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ADP INVESTOR COMM. SERVICES v. IN HOUSE ATTORNEY SERV.

August 18, 2005.

ADP INVESTOR COMMUNICATION SERVICES, INC., Plaintiff,
v.
IN HOUSE ATTORNEY SERVICES, INC. and CRAIG OSBOURNE, Defendants.



The opinion of the court was delivered by: THOMAS PLATT, District Judge

MEMORANDUM OPINION and ORDER

Defendants In House Attorney Services, Inc. ("In House") and Mr. Craig Osbourne ("Osbourne") (collectively "Defendants") move to dismiss Plaintiff ADP Investor Communication Services, Inc.'s ("ADP") Amended Complaint pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(2). In the alternative, Defendants move this Court to dismiss counts two and three of the Amended Complaint pursuant to Rule 12(b)(6).

ADP brings three claims: i) breach of contract against In House; ii) unjust enrichment against In House; and iii) conversion against both Defendants.

  For the following reasons, Defendants' motions are DENIED.

  Factual Summary ADP is a Delaware corporation with its principal place of business in Edgewood, New York. (Am. Compl. ¶ 4.) In House is a California corporation and has its principal place of business in Los Angeles, California. (Id. ¶ 5.) Osbourne is the president and founder of In House and is a resident of the State of California. (Id. ¶ 6.)

  In early 2003, In House submitted and won a bid to print proxy materials and prepare the same for mailing on behalf of the debtors of Peregrine Systems, Inc. ("Peregrine"), a corporation that had filed for bankruptcy in the U.S. Bankruptcy Court in the District of Delaware. (Id. ¶¶ 10, 11.)

  At some point during the Spring of 2003, In House telephoned Mr. Aleck Masouas, an employee at ADP's Edgewood, New York facility, to inquire as to whether ADP was interested in handling the task of mailing the proxy materials to the Peregrine shareholders. (Id. ¶ 11.) The Defendants' version as to who initiated the contract differs. According to Osbourne, after In House was awarded the contract to produce the proxy materials, Peregrine's counsel communicated with Osbourne to inform him that ADP had been chosen to mail the Peregrine materials. (Osbourne Aff. ¶ 10.)

  In any event, before the Parties reached an agreement, In House and ADP's representatives located at ADP's Edgewood, New York headquarters exchanged several phone conversations and emails. (Am. Compl. ¶ 12.) ADP anticipated that the cost to mail the Peregrine materials would be high. (Id. ¶ 13.) Therefore, as ADP was aware that Peregrine was in financial straits, ADP requested pre-payment. (Id.) In House wired the sum of $835,070 to ADP as pre-payment. (Id.) ADP agreed to reimburse In House the difference between the pre-payment and the actual cost of the mailings after they completed the project. (Id.)

  In House prepared the Peregrine materials and then shipped them to ADP's Edgewood, New York headquarters in June, 2003. (Am. Compl. ¶¶ 15-16.) ADP in turn processed and mailed these materials to the Peregrine shareholders. (Id. ¶ 16.) ADP also mailed reminder letters to the Peregrine shareholders. (Id.) After completing the Peregrine project, ADP calculated that In House incurred charges totaling $570,407.20. (Am. Compl. ¶ 17.)

  Keeping with their agreement, ADP wired to In House a refund of $277,699.89 on or about September 11, 2003. (Id. ¶ 18.) According to ADP, this amount was incorrect as they later calculated that the actual amount due to In House was only $264,662.80. (Id.) ADP then wired a second refund check for the "correct" amount to In House on or about January 14, 2004. (Id.)

  Osbourne acknowledged in a telephone call that In House received two checks. (Id. ¶ 19; Osbourne Aff. ¶ 19.) Osbourne also acknowledged that during a phone conversation with a member of ADP's Finance Department in May, 2004, he stated that he thought the refund amount was larger than expected. (Am. Compl. ¶ 19.) Osbourne and In House, however, did not return the first payment to ADP, despite repeated requests to do so. (Id. ¶¶ 19-21.)

  Osbourne contends that it is his understanding that the two payments were installment payments and that together they equaled the accurate amount of monies owed to In House. (Osbourne Aff. ¶ 18.)

  ADP alleges that this Court has personal jurisdiction over the Defendants under New York's long arm statute, N.Y. Civ. Prac. L. & R. ("CPLR") § 302(a)(1), in that the Defendants have transacted business in New York and ADP's claims arise out of Defendants' purposeful business activity in New York. (Am. Compl. ¶ 9.) In addition, on its claim for conversion, ADP argues that this Court has personal jurisdiction over Defendants under both CPLR §§ 302(a)(1) and 302(a)(3). (Id.)

  Legal Standard

  On a motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2), the plaintiff bears the burden to establish jurisdiction. See In re Magnetic Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir. 2003); Freeplay Music, Inc. v. Cox Radio, Inc., No. 04-5238, 2005 U.S. Dist. LEXIS 12397, *5 (S.D.N.Y. June 23, 2005). "A plaintiff must establish the court's jurisdiction with respect to each claim asserted." Sunward Elecs., Inc. v. McDonald, 362 F.3d 17, 24 (2d Cir. 2004). Where no jurisdictional discovery has been conducted — as is the case here — the plaintiff need only establish a prima facie case, and allegations of jurisdictional fact must be construed in a light most favorable to the plaintiff. See CutCo Indus. Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986). The motion may be denied if those allegations suffice as a matter of law. Magnetic Audiotape, 334 F.3d at 206.

  In order to prevail under Rule 12(b)(6), a defendant must show that the plaintiff can prove no set of facts in support of its claim which would entitle plaintiff to relief. Alnwick v. European Micro Holdings Inc., 281 F. Supp. 2d 629, 637 (E.D.N.Y. 2003). Courts must accept as true all of the factual allegations set out in the complaint, and draw inferences from those allegations in the light most favorable to the plaintiff. Id. "Under Rule 12(b)(6), a court `must confine its consideration to facts stated on the face of the complaint, in documents appended to the complaint or incorporated in the complaint by reference, and to matters of which judicial notice may be taken.'" Id. (quoting Tarshis ...


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