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HD BROUS & CO., INC. v. SYNTHESYS SECURE TECHNOLOGIES

November 4, 2002

HD BROUS & CO., INC., PLAINTIFF,
V.
SYNTHESYS SECURE TECHNOLOGIES, INC. A/K/A SYNTHESYS TECHNOLOGIES, INC., DEFENDANT.



The opinion of the court was delivered by: Arthur D. Spatt, United States District Judge

  MEMORANDUM OF DECISION AND ORDER

The plaintiff HD Brous & Company, Inc. ("Brous" or the "plaintiff") alleges that the defendant Synthesys Secure Technologies, Inc. a/k/a Synthesys Technologies, Inc. ("Synthesys" or the "defendant") breached an agreement to pay for investment banking services that Brous provided to it. Synthesys now moves to dismiss the complaint for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure and on the ground of forum non conveniens. Alternatively, Synthesys moves to transfer venue to the Southern District of Florida pursuant to 28 U.S.C. § 1404(a).

I. BACKGROUND

The following facts are taken from the complaint unless otherwise noted. Brous is a Delaware corporation with its principal place of business in Great Neck, New York. It provides a full spectrum of financial and investment banking services to companies and individuals. Synthesys is a Florida corporation with its principal place of business in Boca Raton, Florida. It develops and markets software products that prevent identity theft and information security.

On or about June 20, 2001, Synthesys entered into a letter agreement with Brous entitled "Financial Advisory and Investment Banking Agreement" (the "Agreement"). The Agreement provided for Brous to identify and introduce a third-party with whom Synthesys could effect a sale or license of its technology, a joint venture or other relationship. Also, the Agreement provided that upon the completion of an "Eligible Transaction" between Synthesis and a third-party, Synthesys would pay Brous a fee of $60,000 plus additional compensation in the form of stock or fees depending on the type of transaction.

Thereafter, Brous provided Synthesys with analysis and advise that led to a "strategic alliance" with IMSure Network, Inc. ("IMSure"). Brous alleges that the "strategic alliance" was an "Eligible Transaction" under the Agreement triggering Synthesys' obligation to pay Brous $60,000 and 500,000 shares or 5% of its stock. On the other hand, Synthesys claims, among other things, that the IMSure transaction was never completed and refused to compensate Brous for its services.

On February 8, 2002, Brous filed a complaint against Synthesys in the Eastern District of New York. Brous asserts four claims: (1) breach of contract; (2) unjust enrichment; (3) constructive trust; and (4) quantum meruit. Presently before the Court is a motion by Synthesys to dismiss the complaint for lack of personal jurisdiction and forum non conveniens, or in the alternative, to transfer venue to the Southern District of Florida.

II. DISCUSSION

A. Personal Jurisdiction

1. The Standard

In responding to a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing that jurisdiction exists over the defendant. Distefano v. Carozzi North America, Inc., 286 F.3d 81, 84 (2d Cir. 2001). The plaintiff's burden depends on the posture of the case. Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). Without extensive discovery or an evidentiary hearing — as here — the plaintiff need only make a prima facie showing that personal jurisdiction exists over the defendant. Id. See also Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998). At this early stage, a court must construe all pleadings and affidavits in the light most favorable to the plaintiff and any doubt must be resolved in favor of the plaintiff. Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985) (citations omitted).

In a diversity case — as here — a court exercises personal jurisdiction over a party in accordance with the law of the forum state, subject to the requirements of due process under the United States Constitution. Whitaker v. Amer. Tele., Inc., 261 F.3d 196, 208 (2d Cir. 2001). As such, the Court must look to New York's personal jurisdiction statutes, CPLR §§ 301 — general — and 302 — long-arm — to determine whether Brous has made a prima facie showing of personal jurisdiction over Synthesys. If there is jurisdiction under the CPLR, then the Court evaluates whether the exercise of that jurisdiction comports with due process requirements.

2. CPLR § 302

Brous argues that jurisdiction exists under CPLR ยง 302(a)(1). Jurisdiction is established under Section 302(a)(1) where, (a) the defendant has transacted business within the state; and (b) the claim arises out of that activity. See Bank Brussels, 171 F.3d at 787. "Transacting business" under Section 302 requires only a minimal quantity of activity, provided that it is of the right nature and quality and, in making a determination, a court must examine the totality of the defendant's contact with the forum. Agency Rent A Car System, Inc. v. Grand Rent A Car Corp., 98 F.3d 25, 29 (2d Cir. 1996). Even ...


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