Centimark Corp. v. Lavine, 11cv0757

• Decision Date: 20 July 2011
• Docket Number: 11cv0757
• Parties: CENTIMARK CORPORATION, a Pennsylvania corporation, Plaintiff, v. DONALD LAVINE, an individual, Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

CENTIMARK CORPORATION, a Pennsylvania corporation, Plaintiff, v. DONALD LAVINE, an individual, Defendant.

11cv0757

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

Dated: July 20, 2011

ELECTRONICALLY FILED

MEMORANDUM OPINION RE: DEFENDANT'S MOTION TO DISMISS FOR LACK OF

PERSONAL JURISDICTION AND IMPROPER VENUE OR ALTERNATIVELY MOTION

TO TRANSFER VENUE (Doc. No. 23)

I. Introduction

Presently before this Court is Defendant, Donald Lavine's Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue or alternatively Motion to Transfer Venue. Doc. No. 23. After careful consideration of Defendant's Motion (Doc. No. 23), brief in support thereof (Doc. No. 25), Plaintiff's Response thereto (Doc. No. 35), and Defendant's Reply Brief (Doc. No. 56), Defendant's Motion will be DENIED.

II. Factual Background

The facts of the case, as taken from Plaintiff's Complaint and accepted as true solely for the purpose of this Opinion are as follows:

Defendant, Donald Lavine, is a former employee of Plaintiff, CentiMark, which is a national commercial roofing company based in Pennsylvania. Doc. No. 1, ¶¶ 1-2. Lavine signed an Employment Agreement with CentiMark on November 12, 1998 and began his employment on November 16, 1998. Id. at ¶ 16. Lavine's Employment Agreement, which was signed and initialed on each page, provided the following:

1. Post-employment restrictions on competition

2. A requirement to notify CentiMark of future employment

3. CentiMark's right to obtain injunctive relief to enforce the agreement

4. Pennsylvania law would govern any dispute about the Employment Agreement

5. Any legal actions to enforce the Employment Agreement would be brought in Washington County, Pennsylvania.

Id. at ¶ 24.

Although initially hired as a Technical Representative, Lavine eventually became a Senior Project Manager assigned to the metro portions of Detroit, Michigan, with key contacts with CentiMark customers. Id at ¶ 2. As part of his duties, Lavine had access to confidential proprietary business information regarding CentiMark's current and potential customers and pricing. Id. at ¶ 14. Lavine's Employment Agreement provided that he be bound by post-employment obligations, including non-disclosure of such confidential information, a non-compete provision, and a non-solicitation of customer provision. Id. at ¶ 28.

In or about September 2010, CentiMark discovered that Lavine had improperly emailed sensitive CentiMark documents, including a list of all CentiMark warranty customers in Michigan, to his personal email address. Id. at ¶¶ 54-55. The list of all CentiMark warranty customers is an important confidential document because it indicates when particular businesses, which were often large, important, repeat customers which "generat[ed] millions of dollars of revenue on an annual basis," may need CentiMark or a competitor's roofing services. Doc. No. 1, ¶ 38, 41-45, 58. CentiMark was suspicious of Lavine's actions because of comments that he had made regarding his desire to set up a competing business. Id. at ¶ 62. When confronted, Lavine responded that he needed the documents to enable him to work from home. Id. at ¶ 64.CentiMark demanded that Lavine return the documents, which it was assured would be returned. Id. at ¶¶ 65-66.

However, on October 7, 2010, CentiMark terminated Lavine because he had downloaded proprietary and confidential documents to his personal email address, which had not been returned, and because his performance had decreased (arguably because he had been planning to leave CentiMark to work for one of its competitors). Doc. No. 1 at ¶ 62, 67. On December 14, 2010, in response to a letter sent by CentiMark regarding the information Lavine had downloaded to his personal email address, Lavine signed an acknowledgment that he had the opportunity to review his Employment Agreement and understood his obligation to return confidential information and to notify CentiMark of any new employment. Id. at ¶¶ 68, 70.

Subsequently, Lavine became employed by a direct competitor, Great Lakes Roofing, Inc., but did not notify CentiMark as was required by section 4.08 of his Employment Agreement. Doc. No. 1, ¶¶ 73-76. CentiMark customers have informed CentiMark that Lavine has contacted them to solicit business for Great Lakes. Id. at ¶ 77. Other customers who would have selected CentiMark to complete substantial roofing projects in 2011 have instead decided to use Great Lakes. Id. at ¶ 78. The materials downloaded by Lavine have not been returned to CentiMark. Doc. No. 1. Furthermore, despite this Court's June 13, 2011, Order (Doc. No. 9) directing that all parties were to "preserve, maintain and protect" all documents and software identified in Plaintiff's First Request for Production of Documents, Lavine has failed to produce his laptop hard drive for discovery purposes, and has informed this Court that such hard drive is now missing.

III. Standard of Review

When deciding a Rule 12(b)(2) motion, a court is required to accept the plaintiff's allegations as true, and is to construe disputed facts in favor of the plaintiff. Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009) (internal quotes and citation omitted). Once personal jurisdiction is challenged, the burden rests upon the plaintiff to establish it. Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004). To establish personal jurisdiction and defeat a Rule 12(b)(2) motion to dismiss, plaintiff must go beyond the pleadings and make an affirmative proof. See Dayhoff Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1302 (3d Cir. 1996) (plaintiff bears the burden of proving by affidavits or other competent evidence that jurisdiction is proper).

The Pennsylvania long arm statute permits the courts of Pennsylvania to exercise personal jurisdiction over nonresident defendants to the constitutional limits of the Due Process clause of the Fourteenth Amendment. Dollar Sav. Bank v. First Sec. Bank, N.A., 746 F.2d 208, 211 (3d Cir. 1984). The Due Process clause permits courts to exercise two types of personal jurisdiction over a defendant: general and specific. See Mellon Bank (East) PSFS, Natl Assn. v. Farino, 960 F.2d 1217, 1221 (3d Cir. 1992).

General jurisdiction is the broader of the two types, and is supported where a defendant has maintained systematic and continuous contacts with the forum state. See Marten v. Godwin, 499 F.3d 290, 296 (3d Cir. 2007). The contacts need not be related to the particular claim proceeding in court. Metcalfe, 566 F.3d at 334. If a party is subject to the general jurisdiction of a state, that party can be called to answer any claim against her, regardless of whether the subject matter of the cause of action has any connection to the forum. Mellon Bank, 960 F.2d at 1221.

Absent "continuous and systematic" contacts, a plaintiff may rely on "specific jurisdiction" where the cause of action is related to or arises out of the defendant's contacts with the forum. IMO Industries, Inc. v. Kiekert AG, 155 F.3d 254, 259 n.2 (3d Cir. 1998).

IV. Discussion

Lavine seeks dismissal of CentiMark's Complaint, which alleges: (1) breach of contract, (2) violation of the Pennsylvania Uniform Trade Secrets Act, (3) tortious interference with contract and with prospective business relations, (4) unfair competition, and (5) breach of fiduciary duty/duty of loyalty. Doc. No. 1. In support of his Motions, Lavine argues that he is not subject to personal jurisdiction or venue in Pennsylvania because but for his Employment Agreement, which he contends is a contract of adhesion, he would not be amenable to suit in Pennsylvania for any cause of action. Doc. No. 25, 2. In the alternative, Lavine contends that even if the Employment Agreement's forum selection clause is valid, venue should be transferred to the United States District Court for the Eastern District of Michigan pursuant to 28 U.S.C. § 1404(a), a forum which is more convenient for the parties, the witnesses and is in the interests of justice. Id.

a. Motion to Dismiss Based Upon Lack of Personal Jurisdiction

Pursuant to Federal Rule of Civil Procedure 4(k), district courts determine personal jurisdiction according to the law of the state in which they sit. Personal jurisdiction in Pennsylvania is proper when both the Due Process clause of the Fourteenth Amendment and Pennsylvania's Long-Arm statute, 42 Pa. C.S.A. §§ 5301, 5322, are satisfied. Max Daetwyler Corp. v. R. Meyer, 762 F.2d 290, 293 (3d Cir. 1985). According to Pennsylvania's Long-Arm statute, personal jurisdiction exists "to the fullest extent allowed under the Constitution of the United States and may be based on the most minimum contact with this Commonwealth allowedunder the Constitution of the United States." 42 Pa. Con. Stat. § 5322(b).¹ Pursuant to the Due Process Clause of the Fourteenth Amendment, a non-citizen may be subject to jurisdiction in a forum, when there are sufficient minimum contacts with the forum so that requiring litigation in the forum does not offend "traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).

In support of his Motion to Dismiss, Lavine contends that his Employment Agreement's forum selection clause does not subject him to personal jurisdiction in Pennsylvania. The applicable forum selection clause provides that:

this Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania and Employee hereby irrevocably submits to the personal jurisdiction of the courts sitting in Washington County, Pennsylvania in any action or proceeding arising out of, or relating to, this Agreement . . . . Jurisdiction and venue of all causes of action arising out of, or related to, this Employment Agreement shall be exclusively vested in the state or federal courts in Washington County, Pennsylvania.

Doc. No. 1-2, ¶ 7.06.

Lavine contends that the forum selection clause in his Employment...