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UNIVERSAL MARINE MED. SUPPLY v. LOVECCHIO

June 30, 1998

UNIVERSAL MARINE MEDICAL SUPPLY, INC., Plaintiff,
v.
GEORGE LOVECCHIO, WALDEMAR MUSIAL, MICHELLE BELLORE, FLEET MEDICAL RESOURCES, INC., AND MARINE MEDICAL UNIT, INC., Defendants.



The opinion of the court was delivered by: GLASSER

MEMORANDUM & ORDER

 GLASSER, United States District Judge:

 BACKGROUND

 Plaintiff Universal Marine Medical Supply, Inc. ("Universal") is a New York corporation with its place of business in Brooklyn. Compl. P 1. Universal has been engaged in the business of selling medical supplies for over 23 years. Defendants George Lovecchio ("Lovecchio"), Waldemar Musial ("Musial"), and Michelle Bellore ("Bellore"), all of whom now reside in Louisiana, are former employees of plaintiff. Musial was employed by Universal as its Corporate Director and Company Supervisor. His responsibilities included purchasing inventory, warehouse inventory control, computer analysis, distribution of all international and domestic shipments, direct contract with clients and vendors, and obtaining quotes and bids. Compl. P 11. Bellore was employed as plaintiff's Account Manager, and her duties included "maintaining Plaintiff's accounts, placing orders and quotations in the computer, following up on shipments, researching customer inquiries, executing narcotic invoices, printing and distributing narcotic consumption reports, entering information for quarterly AROCS reports, and keeping records of returns." Compl. P 12. Defendant Lovecchio was the sole owner of a corporation, Diversified Marketing Group, that was engaged in the sale of medical supplies to the maritime industry. In December of 1994, Lovecchio entered into a contract with Universal to act as Universal's sales and marketing representative. In this capacity, Lovecchio was responsible for handling all sales for current and potential clients. Compl. P 13.

 Plaintiff alleges that defendants Lovecchio, Musial, and Bellore "conspired together and engaged in a course of action designed to destroy the business reputation of [Universal] and to enable said defendants to divert the business of [Universal] to their personal benefit." Compl. P 10. Plaintiff claims that Musial deliberately changed the vendors from whom Universal purchased at competitive prices to vendors who sold their goods at higher prices in order to decrease plaintiff's profits and competitive position; deliberately purchased items that "turned over slow in order to tie up cash flow with in-stock merchandise"; deliberately purchased and approved the shipping of "short dated" merchandise; deliberately purchased wrong items in order to create chaos after his departure and to increase expenses when the correct items had to be purchased at greater prices in order for them to be received in time to meet shipping deadlines; deliberately delayed purchases to ensure large back orders and incur additional shipping expenses; "deliberately waited until quote deadlines to dilute service"; destroyed company equipment; erased important information from computer files; falsified records; deliberately provided vessels with "minimum quantities rather than the full quantity required"; misappropriated to his own use confidential information and trade secrets, including company files, customer lists, corporate operating procedures, price catalogs, and vendor contracts; diverted approximately $ 80,000 worth of merchandise to his own use; deliberately failed to send returned items to the manufacturers for credit in order to harm plaintiff, thereby causing plaintiff losses of approximately $ 50,000; deliberately sent incorrect items to plaintiff's main accounts to destroy plaintiff's reputation; and conspired with defendants Bellore and Lovecchio to divert business from plaintiff to competitors in New Orleans.

 Plaintiff further alleges that Bellore deleted important narcotic/controlled substance records required by federal law for DEA reporting; deliberately sabotaged monthly reports and records; submitted incorrect reports to federal authorities; deliberately withheld documents in order to injure plaintiff's reputation; deliberately delayed in responding to customer research inquiries; and deliberately delayed order quotation to give competitors of plaintiff "an edge." Compl. P 15.

 On December 26, 1997, defendants Musial and Bellore left their employment with plaintiff and went to work at defendants Marine Medical Unit, Inc. ("Marine") and Fleet Medical Resources, Inc. ("Fleet"). *fn1" Lovecchio remained in plaintiff's employ and continued to conspire with defendants Bellore and Musial by calling plaintiff's clients and telling them that Bellore and Musial's company had much better service and pricing than plaintiff and otherwise disparaging plaintiff.

 In February of 1998, Lovecchio announced his resignation. On February 27, 1998, plaintiff agreed to make certain payments to Lovecchio and Lovecchio agreed, inter alia, not to interfere with Plaintiff's employees or customers, not to compete with plaintiff, and not to be associated in any way with Musial. However, in violation of this agreement, Lovecchio entered into employment with Bellore and Musial at their competing company. Compl. P 18.

 Plaintiff then filed this lawsuit claiming: breach of fiduciary duty by defendants Musial, Bellore, and Lovecchio, tortious interference with business relations against defendants Musial, Bellore, Lovecchio, and Marine Medical; breach of contract against all of the defendants; and misappropriation of confidences and secrets against all of the defendants.

 Plaintiff also filed a motion for a temporary restraining order, which was denied by Judge Gershon on May 8, 1998. Plaintiff then filed a motion for a preliminary injunction, requesting that this court enjoin defendants from from utilizing confidential information obtained from Universal and from disparaging Universal to its customers, past or present. That motion was denied by this court at oral argument on June 26, 1998. Defendants, in turn, have filed a motion to dismiss plaintiff's complaint.

 DISCUSSION

 Defendants' Motion to Dismiss

 Lack of Personal Jurisdiction

 Defendants' argue that all claims against Fleet and Marine should be dismissed for lack of personal jurisdiction.

 
In deciding a pretrial motion for jurisdiction, a district court has considerable procedural leeway. It 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. If the court chooses not to conduct a full-blown evidentiary hearing on the motion, the plaintiff need make only a prima facie showing of jurisdiction through its own affidavits and supporting materials.

 Champion Motor Group, Inc. v. Visone Corvette of Massachusetts, Inc., 992 F. Supp. 203, 205 (E.D.N.Y. 1998) (quoting Marine Midland Bank v. Miller, 664 F.2d 899, 904 (2d Cir. 1981) (internal quotation marks omitted). This court has chosen not to conduct an evidentiary hearing and thus it will rely on plaintiff's affidavits. In analyzing the affidavits, the facts are to be construed in the light most favorable to the plaintiff. Id. (citing A.I. Trade Finance, Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993).

 Personal jurisdiction of a federal court over a non-domiciliary is determined by the law of the state in which the federal court sits. Arrowsmith v. United Press Int'l, 320 F.2d 219, 222-25 (2d Cir. 1963). New York Law on personal jurisdiction is codified in CPLR §§ 301 and 302.

 Section 301 provides for general jurisdiction over a non-domiciliary defendant where that defendant is "engaged in such a continuous and systematic course of doing business here as to warrant a finding of [its] presence in this jurisdiction." Beacon Enter., Inc. v. Menzies, 715 F.2d 757, 762 (2d Cir. 1983) (quoting Simonson v. Int'l Bank, 14 N.Y.2d 281, 251 N.Y.S.2d 433, 436, 200 N.E.2d 427 (N.Y. 1964)). "The non-domiciliary must be doing business in New York not occasionally or casually, but with a fair measure of permanence and continuity." Id. Here, there is no allegation that the corporate defendants "do business" in New York. Thus, there is no general jurisdiction over these defendants. *fn2"

 Plaintiff, however, may also invoke New York's long-arm statute, set forth in CPLR § 302, to assert specific jurisdiction over the defendants. ...


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