N.Y. Cent. Mut. Fire Ins. Co. v. ICON Health & Fitness, Inc.

• Decision Date: 01 June 2020
• Docket Number: 1:19-CV-00063 EAW
• Parties: NEW YORK CENTRAL MUTUAL FIRE INSURANCE COMPANY, as subrogee of Jeffrey and Chelsea Joy, Plaintiff, v. ICON HEALTH & FITNESS, INC., Defendant.
• Court: U.S. District Court — Western District of New York

NEW YORK CENTRAL MUTUAL FIRE INSURANCE COMPANY,as subrogee of Jeffrey and Chelsea Joy, Plaintiff, v. ICON HEALTH & FITNESS, INC., Defendant.

1:19-CV-00063 EAW

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK

June 1, 2020

DECISION AND ORDER

INTRODUCTION

Plaintiff New York Central Mutual Fire Insurance Company ("Plaintiff") commenced this action on January 11, 2019, bringing various New York state law claims against defendant Icon Health & Fitness, Inc. ("Defendant") pursuant to the Court's diversity jurisdiction under 28 U.S.C. § 1332. (Dkt. 1). Presently before the Court is a motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). (Dkt. 21). For the following reasons, the Court denies the motion to dismiss.

BACKGROUND

The following facts are taken from the allegations in the Amended Complaint, the operative pleading in this matter. (Dkt. 10). As is required on motions such as these, the Court treats Plaintiff's allegations as true.

Jeffrey and Chelsea Jay (the "Subrogors") owned real property located at 9119 Bonta Bridge Road, Jordan, New York 13080 (the "Premises"). (Id. at ¶ 2). Plaintiff issued an insurance policy to Subrogors that covered the Premises for certain types of damage and loss, including property damage. (Id. at ¶ 4).

In approximately 2004, the Subrogors purchased one of Defendant's treadmills from a friend, Carol Miles. (Id. at ¶ 7). Ms. Miles purchased the treadmill brand new in approximately 2002 from a Sears, Roebuck and Company ("Sears") department store located in or around Liverpool, New York. (Id.). The treadmill was located in the basement of the Premises, and it was last used on July 28, 2017. (Id. at ¶¶ 8-9). On or about July 31, 2017, the control/power circuitry of the treadmill failed and caused a fire. (Id. at ¶ 10). As a direct result of the fire, the Premises sustained significant property damage, and the Subrogors sustained other economic losses, all of which were covered by Plaintiff's policy. (Id. at ¶¶ 11-12). Plaintiff paid no less than $520,000.00 to cover the losses sustained as a result of the fire caused by the treadmill. (Id. at ¶ 13). Plaintiff is a citizen of New York, and Defendant is a citizen of Delaware and Utah. (Id. at ¶ 16).

Plaintiff filed the instant action on January 11, 2019. (Dkt. 1). On March 19, 2019, Defendant filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2). (Dkt. 7). Plaintiff filed an Amended Complaint on April 8, 2019 (Dkt. 10), as well as a response to the motion on April 9, 2019 (Dkt. 11). On April 18, 2019, Defendant filed an Answer to the Amended Complaint (Dkt. 12), and the case was referred to United States Magistrate Judge Jeremiah J. McCarthy to address all pretrial matters excluding dispositivemotions on April 19, 2019 (Dkt. 14). The undersigned dismissed the March 19, 2019 motion to dismiss as moot on September 5, 2019. (Dkt. 20).

On September 30, 2019, Defendant filed the instant motion to dismiss. (Dkt. 21). Plaintiff filed its response on October 21, 2019 (Dkt. 24), and Defendant's reply was filed on October 28, 2019 (Dkt. 25). Discovery is presently scheduled to be completed by July 31, 2020. (Dkt. 34).

DISCUSSION

As a preliminary matter, Defendant's motion is not procedurally proper. Federal Rule of Civil Procedure 12 provides that a motion pursuant to Rule 12(b)(2) "must be made before pleading if a responsive pleading is allowed." Fed. R. Civ. P. 12(b). In the instant matter, Defendant filed an Answer to Plaintiff's Amended Complaint. (Dkt. 12). "A strict interpretation of Rule 12(b) would therefore preclude defendants from moving to dismiss for lack of personal jurisdiction under Rule 12(b). Courts, however, have allowed untimely motions raising a defense enumerated in Rule 12(b), so long as the defense has been included in the movant's answer." Saldanha v. Baidyaroy, No. 91 CIV. 6413 (PKL), 1992 WL 147669, at *2 (S.D.N.Y. June 15, 1992). In Defendant's Answer, it asserted as an affirmative defense that it "is not subject to the personal jurisdiction of this Court." (Dkt. 12 at ¶ 47). "Accordingly, the Court will treat [Defendant]'s motion to dismiss as if it had been brought pursuant to Rule 12(b)(2) prior to the answer in this action, and in deciding [Defendant]'s motion, the Court will apply the principles that Courts have developed in deciding Rule 12(b)(2) motions." Saldanha, 1992 WL 147669, at *2; see E-Z Bowz, L.L.C.v. Prof'l Prod. Research Co., No. 00 CIV.8670 LTS GWG, 2003 WL 22064259, at *4 n.2 (S.D.N.Y. Sept. 5, 2003) (collecting cases).

I. Legal Standard

"The requirement that a court have personal jurisdiction flows not from Art. III, but from the Due Process Clause. . . . It represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty." Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982). "On a Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction, [the] plaintiff bears the burden of showing that the court has jurisdiction over the defendant." In re Magnetic Audiotape Antitrust Lit., 334 F.3d 204, 206 (2d Cir. 2003). "A plaintiff may meet this burden 'by pleading in good faith . . . legally sufficient allegations of jurisdiction, i.e., by making a "prima facie showing" of jurisdiction.'" Gaymar Indus., Inc. v. FirstMerit Bank, N.A., No. 06-CV-70S, 2007 WL 894217, at *3 (W.D.N.Y. Mar. 21, 2007) (quoting Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998)). "A plaintiff can make such a prima facie showing through affidavits and supporting material containing sufficient facts which, if credited, would establish personal jurisdiction over the defendant." Id. (citing Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996)). "[W]here the issue is addressed on affidavits, all allegations are construed in the light most favorable to the plaintiff and doubts are resolved in the plaintiff's favor, notwithstanding a controverting presentation by the moving party." A.I. Trade Fin., Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993).

II. Burden of Proof

Defendant contends that because one of the Subrogors had been deposed at the time it filed the instant motion, Plaintiff is required to prove that the Court has personal jurisdiction over the instant matter by a preponderance of the evidence. (Dkt. 21-4 at 2-3). For the following reasons, the Court finds that Plaintiff was only required to make a prima facie showing of personal jurisdiction at the time Defendant's motion was filed.

As discussed above, Plaintiff ultimately bears the burden of demonstrating the Court has personal jurisdiction over its case. See In re Magnetic Audiotape Antitrust Lit., 334 F.3d at 206. The extent of the showing a plaintiff must make depends on what stage the litigation is in:

If the defendant is content to challenge only the sufficiency of the plaintiff's factual allegation . . . by filing a Rule 12(b)(2) motion, the plaintiff need persuade the court only that its factual allegations constitute a prima facie showing of jurisdiction. If the defendant asserts in a Rule 56 motion that undisputed facts show the absence of jurisdiction, the court proceeds, as with any summary judgment motion, to determine if undisputed facts exist that warrant the relief sought. If the defendant contests the plaintiff's factual allegations, then a hearing is required, at which the plaintiff must prove the existence of jurisdiction by a preponderance of the evidence.

Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990). The standard a plaintiff must meet when making a showing of personal jurisdiction also varies depending on how much discovery has been conducted in a case. "[W]here the parties have conducted extensive discovery . . . but no evidentiary hearing has been held—the plaintiff's prima facie showing, necessary to defeat a jurisdiction testing motion, must include an averment of facts that, if credited by [the ultimate trier of fact], would suffice to establish jurisdiction over the defendant." Metro. Life Ins. Co. v. Robertson-Ceco Corp.,84 F.3d 560, 567 (2d Cir. 1996) (second alteration in original) (quotation omitted). However, "[w]here . . . plaintiffs have had minimal opportunity for discovery, the plaintiff need make only a prima facie showing of jurisdiction by pleading in good faith legally sufficient allegations of jurisdiction." In re Amaranth Nat. Gas Commodities Litig., 587 F. Supp. 2d 513, 526 (S.D.N.Y. 2008) (quotations omitted), aff'd, 730 F.3d 170 (2d Cir. 2013).

At the time Defendant filed the instant motion, Plaintiff had only a minimal opportunity for discovery. The record before the Court shows that the only discovery conducted when Defendant moved for dismissal was a deposition taken of one of Plaintiff's Subrogors on August 16, 2019. (See Dkt. 21-3). Plaintiff sent initial discovery demands to Defendant on August 1, 2019, but as of October 21, 2019—the date Plaintiff filed its response to the instant motion—Defendant had not yet responded. (Dkt. 24 at ¶ 7). Additionally, no evidentiary hearing has been held regarding the existence of personal jurisdiction. The Court finds that under these circumstances, Plaintiff "need make only a prima facie showing of jurisdiction by pleading in good faith legally sufficient allegations of jurisdiction." In re Amaranth Nat. Gas Commodities Litig., 587 F. Supp. 2d at 526.

III. Prima Facie Showing of Jurisdiction

"To make a prima facie showing that jurisdiction exists, a Plaintiff must demonstrate: (1) proper service of process upon the defendant; (2) a statutory basis for personal jurisdiction over the defendant; and (3) that exercise of jurisdiction over the defendant is in accordance with constitutional due process principles." Stroud v. Tyson Foods, Inc., 91 F. Supp. 3d 381, 385 (E.D.N.Y. 2015) (citing Licci ex rel. Licci v. LebaneseCanadian Bank, SAL,...