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KOWALSKI-SCHMIDT v. CLS MORTG.

September 30, 1997

NANCY KOWALSKI-SCHMIDT, et al., Plaintiffs, against CLS MORTGAGE, INC., et al., Defendants.


The opinion of the court was delivered by: HURLEY

 HURLEY, District Judge

 Currently pending before the Court in the above-referenced case is the motion of Defendants seeking a variety of relief. For the reasons set forth below, the instant action is dismissed pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(2) for lack of personal jurisdiction.

 BACKGROUND

 This case, along with another case involving similar parties, has a long history before this Court, most of which has been set forth in prior orders of the Court. For that reason, the Court offers only a brief summary of the factual background of the case. The instant action involves a dispute over liens on a parcel of property located in the State of Washington. Plaintiff Nancy Kowalski-Schmidt ("Kowalski-Schmidt") alleges that she, and on certain occasions Plaintiff Joanne Curtis ("Curtis"), received a series of deeds of trust to this property from Marjorie Giordano -- the sister of Plaintiff Kowalski-Schmidt and a relative of Curtis -- and Richard Hamm, Jr. Kowalski-Schmidt claims that she entrusted Ms. Giordano and Mr. Hamm with the execution and perfection of the deeds of trust; however, the deeds were never perfected or recorded.

 In a loan transaction with Defendants CLS Mortgage, Inc. and Opportunity Management, Inc., Ms. Giordano and Mr. Hamm deeded the Washington property to those Defendants. (Compl. P 23.) This deed was perfected and recorded in 1993. (Id.)

 Plaintiffs claim that their interest in the Washington property is superior to that of Defendants. (Am. Compl. P 23.) According to Plaintiffs, Defendants were aware of Plaintiffs' prior deeds, but disregarded them and proceeded with a non-judicial foreclosure on the Washington property in 1994. (Id. P 28.) It appears that a foreclosure sale was never completed.

 All Defendants remaining in this case are residents of the State of Washington. There are three Plaintiffs (collectively, "Plaintiffs"): Kowalski-Schmidt and Curtis, New York residents, and Peter J. Wirs, a Pennsylvania resident who allegedly was assigned an interest in the Washington property. The Court notes, preliminarily, that Defendants' motion is opposed by the memorandum of law of Plaintiff Peter Wirs, who is not an attorney but purports to raise his arguments on behalf of the other pro se plaintiffs. The other pro se plaintiffs have not submitted memoranda of law in opposition to Defendants' motion. Without addressing whether Mr. Wirs may properly submit papers on behalf of the other pro se litigants, the Court has considered fully the arguments raised by Mr. Wirs.

 DISCUSSION

 I. The Present Motion

 On the instant motion, Defendants seek: (1) dismissal the Amended Complaint for a number of reasons, to wit, lack of personal jurisdiction, improper venue, failure to join one or more indispensable parties, and failure to state a claim; (2) summary judgment; and (3) alternatively, the transfer of this case to the United States District Court for the Western District of Washington. (Defs.' Not. of Mot. at 1-2.) The Court, when presented with various grounds upon which relief is sought, should address the issue of personal jurisdiction first. See Arrowsmith v. United Press Int'l, 320 F.2d 219, 221 (2d Cir. 1963); Sunrise Indus. Joint Venture v. Ditric Optics, Inc., 873 F. Supp. 765, 769 (E.D.N.Y. 1995) ("Where a Court is asked to rule on a combination of Rule 12 defenses, it will pass on the jurisdictional issues before considering whether a claim is stated in the complaint.") (citations omitted); Viking Penguin, Inc. v. Janklow, 98 F.R.D. 763, 763 (S.D.N.Y. 1983). See generally 5A Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure ยง 1351 (1990). Accordingly, the Court proceeds to a discussion of personal jurisdiction.

 II. Personal Jurisdiction

 A. General Standards

 As previously set forth in a prior decision of the Court in a case involving several of the same parties, the Court should look to New York State law to determine whether it may exercise personal jurisdiction over the Defendants in this diversity case. See, e.g., CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 363 (2d Cir. 1986) (citation omitted) ("Personal jurisdiction over a defendant in a diversity action is determined by the law of the forum in which the court sits."). "If jurisdiction is appropriate under the relevant statute, the court must then decide whether exercise of jurisdiction comports with due process." Savin v. Ranier, 898 F.2d 304, 306 (2d Cir. 1990) (citation omitted). "The plaintiff generally has the burden of proof in establishing personal jurisdiction over the defendant." Id. (citation omitted). See also Ghazoul v. International Management Servs., Inc., 398 F. Supp. 307, 309 (S.D.N.Y. 1975) ("The plaintiff has the burden of sustaining an assertion of personal jurisdiction against a challenge.") (citations omitted).

 B. Procedures on a Motion to Dismiss

 The Second Circuit has stated that "in deciding a pretrial motion to dismiss for lack of personal jurisdiction, a district court has considerable procedural leeway." Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981).

 
[The Court] may determine the motion on the basis of affidavits alone; or it may permit discovery in aid of the motion; or it may conduct an evidentiary hearing on the merits of the motion.

 Id. (citations omitted). "Whatever procedural path the district court chooses to follow determines the plaintiff's burden of proof and the standard to be applied on appeal." CutCo Indus., 806 F.2d at 364; see also Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.) ("The plaintiff's ...


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