counterclaims ¶ 5). Torres further notes that Hynd admits that she had regular written and electronic communications with FTC's employees in New York and travels to the New York offices one or two times per year. (Hynd Decl. ¶ 7; Torres/Hynd Decl. ¶ 4). He states that in November 2012 alone, Hynd “sent 666 separate emails relating to all aspects of DLC's business relations with FTC.” (Torres/Hynd Decl. ¶ 4).

B. Long–Arm Jurisdiction

1. Conversion of Computer Server and Other Items: C.P.L.R. § 302(a)(2).

Torres and FTC's first basis for asserting long-arm jurisdiction over Hynd is through C.P.L.R. § 302(a)(2), which provides for personal jurisdiction over claims arising from the conduct of a non-domiciliary who “commits a tortious act within the state.” As Hynd points out, however, § 302(a)(2) typically requires that the defendant have been physically present in New York while committing the tortious act. See Bensusan Restaurant Corp. v. King, 126 F.3d 25, 28 (2d Cir.1997) (explaining that “C.P.L.R. § 302(a)(2) reaches only tortious acts performed by a defendant who was physically present in New York when he performed the wrongful act” and holding that acts of trademark infringement not committed in New York but causing injury in New York did not give rise to jurisdiction under § 302(a)(2)); see also Overseas Media, Inc. v. Skvortsov, 277 Fed.Appx. 92, at 95 (2d Cir.2008) (“[T]he two alleged offers to sell rights to Nastoyashie Menty were not tortious acts committed within the state because the defendants were not physically present in New York when they committed the putative tort.”); Japan Press Serv. v. Japan Press Serv., No. 11–cv–5875, 2013 WL 80181, at *9, 2013 U.S. Dist. LEXIS 2163, at *27 (E.D.N.Y. Jan. 2, 2013) (“ ‘Even if [a plaintiff] suffered injury in New York, that does not establish a tortious act in the state of New York within the meaning of Section 302(a)(2).’ ” (quoting Bensusan, 126 F.3d at 28)); Emerald Asset Advisors v. Schaffer, 895 F.Supp.2d 418, 430 (E.D.N.Y.2012) (“The Second Circuit has held that the law in New York State with regard to personal jurisdiction under Section 302(a)(2) is clear: personal jurisdiction arises under this section only pursuant to actions taken while...