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NATIONAL SCH. REPORTING SERVS. v. NATIONAL SCHS. O

April 29, 1996

NATIONAL SCHOOL REPORTING SERv., INC., Plaintiffs, against NATIONAL SCHOOLS OF CA., LTD., (a/k/a NATIONAL SCHOOLS OF CA., L.P.), JAN ANTON and GREG LAWLOR, Defendants.


The opinion of the court was delivered by: BATTS

 DEBORAH A. BATTS, United States District Judge.

 I. BACKGROUND

 Plaintiff is a New York corporation. (Pl.'s Mem. Law at 3.) The information it gathers in its business is stored in a computer database. (Id.) Real estate agencies and agents subscribe to the Plaintiff annually for an unlimited number of school reports. (Id.) In 1993, Anton and Lawlor met Neil Rosen, president of Plaintiff, and offered to buy the Plaintiff by purchasing all its stock. (Id.) Negotiations to buy the stock eventually broke down and Anton and Lawlor instead investigated having the exclusive right to market Plaintiff's service in California. (Id. at 4.)

 On March 15, 1994, Defendants entered into a Franchise Agreement with the Plaintiff and signed a Promissory Note. (Pl.'s Mem. Law at 4.) In September 1994, Defendants defaulted on the Promissory Note. (Id.) In exchange for more time to continue their new business, Anton and Lawlor executed personal guarantees ("Guarantees") and NSC entered into a Forbearance Agreement with the Plaintiff. (Id. at 5.) All five documents contained New York forum selection clauses.

 NSC sued Plaintiff in the Superior Court of the State of California, County of San Diego, which case was removed to the Southern District of California, alleging the Franchise Agreement was fraudulently obtained, among other claims. Plaintiff then sued in New York Supreme Court seeking to collect on the Promissory Note. Defendants now move to dismiss Plaintiff's New York cause of action, pursuant to 12(b)(2).

 II. DISCUSSION

 To survive a motion to dismiss for lack of personal jurisdiction the plaintiff is required to make a prima facie showing that the defendant is subject to the court's jurisdiction. A.I. Trade Finance, Inc. v. Petra Bank, 989 F.2d 76, 79 (2d Cir. 1993). "Eventually personal jurisdiction must be established by a preponderance of the evidence, either at an evidentiary hearing or at trial. But where 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." Id.; CutCo. Indus., Inc. v. Naughton, 806 F.2d 361, 364 (2d Cir. 1986).

 A. Forum Selection Clause

 Personal jurisdiction is governed by the laws of the state of New York. In order to have personal jurisdiction over a defendant, the defendant must have minimum contacts with the state, the defendant must have been served properly, and the defendant must be given an opportunity to be heard. Here, Defendants take issue only with the minimum contacts requirement. Defendants argue that the only way New York could have personal jurisdiction over them is through the forum selection clause found in the Promissory Note, which establishes minimum contacts by consent. *fn2" However, Defendants argue that the selection clause is invalid, as it was not bargained for, nor freely entered into, but obtained under duress.

 The Promissory Note contains a forum selection clause which indicates that, in the event of a dispute, New York law shall apply:

 
"This Note shall be governed and construed in accordance with the laws of the State of New York . . . Maker for itself and its successors and assigns hereby consents to the jurisdiction of the courts of the State of New York and of any federal court located in the City of New York in connection with any action or ...

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