Resnick v. Rowe
| Decision Date | 08 September 2003 |
| Docket Number | Civil No. 03-00168 SOM-KSC. |
| Parties | David RESNICK, Plaintiff, v. Mike ROWE; Bruce Friedman; and Lenders Depot of Sherman Oaks, Inc., Defendants. |
| Court | Hawaii Supreme Court |
Jerry H. Stein, Levin & Stein, Los Angeles, CA, Ken T. Kuniyuki, Honolulu, HI, for plaintiff.
Wilma Sur, Dane L. Miller, Miller, Tokuyama, Kralik & Sur, Honolulu, HI, Gary Phillips, Astor & Phillips, Los Angeles, CA, for defendants.
ORDER DENYING DEFENDANTS' MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND ALTERNATIVE MOTION TO TRANSFER VENUE
This is a diversity case arising out of the failed sale of a golf course and other property. Plaintiff David Resnick of Oregon alleges that Defendants Mike Rowe, Bruce Friedman, and Lenders Depot of Sherman Oaks, Inc. (collectively, "Defendants"), breached an agreement to purchase that property (Count I), intentionally misrepresented and concealed facts (Count II), made negligent misrepresentations (Count III), and breached the covenant of good faith and fair dealing (Count IV). Defendants, all from California, have moved to dismiss Resnick's Complaint for lack of personal jurisdiction. Alternatively, Defendants request a transfer of venue.
Because Resnick has met his burden on this motion of demonstrating that this court has specific jurisdiction over each Defendant as to each claim, and because the convenience of witnesses and parties and the interests of justice do not require venue to be transferred, the court denies the motion.1
A plaintiff has the burden of establishing personal jurisdiction over a nonresident defendant. Ziegler v. Indian River County, 64 F.3d 470, 473 (9th Cir. 1995); Flynt Distrib. Co. v. Harvey, 734 F.2d 1389, 1392 (9th Cir.1984). Even when defendants are jointly liable, a plaintiff must establish personal jurisdiction over each defendant individually. Sher v. Johnson, 911 F.2d 1357, 1365 (9th Cir. 1990). Moreover, a plaintiff must establish personal jurisdiction over a defendant with respect to each claim. Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1289 n. 8 (9th Cir.1977).2
When, as here, a district court acts on a motion to dismiss without holding an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss. Ziegler, 64 F.3d at 473; Flynt, 734 F.2d at 1392. If the plaintiff makes such a prima facie showing on the motion to dismiss, the plaintiff must eventually establish the jurisdictional facts by a preponderance of the evidence at either a preliminary hearing or a trial. Flynt, 734 F.2d at 1392.
In determining whether a plaintiff has made a prima facie showing of jurisdictional facts, the court must accept uncontroverted allegations in a complaint as true, even if unsupported by any evidence in the record before the court. See AT & T Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir.1996), as supplemented by 1996 WL 490789 (9th Cir. Aug. 28, 1996). If the defendant presents evidence to contradict the allegations in the complaint, the plaintiff must go beyond the pleadings and present affirmative proof of personal jurisdiction through affidavits and declarations. See id. Conflicts between the parties' affidavits and other discovery materials must be resolved in favor of the plaintiff for purposes of deciding whether a prima facie case for personal jurisdiction exists. In re Pintlar Corp., 133 F.3d 1141, 1144 (9th Cir.), cert. denied, 524 U.S. 933 (1998).
It is undisputed that Resnick is a citizen of Oregon and that Defendants are all citizens of California. It is also undisputed that most of the events underlying this action occurred outside of Hawaii. Unless specifically noted below, the events described occurred in either Oregon or California.
Pursuant to an agreement made on January 9, 2003, Resnick had the right to purchase the Kiahuna Golf Course on Kauai, Hawaii, and several other properties (collectively, the "Golf Course Properties") for $9,850,000. See Declaration of David Resnick (August 6, 2003) ¶ 5. According to the terms of this agreement, Resnick was required to close escrow on these properties by April 9, 2003. Id.
Before executing the agreement of January 9, 2003, Resnick was already exploring the possibility of reselling the Golf Course Properties for a quick profit. Id. ¶ 6. Resnick says he found purchasers for the Golf Course Properties willing to buy all but one of the properties for $13.6 million. Id. ¶ 9. Resnick would have then had possession of the remaining property, valued at $3 million. Id. Resnick says that at least some of these purchasers were Hawaii residents. Id. ¶¶ 7-8.
According to Resnick, while negotiating the sale of the Golf Course Properties to these purchasers (the "Hawaii Purchasers"), he was also discussing the possibility of selling the Golf Course Properties to a joint venture consisting of Resnick, Rowe, and Friedman, or of selling the properties to Rowe and Friedman outright. Id. ¶¶ 10-12.
Resnick claims that he exchanged emails with Rowe and that Rowe ultimately told Resnick that Rowe was going to Kauai to see the Golf Course Properties. Id. ¶ 13. Rowe and Resnick allegedly met on Kauai on January 13, 2003. Id. Rowe says in his declaration that he was acting in his individual capacity. See Declaration of Mike Rowe (May 30, 2003) ¶ 1. The Complaint alleges, however, that Rowe was acting as an agent for Friedman and Lenders Depot, a company allegedly controlled by Friedman. See Complaint ¶¶ 10-14. The court notes that Rowe's statement was a disavowal of any action on behalf of his employer, Sienna Corporation, and was not directed at the allegation that he was an agent for Friedman or Lenders Depot. Rowe's statement therefore does not dispute the agency allegation in the Complaint.
Resnick says that, at the meeting in Hawaii on January 13, 2003, he told Rowe that, in light of Resnick's closing date of April 9, 2003, Rowe needed to decide quickly whether Rowe was interested in purchasing the Golf Course Properties. Resnick Decl. ¶ 13. Resnick says he also told Rowe that Resnick needed to know whether Rowe had the money to close escrow. Id. ¶ 15. Rowe allegedly responded by informing Resnick that Friedman was financially strong and could purchase the properties immediately. Id.
Rowe, according to Resnick, conducted due diligence in Hawaii on the Golf Course Properties on January 14 and 15, 2003. Id. ¶ 16.
On January 16, 2003, Rowe allegedly told Resnick by phone that he was prepared to pay $16 million for the Golf Course Properties. Resnick says he accepted the offer on the condition that the sale be structured as a joint venture. Id. ¶ 17.
Resnick says that, on January 22, 2003, he asked Rowe for Friedman's phone number. Resnick then allegedly called Friedman, who assured Resnick "that, through a company that he controlled, Lenders Depot, he had immediate access to and control of available funds sufficient to purchase the Kiahuna Golf Course Properties." Id. ¶ 19.
On February 7, 2003, after negotiations for a complete buyout at $17 million, Rowe and Resnick signed an agreement for the outright sale of the Golf Course Properties. Id. ¶ 26-27.
According to the February 7, 2003, agreement, Rowe was required to "deposit $17,160,000 in escrow with First American Title Company (such funds to be held in an account with a bank selected by Rowe) with escrow instructions mutually acceptable to Rowe and Resnick." See February 7, 2003, agreement (attached as Ex. 7 to Resnick Decl.). Resnick says that the money was to be wired to the Honolulu branch of First American Title. See Resnick Decl. ¶¶ first 29, 31.
Resnick claims that, when the escrow company in Honolulu did not timely receive the wired funds, Resnick contacted Rowe about the funds. Rowe allegedly informed Resnick that he did not know the status of the wire transfer because Friedman was the one who knew about the wire transfer and Friedman had called in sick. Id. ¶¶ second 29-30.
On February 12, 2003, Rowe allegedly informed Resnick that Friedman had told Rowe that the money had been wired to the Honolulu escrow officer, Marlene Texiera. Id. ¶ 31.
Resnick says that, on February 13, 2002, both Rowe and Friedman again assured Resnick that the funds had been wired to the Honolulu escrow officer. Id. ¶ 32.
On February 14, 2003, Rowe allegedly told the escrow officer in Honolulu "what he represented were the federal tracking numbers that he had received from Friedman" so that she could try to trace the funds. Id. ¶ 35. The escrow officer allegedly determined that the tracking numbers were not genuine. Id.
On or about February 18, 2003, the escrow officer in Honolulu allegedly received from Friedman a different set of tracking numbers, which also turned out to be false. Id. ¶ 37. Later that day, in a call involving Resnick, Rowe, and Friedman, Friedman allegedly said that the funds to purchase the Golf Course Properties were coming from an investor group in New York. Id.
Resnick claims that, on February 20, 2003, Friedman called Resnick to inform Resnick that the investor(s) had backed out, that there was no money, and that the deal was off. Id. ¶ 43.
On March 2, 2003, while Resnick was in Hawaii, Rowe allegedly called Resnick to say that he was still trying to find funds for the property. Id. ¶ 45. The next day, Rowe allegedly emailed Resnick in Hawaii to say that efforts to secure financing were continuing.
Resnick alleges that, because of Defendants' actions, he was unable to close the sale with the Hawaii Purchasers for $13.6 million—the price that they were originally willing to pay for all but one of the Golf Course Properties. Instead, he was able to sell those properties for only...
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