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Capstone Business Funding, LLC v. Denark Construction, Inc

United States District Court, S.D. New York

January 30, 2017

CAPSTONE BUSINESS FUNDING, LLC Individually, and as assignee of MARCUS CONSTRUCTION, CO., Plaintiff,
v.
DENARK CONSTRUCTION, INC., and WESTERN SURETY COMPANY, Defendants.

          MEMORANDUM OPINION AND ORDER

          LAURA TAYLOR SWAIN United States District Judge.

         Plaintiff Capstone Business Funding, LLC (“Capstone”) brought this action against Defendants Denark Construction, Inc. (“Denark”) and Western Surety Company (“Western Surety, ” and, with Denark, “Defendants”) seeking to recover $248, 019.00, plus interest, that is allegedly owed to Capstone under the terms of two Estoppel Certificates dated October 28, 2015. (See docket entry no. 1 (Complaint (“Compl.”) ¶ 25.)

         Denark has moved, pursuant to Rules 12(b)(2), (4) and (5) of the Federal Rules of Civil Procedure, to dismiss the Complaint for lack of personal jurisdiction, for insufficient service of process, and, alternatively, under the doctrine of forum non conveniens. The Court has subject matter jurisdiction of this action pursuant to 28 U.S.C. § 1332(a)(1).

         The Court has reviewed thoroughly the submissions of both parties in connection with Denark's motion to dismiss. For the following reasons, Denark's motion to dismiss the Complaint is granted.

         Background

         The following summary of relevant facts is drawn from the Complaint, which is taken as true for the purposes of this motion practice, and affidavits submitted in connection with the instant motion.[1]

         Capstone is a Delaware corporation with its principal place of business in New York. (Compl. ¶ 1.) Denark is a Tennessee corporation. (Id. ¶ 2.) Marcus Construction Company (“Marcus”), a Kentucky limited liability company that is not a party to this action, entered into a construction sub-contract with Denark. (See Compl. ¶¶ 6, 13.) Marcus issued invoices to Denark for work done pursuant to the Subcontract in an amount of at least $278, 844.00, of which $248, 019.00 allegedly remains unpaid. (Id. ¶ 14.) Marcus assigned these invoices to Capstone. (Id. ¶ 7.)

         Capstone prepared, and mailed to Denark's offices in Tennessee, Estoppel Certificates regarding the invoices, which Denark modified in part and signed. (See docket entry no. 11, Declaration of Garry T. Stevens Jr. (“Stevens Decl.”), at Ex. B (Affidavit of Frank Rothermel), at Ex. B (“Estoppel Certificates”).) The Estoppel Certificates state that Capstone is the assignee of payment for Marcus, and state the amounts Denark owed Capstone, reciting that the specified sums were then due and owing. (Id.) Denark was instructed in correspondence accompanying the Estoppel Certificates to send all current and future invoice payments to Capstone's lockbox location in Chicago, Illinois. (Id. at p. 3.)

         Denark made two modifications to the Estoppel Certificates: (1) on one, changing the amounts due, and (2) on both, striking provisions that jurisdiction and venue would be exclusive to New York. (See Estoppel Certificates.) Capstone has not contested the enforceability of these modifications.

         Representatives of Denark, Marcus, and Capstone exchanged emails both before and after the execution of the Estoppel Certificates. (Docket entry no. 16, Affidavit of Scott A. Brody, Esq., Ex. A (Affidavit of James Rubbinaccio), at ¶¶ 6-8.)

         Discussion

         On a motion to dismiss a complaint for lack of personal jurisdiction pursuant to Rule 12(b)(2), “[a] plaintiff bears the burden of demonstrating personal jurisdiction over a person or entity against whom it seeks to bring suit.” Troma Entm't, Inc. v. Centennial Pictures Inc., 729 F.3d 215, 217 (2d Cir. 2013) (internal quotation marks and citation omitted). The court must “construe the pleadings and any supporting materials in the light most favorable to the plaintiffs.” Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 167 (2d Cir. 2013). “Where, as here, a court relies on pleadings and affidavits, rather than conducting a fullblown evidentiary hearing, the plaintiff need only make a prima facie showing that the court possesses personal jurisdiction over the defendant.” DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001) (internal quotations omitted).

         The “resolution of a motion to dismiss for lack of personal jurisdiction made in the Southern District of New York requires a two-step analysis.” Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d Cir. 2002). “First, the court must determine if New York law would confer upon its courts the jurisdiction to reach the defendant, which in this case could only be possible under the New York long-arm statute, CPLR § 302.” Id. “If there is a statutory basis for jurisdiction, the court must then determine whether New York's extension of jurisdiction in such a case would be permissible under the Due Process Clause of the Fourteenth Amendment.” Id. However, “if jurisdiction is statutorily impermissible . . . [the court] need not reach the question of its constitutionality.” Best Van Lines, Inc. v. Walker, 490 F.3d 239, 244 (2d Cir. 2007).

         The New York long-arm statute provides, in relevant part, that “a court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent transacts any business within the state or contracts anywhere to supply goods or services in the state.” N.Y. C.P.L.R. § 302(a)(1); Best Van Lines, Inc. v. Walker, 490 F.3d 239, 244 (2d Cir. 2007). “CPLR 302(a) is a single act statute [and] . . . proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial ...


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