Opinion
No. CV 09 6003569
July 27, 2009
MEMORANDUM OF DECISION IN RE DEFENDANT'S MOTION TO DISMISS (#101)
Facts and Procedural History
The plaintiff, Sir Speedy Inc., is the exclusive owner of a proprietary printing system that provides instant reproduction of printed material as well as distinctive decor for business premises; a design for equipment layout on business premises; merchandise displays; service methods; advertising formats; promotion plants; market research methods; record keeping methods; and business practices, procedures and policies. The plaintiff is the exclusive owner of the trade name "Sir Speedy" and the signs, emblems, insignia, color schemes and patterns associated and used with this trade name and Sir Speedy trademark. The plaintiff is incorporated in California and has its principal place of business in Mission Viejo, California. The plaintiff is a franchisor and the defendant, Michael Vogel, is a franchisee who operates a Sir Speedy store in Milford, Connecticut pursuant to a License Agreement entered into by the parties on May 10, 1974. The defendant is an individual and a resident of the State of Connecticut.
On April 22, 2008, the plaintiff filed a demand for arbitration with the American Arbitration Association after the defendant allegedly failed to pay royalty fees pursuant to the License Agreement, which also provided that all disputes be settled by arbitration. On November 20, 2008 the Arbitrator found in favor of the plaintiff. On February 9, 2009, a California court enforced the award by entering judgment in favor of the plaintiff.
The plaintiff filed a complaint in this court on February 25, 2009. The complaint alleges that: "On or about February 9, 2009, a judgment was duly entered against the Defendant in favor of the Plaintiff, in the Superior Court of the State of California in and for the County of Orange, in the amount of $119,019.96 (the "Judgment") . . . The Judgment remains unsatisfied."
The plaintiff brings this action pursuant to § 52-607, which states: "The right of a judgment creditor to proceed by an action on the judgment or a motion for summary judgment in lieu of complaint instead of proceeding under Sections 52-604 to 52-609, inclusive, remains unimpaired." Because the plaintiff elects to enforce the California judgment in this state by an action on the judgment instead of by utilizing the procedures set forth in § 52-604, that section, which precludes the enforcement of judgments obtained by default in appearance or by confession of judgment, is inapplicable. See J. Corda Construction, Inc. v. Zaleski Corp., 98 Conn.App. 518, 522-23 n. 4, 911 A.2d 309 (2006); Business Alliance Capital Corp. v. Fuselier, 88 Conn.App. 731, 735 n. 1, 871 A.2d 1051 (2005).
The defendant filed a motion to dismiss and a memorandum in support of the motion on April 3, 2009. The plaintiff filed a memorandum in opposition to the motion to dismiss on May 5, 2009.
Discussion
"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Beecher v. Mohegan Tribe of Indians of Connecticut, 282 Conn. 130, 134, 918 A.2d 880 (2007); Pedro v. Miller, 281 Conn. 112, 116, 914 A.2d 524 (2007). "When a . . . 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." (Internal quotation marks omitted.) Cogswell v. American Transit Ins. Co., 282 Conn. 505, 516, 923 A.2d 638 (2007); Cox v. Aiken, 278 Conn. 204, 211, 897 A.2d 71 (2006); Filippi v. Sullivan, 273 Conn. 1, 8, 866 A.2d 599 (2005).
The defendant argues that the court lacks subject matter and personal jurisdiction to enforce the California judgment against him because he did not have sufficient contacts, ties or relations with California to allow the California court to exercise jurisdiction over him. The plaintiff counters that the California judgment was properly entered.
The California long-arm statute, § 410.10, provides: "A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States." In Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528, (1985), the United States Supreme Court held that the exercise of in personam jurisdiction over the defendant franchisee pursuant to Florida's long-arm statute did not violate the due process clause of the Fourteenth Amendment because the franchisee established a substantial and continuing relationship with the plaintiff franchisor's headquarters in Florida, received fair notice from the contract documents and the parties' course of dealing that he might be subject to suit in Florida, and failed to demonstrate how jurisdiction in Florida would otherwise be fundamentally unfair.
The Court stated: "The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful contacts, ties, or relations . . . By requiring that individuals have fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign . . . the Due Process Clause gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit . . . Where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, this fair warning requirement is satisfied if the defendant has purposefully directed his activities at residents of the forum . . . and the litigation results from alleged injuries that arise out of or relate to those activities." (Citations omitted; internal quotation marks omitted.) Id., 471-72.
The Court continued: "[T]he constitutional touchstone remains whether the defendant purposefully established minimum contacts in the forum State . . . Although it has been argued that foreseeability of causing injury in another State should be sufficient to establish such contacts there when policy considerations so require, the Court has consistently held that this kind of foreseeability is not a sufficient benchmark for personal jurisdiction . . . Instead, the foresceability that is critical to due process analysis . . . is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there . . . In defining when it is that a potential defendant should reasonably anticipate out-of state litigation, the Court frequently has drawn from the reasoning of Hanson v. Denckla, 357 U.S. 235, 253 [ 78 S.Ct. 1228, 2 L.Ed.2d 1283] (1958): `The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.' This purposeful availment requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts . . . or of the unilateral activity of another party or a third person . . . Jurisdiction is proper, however, where the contacts proximately result from actions by the defendant himself that create a substantial connection with the forum State . . . Thus where the defendant deliberately has engaged in significant activities within a State . . . or has created continuing obligations between himself and residents of the forum . . . he manifestly has availed himself of the privilege of conducting business there, and because his activities are shielded by the benefits and protections of the forum's laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well." (Citations omitted; internal quotation marks omitted.) Id., 474-76.
Furthermore, the Court noted: "Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum State. Although territorial presence frequently will enhance a potential defendant's affiliation with a State and reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted. So long as a commercial actor's efforts are purposefully directed toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there." (Internal quotation marks omitted.) Id., 476.
The Court then examined the defendant franchisee's contacts with Florida. See id., 478-82. The Court concluded that the franchisee purposely availed himself of Florida's laws even though he had no physical ties to Florida, did not maintain offices in Florida and had never even visited there. See id., 479. The Court was satisfied that the franchise dispute grew directly out of a contract, which had a substantial connection with Florida because the franchisee deliberately reached out and negotiated with a Florida corporation for the purchase of a long-term franchise. See id., 479. Thus, given the franchisee's "voluntary acceptance of the long-term and exacting regulation of his business from [the franchisor's] Miami headquarters, the quality and nature of his relationship to the company in Florida can in no sense be viewed as random, fortuitous, or attenuated." (Citations omitted; internal quotation marks omitted.) Id., 480.
In addition, the Court noted that the franchise agreement itself contained a provision stating that the contract would be governed by Florida law. See id., 481. The Court stated: "Nothing in our cases . . . suggests that a choice-of-law provision should be ignored in considering whether a defendant has purposefully invoked the benefits and protections of a State's laws for jurisdictional purposes. Although such a provision standing alone would be insufficient to confer jurisdiction, we believe that, when combined with the 20-year interdependent relationship [the franchisee established with the franchisor's] Miami headquarters, it reinforced his deliberate affiliation with the forum State and the reasonable foreseeability of possible litigation there." (Internal quotation marks omitted.) Id., 481.
Here, the defendant operated a franchise of the plaintiff for more than thirty years. He negotiated and executed a License Agreement with the plaintiff in California, which contains a California choice of law provision. The defendant's franchise business was regulated from the plaintiff's headquarters in California. The defendant was in continuous contact via mail and telephone with the plaintiff, including daily sales and transmittal reports and weekly summaries. The plaintiff provided the defendant with training, invoices, manuals, bookkeeping records, report forms, catalogs, sales forms and price lists. The defendant traveled to California on several occasions to attend training sessions and special events sponsored by the plaintiff. Most significantly, the plaintiff's action against the defendant arose from the defendant's breach of the License Agreement for his failure to pay royalty fees.
Pursuant to the Supreme Court's decision in Burger King Corp. v. Rudzewicz, supra, 471 U.S. 462, this court finds the exercise of in personam jurisdiction over the defendant pursuant to California's long-arm statute does not violate the due process clause of the Fourteenth Amendment because the defendant established a substantial and continuing relationship with the plaintiff's headquarters in California and received fair notice from the License Agreement that he might be subject to suit in California.
Conclusion
The defendant's motion to dismiss is hereby denied.