Klauder & Nunno Enterprises, Inc. v. Hereford Associates, Inc.

723 F. Supp. 336, 1989 U.S. Dist. LEXIS 12669
CourtDistrict Court, E.D. Pennsylvania
DecidedOctober 25, 1989
DocketCiv. A. 89-5654, 89-5129
StatusPublished
Cited by5 cases

This text of 723 F. Supp. 336 (Klauder & Nunno Enterprises, Inc. v. Hereford Associates, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Klauder & Nunno Enterprises, Inc. v. Hereford Associates, Inc., 723 F. Supp. 336, 1989 U.S. Dist. LEXIS 12669 (E.D. Pa. 1989).

Opinion

MEMORANDUM

CAHN, District Judge.

Plaintiff Klauder and Nunno Enterprises, Inc. (“K & N”) filed an action, No. 89-5654, against Hereford Associates, Inc. (“Hereford”) on July 31, 1989, alleging breach of contract, fraud, and reckless conduct stemming from a failed construction contract of September 18, 1987. K & N and Gerald J. Klauder (“Klauder”) sued Hereford and Bernard J. Murtaugh, Jr. (“Murtaugh”) in No. 89-5129 (filed July 13, 1989) for libel and reckless conduct arising from the same transaction.

The parties here are embroiled in a good deal of litigation in New Jersey state and federal courts on related matters, though the claims before this court have not yet been raised elsewhere. The foremost is probably a suit filed by Klauder against Hereford and two of its general partners in Cape May County Superior Court on July 17, 1989, alleging breach of an April 28, 1989 condominium purchase agreement. Hereford and a partner filed a third-party complaint against K & N and some John Doe subcontractors sometime between September 21, 1989, and October 4, 1989 1 for breach of the September 18 contract. K & N has sued Garden State Title Agency, Inc. in the United States District Court for the District of New Jersey, alleging, inter alia, negligent title transfer for units in the condominium project that is the subject of the disputes before this court. K & N has also used Camden County Superior Court to sue City Federal Savings and Loan for violating the terms of the September 18 contract that governed payment to a construction draw account. Finally, K & N has sued Construction Equipment Services, Inc., in Cape May County Superior Court *338 for breach of its subcontract for work arising from the September 18 contract.

Hereford and Murtaugh have filed a motion to dismiss for lack of jurisdiction over the subject matter (Fed.R.Civ.P. 12(b)(1)), lack of jurisdiction over the person (Fed.R. Civ.P. 12(b)(2)), improper venue (Fed.R. Civ.P. 12(b)(3)), failure to join an indispensable party (Fed.R.Civ.P. 12(b)(7), 19), and forum non conveniens. In the alternative, they seek a change of venue under 28 U.S.C. §§ 1404 & 1406(a) to the District of New Jersey at Camden. For the reasons presented below, the motions are denied. 2

1. Subject Matter Jurisdiction

The first argument — lack of subject matter jurisdiction — is advanced only in the notice of motion. In any event, defendants do not challenge any of the predicates to this court’s diversity jurisdiction. K & N and Klauder are Floridians, as stated by Klauder’s uncontested affidavit. While defendant Murtaugh disputes Klauder’s contention that Hereford maintains a presence in Pennsylvania, plaintiffs do state without dispute that Hereford is a New Jersey corporation and that Murtaugh is a New Jersey citizen. Even if Murtaugh’s averments are accepted, diversity remains complete. Defendant also does not argue that this dispute is valued at under $50,000, the amount now required under 28 U.S.C. § 1332(a). This court thus has subject matter jurisdiction.

II. Personal Jurisdiction

Defendants challenge this court’s personal jurisdiction more seriously, though with equal effect. They argue variously that (a) because neither Hereford nor Murtaugh maintained offices in Pennsylvania or otherwise subjected themselves to Pennsylvania’s jurisdiction, that Pennsylvania courts can have no personal jurisdiction and b) because the matters in dispute in No. 89-5654 are under arbitration, this court is divested of jurisdiction. These shall be addressed in turn.

A. The Long-Arm Statute

It is clear that personal jurisdiction is a prerequisite to adjudication. Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 110, 89 S.Ct. 1562, 1569, 23 L.Ed.2d 129 (1969). Since this court sits in diversity, it must apply Pennsylvania’s long-arm statute to determine whether it has in personam jurisdiction. The statute states, in pertinent part, that “the jurisdiction of the tribunals of this Commonwealth shall extend to all persons ... to the fullest extent allowed under the Constitution of the United States and may be based on the most minimum contact with this Commonwealth allowed under the Constitution of the United States.” 42 Pa.Cons.Stat.Ann. § 5322(b) (Purdon 1981). 3 Pennsylvania’s reach is thus limited only by the strictures read into the Due Process Clause of the Fourteenth Amendment by the courts. Koenig v. International Bhd. of Boilermakers, 284 Pa.Super. 558, 567, 426 A.2d 635, 639 (1980).

The Supreme Court has long made clear that the Due Process Clause bars jurisdiction when the state “has no contacts, ties, or relations” with the defendant. International Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 159, 90 L.Ed. 95 (1945). This ensures that a defendant will be able to control, to a degree, its exposure to remote actions. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). To determine when a defendant has subjected himself to foreign suit, a court must first examine whether the action arises from or relates to the defendant’s purposeful contacts with the forum *339 state (“specific jurisdiction”) or, instead, if jurisdiction must be bottomed on the defendant’s unrelated contacts (“general jurisdiction”). Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73 & n. 15, 105 S.Ct. 2174, 2181-82 & n. 15, 85 L.Ed.2d 528 (1985); Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 & nn. 8-9, 104 S.Ct. 1868, 1872 & nn. 8-9, 80 L.Ed.2d 404 (1984); Provident Nat’l Bank v. California Fed. Sav. & Loan Ass’n, 819 F.2d 434, 437 (3d Cir.1987). For specific jurisdiction, the Due Process Clause’s demands are met if the defendant has “carrped] on a ‘part of its general business’ ” in the forum state, which is sufficient to put the defendant on notice that it may find itself in court as a result of its activities there. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 780, 104 S.Ct. 1473, 1481, 79 L.Ed.2d 790 (1984) (quoting Perkins v. Benguet Mining Co.,

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723 F. Supp. 336, 1989 U.S. Dist. LEXIS 12669, Counsel Stack Legal Research, https://law.counselstack.com/opinion/klauder-nunno-enterprises-inc-v-hereford-associates-inc-paed-1989.