Planned Furniture Promotions, Inc. v. City Antique, Inc.

• Decision Date: 29 October 2014
• Docket Number: No. 3:14-cv-0279 (MPS),3:14-cv-0279 (MPS)
• Court: U.S. District Court — District of Connecticut
• Parties: PLANNED FURNITURE PROMOTIONS, INC., Plaintiff, v. CITY ANTIQUE, INC. d/b/a CLASSIC HOME & ANTIQUE, Defendant.

PLANNED FURNITURE PROMOTIONS, INC., Plaintiff, v. CITY ANTIQUE, INC. d/b/a CLASSIC HOME & ANTIQUE, Defendant.

No. 3:14-cv-0279 (MPS)

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

October 29, 2014

MEMORANDUM OF DECISION

I. Introduction

Interested in holding a going-out-of-business sale for its furniture store located in Portland, Oregon, defendant City Antique, Inc. ("City Antique"), an Oregon corporation, entered into a contract with plaintiff Planned Furniture Promotions, Inc. ("PFP"), a Pennsylvania corporation with its principal place of business in Connecticut. City Antique has filed a Motion to Dismiss [Doc. #13] ("MTD") PFP's complaint for insufficient service and lack of personal jurisdiction, as well as a Motion to Transfer Venue [Doc. #14], arguing that the Court should transfer this case under 28 U.S.C. §1404(a) to the United States District Court for the District of Oregon. PFP has filed an Opposition to the MTD [Doc. #18] and an Opposition to the Motion to Transfer Venue [Doc. #19] (collectively, the "Objections").

As discussed more fully below, Connecticut's long-arm statute does not allow this Court to exercise personal jurisdiction over City Antique. Nonetheless, in the interest of justice, this case is transferred to the United States District Court for the District of Oregon.

II. Background¹

PFP, a Pennsylvania corporation with its principal place of business in Connecticut, is a consulting corporation providing "high impact" promotional services to retail furniture stores throughout the United States. (Compl. ¶¶ 6, 13.) City Antique is an Oregon corporation that operated a retail furniture store in Portland, Oregon. (Compl. ¶ 11.) Kim Pelett, the sole owner of City Antique, first contacted PFP via email seeking assistance with City Antique's promotional sale, and PFP's Vice President, Tom Liddell, called her in response. (MTD, Pelett Aff. ¶ 5.) The parties then discussed City Antique's retention of PFP to conduct a going-out-of-business sale for City Antique (the "Sale"). (Compl. ¶ 16.) Mr. Liddell arranged for Andrew Winans, PFP's west coast manager, to fly to Portland for an in-person meeting with Ms. Pelett. (MTD, Pelett Aff. ¶ 5.) On May 8, 2013, Mr. Winans met Ms. Pelett in City Antique's Portland store, and Mr. Winans explained PFP's methodology and what City Antique could expect from PFP. (Id. ¶ 6.) Ms. Pelett had multiple conversations with Mr. Winans over the phone throughout May.² (Id.)

The parties conducted all contract negotiations in Oregon. (Id. ¶ 5.) On May 31, 2013, they entered into the Sale Promotion Consulting Agreement ("SPCA"), which governed the Sale. (Compl. ¶¶ 14, 22.)³ Throughout June 2013, PFP's counsel and City Antique's Portland-based counsel negotiated with City Antique's Oregon-based landlord to extend the store's lease. (MTD, Pelett Aff. ¶ 8.) On July 3, 2013, PFP's sales event manager and bookkeeper Naomi Lyon arrived in Portland and began working out of City Antique's store. (Id. ¶ 9.) Ms. Lyonopened a bank account in Oregon that PFP used for Sale-related expenses. (Id. ¶ 10.) In addition, PFP President Robert Rosenberg and Mr. Winans met with Ms. Pelett at City Antique's store multiple times to sign the SPCA's amendments. (Id. ¶ 9.)

PFP brings four claims against City Antique: breach of contract, fraud, unjust enrichment, and declaratory relief. In relevant part, PFP alleges that Ms. Pelett made a number of fraudulent misrepresentations to induce PFP to enter into the SPCA, and that despite PFP's advancing City Antique money for the Sale, City Antique has not reimbursed PFP, a violation of the SPCA. (See, e.g., Compl. ¶¶ 55-57, 79, 90, 97, 107.)

III. City Antique's Motion to Dismiss

"On a Rule 12(b)(2)⁴ motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing that the court has jurisdiction over the defendant." Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996) (citing reference omitted). "Prior to discovery, a plaintiff may defeat a motion to dismiss based on legally sufficient allegations of jurisdiction." Id. "Where . . . a court relies on pleadings and affidavits, rather than conducting a 'full-blown evidentiary hearing,' the plaintiff need only make a prima facie showing that the court possesses personal jurisdiction over the defendant." Johnsen, Fretty & Co., LLC v. Lands South, LLC, 526 F. Supp. 2d 307, 310 (D. Conn. 2007) (quoting DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001)). "The court must 'construe the pleadings and affidavits in the light most favorable to [the plaintiff], resolving all doubts in his favor.'" Id.

This case presents a question of personal jurisdiction over a foreign corporation in a diversity suit. "'[T]he amenability of a foreign corporation to suit in a federal court in a diversityaction is determined in accordance with the law of the state where the court sits,'" which, here, is Connecticut. Bensmiller v. E.I. Dupont de Nemours & Co., 47 F.3d 79, 81 (2d Cir. 1995) (quoting Arrowsmith v. United Press Int'l, 320 F.2d 219, 223 (2d Cir. 1963) (en banc)). "Connecticut utilizes a familiar two-step analysis to determine if a court has personal jurisdiction. First, the court must determine if the state's long-arm statute reaches the foreign corporation. Second, if the statute does reach the corporation, then the court must decide whether that exercise of jurisdiction offends due process." Id. "A trial court need not make the second of these inquiries if it finds that the pertinent section of the long-arm statute does not reach the defendant foreign corporation." General Star Indem. Co. v. Anheuser-Busch Co., No. 3:97-cv-2542, 1998 WL 774234, at *3 (D. Conn. Aug. 24, 1998) (citing Frazer v. McGowan, 198 Conn. 243, 246-47 (1986)).

City Antique argues this Court lacks personal jurisdiction over it for several reasons: City Antique is an Oregon corporation that owned and operated a retail store in Oregon, not Connecticut; the parties negotiated the SPCA entirely in Oregon; the Sale was conducted in Oregon; the parties used Portland-based media and supplies for the Sale, and hired employees from the Portland area to assistant in the Sale; the SPCA's choice-of-law provision selects Oregon law; PFP's counsel and Ms. Pelett conducted Sale-related negotiations with City Antique's Portland-based landlord in Oregon; PFP's bookkeeper flew to Oregon and opened up a bank account in Portland for the Sale, from which expenses from the Sale were paid; and Ms. Pelett's main contact at PFP was its California-based employee, Mr. Winans, not PFP's Connecticut personnel. (MTD, at 8-10.) Although PFP alleges Ms. Pelett communicated with PFP personnel in Connecticut and that PFP does not have a California office (see Objection to MTD, at 4; Rosenberg Aff. ¶ 10), it does not dispute the rest of City Antique's assertions, nordoes it allege that Ms. Pelett—or any City Antique employee—ever visited PFP's Connecticut office in relation to the SPCA.

PFP argues that City Antique is nonetheless subject to this Court's jurisdiction under Connecticut's long-arm statute and the due process clause. PFP relies on subsections (f)(1) and (f)(4) of Connecticut General Statutes § 33-929:

(f) Every foreign corporation shall be subject to suit in this state, by a resident of this state or by a person having a usual place of business in this state, whether or not such foreign corporation is transacting or has transacted business in this state and whether or not it is engaged exclusively in interstate or foreign commerce, on any cause of action arising as follow: (1) Out of any contract made in this state or to be performed in this state . . . or (4) out of tortious conduct in this state, whether arising out of repeated activity or single acts, and whether arising out of misfeasance or nonfeasance.

Conn. Gen. Stat. § 33-929(f). For the purposes of § 33-929(f), a "foreign corporation" is "a corporation incorporated under a law other than the law of [Connecticut]." Conn. Gen. Stat. § 33-602(15).

a. Analysis under § 33-929(f)(1)

Section 33-929(f)(1) allows a court to exercise personal jurisdiction over foreign corporations in two situations: for a cause of action arising "[o]ut of any contract made in this state or to be performed in this state." Conn. Gen. Stat. § 33-929(f)(1) (emphasis added). PFP does not allege or submit any evidence that it has satisfied the first clause of § 33-929(f)(1), i.e., that the SPCA was made in Connecticut. Nor does it dispute Ms. Pelett's sworn averments that "the agreement and any changes thereto were negotiated entirely in Oregon. Not one part of the agreement was negotiated in Connecticut." (MTD, Pelett Aff. ¶ 5.) Instead, PFP argues that the SPCA was to be "performed" in Connecticut, thereby triggering the second part of § 33-929(f)(1).

PFP concedes that the SPCA does not specify the location for performance of the contract, but that "PFP's performance under the SPCA could be reasonably expected to be made in Connecticut . . . [and] was made, in part, in Connecticut." (Objection to MTD, at 3-4.) PFP does not provide any evidence that City Antique performed the contract in Connecticut, instead relying on its own performance under the SPCA to satisfy § 33-929(f)(1).

PFP may rely on its own activities in Connecticut to trigger personal jurisdiction under § 33-929(f)(1), because "the relevant contractual performance, for purposes of applying Connecticut's long-arm statute, need not be that of the party over whom jurisdiction is sought." Johnsen, 526 F. Supp. 2d at 312 (collecting cases). However, "[w]henever a plaintiff has sought to rely on its own performance of the contract in Connecticut to satisfy the long-arm statute, [Connecticut] courts have found jurisdiction only where (1) the contract expressly contemplated or required performance in Connecticut; or (2) the plaintiff had actually performed its obligations in Connecticut and such performance was...