Resetarits Constr. Corp. v. E & N Constr., Inc.

• Decision Date: 29 April 2021
• Docket Number: 19-CV-1258S
• Parties: RESETARITS CONSTRUCTION CORPORATION, Plaintiff, v. E & N CONSTRUCTION, INC. and ELIO FERREIRA, Defendants.
• Court: U.S. District Court — Western District of New York

RESETARITS CONSTRUCTION CORPORATION, Plaintiff, v. E & N CONSTRUCTION, INC. and ELIO FERREIRA, Defendants.

19-CV-1258S

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK

April 29, 2021

DECISION AND ORDER

I. Introduction

Before this Court is a contract dispute arising from a construction Master Subcontract for a project in New Jersey. Defendants (a New Jersey subcontractor and its principal) removed this case to this Court (Docket No. 1, Notice of Removal). Plaintiff Resetarits Construction Corporation (or "RCC") is a New York corporation and contractor on the New Jersey project, while Defendant E&N Construction ("E&N") is a New Jersey corporation (id. ¶¶ 7, 8, Ex. A, State Compl.) that performed work in the project. In his declaration in support of the Motion to Dismiss, Defendant Elio Ferreira states that he is a citizen of New Jersey (Docket No. 3, Decl. of Elio Ferreira ¶ 6; see also Docket No. 1, Notice of Removal ¶ 8 (Ferreira not a citizen of New York).

This Decision and Order considers (a) Defendants' Motion to Dismiss (Docket No. 3) and (b) Plaintiff's Cross-Motion to Remand and for other, alternative relief (Docket No. 5).

For the reasons stated herein, Plaintiff's Cross-Motion to Remand (Docket No. 5) is denied. Defendants' Motion to Dismiss (Docket No. 3) for lack of personal jurisdiction over Defendant Elio Ferreira is granted and their Motion to Dismiss (id.) Defendant E&N Construction, Inc., is granted. Plaintiff's alternative motion for limited jurisdictional discovery (Docket No. 5) is denied and its motion (id.) for leave to amend the state Complaint as proffered is denied.

II. Background

A. Removal

Defendants removed this case from New York State Supreme Court, Erie County (Docket No. 1, Notice of Removal), asserting federal jurisdiction based on diversity jurisdiction (id. ¶¶ 7, 8, 4). In its Complaint, RCC alleges that RCC and E&N entered into a master subcontract ("Master Subcontract") for construction of the Carrino Plaza Apartments in New Jersey (id., Ex. A, Compl. ¶ 6; see Docket No. 5, Decl. of David Resetarits [First], Ex. 1, Master Subcontract E&N Construction and Resetarits Construction Corporation). E&N denies this (Docket No. 7, Decl. of Shawn Roney ¶¶ 9, 12).

RCC alleges E&N breached the Master Subcontract by failing to secure labor and material bonds, performance bonds, and appropriate insurance; refusing to bill in a form acceptable to RCC, not paying required wages and benefits; and other breaches¹ (id. ¶ 7). To the extent E&N did not pay, RCC claims that E&N's principal owner Defendant Ferreira was personally responsible for the unpaid wages and benefits (id. ¶ 8). In addition to claiming damages from the breach, RCC also seeks to recover its attorneys' fees, costs, and interest under Article 5.6 of the Master Subcontract (id. ¶¶ 9, 10).

B. Master Subcontract

Article 20.4 of the Master Subcontract allows RCC to enforce its terms and provides that "Any such action and all actions by either party hereto, shall be venued and heard exclusively in Supreme Court, Erie County, New York" (Docket No. 5, Resetarits [First] Decl., Ex. 1, art. 20.4). Article 2.2 calls for Work Orders that RCC issues to the subcontractor and "upon acceptance, a subcontract for that portion of the work shall exist between Resetarits and the Subcontractor for such Project, and containing all of the terms and conditions of this Master Subcontract and the provisions of the Work Order" (id.). The Master Subcontract contains an entire agreement provision which made the Master Subcontract, its attachments (including Work Orders, see id., art. 2.2), contract documents referred therein the "sole agreement between the parties hereto" (id., art. 16).

The Master Subcontract submitted in this case is unsigned by both parties (id., at page 15). RCC's Work Order (Docket No. 5, Ex. 3), however, was signed by both parties; senior project manager Thomas Wheeler² signed for RCC and Shawn Roney signed for E&N (id.). While the Work Order (Docket No. 5, Resetarits [First] Decl., Ex. 3; see also Docket No. 8, Resetarits Second Decl., Ex. 1) specified the scope of work, it does not contain a reference to the Master Subcontract or a forum selection clause. The Work Order does provide that E&N was to pay prevailing wages (id., at first to second pages) but did not require E&N to have requisite bonding and insurance or required procedures for payment.

At issue here is the breach of this Master Subcontract (Docket No. 5, Decl. of David Resetarits [First], Ex. 1). This agreement (as RCC argues) is the asserted basis forpersonal jurisdiction over Defendants from their execution of the agreement containing a forum selection clause. The forum selection clause is also the reason RCC now seeks to remand this action to the New York State Supreme Court, Erie County.

David Resetarits, the president and owner of RCC (Docket No. 5, Resetarits [First] Decl. ¶ 1), represents that RCC never enters into a Work Order without the subcontractor first agreeing to a Master Subcontract (Docket No. 5, Resetarits [First] Decl. ¶¶ 8, 10 (practice of RCC to require subcontractors to agree to Master Subcontract before issuance of any Work Order); Docket No. 8, David Resetarits Decl. Second ¶ 15). The Master Subcontract here had the parties "agree that the terms of this Master Subcontract shall be deemed expressly incorporated by reference into each Work Order" (Docket No. 5, Resetarits [First] Decl. ¶ 14, Ex. 1, at 1).

RCC sent the Master Subcontract to E&N for execution (Docket No. 5, Resetarits [First] Decl. ¶ 7, Ex. 1) but RCC later could not find that agreement (id. ¶ 11), concluding that E&N still had it (id. ¶ 12). RCC argues that after E&N agreed upon the Master Subcontract RCC then sent the Work Order to E&N (id. ¶ 13, Ex. 3).

Shawn Roney for E&N contends that the parties agreed to forego the Master Subcontract and to have E&N perform under a negotiated Work Order (Docket No. 7, Decl. of Shawn Roney ¶¶ 8-9, 13; Docket No. 8, Resetarits Second Decl. ¶ 6). E&N consistently rejected provisions that require it to litigate outside of New Jersey (Docket No. 7, Roney Decl. ¶¶ 7, 10-11). Roney claims he negotiated with Tom Vitiello whom Roney contends represented Plaintiff with another unnamed person (id. ¶ 9). E&N did not return a signed Master Subcontract because it rejected various terms in it, as E&N claims it communicated to Vitiello (id. ¶¶ 9, 10-12). Roney argues that Vitiello was "wellaware that E&N rejected the terms of the proposed Master Subcontract" and that Vitiello and E&N agreed to work from the Work Order only (id. ¶ 13). E&N proceeded with the New Jersey project "without agreeing to any of the terms in the proposed Master Subcontract form" (id. ¶ 14).

Vitiello states, however, he never worked for RCC (he was employed instead by Sphere Construction) and claims he never negotiated with Roney or E&N regarding RCC's Master Subcontract with E&N (Docket No. 11, Thomas Vitiello Decl. ¶¶ 5-6, 7-8, 9-11). Sphere's role in this construction or negotiations (if any) is not stated in this record.

David Resetarits agreed that Vitiello was not employed by or an agent of RCC (Docket No. 8, Resetarits Second Decl. ¶ 9). Resetarits did not give authority to Vitiello to negotiate the Master Subcontract with E&N (id. ¶ 11; see id. ¶ 12). Resetarits states that he was the sole individual who could bind RCC to terms of a Master Subcontract (id. ¶ 10). E&N never stated to Resetarits that E&N rejected the Master Subcontract (id. ¶ 13). Had E&N communicated to Resetarits that there was no agreement to a Master Subcontract, "RCC would have not agreed to a Work Order with E&N" (id. ¶ 14; see id. ¶ 16 (if E&N had communicated, there would not have been a Work Order until the terms of the Subcontract were finalized). If a subcontractor like E&N disagrees with the Master Subcontract, Resetarits would consider the requested modifications and "take them into account when negotiating other provisions of the Master Subcontract and/or Work Order, including contract price" (id. ¶ 18; see id. ¶ 20) as was done with the terms of the Work Order here (id. ¶ 19, Ex. 1, Work Order with initialed changes). RCC would not have agreed to the Work Order if E&N rejected the Master Subcontract (id. ¶ 21) and not agreed to have its relationship with E&N be solely governed by the Work Order (id. ¶ 22)."When RCC agreed to the terms of the Work Order, it did so without having received any indication that Defendant E&N was rejecting or objecting to the Master Subcontract" (id. ¶ 23). RCC mailed the Master Subcontract to E&N and emailed to ask E&N to execute it (id. ¶ 25) but E&N never responded to the email or state it was rejecting the Master Subcontract (id. ¶ 26).

Responses to Defendants' Motion to Dismiss³ were due by October 15, 2019, and any reply by October 22, 2019 (Docket No. 4). Plaintiff's Cross-Motion serves as its response to Defendants' Motion to Dismiss (Docket No. 5). Defendants duly replied (Docket No. 7). This Court did not schedule briefing on the Cross-Motion, but Defendants responded in their Reply (id.), Plaintiff replied (Docket No. 8), and supplemented that reply (Docket No. 11; see Docket Nos. 9, 10). The Motions then were deemed submitted without oral argument.

III. Discussion

This Court will consider first Defendants' Motion to Dismiss claims against Elio Ferreira (Docket No. 3) whether Plaintiff asserted personal jurisdiction over Ferreira. Next, this Court will address Plaintiff's Cross-Motion to Remand (Docket No. 5), the applicability of the forum selection clause in the Master Subcontract and its impact on the remand of this action. Next, this Court will consider (if necessary) Defendants' Motion toDismiss E&N on personal jurisdiction grounds (Docket No. 3). Then, if needed this Court will consider Plaintiff's alternative motions for limited discovery and for leave to amend the (state) Complaint (Docket No. 5).

A. Applicable Standards

1. Motion to...