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noting that where a plaintiff's “own pleadings are internally inconsistent, a court is neither obligated to reconcile nor accept the contradictory allegations in the pleadings as true in deciding a motion to dismiss”
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10-CV-1777 (ADS)(AKT)
02-02-2011
NATIONWIDE MUTUAL INSURANCE COMPANY as subrogee of GAIL D. JONES-LEWIS, Plaintiff, v. MORNING SUN BUS COMPANY and XIAO B. WANG, Defendants.
APPEARANCES: Epstein Frankini & Grammatico Attorneys for the Plaintiff 45 Crossways Park Drive, Suite 102 Woodbury, NY 11797 By: Claude N. Grammatico, Esq., Of Counsel Lavin, O'Neil, Ricci, Cedrone & DiSipio Attorneys for the Defendants 420 Lexington Avenue, Suite 2900 New York, NY 10170 By: Timothy J. McHugh, Esq., Of Counsel
MEMORANDUM OF DECISION AND ORDER
APPEARANCES: Epstein Frankini & Grammatico
Attorneys for the Plaintiff
45 Crossways Park Drive, Suite 102
Woodbury, NY 11797
By: Claude N. Grammatico, Esq., Of Counsel Lavin, O'Neil, Ricci, Cedrone & DiSipio
Attorneys for the Defendants
420 Lexington Avenue, Suite 2900
New York, NY 10170
By: Timothy J. McHugh, Esq., Of Counsel SPATT, District Justice.
This case arises from personal injuries sustained by Gail D. Jones-Lewis ("Jones-Lewis"), in a bus accident in Connecticut between a bus owned by Best Trails and Travel, Inc. ("Best Trails") and a bus leased by Morning Sun Bus Company ("Morning Sun"). Jones-Lewis was a passenger on the Best Trails bus when it collided with the Morning Sun bus, which was being driven by Xiao B. Wang ("Wang" and together with Morning Sun "the Defendants"). Pursuant to an insurance policy with Nationwide Mutual Insurance Company ("Nationwide" or "the Plaintiff"), Jones-Lewis received certain no-fault benefits for her injuries.
On April 21, 2010, Nationwide, as subrogee of Jones-Lewis, commenced this subrogation action against the Defendants seeking to recover the no-fault insurance payments pursuant to New York General Insurance Law § 5104. Presently before the Court is the Defendants' motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction and Fed. R. Civ. P. 12(b)(6) for failure to state a claim. For the reasons that follow, the Court grants the motion to dismiss for lack of personal jurisdiction as to both of the Defendants. Because the Court ultimately finds that it lacks personal jurisdiction over both of the Defendants, it does not reach the issue of whether the complaint states a claim for relief.
I. BACKGROUND
The following facts are drawn from the complaint, motion papers and annexed exhibits submitted by the parties, and are construed in the light most favorable to the Plaintiff. A. Factual Background
The Plaintiff, Nationwide Mutual Insurance Company, is a foreign corporation licensed to do business in the State of New York. Defendant Morning Sun Bus Company is a Massachusetts corporation with its primary place of business in Norfolk, Massachusetts. Defendant Xiao B. Wang is a Massachusetts resident and employee of Morning Sun. The relevant facts giving rise to this case are as follows.
On April 21, 2007, Wang was driving a Morning Sun bus when he was involved in a motor vehicle accident with a Best Trails bus in the Autumn Bus Lobby at the Mohegan Sun Casino in Uncasville, Connecticut. Gail Jones-Lewis, a New York resident, was passenger on the Best Trails bus and sustained injuries as a result of the accident.
At the time of the accident, Jones-Lewis had a personal automobile insurance policy with Nationwide that had been issued from Nationwide's office in Woodbury, New York (the "Jones- Lewis policy"). As a result of Jones-Lewis's injuries from the accident, Nationwide paid certain no-fault benefits on her behalf, including $53,289.43 in Personal Injury Protection ("PIP") payments and $47,520.70 in Additional Personal Injury Protection ("APIP") payments (the "no-fault benefits"). Under the Jones-Lewis policy, Nationwide has a right to seek reimbursement for the no-fault benefits from the third parties involved in the accident, in this case Wang and Morning Sun.
On April 21, 2010, Nationwide commenced the instant action as subrogee of Jones-Lewis, seeking to recover the above stated no-fault benefits from the Defendants under New York General Insurance Law § 5104. Both of the Defendants signed a waiver of service of the summons and complaint preserving their objections to the jurisdiction of this Court. (Docket Nos. 8, 9.)
In addition to the instant litigation, Jones-Lewis's injuries from this accident have been the subject of two additional lawsuits. The first was a personal injury lawsuit filed on October 24, 2008 by Jones-Lewis and another Best Trails passenger in the Superior Court in the State of Connecticut, Jurisdiction of New London (the "Connecticut action"). The defendants in the Connecticut action are Morning Sun, Wang, Best Trails, the driver of the Best Trails bus Alexandr Dorin, and ABC Bus Leasing Inc. ("ABC Leasing"), the owner of the bus leased to Morning Sun. The Connecticut action is still pending.
The second related lawsuit was filed on or about September 11, 2009 in the Supreme Court of the State of New York, County of Nassau (the "State Court action"). Nationwide commenced the State Court action as subrogee of Jones-Lewis against ABC Leasing, Morning Sun, Wang, Best Trails, and Dorin, seeking the same relief presently sought before this Court. By Order dated January 21, 2010, the Honorable Thomas Feinman of the Supreme Court of the State of New York, County of Nassau dismissed the State Court action as against Wang for lack of personal jurisdiction. Subsequently, while the instant motions were pending, the State Court action was discontinued without prejudice.
On June 28, 2010, the Defendants brought the present motions to dismiss alleging that the Court lacks personal jurisdiction over both Morning Sun and Wang, and that Nationwide cannot state a claim for relief under New York, Massachusetts, and Connecticut law. For its part, Nationwide contends that New York law is applicable and that it has stated a claim under New York law, and the motion to dismiss for lack of personal jurisdiction is premature because jurisdictional discovery is necessary to resolve the issue.
II. DISCUSSION
A. Legal Standard on a Motion to Dismiss under Fed. R. Civ. P. 12(b)(2)
Fed R. Civ. P. 12(b)(2) ("Rule 12(b)(2)") permits a defendant to challenge a court's personal jurisdiction over it prior to the filing of an answer or the commencement of discovery. In diversity cases, "personal jurisdiction is determined by the law of the state in which the district court sits, which in this case is New York." DiStefano v. Carozzi North Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001). Accordingly, in analyzing a Rule 12(b)(2) motion, courts in New York follow a two-step process. First, a court will determine whether personal jurisdiction lies pursuant to any of the provisions of New York's long-arm statute, CPLR §§ 301 and 302. See Nat'l Union Fire Ins. Co. of Pittsburgh, PA. v. BP Amoco P.L.C., 319 F. Supp. 2d 352, 357 (S.D.N.Y. 2004) (citing Omni Capital Int'l Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 105, 108 S. Ct. 404, 98 L. Ed. 2d 415 (1987)). Second, a court must analyze whether personal jurisdiction comports with the basic requirements of due process. Id.
"A plaintiff bears the burden of demonstrating personal jurisdiction over a person or entity against whom it seeks to bring suit." Penguin Grp. (USA), Inc. v. Am. Buddha, 609 F.3d 30, 34 (2d Cir. 2010); Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001). In deciding a motion to dismiss for lack of personal jurisdiction, the Court may rely upon materials that are outside the pleadings, including any affidavits submitted by the parties. See DiStefano, 286 F.3d at 84. However, where, as here, the Court "relies on the pleadings and affidavits, and chooses not to conduct a 'full-blown evidentiary hearing,' plaintiffs need only make a prima facie showing of personal jurisdiction over the defendant." Porina v. Marward Shipping Co., Ltd., 521 F.3d 122, 126 (2d Cir. 2008); Penguin, 609 F.3d at 34-35. "Such a showing entails making legally sufficient allegations of jurisdiction, including an averment of facts that, if credited, would suffice to establish jurisdiction over the defendant." Id. at 35 (internal quotations and alterations omitted); see also Tamam v. Fransabank Sal, 677 F. Supp. 2d 720, 725 (S.D.N.Y. 2010) ("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.") (internal quotation marks omitted). B. Whether the Court has Personal Jurisdiction over Morning Sun
Pursuant to the New York long-arm statute, there are two ways that a New York court can exercise personal jurisdiction over a non-resident defendant: general jurisdiction pursuant to N.Y. C.P.L.R. § 301 ("section 301") or specific jurisdiction pursuant to N.Y. C.P.L.R. § 302 ("section 302").
As an initial matter, the Court notes that in pleading the allegations in the complaint relating to jurisdiction, Nationwide essentially adds "Morning Sun Bus Company, Inc., its agents, servants and/or employees" to a formulaic recitation of the long-arm statute. By simply stating the standard, Nationwide asks this Court to find, without any corroborating facts, that Morning Sun by definition has the required contacts with New York required to satisfy the long-arm statute, even those which contradict each other and the undisputed facts of the case. For example, despite the undisputed fact that there is only one relevant tort—alleged negligence causing an automobile accident in Connecticut—Nationwide inexplicably pleads both that Morning Sun committed a tort within the State of New York to satisfy section 302(a)(2) (Compl., ¶ 17), and that Morning Sun committed a tort outside of New York to satisfy section 302(a)(3) (Compl., 22).
The Second Circuit has held that a plaintiff cannot meet the burden of showing a prima facie case of jurisdiction where the complaint asserts only "conclusory non-fact-specific jurisdictional allegations" and a court is "not bound to accept as true a legal conclusion couched as a factual allegation." Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 185 (2d Cir. 1998) (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S. Ct. 2932, 92 L. Ed. 2d 209 (1986)); accord Galerie Gmurzynska v. Hutton, 257 F. Supp. 2d 621, 625 (S.D.N.Y. 2003) ("However, conclusory allegations are not enough to establish personal jurisdiction.") (internal quotation marks omitted), aff'd, 355 F.3d 206 (2d Cir. 2004). Nevertheless, even accepting the allegations as true for the purposes of this motion, the Court finds that Nationwide has failed to make a prima facie showing of personal jurisdiction over Morning Sun.
In addition, Nationwide contends the Court should deny the motion to dismiss because Morning Sun has not provided affirmative evidence that the Court lacks personal jurisdiction. Howevever, it is well-settled that the "plaintiff bears the burden of demonstrating personal jurisdiction over a person or entity against whom it seeks to bring suit." Penguin Grp. (USA), Inc. v. Am. Buddha, 609 F.3d 30, 34-35 (2d Cir. 2010). Thus, contrary to Nationwide's assertion, the burden was not on Morning Sun to show that it was not subject to personal jurisdiction, but rather the burden was on Nationwide to plead facts that, if true, would provide the Court with personal jurisdiction.
Finally, it is not entirely clear to the Court whether Nationwide seeks to premise personal jurisdiction over Morning Sun on section 301, section 302, or both. In opposition to the instant motion, Nationwide only addresses whether Morning Sun is subject to the Court's specific jurisdiction under section 302. However, there are certain allegations in the complaint and arguments in Nationwide's opposition to the instant motion that appear to assert that Morning Sun is subject to general jurisdiction in New York. Specifically, Nationwide states in the complaint that Morning Sun is authorized to do business in New York and that Morning Sun, its agents and employees are engaged in business in New York. As discussed in detail below, under certain circumstances these allegations could support general jurisdiction under section 301. Moreover, the only example of an actual contact with New York that Nationwide cites is Morning Sun's website, which is accessible in New York. To the extent this constitutes solicitation of business in New York, in combination with other factors this too could support general jurisdiction. Thus, in an abundance of caution, the Court considers whether Nationwide has made a prima facie case that Morning Sun is subject to general jurisdiction in New York.
1. As to General Jurisdiction pursuant to CPLR § 301
CPLR § 301 provides for jurisdiction over a defendant that is "engaged in such a continuous and systematic course of 'doing business' in New York as to warrant a finding of its 'presence' in the state." Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998) (internal quotation marks and citation omitted). "[A] corporation is 'doing business' and is therefore 'present' in New York and subject to personal jurisdiction with respect to any cause of action, related or unrelated to the New York contacts, if it does business in New York not occasionally or casually, but with a fair measure of permanence and continuity." Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 95 (2d Cir. 2000) (internal citation and quotation marks omitted). In determining whether a defendant is subject to general jurisdiction, New York courts look to a number of factors including: (1) "the existence of an office in New York"; (2) "the solicitation of business in the state"; (3) "the presence of bank accounts and other property in the state"; and (4) "the presence of employees of the foreign defendant in the state." Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 58 (2d Cir. 1985).
Nationwide vaguely alleges that Morning Sun has employees and property in New York, and engages in business in New York, but otherwise fails to include any detail that may suggest that the property, employees, and business transactions are substantial enough to constitute "doing business" in New York. Furthermore, while Morning Sun's website could potentially fall within the category of "solicitation of business in the state," it is well-established that "'solicitation of business alone will not justify a finding of corporate presence in New York with respect to a foreign manufacturer or purveyor of services.'" Xiu Feng Li v. Hock, 371 Fed. Appx. 171, 174 (2d Cir. 2010) (quoting Laufer v. Ostrow, 55 N.Y.2d 305, 310, 449 N.Y.S.2d 456, 434 N.E.2d 692 (1982)); Spencer Trask Ventures v. Archos S.A., No. 01-CV-1169, 2002 WL 417192, at *6 (S.D.N.Y. Mar. 18, 2002) ("[T]he fact that a foreign corporation has a website accessible in New York is insufficient to confer jurisdiction under CPLR § 301.").
Nevertheless, jurisdiction under section 301 may be appropriate based on Nationwide's allegation that Morning Sun is authorized to do business in New York. Generally, a party authorized to do business in New York is subject to general jurisdiction in New York regardless of whether it conducts substantial business in New York. See Amalgamet, Inc. v. Ledoux & Co., 645 F. Supp. 248, 249 (S.D.N.Y. 1986) ("Defendant argues that the mere fact that it was authorized to do business in New York does not confer personal jurisdiction on this court. However, the general rule is that a foreign corporation which files a certificate of authority to do business in New York has consented to personal jurisdiction in the state."). There is a rationale for asserting jurisdiction solely based on authorization to business in New York. Pursuant to New York Business Corporation Law § 304(b), when a company obtains authorization to do business in New York, there is a "concomitant designation of the Secretary of State as its agent for service of process," which is considered a "consent to in personam jurisdiction." Augsbury Corp. v. Petrokey Corp., 97 A.D.2d 173, 175, 470 N.Y.S.2d 787, 789 (3d Dep't 1983).
For its part, Morning Sun disputes that it is authorized to do business in New York by: 1) stating in its moving brief that Morning Sun is "not authorized to do business in New York" and 2) attaching to its moving brief a printout from the New York Department of State: Division of Corporations website showing that "Morning Sun Bus Company" is not listed as an entity authorized to do business in New York. (See Pl.'s Br. at 7; Ex. F.) Although the Court can consider evidence outside of the complaint on a Rule 12(b)(2) motion to dismiss, the Court finds neither the statement nor the website to be admissible evidence. A statement in a memorandum of law, as opposed to one in an affidavit from a person with knowledge, is insufficient to raise an issue of fact. See In re Teligent, Inc., Nos. 01-12974, 03-3577, 2004 WL 724945, at *4 (Bankr. S.D.N.Y. Mar. 30, 2004) (disregarding anti-jurisdictional facts that the defendant asserted in a memorandum of law, where the defendant did not include a supporting affidavit based on personal knowledge). In addition, without any explanation or affirmation as to its evidentiary value or admissibility, the Court affords no weight to the printout from the New York Department of State website. While neither the statement nor the printout are admissible evidence to prove that Morning Sun is not authorized to do business in New York, they do raise a serious question as to whether Morning Sun is in fact authorized to do business in New York.
Further undermining the credibility of Nationwide's assertion that Morning Sun is authorized to do business in New York, is that Nationwide inexplicably also alleges in the complaint that Morning Sun is not authorized to do business in New York. (Compl., ¶ 15.) "Where plaintiff's own pleadings are internally inconsistent, a court is neither obligated to reconcile nor accept the contradictory allegations in the pleadings as true in deciding a motion to dismiss." In re Richartz, Fliss, Clark & Pope, Inc., Adv. No. 10-03317, 2010 WL 4502038 (Bankr. S.D.N.Y. 2010); Fisk v. Letterman, 401 F. Supp. 2d 362, 368 (S.D.N.Y. 2005) ("The Court, however, is not obliged to reconcile plaintiff's own pleadings that are contradicted by other matters asserted or relied upon or incorporated by reference by a plaintiff in drafting the complaint."). In light of the contradictory statements in Nationwide's complaint, this factual issue is insufficient to defeat the present motion.
However, while the Court questions the veracity of such a claim, Nationwide has at least raised an issue of fact as to whether Morning Sun is authorized to do business in New York and thus subject to personal service in New York. In the appropriate cases, it is the "usual practice upon granting a motion to dismiss to allow leave to replead." Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir. 1991). Thus, the Court will afford Nationwide twenty days from the date of this order to amend its pleading to clarify whether it alleges that Morning Sun is authorized to do business in New York so that service on Morning Sun can be effectuated either on the Secretary of State or another authorized agent in New York. Given Morning Sun's statement that it is not authorized to do business in New York, the Court cautions Nationwide to remember that Fed. R. Civ. P. 11(b) requires a party to have "evidentiary support" for its factual allegations, and to note that discovery is not required to ascertain whether a company is authorized do business and subject to service in New York.
2. As to Specific Jurisdiction Pursuant to CPLR § 302
Section 302 of New York's long-arm statute provides that:
(a) As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:
1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or
2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or
3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he
(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or
(ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce; or
N.Y. C.P.L.R. § 302(a) (McKinney 2010). In support of its argument that Morning Sun is subject to specific jurisdiction under the long-arm statute, Nationwide primarily relies on the recitation of the long-arm statute in the complaint, and the notion that a "single transaction" through Morning Sun's website can confer jurisdiction. With regard to the website, Nationwide attaches as an exhibit to the Affidavit of Claude N. Grammatico ("Grammatico Affidavit") four pages apparently printed from Morning Sun's website. The first page appears to be a printout of a home page with a photograph of buses and a header on top of the page that says "Morning Sun Bus Company" and "We Specialize in Bus Tours & Chartered Service." (Grammatico Aff., Ex. D.) The second page includes four links a customer can click on entitled: About Us, Services, Booking, and Contact Us. The third page included is the "About Us" page, which states that Morning Sun provides a safe, comfortable and enjoyable service in the "New England Region," that is "easy to access, easy to use and easy to get you where you want to go." Finally, the fourth page provides contact information, identifying the location of Morning Sun as "219 Quincy Ave. Unit 93, Quincy, MA 02169" and stating that for booking information customers should contact an individual named George Wu at one of four Massachusetts phone numbers, or an email address. (Id.)4. owns, uses or possesses any real property situated within the state.
As set forth below, the Court finds that Nationwide has not met its burden as to any of the prongs of section 302.
"To establish personal jurisdiction under section 302(a)(1), two requirements must be met: (1) The defendant must have transacted business within the state; and (2) the claim asserted must arise from that business activity." Sole Resort, S.A. de C.V. v. Allure Resorts Mgmt. LLC, 450 F.3d 100, 103 (2d Cir. 2006). "[A] suit will be deemed to have arisen out of a party's activities in New York if there is an articulable nexus, or a substantial relationship, between the claim asserted and the actions that occurred in New York." Best Van Lines, Inc. v. Walker, 490 F.3d 239, 246 (2d Cir. 2007) (internal quotation marks and citation omitted). A connection that is "merely coincidental" is insufficient to support jurisdiction. Johnson v. Ward, 4 N.Y.3d 516, 520, 797 N.Y.S.2d 33, 35, 829 N.E.2d 1201, 1203 (N.Y. 2005).
To support personal jurisdiction under section 302(a)(1), Nationwide alleges in the complaint that Morning Sun transacts business in New York and contracts to provide goods and services in New York. In addition, Nationwide contends that, even if Morning Sun's website does not rise to the level of "doing business" in New York for general jurisdiction, the long-arm statute is a "single act statute," and therefore personal jurisdiction is proper based on Morning Sun's "transaction of business through its website." (Pl.'s Br. at 9.) In response, Morning Sun claims that its website does not rise to the level of transacting business. However, even if did, Nationwide has still failed to make a prima facie showing of personal jurisdiction because Nationwide does not allege that any of Morning Sun's business transactions in New York, through its website or otherwise, were connected to the underlying cause of action.
The fact that individuals in New York can access Morning Sun's website does not constitute "transacting business" for the purposes of section 302(a)(1) unless Morning Sun, through its website or other commercial activity, has some additional connection to New York. See, e.g., ISI Brands, Inc. v. KCC Intern., Inc., 458 F.Supp.2d 81, 87-88 (E.D.N.Y. 2006) (noting that "[e]ven the existence of an interactive 'patently commercial' website that can be accessed by New York residents is not sufficient to justify the exercise of personal jurisdiction unless some degree of commercial activity occurred in New York."); Savage Universal Corp. v. Grazier Constr., Inc., 2004 WL 1824102, at *9 (S.D.N.Y. Aug. 13, 2004) ("It stretches the meaning of 'transacting business' to subject defendants to personal jurisdiction in any state merely for operating a website, however commercial in nature, that is capable of reaching customers in that state, without some evidence or allegation that commercial activity in that state actually occurred."); Chloe, Div. of Richemont North Am., Inc. v. Queen Bee of Beverly Hills, LLC, 571 F. Supp. 2d 518, 528 (S.D.N.Y. 2008) (collecting cases and observing that courts have exercised personal jurisdiction based upon a defendant's website only in cases where the defendant had other relevant forum contacts).
Here, Nationwide does not allege that Morning Sun purposefully solicits New York customers; that New York customers can purchase tickets through the website; or that the website directly targets New York. In fact, the pages of the website provided by Nationwide in support of this contention contradict such a notion. It does not appear that customers, in New York or anywhere else in New England, can purchase tickets through the website. Rather, the website provides information for calling, faxing, or emailing a Morning Sun representative in Massachusetts. "Under the circumstances, the bare allegation that [Nationwide] operates a website that may reach New Yorkers is insufficient to trigger the application of 302(a)(1)." O'Keefe v. Blue & Gold Fleet, L.P., 634 F. Supp. 2d 284, 288 (E.D.N.Y. 2009) (Spatt, J.).
Nationwide attempts to overcome this deficiency by arguing that that the long-arm statute is a "single act statute" and therefore proof of one transaction through Morning Sun's website can support jurisdiction. Notably, Nationwide does not provide a single example of a transaction that an individual in New York could make through Morning Sun's website. In addition, a single transaction can only invoke jurisdiction under section 302(a)(1) "if there is a substantial relationship between the transaction and the claim." Kaloyeva v. Apple Vacations, 21 Misc. 3d 840, 866 N.Y.S.2d 488 (N.Y. 2008); Grimaldi v. Guinn, 72 A.D.3d 37, 895 N.Y.S.2d 156 (N.Y. 2010) ("If a Web site provides information, permits access to e-mail communication, describes the goods or services offered, downloads a printed order form, or allows online sales with the use of a credit card, and sales are, in fact, made in this manner in the forum state, particularly by the injured consumer . . . then the assertion of personal jurisdiction may be reasonable.") (internal citations omitted) (emphasis added); Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 198-99, 522 N.E.2d 40, 43 (N.Y. 1988) (holding that the single act must be one where "there is a substantial relationship between the transaction and the claim asserted"). As the Second Circuit has noted, "the long-arm statute bases jurisdiction on a level of conduct far less than that necessary for the 'doing' of business, meeting what was felt to be the requirement of due process by demanding a direct relation between the cause of action and the in-state conduct." Fontanetta v. Am. Bd. of Internal Med., 421 F.2d 355, 357 (2d Cir. 1970) (emphasis added). Thus, a "single act" of transacting business in New York, such as a transaction through a website or any other transaction Nationwide may be referencing through its vague and conclusory allegations in the complaint, that has no "articulable nexus" or "substantial relationship" to the underlying cause of action, would undermine the due process protection intentionally provided for in the long-arm statute.
Indeed, the New York Court of Appeals has specifically noted that, where, as here, a cause of action arises out of negligent driving in another state, the business activity must relate to that cause of action. See Johnson, 4 N.Y.3d at 520, 797 N.Y.S.2d at 35, 829 N.E.2d at 1203 ("Plaintiffs' cause of action arose out of defendant's allegedly negligent driving in New Jersey, not from the issuance of a New York driver's license or vehicle registration. The relationship between the negligence claim and defendant's possession of a New York license and registration at the time of the accident is too insubstantial to warrant a New York court's exercise of personal jurisdiction over defendant."). That is not to say that a website transaction could not provide the Court with jurisdiction. For example, if Jones-Lewis had been a passenger on the Morning Sun bus, and while in New York had purchased her ticket from Morning Sun through its website, that transaction would potentially provide the Court with personal jurisdiction over Morning Sun. However, those are not the facts of this case, and Nationwide does not allege that any of Morning Sun's business transactions, through its website or otherwise, had any relationship with the alleged tort. While Nationwide contends that "questions of fact remain as to the defendants' presence, involvement and contact to New York State," (Pl.'s Br. at 9), the Court ultimately finds that the requisite nexus between any of Morning Sun's potential business activities in New York and the cause of action is wholly lacking. Accordingly, the Court finds that CPLR § 302(a)(1) does not provide the Court with jurisdiction over Morning Sun.
b. CPLR §§ 302(a)(2) and 302(a)(3)
Nationwide cannot premise the Court's personal jurisdiction over Morning Sun on either section 302(a)(2) or 302(a)(3), because neither is applicable where the underlying cause of action is against a non-domiciliary defendant for injuries sustained in an out-of-state motor vehicle accident. Section 302(a)(2) would only provide the Court with jurisdiction if the tortious act—in this case the alleged negligence causing the accident—occurred in New York. Putting aside the fact that, as previously noted, Nationwide claims the tortious act was committed both within New York and outside of New York, because the accident indisputably occurred in Connecticut, the Court does not have personal jurisdiction over Morning Sun under section 302(a)(2).
Moreover, while section 302(a)(3) serves as a basis for personal jurisdiction where a tortious act is committed outside of New York but causes injury in New York, section 302(a)(3) is rarely, if ever, applied in this factual scenario. Courts apply a situs-of-the-injury test to determine where the injury occurred, which in the tort context "is the location of the original event which caused the injury, not the location where the resultant damages are felt by the plaintiff." Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 209 (2d Cir. 2001) (internal quotation and citation omitted). Where, as here, the underlying cause of action arises from injuries sustained in an motor vehicle accident outside of New York, and is asserted against a party to that accident for damages, the location of the injury is where the accident occurred, not where the subsequent pain is felt. See Morales v. Schofield, 174 F.R.D. 253, 257 (E.D.N.Y. 1997) ("The New York courts that have addressed cases where a New York plaintiff is injured in an automobile accident outside the state by a non-domiciliary who has no other New York contacts, have held that there is no personal jurisdiction over the defendant.") (citing Lancaster v. Colonial Motor Freight Line, Inc., 177 A.D.2d 152, 581 N.Y.S.2d 283 (1st Dep't 1992); Bramwell v. Tucker, 107 A.D.2d 731, 484 N.Y.S.2d 92 (2d Dep't 1985)); Rounds v. Rea, 947 F. Supp. 78, 86 (W.D.N.Y. 1996) ("Further, the fact that Rea is alleged to have been driving in an unsafe manner in New York is irrelevant to the fact that the accident occurred in Pennsylvania as any injury suffered by Plaintiff was suffered in Pennsylvania, not New York."); Lancaster, 177 A.D.2d at 158, 581 N.Y.S.2d at 287 (holding that, where the underlying cause of action related to injuries a plaintiff sustained in a car accident in South Carolina that "the injury actually occurred in South Carolina notwithstanding that plaintiff's pain and suffering largely took place in New York, her place of domicile").
This is true even when, as here, the suit concerns first party no-fault benefits as opposed to personal injury damages. Cf. McCann v. Somoza, 933 F. Supp. 362 (S.D.N.Y. 1996) (noting in a case where the New York plaintiff was seeking no-fault benefits from a New Jersey defendant based on an automobile accident in Connecticut, that Connecticut was the place of the injury). Thus, because the accident occurred in Connecticut, the place of the injury is also Connecticut, and the Court therefore lacks personal jurisdiction over Morning Sun under section 302(a)(3).
Finally, section 302(a)(4) also does not provide this Court with a basis for personal jurisdiction over Morning Sun. Although Nationwide alleges that Morning Bus owns, uses, or possesses real property in New York, section 302(a)(4) "requires a relationship between the property and the cause of action sued upon." Lancaster v. Colonial Motor Freight Line, Inc., 177 A.D.2d 152, 159, 581 N.Y.S.2d 283, 288 (1st Dep't 1992). Insofar as Nationwide does not identify the relevant property or allege any connection between the unnamed property and the accident, section 302(a)(4) cannot provide a basis for personal jurisdiction.
Accordingly, there are no grounds for the Court to exercise personal jurisdiction over Morning Sun pursuant to any of the provisions of section 302. In addition, Given that Nationwide has not made a prima facie showing of personal jurisdiction under New York law, the Court does not need to address whether asserting personal jurisdiction over Morning Sun would violate due process. See Best Van Lines, 490 F.3d at 242 (finding that courts need to undergo a Fourteenth Amendment due process investigation "[i]f, but only if" personal jurisdiction is statutorily permissible).
3. As to Nationwide's Request for Jurisdictional Discovery
Nationwide asserts that Morning Sun's motion to dismiss is premature because jurisdictional discovery is necessary to determine whether the Court has personal jurisdiction. However, jurisdictional discovery is not required where, as here, a plaintiff fails to make a prima facie showing of personal jurisdiction. Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 186 (2d Cir. 1998). "Discovery need not be granted to allow [a] plaintiff to engage in an unfounded fishing expedition for jurisdictional facts." Gear, Inc. v. L.A. Gear California, Inc., 637 F. Supp. 1323, 1328 (S.D.N.Y.1986).
Although the Court notes that Morning Sun's arguments as to why it was not subject to specific jurisdiction was primarily on legal and not factual grounds, it was incumbent on Nationwide to demonstrate that "facts 'may exist' . . . to defeat the motion." Peterson v. Spartan Indus., Inc., 33 N.Y.2d 463, 354 N.Y.S.2d 905 (N.Y. 1974). A plaintiff is not entitled to jurisdictional discovery simply to augment an inadequate pleading "if the defendant merely challenges the legal sufficiency of the jurisdictional allegations in the complaint, and does not place the factual basis for personal jurisdiction in issue." In re Teligent, Inc., Nos. 01-12974, 03-3577, 2004 WL 724945, at *6 (Bankr. S.D.N.Y. Mar. 30, 2004). Nationwide has failed to raise an issue of fact as to any ground for specific jurisdiction over Morning Sun in New York based on accident that occurred in Connecticut. See Lancaster, 177 A.D.2d at 158, 581 N.Y.S.2d at 287 (dismissing a complaint against for lack of personal jurisdiction where "the cause of action ar[ose] from a vehicle collision which occurred in South Carolina between one of defendant's trucks and an automobile in which plaintiff was a passenger" because the accident "[was] not alleged to be, nor [could] it in any way be said to be, related to any possible business contacts or transactions which defendant corporation may have been engaged in at that time in the state of New York and further discovery could provide no evidence that would alter this conclusion"). Accordingly, Nationwide's request that the Court deny the Defendants' motion as premature pending jurisdictional discovery is denied. C. Whether the Court has Personal Jurisdiction over Wang
Finally, the Defendants contend that the Court should dismiss the complaint against Wang for lack of personal jurisdiction because this issue was already decided by Justice Feinman in the state court proceeding. Nationwide inexplicably chose not to address the Court's personal jurisdiction over Wang in its opposition to the instant motion, nor did it address whether Justice Feinman's Order was binding. Although the Court does not deny that collateral estoppel may be applicable, the lack of personal jurisdiction over Wang is clear and therefore the Court does not need to go through a lengthy collateral estoppel analysis.
Wang is now and was at the time of the accident a resident of the State of Massachusetts. Wang is now and was at the time of the accident, employed by Morning Sun, a Massachusetts based company. Nationwide does not allege in the complaint, or in opposition to the instant motion, that Wang has any connection to the State of New York that would support personal jurisdiction under the long-arm statute. Thus, finding no basis for jurisdiction over Wang, the Court grants Wang's motion to dismiss the complaint against him.
III. CONCLUSION
For the foregoing reasons, it is hereby
ORDERED that the Defendants' motion to dismiss the complaint for lack of personal jurisdiction is granted, and it is further
ORDERED that the Plaintiff is afforded twenty days from the date of this order to serve an amended complaint only as to whether defendant Morning Sun is subject to general jurisdiction under CPLR § 301.
SO ORDERED.
Dated: Central Islip, New York
February 2, 2011
/s/ Arthur D . Spatt
ARTHUR D. SPATT
United States District Judge