Hatheway v. Sirochman

• Court: District Court, D. Arizona
• Decided: August 22, 2019
• Docket: 3:19-cv-08028
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Alison Lorraine Hatheway, No. CV-19-08028-PCT-DWL

10 Plaintiff, ORDER

11 v.

12 Michael Sirochman, et al.,

13 Defendants. 14 15 INTRODUCTION 16 Plaintiff “Alison Lorraine Hatheway TM/SM” has asserted Lanham Act claims 17 against three Connecticut realtors (Michael Sirochman, Nicholas Mastrangelo, and Richard 18 Greene) and one Connecticut attorney (John S. Bennet)1 (collectively, “Defendants”). The 19 complaint alleges that Defendants mischaracterized a parcel of Connecticut property as 20 “bank owned” on certain real estate websites, even though that property is actually owned 21 by a “common law trust” controlled by Plaintiff, and that Defendants thereby caused 22 Plaintiff to be locked out of the Connecticut property when attempting to use it “for 23 business and or domicile.” 24 Now pending before the Court are a pair of motions to dismiss, one filed by the 25 three realtors (Doc. 18) and the other filed by the attorney (Doc. 19). Although Defendants 26 have identified an array of different reasons why the complaint should be dismissed 27

28 1 The complaint names “John S. Bennett,” but this Defendant’s declaration clarifies that his last name is spelled “Bennet.” (Doc. 19-1 ¶ 7.) 1 (including lack of service, lack of subject matter jurisdiction, and failure to state a claim), 2 the Court will grant both motions on the most straightforward ground presented: lack of 3 personal jurisdiction. 4 BACKGROUND 5 I. Complaint 6 Plaintiff, who is proceeding pro se, has brought claims against Defendants for false 7 advertising under 15 U.S.C. § 1125, a provision of the Lanham Act. The complaint 8 generally alleges that Defendants have falsely advertised a property in Deep River, 9 Connecticut as “bank owned.” To the extent the Court can decipher the complaint, it 10 specifically alleges as follows: 11 Plaintiff “Alison Lorraine Hatheway is a business entity registered in Minnesota, 12 with a business location in Arizona.” (Doc. 1 at 2.) Plaintiff operates a “travel agency 13 business” and is trustee of a trust, Sonlight, that owns the Connecticut property. (Id. at 2- 14 3, 5.) 15 Defendants Sirochman, Mastrangelo, and Greene “appear to be acting as realtors 16 for Coldwell Banker[].” (Id. at 2.) 17 Defendant Bennet “is an individual who claims to be representing the Bank of New 18 York Mellon, as trustee for CWALT.” (Id.) 19 Bank of New York Mellon, as Trustee for CWALT, obtained a foreclosure 20 judgment for the Connecticut property, but “[i]t is legally impossible for Bank of New 21 York to sell [the] property.” (Id. at 2.) 22 Defendants have violated 15 U.S.C. § 1125 by “publicly advertising the property is 23 bank owned,” “refus[ing] to cease and desist when formally requested to do so,” 24 “continuing to promote the property for sale as bank owned,” and “entic[ing] potential 25 buyers to trespass on the property.” (Id. at 3-4.) Specifically, Bennet “filed a petition into 26 the Superior Court of New Britain Connecticut naming the Bank of New York Mellon as 27 the owner of the real property,” Mastrangelo “advertis[ed] the property for sale, bank 28 owned on auction.com,” Sirochman “offered the property as bank ow[n]ed in July 2018” 1 and then “continued to advertise using the term bank owned” after briefly “remov[ing] the 2 listing,” and Greene “has continued to advertise [the property] as bank owned, . . . 3 continue[d] to trespass on the property with alleged potential buyers who have been told 4 the property is bank owned,” and “summoned the police to the property to remove the 5 security” hired by Sonlight, “informing the police with no documentation that it is bank 6 owned.” (Id.) 7 As for damages, Plaintiff alleges it “cannot use or domicile at the property due to 8 the trespass of defendants” and “is unable to enter the property as defendants have two lock 9 boxes and padlocks on the property” and has therefore experienced “commercial loss” 10 because it “cannot perform [its] duties and work.” (Id. at 4-5.) It has also been forced to 11 “retain security” and “work with neighbors to allow cameras on their property.” (Id.) 12 II. Declarations 13 Defendants have filed declarations in support of their motions to dismiss. (Doc. 18- 14 1 at 5-12; Doc. 19-1.) Those declarations contain the following facts: 15 Sirochman “reside[s] and work[s] in Orange, Connecticut, and ha[s] resided in 16 Orange since 2017 and worked in Orange, Connecticut since 2005.” (Doc. 18-1 at 5 ¶ 3.) 17 He does not live, work, or transact business in Arizona. (Id. ¶ 4.) 18 Mastrangelo “ha[s] resided and worked in Orange, Connecticut since Sept. 1970” 19 and does not live, work, or transact business in Arizona. (Id. at 8 ¶¶ 3-4.) 20 Greene “ha[s] resided and worked in Essex, Connecticut since 1949,” does not live 21 or work in Arizona, and does not transact business in Arizona. (Id. at 11 ¶¶ 3-4.) 22 Bennet resides in Connecticut, “ha[s] no personal or business ties to Arizona,” and 23 works at a law firm located in Connecticut. (Doc. 19-1 ¶¶ 3-4.) 24 ANALYSIS 25 A defendant may move to dismiss for lack of personal jurisdiction. Fed. R. Civ. P. 26 12(b)(2). “In opposing a defendant’s motion to dismiss for lack of personal jurisdiction, 27 the plaintiff bears the burden of establishing that jurisdiction is proper.” Ranza v. Nike, 28 Inc., 793 F.3d 1059, 1068 (9th Cir. 2015) (citation omitted). “Where, as here, the 1 defendant’s motion is based on written materials rather than an evidentiary hearing, the 2 plaintiff need only make a prima facie showing of jurisdictional facts to withstand the 3 motion to dismiss.” Id. (citations and internal quotation marks omitted). 4 “[U]ncontroverted allegations must be taken as true, and ‘[c]onflicts between parties over 5 statements contained in affidavits must be resolved in the plaintiff’s favor,’” but “[a] 6 plaintiff may not simply rest on the ‘bare allegations of [the] complaint.’” Id. (citations 7 omitted). 8 “Federal courts ordinarily follow state law in determining the bounds of their 9 jurisdiction over persons.” Morrill v. Scott Fin. Corp., 873 F.3d 1136, 1141 (9th Cir. 2017) 10 (quoting Daimler AG v. Bauman, 571 U.S. 117, 125 (2014)). “Arizona law permits the 11 exercise of personal jurisdiction to the extent permitted under the United States 12 Constitution.” Id. (citing Ariz. R. Civ. P. 4.2(a)). Accordingly, whether this Court has 13 “personal jurisdiction over Defendants is subject to the terms of the Due Process Clause of 14 the Fourteenth Amendment.” Id. 15 “Constitutional due process requires that defendants ‘have certain minimum 16 contacts’ with a forum state ‘such that the maintenance of the suit does not offend 17 ‘traditional notions of fair play and substantial justice.’” Id. (citation omitted). Minimum 18 contacts exist “if the defendant has ‘continuous and systematic general business contacts’ 19 with a forum state (general jurisdiction), or if the defendant has sufficient contacts arising 20 from or related to specific transactions or activities in the forum state (specific 21 jurisdiction).” Id. at 1142 (citation omitted). 22 It is unclear whether Plaintiff is contending this Court has general or specific 23 jurisdiction over Defendants. Thus, the Court will address both theories. 24 I. General Jurisdiction 25 “For general jurisdiction to exist over a nonresident defendant . . . , the defendant 26 must engage in ‘continuous and systematic general business contacts,’ that ‘approximate 27 physical presence’ in the forum state.” Schwarzenegger v. Fred Martin Motor Co., 374 28 F.3d 797, 801 (9th Cir. 2004) (citations omitted). As the Ninth Circuit has noted, “[t]his is 1 an exacting standard, as it should be, because a finding of general jurisdiction permits a 2 defendant to be haled into court in the forum state to answer for any of its activities 3 anywhere in the world.” Id. “For an individual, the paradigm forum for the exercise of 4 general jurisdiction is the individual’s domicile; for a corporation, it is an equivalent place, 5 one in which the corporation is fairly regarded as at home.” Goodyear Dunlop Tires 6 Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011). 7 A. Defendants Sirochman, Mastrangelo, and Greene 8 The complaint alleges that Sirochman, Mastrangelo, and Greene “appear to be 9 acting as realtors for Coldwell Banker[],” which is “a real estate agency conducting 10 business in Arizona.” (Doc. 1 at 2.) 11 That allegation is insufficient to confer general jurisdiction over these Defendants. 12 Although it might be relevant to whether the Court has general jurisdiction over Coldwell 13 Banker, it is not relevant to whether the Court has general jurisdiction over individual 14 realtors for Coldwell Banker, particularly given that it is not apparent from the complaint 15 that these Defendants had any contacts with Arizona through their employment with 16 Coldwell Banker. See generally AFL Telecomms. LLC v. Fiberoptic Hardware, LLC, 2011 17 WL 4374262, *3 (D. Ariz. 2011) (“Personal jurisdiction over individual corporate officers 18 may not be based on jurisdiction over the corporation itself . . . . The relevant inquiry is 19 whether, given the corporate officer’s own contacts with the forum state, he should 20 ‘reasonably anticipate being haled into court there.’”) (citation omitted). Sirochman, 21 Mastrangelo, and Greene have stated in their declarations that they do not live, work, or 22 otherwise transact business in Arizona. Plaintiff has presented no evidence to the contrary. 23 Thus, this Court lacks general jurisdiction over them. Morrill, 873 F.3d at 1142. 24 B. Defendant Bennet 25 There are no allegations in the complaint, and Plaintiff has presented no evidence, 26 connecting Bennet to Arizona. The complaint contains only three allegations specifically 27 naming Bennet, none of which relate to Arizona in any way. The complaint alleges that 28 (1) Bennet “is an individual who claims to be representing the Bank of New York Mellon, 1 as trustee for CWALT”; (2) Bennet “filed a petition into the Superior Court of New Britain 2 Connecticut naming the Bank of New York Mellon as the owner of the real property”; and 3 (3) “request was made [to him] to provide proof of a bank holding title” but “[n]one was 4 provided.” (Doc. 1 at 2-3.) Bennet also stated in his declaration that he does not live or 5 work in Arizona and “ha[s] no personal or business ties to Arizona.” (Doc. 19-1 ¶¶ 3-4.) 6 The Court therefore lacks general jurisdiction over him. 7 II. Specific Jurisdiction 8 The Court will next apply the Ninth Circuit’s three-prong test to determine whether 9 Defendants had sufficient contacts with Arizona to be subject to specific jurisdiction:

10 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform 11 some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and 12 protections of its laws;

13 (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and 14 (3) the exercise of jurisdiction must comport with fair play and substantial 15 justice, i.e., it must be reasonable. 16 Morrill, 873 F.3d at 1142. “The plaintiff bears the burden of satisfying the first two prongs 17 of the test.” Id. (citation omitted). “If the plaintiff succeeds in satisfying both of the first 18 two prongs, the burden then shifts to the defendant to ‘present a compelling case’ that the 19 exercise of jurisdiction would not be reasonable.” Id. (citations omitted). 20 In the Ninth Circuit, courts use the “purposeful availment” analysis for claims 21 arising from contract and the “purposeful direction” analysis for claims arising from tort. 22 Id. Here, Plaintiff’s claim arises from tort, so the “purposeful direction” analysis applies. 23 Under this analysis, courts within the Ninth Circuit apply the Calder effects test, taken 24 from Calder v. Jones, 465 U.S. 783 (1984), under which the defendant must have “(1) 25 committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that 26 the defendant knows is likely to be suffered in the forum state.” Schwarzenegger, 374 F. 27 3d at 805 (citation omitted). 28 “Actions may be directed at the forum state even if they occurred elsewhere,” but 1 “‘random, fortuitous, or attenuated contacts’ are insufficient to create the requisite 2 connection with the forum.” Morrill, 873 F.3d at 1142 (quoting Burger King Corp. v. 3 Rudzewicz, 471 U.S. 462, 475 (1985)). Courts must focus on “the relationship among the 4 defendant, the forum, and the litigation.” Walden v. Fiore, 571 U.S. 277, 284-85 (2014) 5 (citation omitted). Importantly, “the relationship must arise out of contacts that the 6 ‘defendant himself’ creates with the forum State.” Id. at 284 (citation omitted). Courts 7 should “look[] to the defendant’s contacts with the forum State itself, not the defendant’s 8 contacts with persons who reside there.” Id. at 285. “The proper question is not where the 9 plaintiff experienced a particular injury or effect but whether the defendant’s conduct 10 connects him to the forum in a meaningful way.” Id. at 290. 11 A. Defendants Sirochman, Mastrangelo, and Greene 12 The complaint contains three allegations that are potentially relevant to the specific 13 jurisdiction analysis as to Defendants Sirochman, Mastrangelo, and Greene: (1) Plaintiff 14 has a “business location in Arizona”; (2) Defendants Sirochman, Mastrangelo, and Greene 15 “appear to be acting as realtors for Coldwell Banker[s],” which is “a real estate agency 16 conducting business in Arizona”; and (3) the Connecticut property is “featured on the 17 Coldwell Banker Arizona website,” and Defendants Sirochman, Mastrangelo, and Greene 18 “list themselves as the contact actors for the property.” (Doc. 1 at 2.) 19 Defendants Sirochman, Mastrangelo, and Greene argue the Court lacks specific 20 jurisdiction over them because “[t]he only possible connection between Defendants’ 21 alleged conduct and Arizona is that Plaintiff allegedly has a ‘business location in Arizona’” 22 and “Plaintiff’s purported Arizona office, on its own, is not enough to establish that 23 Defendants ‘expressly aimed’ their conduct at Arizona or caused harm that they knew 24 would be suffered in Arizona.” (Doc. 18 at 8, citing Doc. 1 at 2.) In their argument 25 regarding general jurisdiction, they also assert that “Plaintiff only alleges that Coldwell 26 Banker—not Defendants—‘conduct[s] business in Arizona’ and Defendants ‘appear to be 27 affiliated with Coldwell Banker.’” (Doc. 18 at 9, citing Doc. 1 at 2, emphasis omitted.) 28 In response, Plaintiff asserts that Defendants Sirochman, Mastrangelo, and Greene 1 “currently are offering, in the state of Arizona, the real property as owned by the bank via 2 a web location for Arizona viewers. They have continuously from conception of the sale 3 advertised the property in Arizona.” (Doc. 21 at 2.)2 4 Defendants Sirochman, Mastrangelo, and Greene seem to concede they have 5 engaged in the intentional act of advertising the Connecticut property, so at issue is the 6 second prong of the Calder effects test—whether they expressly aimed their conduct at 7 Arizona.3 Although they are mistaken that the “only possible connection” between their 8 conduct and Arizona is Plaintiff’s operation of a business in Arizona—the complaint also 9 contains allegations concerning the transmission of internet advertisements in Arizona— 10 the Court nonetheless agrees that it lacks specific jurisdiction over them. 11 With respect to the internet advertisements, the complaint merely alleges that the 12 Connecticut property was “featured on the Coldwell Banker Arizona website” and that 13 Defendants Sirochman, Mastrangelo, and Greene “list[ed] themselves as the contact actors 14 for the property” on that website. Those allegations fall far short of demonstrating that 15 Defendants expressly aimed their conduct at Arizona. In our modern age, products and 16 services are frequently advertised on the internet. This does not mean an advertiser is 17 subject to personal jurisdiction under the “purposeful direction” test in every state in which 18 a potential customer has access to the internet and can thus view the advertisement. See, 19 e.g., Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 420 (9th Cir. 1997); Facebook, Inc. v. 20 Teachbook.com, LLC, 2011 WL 1672464, *3 (N.D. Cal. 2011) (“The fact that an 21 essentially passive Internet advertisement may be accessible in the plaintiff’s home state 22 without ‘something more’ is not enough to support personal jurisdiction in a trademark 23 infringement suit brought in the plaintiff’s home state.”); Digital Control, Inc. v. 24 Boretronics, Inc., 161 F. Supp. 2d 1183, 1186 (W.D. Wash. 2001) (“Posting information 25 on a web site tells one very little about the purpose or intent of the advertiser. The medium,

26 2 It should be noted that these allegations do not appear in the complaint and Plaintiff has not provided evidence in support of them in connection with the response. 27 3 They also argue that Plaintiff cannot establish the third prong (Doc. 18 at 7-8), but 28 the Court need not address that argument because Plaintiff has failed to establish the second prong. 1 by its very nature, provides immediate and virtually uncontrollable worldwide 2 exposure. . . . [T]he mere existence of a worldwide web site, regardless of whether the site 3 is active or passive, is an insufficient basis on which to find that the advertiser has 4 purposely directed its activities at residents of the forum state.”). The complaint does not 5 allege facts suggesting that the Coldwell Banker website or “auction.com” were anything 6 more than passive websites.4 7 B. Bennet 8 The conduct of Bennet that is challenged in the complaint (i.e., participating in 9 various ways in a lawsuit in “the Superior Court of New Britain Connecticut”) has 10 absolutely no connection to Arizona. Thus, the Court lacks specific jurisdiction over him. 11 III. Leave To Amend 12 Plaintiff did not request leave to amend in its response to the motion to dismiss. 13 Moreover, even though the Court has discretion to grant leave to amend despite the absence 14 of a formal request, Edwards v. Occidental Chemical Corp., 892 F.2d 1442, 1445 n.2 (9th 15 Cir. 1990), such leave “may be denied . . . if amendment of the complaint would be futile.” 16 Albrecht v. Lund, 845 F.2d 193, 195 (9th Cir. 1988). “An amendment is futile when ‘no 17 set of facts can be proved under the amendment to the pleadings that would constitute a 18 valid and sufficient claim or defense.’” Missouri ex rel. Koster v. Harris, 847 F.3d 646, 19 656 (9th Cir. 2017) (citation omitted). 20 The Court denies leave to amend here because there are no new factual allegations 21 Plaintiff could plausibly offer to overcome the deficiencies identified above. 22 Accordingly, IT IS ORDERED that: 23 (1) The motion to dismiss filed by Defendants Sirochman, Mastrangelo, and 24 4 The Court further notes that, although the complaint refers to “the Coldwell Banker 25 Arizona website,” Plaintiff clarified in its opposition to the motion to dismiss that the Coldwell Banker website was simply available “via a web location for Arizona viewers.” 26 (Doc. 21 at 2.) This suggests it was not an Arizona-specific website but simply part of a generally-available website that could be viewed anywhere. This makes sense, because it 27 is implausible that a trio of Connecticut realtors would go to the trouble of marketing a piece of property located in Connecticut only to Arizonans. Nevertheless, even if the 28 website were only available in Arizona, this would still be insufficient—without more—to create specific jurisdiction under Cybersell, Facebook, and Digital Control. Greene (Doc. 18) is granted; 2 (2) | The motion to dismiss filed by Defendant Bennet (Doc. 19) is granted; and 3 (3) Plaintiff’s complaint is dismissed without prejudice. Plaintiff may not file 4|| its complaint again in this District. The Clerk of Court is directed to enter judgment 5 || accordingly and shall terminate this case. 6 Dated this 22nd day of August, 2019. 7 8 Po

10 United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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