Opinion
No. HHB-CV-06-5000572 S
June 17, 2008
MEMORANDUM OF DECISION
The plaintiff, RJM Aviation Associates, Inc., is a Connecticut corporation with its principal place of business in Berlin, Connecticut. The defendant, London Aircraft Service Center, Inc., is a Florida corporation with its principal place of business in Naples, Florida. The plaintiff has filed a two-count complaint against the defendant for breach of contract and negligence in connection with allegedly defective repairs made by the defendant to the plaintiff's airplane in Florida.
The defendant has filed a motion to dismiss the complaint for lack of personal jurisdiction together with a memorandum of law dated January 24, 2006. The plaintiff has filed an objection to the motion together with a memorandum of law in support of its objection. On June 2, 2006, the court (Shapiro, J.), in the exercise of its discretion, concluded that jurisdictional discovery was warranted and ordered evidentiary proceedings on the issue of jurisdiction in accordance with Standard Tallow Corp. v. Jowdy, 190 Conn. 48, 56, 459 A.2d 503 (1983). At the completion of jurisdictional discovery, the defendant reclaimed its motion to dismiss, the parties filed supplemental memoranda and sworn affidavits and the court heard argument on the motion to dismiss on March 31, 2008.
Legal Standard
Practice Book § 10-31 provides that a motion to dismiss "shall be used to assert . . . (2) lack of jurisdiction over the person." See also Brunswick v. Inland Wetlands Commission, 222 Conn. 541, 551, 610 A.2d 1260 (1992). If a challenge to the court's personal jurisdiction is raised by a defendant, either by a foreign corporation or by a nonresident individual, the plaintiff must bear the burden of proving the court's jurisdiction. Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 54.
"When a [trial] court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Citation omitted; intemal quotation marks omitted.) Lagassey v. State, 268 Conn. 723, 736, 846 A.2d 831 (2004). "The motion to dismiss . . . admits all facts which are well pleaded, invokes the existing record and must be decided on that alone . . . Where, however . . . the motion is accompanied by supporting affidavits containing undisputed facts, the court may look to their content for determination of the jurisdictional issue and need not conclusively presume the validity of the allegations of the complaint." (Citation omitted; footnote omitted; internal quotation marks omitted.) Barde v. Board of Trustees, 207 Conn. 59, 62, 539 A.2d 1000 (1988).
"When a defendant files a motion to dismiss challenging the court's jurisdiction, a two part inquiry is required. The trial court must first decide whether the applicable state long-arm statute authorizes the assertion of jurisdiction over the [defendant]. If the statutory requirements [are] met, its second obligation [is] then to decide whether the exercise of jurisdiction over the [defendant] would violate constitutional principles of due process." (Footnote omitted; internal quotation marks omitted.) Knipple v. Viking Communications, Ltd., 236 Conn. 602, 606, 674 A.2d 426 (1996). If a challenge to the court's personal jurisdiction is raised by a defendant, the plaintiff bears the burden of proving the court's jurisdiction. Id., 607.
Factual Background
The plaintiff corporation owns a Citation 560 Excel aircraft. The defendant operates an aircraft repair station which engages in aircraft maintenance and repair at Naples Airport in Naples, Florida. On or about December 15, 2003, the plaintiff's aircraft was located at Naples Airport. When the aircraft would not start, an agent of the plaintiff brought the aircraft to the defendant's repair facility and requested that the defendant repair the aircraft. After the repairs were completed, the aircraft was towed to the Naples Airport Authority for a test run. During the test, the engine caught fire requiring emergency extinguishment. There was no written contract or proposal prepared prior to the work, only post-repair invoices. The plaintiff claims damages, including loss of income, as a result of the damage caused by the fire. The plaintiff served the defendant foreign corporation by certified mail, return receipt requested.
Discussion
As required, the court will first consider whether the plaintiff has sustained its burden of proving that the court has jurisdiction over the defendant pursuant to the provisions of General Statutes § 33-929.
General Statutes § 33-929(f) provides: "Every foreign corporation shall be subject to suit in this state, by a resident of this state or by a person having a usual place of business in this state, whether or not such foreign corporation is transacting or has transacted business in this state and whether or not it is engaged exclusively in interstate or foreign commerce, on any cause of action arising as follows: (1) Out of any contract made in this state or to be performed in this state; (2) out of any business solicited in this state by mail or otherwise if the corporation has repeatedly so solicited business, whether the orders or offers relating thereto were accepted within or without the state; (3) out of the production, manufacture or distribution of goods by such corporation with the reasonable expectation that such goods are to be used or consumed in this state and are so used or consumed, regardless of how or where the goods were produced, manufactured, marketed or sold or whether or not through the medium of independent contractors or dealers; or (4) out of tortious conduct in this state, whether arising out of repeated activity or single acts, and whether arising out of misfeasance or nonfeasance."
In its memorandum of law in support of its objection to the defendant's motion to dismiss, the plaintiff states that it "relies on subsections (3) and/or (4) as the basis for the claim that this Court does have personal jurisdiction over the defendant." Since the plaintiff's memorandum of law only developed argument for jurisdiction based on General Statutes § 33-929(f)(2) and (3) and the plaintiff concedes that General Statutes § 33-929(f)(1) and (4) are not applicable to the case at bar, the court will consider the plaintiff's reference to § 33-929(f)(4) to be a typographical error and address the plaintiff's claims of jurisdiction based on General Statutes § 33-929(f)(2) and (3).
A. C.G.S. § 33-929(f)(2) — Solicitation of Business.
General Statutes § 33-929(f)(2) makes foreign corporations subject to suit in Connecticut for causes of action arising "out of any business solicited in this state by mail or otherwise if the corporation has repeatedly so solicited business, whether the orders or offers relating thereto were accepted within or without the state."
The thrust of the plaintiff's claim is that the defendant has solicited business in Connecticut by the use of its internet web site, through which the plaintiff claims business can be conducted interactively.
In Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Sup. 1119 (W.D. Pa. 1997), the court outlined the various means by which a web site may be used for commercial purposes and how that use may influence a court's consideration of whether such use might subject a foreign corporation to personal jurisdiction and suit in a different forum.
[T]he likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet . . . At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper . . . At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions. A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jurisdiction . . . The middle ground is occupied by interactive web sites where a user can exchange information with the host computer. In those cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site.
(Citations omitted.) Id., 1124.
"Some courts have differentiated between those cases in which a defendant merely posts information on a passive site on the Internet and those in which the defendant is actually conducting business over the Internet through and interactive site." Edberg v. Neogen Corp., 17 F.Sup.2d 104, 114-15 (D.Conn. 1998).
"Generally, despite the Internet's lack of territorial boundaries, the courts have attempted to apply traditional concepts of personal jurisdiction to the Internet, such as whether the defendant intentionally reached beyond its own state to engage in business with residents of the forum state." Id. In analyzing the constitutional due process issue raised by the defendant in Bensusan Restaurant Corp. v. King, 937 F.Sup. 295 (S.D.N.Y. 1996), aff'd, 126 F.3d 25 (2d Cir. 1997), the district court explained that the defendant had "done nothing to purposefully avail himself of the benefits of [the forum state]." Id., 301. Instead, the defendant, like numerous others, simply created a web site and permitted anyone who could find it to access it. "Creating a site, like placing a product into the stream of commerce, may be felt nationwide — or even worldwide — but, without more, it is not an act purposefully directed towards the forum state." Id.
"To survive [a] motion [to dismiss], the plaintiff must make a `prima facie showing' through affidavits or other evidence that the defendant's conduct was sufficient for the court to exercise personal jurisdiction." Ensign-Bickford Co. v. ICI Explosives USA, Inc., 817 F.Sup. 1018, 1026 (D.Conn. 1993). However, "[w]hen, as here, an evidentiary hearing has been conducted, the plaintiff's burden increases such that he must prove jurisdictional facts by a preponderance of the evidence." Milne v. Catuogno Court Reporting Services, Inc., 239 F.Sup.2d 195, 198 (D.Conn. 2002).
In its memorandum in support of its objection to the motion to dismiss, the plaintiff argues that "Robert Morande's affidavit shows how the web site is used to attract people to [the defendant]. Although defendant argues that the web site is general and does not specifically target Connecticut residents, it can be argued that the web site and the information given and the way the web site is reached targets a specific audience (private airplane owners in each state) to use its service if the airplane is at the Naples Municipal Airport."
The substantive portion of the affidavit of the plaintiff's president, Robert Morande, states:
4. I learned about the existence of London Aircraft Service Center, Inc. before December 15, 2003 because, to the best of my recollection, I wanted to know if there was a parts and repair facility at the Naples Municipal Airport and it was the defendant whose web site I found. This occurred while I was in Connecticut.
The remaining substantive paragraph of Morande's affidavit states that in preparation of the subject affidavit, he "Googled Airplane Repairs and Naples Florida" on March 25, 2006 "and the first site that appears is London Aviation's site." Since this portion of the affidavit offers information retrieved from the internet by Morande after the commencement of the action, it cannot be considered as having any reliable probative value on the issue of the court's jurisdiction over the defendant. "It is well established that jurisdiction is to be determined by examining the conduct of the defendants as of the time of service of the complaint." (Citation omitted.) FF Screw Products, Inc. v. Clark Screw Machine Products Co., Superior Court, Judicial District of Hartford, Docket No. CV 00-0500360S (December 10, 2002, Berger, J.) ( 33 Conn. L. Rptr. 534).
The defendant submitted a sworn affidavit from its president, Mark London which states that the defendant is engaged in "the business of aircraft maintenance, repair and inspection." London's affidavit also states that "without any prior scheduling or arrangements," an agent or representative of the plaintiff brought the aircraft to the defendant's facility and "requested that repair and/or maintenance services be performed." The affidavit goes on to state that all the work was done at the facility without any written contract and that the only documents pertaining to the repairs were the invoice and work order provided to the plaintiff. According to London's affidavit, the defendant has no offices, employees, sale representatives, bank accounts, real property, warehouses or telephone numbers in Connecticut. The defendant advertised in the Florida yellow pages and maintained a web site but did not have any advertising directed or targeted toward any Connecticut entity nor did it offer any special services, products, pricing or similar advantage to any Connecticut residents or businesses.
As part of the jurisdictional discovery ordered by the court, the plaintiff requested production of all invoices for service or parts sold by the defendant to Connecticut residents or billed to a Connecticut address since 2003. The defendant submitted copies of all such invoices, with the names of its customers redacted, for the period 2003 through December 15, 2005 (the date this action was commenced) as Exhibit B to its Supplemental Memorandum of Law. The court has reviewed the invoices and finds that they show the following. The defendant issued invoices to six Connecticut customers (in addition to the plaintiff) having addresses in the towns of Prospect, Stratford, East Granby, Stamford, and Greenwich. All of the invoices reflect maintenance work or repairs to aircraft completed in Florida except two invoices to an East Granby address describing "brokerage sales" of what appear to be aircraft parts. The plaintiff has submitted no evidence that the sale of these parts was solicited or consummated over the internet.
In Centennial Helicopters, Inc. v. Sterling Corp., Superior Court, judicial district of Middlesex, Docket No. CV 05 4002666 (November 22, 2005, Silbert, J.) ( 40 Conn. L. Rptr. 342), the court addressed the plaintiff's argument that the defendant's use of an "active" rather than "passive" internet web site should result in the imposition of longarm personal jurisdiction pursuant to General Statutes § 33-929(f)(2), and concluded: "That distinction is irrelevant in this case . . . Regardless of whether the activity necessary for a Connecticut consumer to be solicited by the defendant's internet advertising in the present case is considered active or passive, there is no evidence that the internet advertising of the defendant here specifically targeted Connecticut residents. Because there is no evidence that the internet advertising of the defendant specifically targeted Connecticut residents, General Statutes § 33-929(f)(2) does not confer jurisdiction over the defendant in this case."
Likewise, the missing element in the present case is any evidence that the defendant's internet website specifically targeted Connecticut customers. Cf. Thomason v. Chemical Bank, 234 Conn. 281, 297-98, 661 A.2d 595 (1995). "[N]o court has ever held that an Internet advertisement alone is sufficient to subject a party to jurisdiction in another state . . . In each case where personal jurisdiction was exercised, there has been `something more' to `indicate that the defendant purposefully, (albeit electronically), directed his activity in a substantial way to the forum state . . . If jurisdiction were be based upon a defendant's mere presence on the Internet, this would lead to a defendant's being subjected to jurisdiction on a worldwide basis and would eviscerate the personal jurisdiction requirements as they currently exist." (Citations omitted; internal quotation marks omitted). Edberg v. Neogen Corp., supra, 17 F.Sup.2d 115.
"Moreover, the courts have repeatedly held that jurisdiction may not be manufactured by the conduct of others . . . Under such circumstances a defendant cannot be said to have purposefully availed itself of the forum . . . Only those contacts with the forum that were created by the defendant, rather than those manufactured by the unilateral acts of the plaintiff, should be considered for due process purposes. To hold otherwise would allow a plaintiff to manufacture jurisdiction over a non-resident defendant in any forum, regardless of how inconvenient, even when the defendant has not purposefully directed any activity toward the forum state." (Citations omitted.) Id., 112.
The plaintiff initiated the contact with the defendant, all of which occurred in Florida. There is no evidence that the plaintiff was enticed by or traveled to Florida as a result of any solicitation by the defendant. The plaintiff has not shown, nor even claimed, that during the time in question, any products were offered or sold over the internet to any Connecticut persons or that the defendant in any way targeted its website to Connecticut.
Despite having conducted jurisdictional discovery, the plaintiff has not provided the court with any reason to disbelieve the uncontradicted sworn affidavit submitted by the defendant or any evidence of any linkage with Connecticut which would support the proper exercise of jurisdiction over the defendant pursuant to General Statutes § 33-929(f)(2).
B. C.G.S. § 33-929(f)(3) — Production. Manufacture or Distribution of Goods.
General Statutes § 33-929(f)(3) subjects foreign corporations to suit in Connecticut for causes of action arising "out of the production, manufacture or distribution of goods by such corporation with the reasonable expectation that such goods are to be used or consumed in this state and are so used or consumed, regardless of how or where the goods were produced, manufactured, marketed or sold or whether or not through the medium of independent contractors or dealers."
The plaintiff, in count one of its complaint, alleges: "The aircraft that are serviced and repaired by the defendant are not all owned or based in Florida and in some cases are just passing through Naples . . . Even though the service and parts were not actually consumed in Connecticut is (sic) is a result of the defendant's breach of the repair contract, the defendant is subject to the jurisdiction of the Connecticut Courts by virtue of CGS section 33-929(f) or, in the alternative, because it is engaged in interstate commerce." The plaintiff makes a similar allegation in the second count of its complaint sounding in negligence.
The plaintiff further alleges that "[i]n the matter alleged in this case the defendant should have foreseen that its services and the parts installed would be used and consumed outside of Florida in general and in Connecticut in particular since it knew that the plaintiff was a business that was located in Connecticut."
The defendant urges that its motion to dismiss be granted because the exercise of jurisdiction over the defendant would be inconsistent with the provisions of General Statutes § 33-929(f)(3) since there was no showing that the defendant was involved in "the production, manufacture or distribution of goods." The defendant also asserts that to subject the defendant to the jurisdiction of the Connecticut courts would violate the Due Process Clause of the United States Constitution.
The plaintiff bears the burden of proving that, at the time in question, the defendant was involved in "the production, manufacture or distribution of goods . . . with the reasonable expectation that such goods are to be used or consumed in [Connecticut] and are so used or consumed, regardless of how or where the goods were produced, manufactured, marketed or sold or whether or not through the medium of independent contractors or dealers" so as to make the defendant subject to the jurisdiction of the Connecticut courts pursuant to General Statutes § 33-929(f)(3).
No case has been brought to the court's attention, nor has the court found any case, which has directly addressed the meaning of the phrase "the production, manufacture or distribution of goods" for the purposes of subjecting a foreign corporation to Connecticut's jurisdiction pursuant to General Statutes § 33-929(f)(3). Therefore, the court must ascertain and give effect to the legislative intent as expressed in the statutory text.
"The process of statutory interpretation involves the determination of the meaning of the statutory language as applied to the facts of the case, including the question of whether the language does so apply." (Internal quotation marks omitted.) Renaissance Management Co. v. Connecticut Housing Finance Authority, 281 Conn. 227, 231, 915 A.2d 290 (2007).
In seeking to determine the meaning of a statute, if the meaning or applicability of the statute is clear from its text, the court should look no further. See General Statutes § 1-2z. General Statutes § 1-2z also directs the court to consider the text of the statute and its relationship to other statutes. Connecticut Ins. Guaranty Ass'n. v. State, 278 Conn. 77, 82, 896 A.2d 747 (2006). Accordingly, the court must look to the common meaning of the words used by the legislature and to other statutes governing activities of the same or similar character as those in the present matter.
In determining the reach of Connecticut's longarm statute, the legislature clearly limited its assertion of jurisdiction over foreign corporations in § 33-929(f)(3) to causes of action arising out of "the production, manufacture or distribution of goods."
Commercial transactions, in large part, are governed by the Uniform Commercial Code. "Goods" are defined in General Statutes § 42a-2-105(1) as "all things, including specially manufactured goods, which are movable at the time of identification to the contract . . ."
In many cases, the courts have drawn major distinctions between transactions involving goods and services. It is generally agreed that article two of the Uniform Commercial Code applies to the sale of goods and does not apply to the sale of services. See Incomm, Inc. v. Thermo-Spa, Inc., 41 Conn.Sup. 566, 569, 595 A.2d 954 (1991); Lucid, Inc. v. Disanto Technology, Superior Court, judicial district of Ansonia /Milford at Derby, Docket No. CV 98 0060934 (November 22, 2000, Mancini, J.). "In . . . hybrid transactions [where a party purchases both services and goods], the question becomes whether the dominant factor or `essence' of the transaction is the sale of the materials or the services." (Internal quotation marks omitted.) Incomm, Inc. v. Thermo-Spa, Inc., supra, 570.
The plaintiff states in its complaint: "The defendant was asked by the plaintiff to examine the Citation and to determine a cause for the `no start' problem and to make necessary repairs so the plaintiff could resume its flight." (Emphasis added). In both counts of its complaint, the plaintiff alleges the "defendant's breach of the repair contract." (Emphasis added).
"[W]here the contract is basically one for the rendition of services, and the materials are only incidental to the main purpose of the agreement, the contract is not one for the sale of goods . . ." Gulash v. Stylarama, Inc., 33 Conn.Sup. 108, 111, 364 A.2d 1221 (1975).
The plaintiff argues that the transaction involved the sale of a good since the replacement of a part was included in the repairs performed. "[I]t is clear that where the contract is basically one for the rendition of services, and the materials are only incidental to the main purpose of the agreement, the contract is not one for the sale of goods . . ." (Internal quotation marks omitted.) Martisek v. Showron, Superior Court, judicial district of Fairfield, Docket No. CV 98 0354780 (July 9, 2003, Doherty, J.). As was the case in North American Leisure Corp. v. AB Duplicators, Ltd., 468 F.2d 695 (2d Cir. 1972), it is clear that the "essence" of the activity that gave rise to this litigation was labor and services rather than goods and materials.
Conclusion
"A foreign corporation may be haled into court in Connecticut only if a plaintiff alleges jurisdictional facts that, if proven, would satisfy one of the provisions of our long arm statute." Pitruzello v. Muro, 70 Conn.App. 309, 311, 798 A.2d 469 (2002).
"If the conduct of a foreign corporation does not fit within the terms of § 33-929(f), the courts of this state do not have personal jurisdiction over that corporation, even though jurisdiction would otherwise be conferred under the federal due process clause of the U.S. Constitution." Bennett v. Performance Racing Marine, Inc., Superior Court, judicial district of New Haven, Docket No. CV 98-0417998 (January 27, 1999, Silbert, J.).
The plaintiff has failed to place in the record any evidence to support a finding that the Connecticut longarm statute should apply to this defendant. Accordingly, the plaintiff has not met its burden of proving jurisdiction over the defendant under General Statutes § 33-929(f).
Since the court has concluded that the requirements of the long-arm statute have not been satisfied, it is not necessary to decide the due process issue. See Knipple v. Viking Communications, Ltd., supra, 236 Conn. 606.
The defendant's motion to dismiss is granted.