United States District Court, S.D. New York
OPINION AND ORDER
G. SCHOFIELD UNITED STATES DISTRICT JUDGE.
Neil Persh brings this action against Defendant Aldo Petersen
for breach of an oral agreement. For the following reasons,
and following an evidentiary hearing, the Court determines
that it lacks personal jurisdiction over Petersen.
facts of this case are set out in detail in Persh v.
Petersen, 15 Civ. 1414, 2016 WL 4766338 (S.D.N.Y. Sept.
13, 2016). As is relevant here, Persh alleges that he,
Petersen and David Nemelka entered into an oral currency
exchange rate agreement (“CERA”) in order to
induce Nemelka to invest in the acquisition of a Danish
company, LiqTech A/S (“LiqTech Denmark”).
sued Petersen, alleging that Petersen had breached the oral
CERA. Petersen moved for summary judgment, asserting in part
that the Court lacks personal jurisdiction over him. The
Court held that it lacks general personal jurisdiction over
Petersen, but denied Petersen's motion with respect to
specific jurisdiction because Persh had included an averment
of facts at summary judgment that would suffice to establish
jurisdiction over Petersen if credited by the trier of fact.
On October 20, 2016, an evidentiary hearing was held to
resolve that factual issue. Three witnesses testified at the
evidentiary hearing: Petersen, Persh and attorney George
Lander, who represented LiqTech USA in the transaction.
testified under oath that he is a Danish citizen and
resident, with no home in the United States and no bank
account or tax obligations in New York. Petersen further
testified that he attended meetings in Copenhagen, Miami and
Minneapolis to structure the LiqTech acquisition, after which
Lander was hired by LiqTech Denmark to facilitate the deal.
Petersen initially testified that he attended one meeting in
New York to discuss the deal's overall structure
following the meeting in Miami, and spent two days in New
York to finalize the deal. He later stated that he attended
only the closing in New York. Petersen denied that he had
entered into any oral CERA and averred that he did not attend
any meetings in New York at which a CERA was negotiated or
discussed. He likewise denied that he had used a New York
telephone number to discuss a CERA. Petersen further denied
that Lander had ever represented him personally in connection
with the LiqTech acquisition or a CERA, and denied talking to
Lander about a CERA.
contrast, Persh testified under oath that he met Petersen and
Lander in New York between fifteen and twenty-five times to
discuss the LiqTech transaction, including a meeting at the
Hyatt Hotel on 57th Street. Later in his testimony, Persh
stated that he was conservative in his initial estimate and
that he and Petersen likely had met in New York more than
fifty times. Persh further testified that he and Petersen
negotiated a CERA with Lander's help, and that Petersen
gave Lander authority to deal with Nemelka's counsel in
handling the CERA.
testified under oath as follows: he is a New York attorney.
To facilitate the acquisition, Lander formed LiqTech USA at
the direction of Petersen and Persh who, directly or through
their affiliates, were initially the sole shareholders of
LiqTech USA. Lander represented LiqTech USA in connection
with the transaction, and his retainer agreement was with
LiqTech USA. Lander met Petersen and Persh at his office in
New York approximately ten times to discuss the acquisition,
and met Petersen once or twice without Persh to do the same.
He discussed a CERA -- i.e., that Persh and Petersen would
take the currency risk with respect to Nemelka's
investment -- with both Persh and Petersen in New York at or
near the closing of the deal. Persh and Petersen both
directed Lander to work out an agreement with Nemelka's
attorney regarding a CERA, “[b]asically draft it, send
it to his attorney, negotiate it, etc.” Lander
negotiated a written CERA with Nemelka's attorney, which
Persh and Nemelka signed but Petersen did not. Lander did not
bill separately or have a separate retainer agreement for the
work on the CERA. Following the Liqtech acquisition, Lander
continued to work with Persh on other deals for which he was
compensated by Persh, including a deal “a couple
months” prior to the evidentiary hearing, but did not
continue to work with Petersen. In connection with this
action, Lander signed an affidavit prepared by Persh's
attorney that he suspected could be used in a lawsuit against
addition to witness testimony, Persh submitted into evidence
(1) notes written by Petersen on Hyatt stationery that
contains no address or other identifying information, which
refer to details of the LiqTech acquisition, and (2)
Lander's invoice to LiqTech USA, to the attention of
Persh and Petersen.
submitted into evidence (1) a copy of a payment from LiqTech
Denmark to Persh's company; (2) the agreement and plan of
merger for the LiqTech transaction, which was signed by Persh
and not Petersen on behalf of LiqTech USA; (3) a 2009 opinion
of the First Department -- Appellate Division suspending
Lander's license to practice law; (4) a print-out from
the New York State Unified Court System website stating that
Lander's license was still suspended as of the date of
the evidentiary hearing; (5) a sworn affidavit, drafted by
Persh's attorney and signed by Lander, asserting that
Petersen intended to be bound by the CERA, and (6) a
transcript of Persh's prior deposition testimony.
the evidentiary hearing, the parties submitted written
closing arguments on November 18, 2016.
personal jurisdiction is contested prior to trial, district
courts may decide to hold a pre-trial evidentiary hearing to
resolve the issue. See Marine Midland Bank, N.A. v.
Miller, 664 F.2d 899, 904 (2d Cir. 1981). If an
evidentiary hearing is held, the plaintiff bears the burden
of establishing that the court has jurisdiction over the
defendant by a preponderance of the evidence. See id;
Dorchester Fin. Sec, Inc. v. Banco BRJ, S.A., 722 F.3d
81, 87 (2d Cir. 2013).
establish specific jurisdiction in New York over a
non-domiciled defendant, a plaintiff must demonstrate that
the defendant “transacts any business within the
state” that gives rise to a cause of action. CPLR
§ 302(a)(1); see also Brown v. Lockheed Martin
Corp.,814 F.3d 619, 624 (2d Cir. 2016) (federal
district courts generally look to the law of the forum state
to determine whether they have personal jurisdiction over
parties). The “overriding criterion necessary to
establish a transaction of business is some act by which the
defendant purposefully avails [him]self of the privilege of
conducting activities within New York, thereby invoking the
benefits and protections of its laws.” Licci ex
rel. Licci v. Lebanese Canadian Bank, SAL,673 F.3d 50,
61 (2d Cir. 2012) (internal quotation marks and citations
omitted). “A claim arises out of a defendant's
transaction of business in New York when there exists a
substantial nexus between the business transacted and the
cause of action sued upon.” Agency Rent A Car Sys.,
Inc. v. Grand Rent ...