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SCHOTTENSTEIN v. SCHOTTENSTEIN

November 5, 2004.

SARAH SCHOTTENSTEIN, Plaintiff,
v.
STEVEN SCHOTTENSTEIN; M/I HOMES, INC.; and DOES I through X, Defendants.



The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge

OPINION & ORDER

Sarah Schottenstein ("Sarah") brings this action against her father, Steven Schottenstein ("Mr. Schottenstein") and his employer, M/I Homes, Inc. ("M/I Homes") (collectively, "defendants"), alleging, inter alia, false imprisonment, invasion of privacy, intentional infliction of mental and emotional distress, and conversion.*fn1 Mr. Schottenstein and M/I Homes have filed separate motions seeking to dismiss the Amended Complaint on grounds that include: lack of subject-matter and personal jurisdiction, improper venue, and failure to state a claim upon which relief can be granted.*fn2 For the reasons that follow, M/I Homes's motion to dismiss is granted and Mr. Schottenstein's motion to dismiss is granted in part and denied in part.

  I. BACKGROUND

  A. The Parties

  Sarah is a New York citizen who has lived with her mother, Jill Schottenstein (Mr. Schottenstein's ex-wife), since she reached the age of majority on February 8, 2004.*fn3 Mr. Schottenstein is a citizen of Ohio and the Chief Operating Officer and Vice Chairman of M/I Homes, a homebuilding company with its principal place of business in Columbus, Ohio.*fn4 B. Facts

  The origins of this lawsuit can be traced to January 29, 1998, when Jill Schottenstein filed for divorce. Sarah alleges that Mr. Schottenstein "regarded Jill's rejection and divorce as a personal insult. In retaliation, he decided to make Jill Schottenstein pay where it hurt most, by depriving her of her daughters."*fn5 Custody of Sarah and her younger sisters Ashley and Abbey was awarded to Mr. Schottenstein and Mrs. Schottenstein was permitted visitation rights.*fn6

  Mrs. Schottenstein and her children appealed from the Decree of Divorce and various orders of contempt against Mrs. Schottenstein relating to visitation and interference with custody.*fn7 The Ohio Tenth District Court of Appeals affirmed the trial court on "all financial issues, however, the [court] reversed the prior findings of contempt against [Mrs. Schottenstein], and remanded the matter to the trial court to take new evidence on intervening events and to re-interview the children."*fn8 The case was then continued for a year, during which Mr. Schottenstein filed for and obtained an Order of Civil Protection against Mrs. Schottenstein, who was found to have engaged in domestic violence against her daughters. The trial court then awarded sole custody to Mr. Schottenstein, permitting Mrs. Schottenstein supervised visitation with her children.

  Sarah claims that while she was in the custody of Mr. Schottenstein, he used the M/I Homes aircraft to take "[her] against her will and without her consent to Connecticut to be enrolled at Suffield Academy, where [she] suffered several health problems."*fn9 Sarah avers that Mr. Schottenstein later took her to Utah and placed her in Cross Creek Manor, a "highly punitive lock-down facility housing serious drug offenders and badly behaving girls."*fn10 Jill Schottenstein "traced the M/I Homes jet" to Utah, prompting Mr. Schottenstein to move Sarah to a mental hospital in Kansas.*fn11 In February of this year, Sarah turned eighteen and left her father's house to live with her mother, who had moved to New York in 2002. Within five months, Sarah filed the instant lawsuit.

  C. The Amended Complaint

  Sarah sets forth seven causes of action in her complaint.*fn12 First, she asserts a claim for false imprisonment premised on her father's decision to place her in the Suffield Academy, a Utah prison camp, and a psychiatric hospital.*fn13 Second, she claims invasion of privacy, alleging that her father disrespected "boundaries that she had a right, as an individual, to expect and maintain regardless of her minority status" by, among other things, entering her room without her permission, monitoring her telephone calls, and "using her as an object to punish her mother."*fn14 Third, she alleges intentional infliction of emotional distress because her father used his "power to influence Ohio courts and witnesses" to keep Sarah and her mother apart, in an alleged attempt to "deliberate[ly] and outrageous[ly] . . . punish his wife for leaving him and his daughter for her allegiance to [her mother] and not to him."*fn15 Fourth, Sarah claims conversion premised on her belief that Mr. Schottenstein has control over accounts and trusts for which she is the beneficiary and that he has converted some of the funds for his own profit, for which she seeks restitution and an accounting.

  Fifth, she asserts a violation of the Fourteenth Amendment, based on the Ohio court's custody order that purportedly deprived her of her "liberty and privacy interests by forcing her to live away from her mother whom she adores and to be locked up [in Utah and Kansas]" in violation of her right to "substantive due process of law."*fn16 Sixth, she claims that her father violated the Eighth and Fourteenth Amendments by "locking [her] up in Utah and Kansas, and [depriving] her of [her mother's] company, comfort and care, without procedural or substantive due process of law."*fn17 Seventh, she petitions for habeas corpus relief on behalf of her sisters.*fn18

  Sarah seeks compensatory and punitive damages, the restitution of funds and securities allegedly converted by Mr. Schottenstein and an accounting of funds and securities held in her name or for her benefit, and "immediate production of Ashley and Abby . . . at their mother's residence in New York City."*fn19

  D. Jurisdictional Allegations

  1. Mr. Schottenstein

  a. Financial Transactions

  Sarah asserts that two days before her eighteenth birthday, Mr. Schottenstein "got the Ohio court to transfer Sarah's `gift to minors money' from her mother's custody to himself so that Sarah would have no money for college in New York and would have to return to him."*fn20 Additionally, the opposition brief contains various unsworn statements indicating that Mr. Schottenstein, through a New York brokerage firm, Salomon Smith Barney, sold $400,000 of securities that belonged to her.*fn21 He then "refused to return the proceeds for the stock sale to [her] in New York, or to tell her where the proceeds are."*fn22 Sarah further contends that Mr. Schottenstein "regularly and recently has sold a considerable number of shares in his own company, M/I Homes, which is listed on the New York Stock Exchange, resulting in substantial revenue."*fn23

  b. Interference with Health Care

  Sarah further alleges that her father interfered with the medical care that she was receiving in New York pursuant to her mother's Aetna health insurance plan. In particular, she avers that after Aetna informed Mr. Schottenstein of Sarah's medical history, "M/I Homes . . . changed its health insurance from Aetna to another carrier with Sarah listed as a beneficiary so that Sarah would be forced to use a carrier accessible to her father, and allowing Aetna to cap its coverage due to another carrier's being involved."*fn24

  c. Correspondence with Sarah Finally, Sarah submits that Mr. Schottenstein "purposefully directed his activities toward [her], a resident of New York State."*fn25 In particular, he has purportedly sent and continues to send e-mail messages, letters, and Airborne deliveries "after commencement of this case without going through her retained counsel."*fn26

  2. M/I Homes

  a. Company Website

  In her opposition papers, Sarah claims that M/I Homes

 
maintains an interactive website that targets New York state residents for its Orlando, Tampa, and West Palm Beach Florida home and financing products. It engages prospective buyers, including those in New York into sampling its wares; expressing their needs of home types and location, including three locations in Florida. It engages them in interactive participation so that they will know the level of home they can afford through Schottenstein financing.*fn27
Sarah further argues that M/I Homes "makes and solicits millions of dollars of sales, [] serves the New York market, [] targets New York consumers through electronic advertising, [] sells large numbers of homes to New York customers, and [] maintains ongoing contacts with New York customers who register on its web site and have interest in M/I Homes' products in Florida."*fn28

  b. New York Customers

  Sarah further contends that "a minimum of 20% of M/I Homes [sic] revenue comes from the sale of lots, homes, upgrades, and or financing to New York residents, much of it by way of M/I Homes [sic] internet website."*fn29

  II. APPLICABLE LAW

  A. Legal ...


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