C.B.C. Wood Products v. Lmd Integrated Logistics

• Decision Date: 07 October 2006
• Docket Number: No. 06 CV 2673(ADS)(AKT).,06 CV 2673(ADS)(AKT).
• Citation: 455 F.Supp.2d 218
• Parties: C.B.C. WOOD PRODUCTS, INC., Plaintiff, v. LMD INTEGRATED LOGISTICS SERVICES, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

455 F.Supp.2d 218

C.B.C. WOOD PRODUCTS, INC., Plaintiff, v. LMD INTEGRATED LOGISTICS SERVICES, INC., Defendant.

No. 06 CV 2673(ADS)(AKT).

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

October 7, 2006.

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Reisman, Peirez & Reisman, L.L.P., by E. Christopher Murray, Esq., of counsel, Garden City, NY, for Plaintiff.

Mound Cotton Wollan & Greengrass, by Francis A. Montbach, Esq., Jacqueline K. Seidel, Esq., of counsel, New York, NY, for Defendant.

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

C.B.C. Wood Products, Inc. ("CBC" or the "Plaintiff'), commenced this diversity action against LMD Integrated Logistics Services, Inc. ("LMD" or the "Defendant"), seeking monetary damages for the alleged breach of an agreement and conversion of property.

Pending before the Court is a motion to dismiss the Complaint by the Defendant pursuant to Federal Rules of Civil Procedure 12(b)(2) and (3) ("Fed. R. Civ.P.") or, alternatively, to transfer venue to the District of New Jersey pursuant to 28 U.S.C. § 1406(a).

BACKGROUND

A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2) is "inherently a matter requiring the resolution of factual issues outside of the pleadings." Yellow Page Solutions, Inc. v. Bell Atl. Yellow Pages Co., 2001 WL 1468168, at *1 (S.D.N.Y. Nov.19, 2001). As a result, "all pertinent documentation submitted by the parties may be considered in deciding the motion." Id. The following facts, therefore, are drawn from the complaint, affidavits, and documentary exhibits submitted by the Plaintiff and the Defendant, and are construed in the light most favorable to the Plaintiff. Id. (citing CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir.1986)).

The Plaintiff, a New York corporation, is a wholesale distributor of plywood and other lumber products. The Defendant, a provider of logistics services for warehousing, distribution and transportation for domestic and international companies, is incorporated in Delaware, with its principal place of business in California.

In or about December 2005, the Plaintiff received a shipment of plywood from Bellimar, BVBA, a Belgian export agency. The plywood was stored at the Defendant's Elizabeth, New Jersey warehouse and the Plaintiff and the Defendant communicated by telephone and mail regarding the stored plywood. The Defendant was not responsible for transporting the lumber into New York.

According to the declaration of Louis Diblosi, Jr., ("Diblosi declaration") the Defendant's Chief Executive Officer and Chairman, in December 2005, the Defendant released some of the plywood to the Plaintiff. On December 20, 2005, the Plaintiff informed Bellimar that it could not complete payment of its invoice. Also, on December 20, 2005, in an e-mail, Bellimar instructed the Defendant not to release any additional plywood without its written confirmation. Bellimar provided the Defendant with copies of the invoices from its transaction with the Plaintiff, stating that "the goods are property of Bellimar until complete payment of the invoice." Diblosi declaration at Ex.3. The Defendant did not release any additional plywood from its storage facility to the Plaintiff.

In its Complaint, the Plaintiff alleges that the plywood stored at LMD's New Jersey facility was CBC's property and that the Defendant was aware that CBC had full ownership of the plywood. The Plaintiff claims that LMD exercised unlawful dominion and control over CBC's property and released a portion of plywood to a third party. The Plaintiff asserts that the Defendant breached its agreement with the Plaintiff and wrongfully converted the Plaintiff's property. The Plaintiff does not allege that it had a written contract with the Defendant.

The Defendant now moves to dismiss this action pursuant to Fed.R.Civ.P. 12(b)(2) and (3) for lack of personal jurisdiction and improper venue, or alternatively, to transfer venue to the District of New Jersey.

DISCUSSION

I. PERSONAL JURISDICTION

In a motion to dismiss for lack of personal jurisdiction pursuant to Fed. R.Civ.P. 12(b)(2), the plaintiff bears the burden of demonstrating that the Court has jurisdiction over the defendant. See Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 208 (2d Cir.2001); Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir.1999)(citing Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir.1996)). Where, as here, the parties have not yet conducted discovery, the plaintiff may defeat such a motion by making a prima facie showing of jurisdiction by way of the complaint's allegations, affidavits, and other supporting evidence. Bank Brussels Lambert, 171 F.3d at 784; Kerman v. Kurz-Hastings, Inc., 175 F.3d 236, 240 (2d Cir.1999). Furthermore, materials presented by the plaintiff should be construed in the light most favorable to the plaintiff and all doubts resolved in its favor. See A.I. Trade Fin., Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir.1993).

Personal jurisdiction over a nonresident defendant in a federal diversity action is determined by the law of the forum state. See Whitaker, 261 F.3d at 208. Therefore, this Court must look to New York's personal jurisdiction statutes, namely the New York Civil Practice Law and Rules ("CPLR") Sections 301 and 302, to determine whether the Plaintiff has made a prima facie showing of personal jurisdiction over the out-of-state Defendant. Then, if jurisdiction is found, the Court must determine whether such exercise of jurisdiction under state law satisfies the federal due process requirements of "fair play and substantial justice." Burger King Corp., v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Int'l Shoe Co. v. Wash., 326 U.S. 310, 320, 66 S.Ct. 154, 90 L.Ed. 95 (1945)); see also Bank Brussels Lambert, 171 F.3d at 784.

In the Complaint, the Plaintiff alleges that the Defendant operates facilities in "numerous states providing worldwide warehousing, transportation and distribution services." The Plaintiff further claims that the Defendant regularly conducts business in New York by providing transportation and distribution services, soliciting customers and entering into contracts in the state. In its memorandum of law in opposition to the Defendant's motion, the Plaintiff argues that personal jurisdiction exists under Sections 301 and 302(a)(1). Specifically, the Plaintiff claims that: (1) LMD is a licensed commercial freight carrier in 48 states, including New York; (2) LMD provides trucking and delivery services into New York; (3) LMD maintains an interactive website permitting consumers to place orders and conduct transactions on the internet; and (4) LMD had regular contacts with the Plaintiff at its New York office, including sending invoices to CBC, engaging in telephone calls with CBC employees and notifying CBC when material had arrived at the warehouse.

A. As To General Jurisdiction

Pursuant to New York CPLR § 301, "[a] court may exercise such jurisdiction over persons, property, or status as might have been exercised heretofore." This section authorizes the general exercise of personal jurisdiction over a nonresident defendant if it is "engaged in such a continuous and systematic course of doing business here as to warrant a finding of its presence in this jurisdiction." J.L.B. Equities, Inc. v. Ocwen Fin. Corp., 131 F.Supp.2d 544, 547-48 (S.D.N.Y.2001) (citations omitted). "Occasional or casual business in New York will not meet the requirements of Section 301." See Fashion Fragrance & Cosmetics v. Croddick, No. 02 Civ. 6294, 2003 WL 342273, *3, 2003 U.S. Dist. LEXIS 2220, at *7 (S.D.N.Y. Feb.11, 2003).

To determine whether a defendant "does business" in New York, courts have focused on the following factors: "the existence of an office in New York; the solicitation of business in the state; the presence of bank accounts and other property in the state; and the presence of employees of the foreign defendant in the state." Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 58 (2d Cir.1985); CES Indus., Inc. v. Minn. Transition. Charter School, 287 F.Supp.2d 162, 166 (E.D.N.Y.2003).

In an affidavit, Leslie Roth, Vice President of the Plaintiff, states that the Court should exercise personal jurisdiction over the Defendant, pursuant to Section 301 because the Defendant: (1) is a licensed freight carrier in New York; (2) maintains a website accessible to residents of New York; and (3) had regular contacts with the Plaintiff through telephone calls to the Plaintiff's New York office and mailing of invoices to the Plaintiff's New York office.

It is undisputed that the Defendant does not have a New York office or any property in New York. Further, it is undisputed that the Defendant does not have New York bank accounts or employees in New York. Nor does the Defendant have a mailing address, telephone line, or post office box within the state. In addition, the Defendant does not pay New York income or property taxes. Although the Plaintiff argues that the Defendant has contact with New York through telephone calls to the Plaintiff in New York and the mailing of invoices to the Plaintiff in New York, the "`[s]olicitation of business alone will not justify a finding of corporate presence in New York with respect to a foreign manufacturer or purveyor of services.'" Burrows Paper Corp. v. R.G. Engineering, Inc., 363 F.Supp.2d 379, 384 (N.D.N.Y. 2005) (quoting Laufer v. Ostrow, 55 N.Y.2d 305, 310, 449 N.Y.S.2d 456, 434 N.E.2d 692 (1982)).

Although the Plaintiff further alleges that the Defendant maintains a website accessible by New York residents and to solicit New York residents, it is wellestablished that solicitation of business alone will not justify a finding of corporate presence in New York. See Fashion Fragrance & Cosmetics, 2003 WL 342273, *5, 2003 U.S. Dist. LEXIS 2220, at *9. The Plaintiff does not claim that the website was...