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Inc. v. Kular

United States District Court, S.D. New York

May 21, 2015

BIZ2CREDIT, INC., Plaintiff,


EDGARDO RAMOS, District Judge.

Biz2Credit, Inc. ("Plaintiff") brings suit against Shalinder Kular ("Defendant") for tortious interference with contractual relations and unfair business practices. Jurisdiction is based on diversity of citizenship pursuant to 28 U.S.C. § 1332(a). Before the Court is Defendant's motion to dismiss the Complaint pursuant to Rule 12(b)(2) or, in the alternative, 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons set forth below, Defendant's motion to dismiss under Rule 12(b)(2) is GRANTED. Because the Court grants dismissal under Rule 12(b)(2), the Court does not reach the Rule 12(b)(6) issue.

I. Background[1]

A. The Dispute

Plaintiff is a business which assists other businesses in obtaining financing through Plaintiff's customer lists and "unique processes and technologies." Compl. ¶ 4. Defendant is Plaintiff's former client who also occasionally referred potential clients to Plaintiff and, on at least one occasion, was compensated for his referral. Id. ¶¶ 5, 6; Shalinder Kular's Declaration ("Def.'s Decl.") ¶ 9. In September 2013, one of Plaintiff's employees, Neraaj Tulshan ("Tulshan"), left the business. Compl. ¶ 7. At that time, Tulshan was bound by an employment agreement which, in the event of his separation from Plaintiff, barred him from "soliciting customers and clients of the plaintiff or from interfering with such existing relationships for a period of one year." Id. ¶ 8. Tulshan purportedly breached his agreement by soliciting Plaintiff's clients and stealing Plaintiff's proprietary and confidential information. Id. ¶ 11; Ramit Arora's Declaration ("Pl.'s Decl.") ¶ 7. Plaintiff alleges that Defendant, who had been informed of the the non-solicitation provision of Tulshan's agreement, procured and encouraged Tulshan's breach. Compl. ¶¶ 10, 12.

B. Defendant's New York Contacts

Plaintiff is a Delaware corporation with its principal office located in New York. Compl. ¶ 1; Pl.'s Decl ¶ 2. Defendant is a citizen of Indiana and resides in Indianapolis. Def.'s Decl. ¶

1. Defendant owns and operates several small local business in Indiana, including, delis, convenience stores, frozen yogurt shops, and cafes. Id. ¶ 6. Defendant declares he has never (1) maintained a residence, owned, used, or possessed real property in New York State, id. ¶ 2; (2) maintained a bank account, office address, or telephone number in New York State, id. ¶ 3; (3) conducted business within New York State, id. ¶ 4; or (4) solicited, advertised or promoted himself or his businesses in New York State, id. ¶ 5.

However, Defendant is not completely devoid of contacts with the State. Defendant has been to New York "six or seven" times for personal reasons. Id. ¶ 7. Defendant acknowledges that twice during personal trips he met with Plaintiff: Once for a "social" visit where business was not discussed and once where Plaintiff introduced Defendant to "people from a restaurant chain" to discuss potentially opening locations in Indiana. Id. ¶¶ 7-9. Any deals involving Defendant and Defendant's businesses were worked on by Plaintiff from Plaintiff's New York office. Pl.'s Decl. ¶¶ 2, 15. Plaintiff also alleges that Defendant attended several meetings in New York, including one at Plaintiff's New York office to discuss Defendant's potential investment in some of Plaintiff's New York based clients. Id. ¶¶ 3, 5, 6. Plaintiff alleges that Defendant visited "several" more times in New York when Plaintiff introduced Defendant to several of its New York customers. Id. ¶¶ 5, 6. However, no business deals are alleged to have resulted from those meetings.

Plaintiff and Defendant disagree about whether there was an ongoing contractual relationship between the parties. Defendant contends that there was none but acknowledges that, while physically located in Indiana, he occasionally referred business to Plaintiff and was paid a referral commission for a one-time referral of an Indiana company. Def.'s Decl. ¶¶ 10, 11; Def.'s Mem. 3, 18; Def.'s Reply Mem. 8. Plaintiff contends that starting in mid-2012, Defendant began referring Plaintiff business. Pl.'s Decl. ¶ 4. In total, Defendant made six or seven referrals, after which, Plaintiff and Defendant negotiated a referral fee arrangement, [2] pursuant to which, Defendant would be compensated for referrals. Id. On October 10, 2013, Plaintiff made a payment of $8, 000 and another payment for an unspecified amount to Defendant. Id. Plaintiff alleges Defendant was paid for his services per the referral arrangement but does not make it clear whether those payments were for referrals made prior to or after they entered the agreement.[3] Defendant was also issued a 1099 by Plaintiff. Id.

After Tulshan gave Plaintiff notice he was leaving in September 2013, Plaintiff twice informed Defendant of Tulshan's departure and of the non-solicitation provision in Tulshan's employment contract. Id. ¶¶ 7-9; Compl. ¶ 10. Both times, Defendant repeatedly assured Plaintiff that he would not refer business to Tulshan and would continue referring business to Plaintiff. Pl.'s Decl. ¶¶ 8, 9, 12. In gratitude, Plaintiff made an additional "bonus" payment of $2, 000 to Defendant. Id.

Plaintiff alleges that even before Tulshan left Plaintiff's employment, Defendant and Tulshan started working together in violation of Tulshan's contract. Id. ¶ 13. According to Plaintiff, Defendant and Tulshan engaged in "months of prior planning" and "act[ed] in lockstep" to steal from Plaintiff. Id. ¶ 11. Defendant purportedly diverted nine deals to Tulshan that were intended for or originally sent to Plaintiff. Pl.'s Decl. ¶ 14; Compl. ¶¶ 17-18. These nine deals involve Indiana, not New York, businesses. Def.'s Decl. ¶ 12.

C. Procedural History

Plaintiff filed an earlier action on September 24, 2013 in the Supreme Court of the State of New York, New York County, against Tulshan and Hudson Capital Advisors, LLC for damages arising from Tulshan's alleged violation of his employment agreement and theft of proprietary and confidential information from Plaintiff. See Compl. ¶ 11; Biz2Credit, Inc. v. Neeraj Tulshan and Hudson Capital Advisors, LLC, No. 65718/13 (" Tulshan Action"). It was through discovery obtained in the Tulshan action that Plaintiff learned of Defendant's purported tortious conduct. Compl. ¶ 12.

Plaintiff originally commenced this action in the Supreme Court of the State of New York, New York County, on September 9, 2014. See Compl. On October 15, 2014, Defendant removed this action to this Court on the basis of diversity jurisdiction. On November 14, 2014, a pre-motion conference was held before this Court, at which Defendant was granted leave to file the instant motion.

II. Standard of Review

"A plaintiff opposing a motion to dismiss under Rule 12(b)(2) for lack of personal jurisdiction has the burden of establishing that the court has jurisdiction over the defendant." BHC Interim Funding, LP v. Bracewell & Patterson, LLP, No. 02 Civ. 4695 (LTS) (HBP), 2003 WL 21467544, at *1 (S.D.N.Y. June 25, 2003) (citing Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir.1999)). To meet this burden, the plaintiff must plead facts sufficient for a prima facie showing of jurisdiction. Id.[4] The Court construes all of Plaintiff's allegations as true and resolves all doubts in its favor. Casville Invs., Ltd. v. Kates, No. 12 Civ. 6968 (RA), 2013 WL 3465816, at *3 (S.D.N.Y. July 8, 2013) (citing Porina v. Marward Shipping Co., 521 F.3d 122, 126 (2d Cir. 2008)). "However, a plaintiff may not rely on conclusory statements without any supporting facts, as such allegations would lack the factual specificity necessary to confer jurisdiction.'" Art Assure Ltd., LLC v. Artmentum GmbH, No. 14 Civ. 3756 (LGS), 2014 WL 5757545, at *2 (S.D.N.Y. Nov. 4, 2014) (quoting Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 185 (2d Cir. 1998)). As 12(b)(2) motions are "inherently... matter[s] requiring the resolution of factual issues outside of the ...

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