Finance & Marketing Ass'n International, Inc. v. He-Ro Group, Inc.

975 F. Supp. 1429, 1997 U.S. Dist. LEXIS 13475, 1997 WL 542688
CourtDistrict Court, D. Kansas
DecidedSeptember 2, 1997
Docket97-1208-JTM
StatusPublished
Cited by3 cases

This text of 975 F. Supp. 1429 (Finance & Marketing Ass'n International, Inc. v. He-Ro Group, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Finance & Marketing Ass'n International, Inc. v. He-Ro Group, Inc., 975 F. Supp. 1429, 1997 U.S. Dist. LEXIS 13475, 1997 WL 542688 (D. Kan. 1997).

Opinion

MEMORANDUM AND ORDER

MARTEN, District Judge.

The present action is a contract dispute between Finance & Marketing Association International, Inc. (FMA), and The He-Ro Group, Inc. FMA is a Kansas corporation. He-Ro is a New York City company which designs, manufactures, and distributes women’s apparel. FMA contends He-Ro breached a January 31, 1996 exclusive representation agreement entered into by the parties. Under the agreement, FMA was to be the exclusive dealer to “purchase, promote, and sell the products made by [He-Ro] in the Country of Lebanon.” (Kaplan Aff. at ¶ 9.)

Currently before the court is defendant He-Ro’s motion seeking, alternatively, dismissal for lack of personal jurisdiction or venue in Kansas, or transfer to New York under 28 U.S.C. § 1404. With one minor exception (noted below) the facts relating to jurisdiction and venue which are premised on affidavits submitted by the parties are not in dispute.

He-Ro stresses that its principal place of business is New York City. It maintains no offices, branches, or agencies in Kansas. It is not licensed to do business in Kansas and has no employees, assets, or facilities to receive communications in Kansas. According to He-Ro, it derives no appreciable income from Kansas, making only 0.5% of its fiscal 1997 sales from Kansas buyers. All orders from Kansas buyers are written in or sent to New York or Dallas.

According to the affidavits attached to HeRo’s motion, none of its agents entered Kansas to discuss or negotiate the agreement. He-Ro contends no acts pursuant to the contract took place in Kansas and that no such acts were even contemplated to take place in Kansas. The contract does not require any acts to take place in Kansas. According to He-Ro, the agreement provided only that He-Ro would procure sales in Lebanon. When He-Ro delivered goods to FMA, it did so in New York.

The agreement provides that its validity will be governed by the laws of the State of New York. (Agreement at ¶ 5(d).) While He-Ro never went to Kansas, FMA came to New York many times in connection with the agreement, and all face-to-face meetings occurred in New York. The breach of the agreement allegedly occurred in New York.

In response, FMA stresses its connection to Kansas, stating that its primary place of business for the last six years has been Wichita, Kansas. FMA contends He-Ro, through its prior contacts with FMA, knew FMA’s business was run from Kansas. In performing the contract, He-Ro agents telephoned FMA in Kansas. All merchandise orders placed pursuant to the agreement were faxed from Wichita to He-Ro in New York. Mail from FMA to He-Ro is sent from Wichita. FMA wired payments to He-Ro in New York from Wichita banks. FMA contends He-Ro received “significant income from Kansas, including several hundreds of thousands of dollars” under the terms of the agreement in issue.

Jean-Pierre Mikhail, the president of FMA, drafted the agreement in Kansas. Under the terms of the agreement, He-Ro expected FMA to contact local retailers in Lebanon. Mikhail states in his affidavit that “[c]ertain shipments of clothing from He-Ro were shipped to FMA in Kansas and received by FMA in Kansas.” (Mikhail Aff. at ¶ 6.) He-Ro disputes this point, contending no shipments were ever made to Kansas. The affidavit of Mikhail states that “invoices showing these shipments to Kansas will be produced when I return from Lebanon in mid-August.” Id. Although it is now late August, such invoices have not been submitted. Given the posture of the ease, the court has to take the plaintiffs allegations as true and assume some shipments were made directly to Kansas.

Mikhail further states in his affidavit that “I plan to spend at least 80 percent of my time in Kansas during the time this matter is expected to be litigated. Wichita is my primary base of operations, and it is where I live and work.” (Mikhail Aff. at 7). Where Mikhail lives during the litigation is, of course, entirely irrelevant. Indeed, the affi *1431 davit clearly suggests that prior to this litigation Mikhail spent substantially less time in Kansas than he now intends.

FMA identifies two potentially relevant portions of the Kansas long arm statute as a basis for invoking jurisdiction over He-Ro in Kansas. It alleges that He-Ro both transacted business in Kansas within the meaning of K.S.A. 60 — 308(b)(1) and entered into a contract to be performed in whole or part in Kansas under K.S.A. 60 — 301(b)(5).

The Kansas long arm statute is construed liberally to allow jurisdiction to the full extent permitted by due process. Federated Rural Elec. v. Kootenai Elec., 17 F.3d 1302, 1305 (10th Cir.1994). To support an exercise for personal jurisdiction under the transaction business element of the statute, the plaintiff must show that the nonresident defendant purposely consummated a transaction in Kansas, the claim for relief arose from that conduct, and the exercise of personal jurisdiction does not affect traditional notions of fair play and substantial justice. Rambo v. American Southern Ins. Co., 839 F.2d 1415, 1419 (10th Cir.1988); Green Country Crude v. Avant Petroleum, 648 F.Supp. 1443 (D.Kan.1986).

A defendant can establish sufficient minimum contacts with the forum state in one of two ways. Specific jurisdiction exists when the defendant purposely avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws, and the claims against it arise out of those contacts. Kuenzle v. HTM Sport-Und Freizeitgerate AG, 102 F.3d 453, 456 (10th Cir.1996). General jurisdiction lies when the defendant’s contacts with the forum state are so continuous and systematic that the state may exercise personal jurisdiction even when the claims are unrelated to the defendant’s contacts with the forum state. Trierweiler v. Croxton and Trench Holding Corp., 90 F.3d 1523, 1532-33 (10th Cir.1996).

Business is transacted when “an individual is within or enters this state in person or by agent and, through dealing with another within the state, effectuates or attempts to effectuate a purpose to improve his economic conditions and satisfy his desires.” Woodring v. Hall, 200 Kan. 597, 607, 438 P.2d 135 (1968); Marcus Food Co. v. Crown Meat Co., 779 F.Supp. 514, 521 (D.Kan.1991).

Here, the court finds the allegations presented by FMA do not establish that defendant He-Ro transacted business in Kansas, and that it did not enter into a contract which was to be performed in Kansas.

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Bluebook (online)
975 F. Supp. 1429, 1997 U.S. Dist. LEXIS 13475, 1997 WL 542688, Counsel Stack Legal Research, https://law.counselstack.com/opinion/finance-marketing-assn-international-inc-v-he-ro-group-inc-ksd-1997.