Opinion
Civil Action No. 00-6007 (DMC)
December 6, 2001
OPINION
This matter comes before the Court on Defendant, Kim Hannan's motion to dismiss Plaintiff, Bank of the West's Complaint for lack of personal jurisdiction. Pursuant to Rule 78 of the Federal Rules of Civil Procedure, the Court heard oral argument on this motion on December 4, 2001. For the reasons set forth below, Defendant's motion is denied.
BACKGROUND
According to the present record, Defendant, Kim Hannan, signed paperwork entitling her to the ownership of a boat, the Motor Vessel "2000 Fountain 27 Fever" along with its 2000 Mercruiser 502 engine and appurtenances (the "vessel") in or around July 2000. Ms. Hannan further executed a Retail Installment Contract and Security Agreement ("the contract") with Checkmate Sport Boat Sales ("Checkmate"), a company located in Freeport, New York from which Ms. Hannan purchased the vessel. Checkmate, in turn, assigned the security interest in the vessel to Plaintiff, Bank of the West. At the time of the signing, Ms. Hannan was a resident of Staten Island, New York. After its purchase, the vessel was registered under the laws of the State of New York, and title of the vessel was issued to Ms. Hannan.
Ms. Hannan contends that she only had a partial interest in the vessel and contends she was deceived when the records showed that she was, in fact, the sole owner. Ms. Hannan admits to co-signing a boat loan for $8,600 along with Ryan Trapanese, her alleged boyfriend and resident of New Jersey, but does not claim a sole interest in the vessel, and argues that she is not responsible for the entire debt outstanding valued at approximately $77,000.
Ms. Hannan is alleged to have defaulted in her obligation to make timely payments on the vessel, which prompted Bank of the West to investigate as to the vessel's whereabouts. The vessel was found dry-docked at Kurts Marina Competition Center (the "Kurts Marina") in Brick, New Jersey. Plaintiff alleges that Ms. Hannan transported the vessel from New York to New Jersey in order to avoid repossession. Ms. Hannan responds that either Bank of the West or Checkmate released the boat to Mr. Trapanese, without her consent or knowledge, and that he, not she, was responsible for moving the vessel. The question before this Court is basic; Is Kim Hannan subject to the jurisdictional reach of this Court. For the reasons articulated below, this Court finds that Ms. Hannan is properly before this Court and thus denies her motion to dismiss for lack of personal jurisdiction.
DISCUSSION
I. Standard of Review of Motions to Dismiss for Lack of Personal Jurisdiction.
In deciding a motion to dismiss for lack of personal jurisdiction, the Court assumes the allegations of the complaint are true. See Conley v. Gibson, 355 U.S. 41, 45 (1957); Dayhoff Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1302 (3d Cir. 1996); Carteret Savs. Bank Shushan, 954 F.2d 141, 142, n. 1 (3d Cir. 1992); Wright v Xerox Corp., 882 F. Supp. 399, 403 (D.N.J. 1995); Narco Avionics, Inc. v. Sportsman's Mkt., Inc., 792 F. Supp. 398, 402 (E.D.Pa. 1992). However, once a defendant has raised a jurisdictional defense, the plaintiff bears the burden of proving by affidavits or other competent evidence that jurisdiction is proper. See North Penn Gas Co. v. Corning Natural Gas Corp., 897 F.2d 687, 689 (3d Cir.), cert. denied, 498 U.S. 847 (1990);see also Mellon Bank (East) v. DiVeronica Bros., 983 F.2d 551, 554 (3d Cir. 1993).
Personal jurisdiction may be exercised over non-resident defendants only "to the limit of due process as expressed in the 14th amendment of the Constitution." Remick v. Manfredy, 238 F.3d 248, 254 (3d. Cir. 2001) (quoting Mellon Bank (East) PSFS, Nat'l Ass'n. v. Farino, 960 F.2d 1217,1221 (3d Cir. 1992). The limit of due process is determined by assessing if a nonresident defendant's minimum contacts with the forum state are "such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice."International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks omitted). Two major aspects of a "minimum contacts" analysis are foreseeability and purposeful availment. "The foreseeability that is critical to due process analysis is that the defendant's conduct and connection with the forum are such that [she] should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295 (1980). "The purposeful availment requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts." Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984).
Purposeful availment arises when a nonresident defendant takes advantage of the "privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). In other words, the defendant must have engaged in some purposeful conduct within the forum "such that he [or she] should reasonably anticipate being haled into court there."See World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297 (1980). To demonstrate such conduct, "the plaintiff must establish either that the particular cause of action sued upon arose from the defendant's activities within the forum state (`specific jurisdiction') or that the defendant has `continuous and systematic' contacts with the forum state (`general jurisdiction')." See Provident Nat'l Bank v. California Fed. Sav. Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987) (quoting Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414, 416 (1984)); Mesalic v. Fiberfloat Corp., 897 F.2d 696, 699 (3d Cir. 1990) (quoting Time Share Vacation Club v. Atlantic Resorts Ltd., 735 F.2d 61, 63 (3d Cir. 1984).
II. Whether Traditional Jurisdictional Principles Justify Personal Jurisdiction over Kim Hannan
For the purposes of this Federal Rules of Civil Procedure 12(b)(2) motion to dismiss, the court must accept as true the plaintiff's version of the facts, and draw all reasonable inferences in the plaintiff's favor. Time Share Vacation Club v. Atlantic Resorts Ltd., 735 F.2d at 62. Bank of the West's primary factual dispute is over the manner in which the vessel arrived to Kurts Marina. While Bank of the West alleges that Ms. Hannan moved the vessel from the New York to New Jersey, it offers no support by way of affidavit or any other evidence to validate its contention. Unsupported allegations are insufficient for the purposes of the 12(b)(2) motion. See Patterson v. Federal Bureau of Investigation, 893 F.2d 595, 604 (3d Cir. 1990) ("At no point may a plaintiff rely on the bare pleadings alone in order to withstand a defendant's Rule 12(b)(2) motion to dismiss for lack of personam jurisdiction."); Time Share Vacation Club v. Atlantic Resorts Ltd., 735 F.2d at 67 n. 9. (The plaintiff must produce sworn affidavits or other competent evidence, since a Rule 12(b)(2) motion requires resolution of factual issues outside the pleadings).
Given this precedent, the only jurisdictional fact that warrants the denial of Ms. Hannan's motion (i.e., the alleged removal of the vessel from New York and to Kurt's Marina in Brick, New Jersey) is unsupported and thus will not be relied upon by this Court for the purposes of a traditional jurisdictional analysis. Aside from this, Ms. Hannan has no other contacts with New Jersey. Ms. Hannan was a resident of New York at the time of the purchase, the vessel was bought in New York from a New York company, the contract was negotiated and executed in New York, and the vessel is registered in New York. Therefore, based on the aforementioned reasons, Ms. Hannan cannot be haled into court based on traditional principles of in personam jurisdiction.
III. Whether Admiralty Jurisdictional Principles Justify Personal Jurisdiction over Kim Hannan
This Court's finding that traditional jurisdictional principles do not permit jurisdiction over Kim Hannan does not end the inquiry as to whether this Court's jurisdiction over Kim Hannan is proper. This Court has in rem jurisdiction over the vessel in light of its mere presence within the District of New Jersey. Plaintiff argues that the presence of the vessel in this jurisdiction, which is undisputed, constitutes a sufficient jurisdictional nexus to warrant in personam jurisdiction over Defendant as well as in rem jurisdiction over her alleged vessel. Plaintiff's strongest support for this argument is contained in the Fifth Circuit holding in Great Prize, S.A. v. Mariner Shipping Party, Ltd., 967 F.2d 157 (5th Cir. 1992), where the Court of Appeals stated that:
[A] good faith allegation in the complaint that the res is present within the geographical jurisdiction of the court is the jurisdictional fact which gives the court in personam jurisdiction over the defendant purported to own the res.Great Prize, S.A., 967 F.2d at 159-160. The power to maintain jurisdiction over both the res and the owner (Ms. Hannan) is discretionary, and will be applied based on the unique issues placed before the court. See Just v. Chambers. The Friendship II, 312 U.S. 383, 386 (1941) ("We have said that the court of admiralty in such a proceeding acquires the right to marshal all claims, whether of strictly admiralty origin or not, and to give effect to them by the apportionment of the res and by judgment in personam against the owner, so far as the court may decree").
The present record, viewed in the light most favorable to the Plaintiff, supports the conclusion that Ms. Hannan is the owner of the vessel. As owner, she is responsible for the vessel regardless of how it arrived at Kurts Marina. Having found the vessel in New Jersey, the Court is well within its power to establish in rem jurisdiction over the vessel. Adopting the Fifth Circuit's reasoning in Great Prize, the Court may also impose in personam jurisdiction over Ms. Hannan due to the fact that the vessel in question, owned by Ms. Hannan, was found drydocked in a New Jersey marina. This decision promotes judicial economy. Accordingly, this Court finds that the mere presence of Ms. Hannan's vessel within this jurisdiction satisfies the due process requirement of minimum contacts for personal jurisdiction. Accordingly, Defendant's motion to dismiss Plaintiff's complaint for lack of personal jurisdiction is denied.
The plaintiff includes Exhibits A and B in his complaint to illustrate the purchase of the vessel by Ms. Hannan solely as well as her leasing contract with which she entered into with the plaintiff. Ms. Hannan also admits to being the sole owner in her brief although she qualifies her ownership in that she claims to have been deceived into purchasing the vessel. See Defendant's Brief, at 2-3.