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Upstate Networks, Inc., A New York Corporation; and Christopher M. Smolen v. Michael J. Early

August 23, 2012

UPSTATE NETWORKS, INC., A NEW YORK CORPORATION; AND CHRISTOPHER M. SMOLEN, PLAINTIFFS,
v.
MICHAEL J. EARLY, SR.; EARLY BIRD CARWASH, INC., A PENNSYLVANIA CORPORATION; AND
MR. BIRD'S CUSTOM CAR WASH EQUIPMENT, LLC, A PENNSYLVANIA CORPORATION, DEFENDANTS.



MEMORANDUM-DECISION and ORDER

I. INTRODUCTION

On September 27, 2011, Plaintiffs Upstate Networks, Inc. ("Upstate Networks") and Christopher M. Smolen ("Smolen") (collectively, "Plaintiffs") filed a Complaint alleging that Defendants Michael J. Early, Sr. ("Early"), Early Bird Carwash, Inc. ("Early Bird Carwash"), and Mr. Bird's Custom Car Wash Equipment, LLC ("Mr. Bird's Car Wash") (collectively, "Defendants") engaged in conduct constituting libel, breach of contract, and intentional infliction of emotional distress. Dkt. No. 1 ("Complaint"). Presently before the Court is Defendants' November 10, 2011 Motion to dismiss Plaintiffs' Complaint pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure or, alternatively, to transfer venue pursuant to 28 U.S.C. §1404. Dkt. No. 11 ("Motion"). Plaintiffs filed a response in Opposition to Defendants' Motion, along with a supporting Memorandum of law, on November 29, 2011.

Dkt. Nos. 18 ("Plaintiffs' Opposition"), 20 ("Plaintiffs' Memorandum"). On December 5, 2011, Defendants filed a Reply. Dkt. No. 23 ("Reply"). For the reasons that follow, Defendants' Motion is granted, and Plaintiffs' Complaint is dismissed.

II. BACKGROUND

Plaintiff Upstate Networks is a corporation organized and existing under the laws of the State of New York, with a principal place of business in Utica, New York. Compl. ¶ 1. Plaintiff Smolen is a citizen and resident of the County of Oneida in the State of New York. Id.

¶ 2. Defendant Early Bird Carwash is a corporation organized and existing under the laws of the State of Pennsylvania with a principal place of business in the County of Lycoming, Pennsylvania. Declaration of Michael Early (Dkt No. 11-2) ("Early Declaration") ¶ 8. Defendant Mr. Bird's Car Wash is a limited liability company organized and existing under the laws of the State of Pennsylvania with a principal place of business in the County of Lycoming, Pennsylvania. Id. ¶ 14. Defendant Early retains ownership of Early Bird Carwash and Mr. Bird's Car Wash and is a resident of the County of Lycoming in the State of Pennsylvania.Id.

¶¶2, 5-6.

In or around 2007, Plaintiff Upstate Networks, Inc. was hired by Defendants to develop and manufacture a credit card payment system for use in a self-service car wash. Declaration of Christopher Smolen (Dkt. No. 19) ("Smolen Declaration") ¶¶ 5-6. Defendant Early, on behalf of Early Bird Car Wash, initiated the business relationship with Upstate Networks in 2007. Early Decl. ¶20; Pls.' Opp. ¶ 5. On November 1, 2007, Smolen, on behalf of Upstate Networks, visited the joint facility of Early Bird Car Wash. and Mr. Bird's Car Wash, (collectively "Early's facility") at 933 Broad Street in Montoursville, Pennsylvania. Mot. ¶¶ 5- 6. Upstate Networks' initial proposal indicated that there would be additional visits to Early's facility with an engineer and programmer to follow this initial visit. Early Decl. Ex. A; Early Decl. ¶ 24; Mot. ¶ 14. The proposal for the project was created by Plaintiffs in Utica, New York and then transmitted to Defendants in Pennsylvania via electronic mail. Id. ¶¶ 23-25; Smolen Decl. ¶ 11. When Early failed to respond, Smolen, on behalf of Upstate Networks, sent a letter with a lower quote, dated January 22, 2008, to Early Bird Car Wash. Early Decl. ¶ 26, Ex. B. Upstate Networks' quote indicates that Plaintiffs' performance of the system contract would include "travel for three on-site visits" to Early's facility in Pennslyvania. Id. In acceptance of the revised quote, Defendant Early, on behalf of Early Bird Car Wash, signed and executed a credit card authorization in Pennsylvania to place a $4,500 down payment on the contract. Early Decl. ¶¶ 29-30. The parties then proceeded with performance under the contract. Id. ¶ 31. The contract was subsequently assigned from Early Bird Car Wash to Mr. Bird's Car Wash. Id. ¶ 32. The contract did not contain a forum selection clause. Smolen Decl. ¶ 27.

The product was custom designed for Defendants, and all design and development work by Plaintiffs took place in or near Utica, New York. Smolen Decl. ¶ 6. After the contract was executed, Defendant Early traveled to New York between two and three times in 2008 to hold meetings regarding the project.Early Decl. ¶ 33; Pls.' Opp. ¶¶ 10-11, 13.*fn1 On or about August 19, 2010, technicians from Upstate Networks traveled to Defendant Early's place of business in Pennsylvania to install and deliver the system. Compl. ¶ 13. According to Plaintiffs, the product could not be installed properly because Defendants did not have the proper network connectivity or power setup and were not willing to make the necessary changes and/or upgrades. Id. ¶ 14-15. Upstate Networks subsequently made at least two offers to install the product that were refused by Defendants. Id. ¶ 16. Beyond the meetings described above, all additional contact between Plaintiffs and Defendants was conducted by telephone and electronic mail. Early Decl. ¶ 39.

Throughout the project, Upstate Networks billed Defendant Early through several invoices. Each of these invoices were paid, with the exception of the last invoice in the amount of $5,479.62, which remains unpaid despite repeated requests from Plaintiff Smolen. Compl. ¶¶ 17-18. Plaintiffs claim that this failure to pay constitutes a breach of contract. Id. at 17-18. Plaintiffs also claim that, as the business relationship became strained, Defendant Early posted false and misleading messages on two websites ("autocareforum.com" and "yelp.com"), filed a complaint with the Better Business Bureau, and sent harassing and threatening email communications to Plaintiffs. Id. ¶¶ 19-33. Plaintiffs allege that these actions constituted libel and intentional infliction of emotional distress. Id. at 5-16.

III. LEGAL STANDARD

Where a party moves to dismiss an action for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of showing that the court has jurisdiction over the defendant. Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996). Prior to discovery, a plaintiff may survive a 12(b)(2) motion to dismiss by pleading in good faith legally sufficient allegations of jurisdiction. Id.(citing Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990)). That is, where a court relies only upon the pleadings and supporting affidavits, a plaintiff need only make a prima facie showing of personal jurisdiction over a defendant. Cutco Indus., Inc. v. Naughton, 806 F.2d 361, 364 (2d Cir. 1986) (citing Marine Midland Bank N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981)); Grand River Enters. Six Nations, Ltd. v. Prvor, 425 F.3d 158, 165 (2d Cir. 2005).

"A prima facie showing of jurisdiction 'does not mean that plaintiff must show only some evidence that defendant is subject to jurisdiction; it means that plaintiff must plead facts which, if true, are sufficient in themselves to establish jurisdiction.'" Tamam v. Fransabank Sal, 677 F. Supp. 2d 720, 725 (S.D.N.Y. 2010) (citation omitted). Pleadings that assert only "conclusory non-fact-specific jurisdictional allegations" or state a "legal conclusion couched as a factual allegation" do not meet this burden. Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 185 (2d Cir. 1998) (quotation omitted).Finally, while a court is to assume the truth of all well-pleaded factual allegations that support a finding of personal jurisdiction, Ball, 902 F.2d at 197, it should "not draw 'argumentative ...


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