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Carroll v. Mitsubishi Motor Sales of America

December 4, 2006



I. Background

Presently before this Court is a Motion brought by Bey Auto, Inc. ("Defendant") to dismiss, pursuant to Rules 12(b)(1), 12(b)(2), 12(b)(4), and/or 12(b)(5) of the Federal Rules of Civil Procedure ("FRCP"), the complaint filed by Kristina Carroll ("Plaintiff"). Dkt. No. 10. Plaintiff commenced this action in the Supreme Court, State of New York, Ulster County on August 11, 2005, to recover damages allegedly resulting from a motor vehicle accident that occurred on August 11, 2002. Id. Plaintiff, a resident of Ulster County, New York, purchased the motor vehicle, a 2002 Mitsubishi sports utility vehicle, from Defendant at its place of business in Danbury, Connecticut, on December 19, 2001. Id. Counsel for the co-defendants filed and served a notice of removal, pursuant to 28 U.S.C. § 1446, to this Court on December 30, 2005. Dkt. No. 1.


A. Personal Jurisdiction

1. FRCP 12(b)(2) Standard

When a defendant moves to dismiss a complaint for lack of personal jurisdiction pursuant to FRCP 12(b)(2), the plaintiff bears the burden of showing that the court has jurisdiction over the defendant. See In re Magnetic Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir. 2003). The defendant's FRCP 12(b)(2) motion only challenges the sufficiency of the plaintiff's factual allegations. See Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990). Accordingly, "the plaintiff need persuade the court only that its factual allegations constitute a prima facie showing of jurisdiction." Id. The Court will credit Plaintiff's averments of jurisdictional facts as true. See Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996).

In diversity cases, personal jurisdiction is determined by the law of the state in which the district court sits. DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001). In order to determine whether there is a basis to exercise personal jurisdiction over a defendant, a district court sitting in diversity is required to apply a two part analysis and will look first to the law of the forum state, here New York, to determine whether there is jurisdiction over the defendant, before determining whether an exercise of jurisdiction is consistent with constitutional due process requirements. See Siverls-Dunham v. Seung Huen Lee, 05 Civ. 7518 (PKC), 2006 U.S. Dist. LEXIS 82927, at *13-*14 (S.D.N.Y. Nov. 13, 2006). Defendant argues that personal jurisdiction cannot be asserted under two provisions of New York law, Sections 301adn 302(a)(1) of New York Civil Practice Law and Rules ("CPLR"). In response, Plaintiff contends that Defendant: (1) did not comply with CPLR 3211(e) and waived the affirmative defense of lack of jurisdiction by failing to move to dismiss with within sixty (60) days from originally asserting that the Court lacked jurisdiction in its Answer served on Plaintiff, and (2) that Defendant consented to jurisdiction by joining in the removal of this action to federal court.

2. Motion for Lack of Personal Jurisdiction Not Time Barred

Neither of Plaintiff's arguments are persuasive. First, CPLR 3211(e) requires that a defendant move to dismiss only for improper service within sixty (60) days after raising this defense in its answer; all other objections that go to personal jurisdiction can be postponed until later, if they were raised as a defense in the defendant's answer. See N.Y. C.P.L.R. 3211 & cmt. C3211:59 (McKinney 2006). A defense based on lack of personal jurisdiction is only waived if the defendant fails to make it either by motion or answer. See id. Defendant did raise its objection to the Court's exercise of personal jurisdiction in its Verified Answer, and, thus, the Defendant has preserved his jurisdictional objection. See Verified Answer (Dkt. No. 6) at ¶12.

3. Consent to Removal Does Not Waive Defense of Lack of Personal Jurisdiction

The case law holds that Defendant's consent to removal of an action does not waive a defense of lack of personal jurisdiction. Plaintiff cites Lomaglio Assocs. v. LBK Mktg. Corp., 876 F. Supp. 41 (S.D.N.Y. 1995), in support of her contention that Defendant has consented to the exercise of this Court's jurisdiction. However, Supreme Court and Second Circuit precedent holds that Lomaglio was incorrectly decided and that removal does not waive a defendant's defense of lack of personal jurisdiction See Sirius Am. Ins. Co., v. SCPIE Indem. Co., 05 Civ. 7923 (BSJ) (GWG), 2006 U.S. Dist. LEXIS 64916 (S.D.N.Y. Sept. 3, 2006) (citing Cain v. Commercial Publ'g Co., 232 U.S. 124, 133 (1914) (removal did not affect defendant's right to object to personal jurisdiction); Morris & Co. v. Skandinavia Ins. Co., 279 U.S. 405 (1929) ("Petitioner suggests that, by removal of the case to the federal court, objection to jurisdiction over the person of respondent was waived. Our decisions are to the contrary.") (citations omitted); Cantor Fitzgerald, L.P. v. Peaslee, 88 F.3d 152, 157 n.4 (2d Cir. 1996) (rejecting argument that defendant "waived his defense of lack of personal jurisdiction by removing to federal court and commencing discovery on the merits after filing his motion to dismiss" and holding that "[r]emoval does not waive any Rule 12(b) defenses"). As a result, this Court finds that Defendant did not consent to the jurisdiction of the Court by allowing the removal of the present action and itsdefense of lack of jurisdiction is now properly before the Court.

4. No Personal Jurisdiction Under CPLR 302(a)(1)

Defendant states that the claim before the Court does not arise out of the transaction of any business in New York State and, therefore, Plaintiff cannot establish jurisdiction over Defendant pursuant to CPLR 302(a)(1). CPLR 302(a)(1) provides a basis for jurisdiction over a nondomiciliary who, inter alia, (1) transacts business within the state and (2) the cause of action arises from that transaction. N.Y. C.P.L.R. 302(a)(1) (McKinney 2006). Defendant asserts that the transaction at issue, the purchase of the vehicle from Defendant's car dealership, took place wholly and completely in Connecticut and, as a result, Plaintiff cannot establish the threshold element -- that the transaction occurred in New York. See Deft's Memorandum of Law (Dkt. No. 10, Attach. 2) at 2; Affidavit of Beylouni (Dkt. No. 10, Attach. 3) at ΒΆ4. Plaintiff acknowledges that she purchased the vehicle from Defendant in Danbury, Connecticut. Affidavit of K. ...

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