Ye Olde Time Keepers, Inc. v. C.R. Martin Auctioneers, Inc.
| Decision Date | 17 April 2018 |
| Docket Number | 2:17-cv-04377 (ADS)(ARL) |
| Parties | YE OLDE TIME KEEPERS, INC., Plaintiff, v. C.R. MARTIN AUCTIONEERS, INC. doing business as Clars Auction Gallery, Defendant. |
| Court | U.S. District Court — Eastern District of New York |
APPEARANCES:
Zukerman Gore Brandeis & Crossman, LLP
Counsel for the Plaintiff
New York, NY 10036
By: Ted Poretz, Esq., Of Counsel
David C. Lee, Esq. Of Counsel
41 Madison Avenue
New York, NY 10010
By: Eleanor Martine Lackman, Esq., Of Counsel
The Plaintiff Ye Olde Time Keepers, Inc. (the "Plaintiff" or "Time Keepers") brought this breach of contract action against the Defendant C.R. Martin Auctioneers, Inc. doing business as Clars Auction Gallery (the "Defendant" or "Clars") based on a pair of rare 19th century Chinese clocks purchased by the Plaintiff at an auction hosted by the Defendant. The Plaintiff alleges that the clocks sold by the Defendant are recently-manufactured duplicates, and that the Defendant fraudulently induced the Plaintiff to purchase them.
Presently before the Court is a motion by the Defendant to dismiss the action for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure ("FED. R. CIV. P." or "Rule") 12(b)(2); or for improper venue under 12(b)(3). In the alternative, the Defendant asks the Court to transfer venue to the United States District Court for the Northern District of California (the "NDCA") pursuant to 28 U.S.C. § 1404(a) ("Section 1404(a)"). For the following reasons, the Defendant's motion to dismiss the complaint pursuant to Rules 12(b)(2) or 12(b)(3) is denied without prejudice. The Defendant's motion to transfer venue to the NDCA pursuant to Section 1404(a) is denied.
The following facts are drawn from the Plaintiff's first amended complaint, as well as the parties' submissions. Everlast World's Boxing Headquarters Corp. v. Ringside, Inc., 928 F. Supp. 2d 735, 737 n.1 (S.D.N.Y. 2013) (); In re Stillwater Capital Partners Inc. Litig., 851 F. Supp. 2d 556, 566-67 (S.D.N.Y. 2012) ().
In deciding a motion to dismiss for lack of personal jurisdiction, "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).
The Plaintiff is a New York corporation which buys and sells rare and antique clocks and timepieces. It is managed and owned by Dennis Nichinson and his son, Jason Nichinson (the "Nichinsons").
The Defendant is a California corporation which conducts regular auctions. The Defendant's auctions are conducted live at its Oakland, California offices, but it advertises online, and accepts bids via telephone and the internet. On its website, www.clars.com, the Defendant boasts that it "works with buyers and sellers throughout the world." (Pl.'s Ex. A).
The specific auction at issue was held on May 22, 2016 (the "auction"). The Defendant advertised the auction on its website, www.clars.com, and sent catalogs to past buyers. Prior to May 22, 2016, the Plaintiff had never purchased any items from the Defendant, and therefore was made aware of the auction by visiting the Defendant's website.
The auction included Lot 6526, which consisted of a "rare pair of Chinese ormolu Automaton clocks, Guangzhou Workshop (the "[c]locks")." (Decl. of Redge Martin ¶ 13 (internal alteration omitted)). On May 20, 2016, Jason Nichinson emailed the Defendant to express his interest in bidding on the Clocks. He asked for a condition report on the clocks, and requested that the Defendant set up a phone bid for him. The email listed two phone numbers, both of which had New York "516" area codes. However, the email did not state that Jason Nichinson was located in New York or that he was interested in purchasing the clocks for a New York company. Clars emailed Jason Nichinson to inform him that he was registered to bid on the auction by telephone, and that all telephone bids are subject to the Clars' conditions of sale. Clars also sent a condition report to Jason Nichinson, and confirmed that the clocks were authentic ancient Chinese clocks.Also relevant here, at some point before the auction, the Nichinsons supplied the Defendant with a New York State resale certificate so that the Plaintiff would not be charged sales tax; and also gave the Defendant a New York State driver's license for identification. It is not clear whose driver's license was provided.
On May 22, 2016, the Nichinsons watched the auction in real time at www.liveauctioneers.com, and participated in the bidding by telephone. Liveauctioneers.com is a New York company that advertises upcoming auctions and provides live video to those auctions. Forty-five bids were placed for the clocks, and the Nichinsons won the bidding at the sum of $520,000.
Clars and Jason Nichinson exchanged several emails in which Jason Nichinson requested photographs of the clocks; made plans to travel to California; and asked that the rescission period be extended from 21 days to 30 days. Clars agreed to the extension of the rescission period. The Court notes that Jason Nichinson never represented that he was emailing Clars from New York. However, the invoice from Clars shows that the clocks were being sent to Jason Nichinson in East Rockaway, New York for resale.
Time Keepers eventually paid the full price after the rescission period ended. Payment was sent via wire transfer from Time Keepers' Chase account in East Rockaway, New York.
Jason Nichinson traveled to California to oversee packaging and shipping. The clocks were shipped to Hong Kong for inspection by Time Keepers' clock expert.
Time Keepers' expert informed the Nichinsons that the clocks were counterfeit. Several weeks later, after the clocks were shipped, Jason Nichinson contacted the Defendant to inform Clars that the clocks were not genuine.
On July 24, 2017, the Plaintiff filed its complaint. After serving the Defendant on August 1, 2017, the Plaintiff filed an amended complaint as a matter of right on August 8, 2017. The amended complaint brings claims for common law fraud; breach of contract; breach of express warranty; and violation of the California Consumer Legal Remedies Act. The Plaintiff seeks damages, costs, and attorneys' fees.
On October 12, 2017, the Defendant filed the instant motion to dismiss.
Rule 12(b)(2) authorizes a party to seek dismissal on the ground that the Court lacks personal jurisdiction over him or it. However, as the party attempting to invoke the Court's jurisdiction, it is the Plaintiff that bears the burden of showing that personal jurisdiction exists over the Defendant. See Metropolitan Life Ins., 84 F.3d at 566.
"Prior to discovery, a plaintiff may defeat a motion to dismiss based on legally sufficient allegations of jurisdiction." Id. (citing Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990). In doing so, "the plaintiff need only make a prima facie showing," and "[t]he allegations in the complaint must be taken as true to the extent they are uncontroverted by the defendant's affidavits." MacDermid, Inc. v. Deiter, 702 F.3d 725, 727 (2d Cir. 2012) (quoting Seetransport Wiking Trader Schiffarhtsgesellschaft MBH & Co., Kommanditgesellschaft v. Navimpex Centrala Navala, 989 F.2d 572, 580 (2d Cir. 1993)).
In resolving questions of personal jurisdiction in a diversity action, the Court must conduct a two-part inquiry: "First, it must determine whether the plaintiff has shown that the defendant is amenable to service of process under the forum state's laws; and second, it must assess whether the court's assertion of jurisdiction under these laws comports with the requirements of due process." See Metropolitan Life Ins, 84 F.3d at 567.
First, the Court must determine whether, under the facts and circumstances of a given case, New York law supports the exercise of either general jurisdiction (also called "all-purpose jurisdiction") or specific jurisdiction (also called "case-linked jurisdiction"). See Brown v. Lockheed Martin Corp., 814 F.3d 619, 624 (2d Cir. 2016). General jurisdiction "permits a court to adjudicate any cause of action against the [] defendant, wherever arising, and whoever the plaintiff," while specific jurisdiction is only "available when the cause of action sued upon arises out of the defendant's activities in [the] state." Id. (citing Chloé v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 164 (2d Cir. 2010)).
As the Plaintiff concedes that this Court cannot exercise general jurisdiction over the Defendant, the Court will not engage in a discussion of the standard of general jurisdiction. Instead, the Court proceeds to specific jurisdiction.
i. Specific (or "Case-Linked") Jurisdiction
The statutory basis for specific jurisdiction is found in New York's long-arm statute,...
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