Leone v. Cataldo

574 F. Supp. 2d 471, 2008 U.S. Dist. LEXIS 61452, 2008 WL 3495634
CourtDistrict Court, E.D. Pennsylvania
DecidedAugust 11, 2008
DocketCivil Action 07-3636
StatusPublished
Cited by34 cases

This text of 574 F. Supp. 2d 471 (Leone v. Cataldo) 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
Leone v. Cataldo, 574 F. Supp. 2d 471, 2008 U.S. Dist. LEXIS 61452, 2008 WL 3495634 (E.D. Pa. 2008).

Opinion

MEMORANDUM AND ORDER

ANITA B. BRODY, District Judge.

Plaintiffs Ernesto Leone and Angelo Duva bring this action against Anthony Cataldo for: (1) breach of contract; (2) common law fraud; (3) violation of New York General Business Law § 349; (4) false advertising; (5) intentional misrepresentation; (6) negligent misrepresentation; and (7) breach of implied covenant of good faith. Cataldo moved to dismiss this case for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) and for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3), or, in the alternative, to transfer this case to the Northern District of New York pursuant to 28 U.S.C. § 1404(a). On March 19, 2008, this Court held an evidentiary hearing on Cataldo’s motion.

I. FACTUAL BACKGROUND

Plaintiff Angelo Duva (“A. Duva”) is from Moorestown, New Jersey. Plaintiff Ernesto Leone (“Leone”) is from Meadow-brook, Pennsylvania. Defendant Anthony Cataldo (“Cataldo”) is from Endicott, New York.

Around March 14, 2006, A. Duva purchased the newspaper Oggi in New Jersey. In Oggi, A. Duva saw a real estate adver *476 tisement that listed the sale of several restaurants under the heading “Northern & Central New Jersey.” A. Duva was interested in one restaurant listed as a pizzeria/grill because the advertisement stated that it had a weekly gross income of approximately $60,000. The advertisement provided a phone number and address for a real estate agency in Little Ferry, New Jersey. A. Duva contacted the real estate agency and an agent informed him that the pizzeria/grill was called Tony’s Italian Grill (“Tony’s”) and it was located in Endicott, New York.

Around the end of March or the beginning of April 2006, A. Duva and his brother, Mario Duva (“M. Duva”), visited Tony’s. During their visit to Tony’s, A. Duva and M. Duva met with Cataldo, the owner of the restaurant. At this meeting, A. Duva expressed his interest in purchasing Tony’s and mentioned that he owned Marco Polo, a restaurant located in Elkins Park, Pennsylvania. Cataldo and A. Duva discussed their experiences in the restaurant business and exchanged phone numbers. After this initial visit, M. Duva visited Tony’s on behalf of A. Duva between ten and twelve times before the sale of the restaurant was finalized.

On April 24, 2006, Cataldo and his wife visited Marco Polo in Elkins Park, Pennsylvania. Cataldo visited Marco Polo to ascertain whether A. Duva was capable of running a restaurant. It was important for Cataldo to determine that the person who purchased Tony’s could successfully operate a restaurant. This was because the sale of Tony’s would be self-financed and Cataldo’s financial health would hinge on the buyer’s ability to pay him.

While at Marco Polo, Cataldo met with A. Duva, his wife, and M. Duva for about two and a half hours. During this visit, Cataldo and A. Duva discussed the sale of Tony’s. Cataldo promised A. Duva that the restaurant’s weekly gross income was approximately $60,000. Based on this revenue guarantee, A. Duva entered negotiations with Cataldo to purchase Tony’s. At the Marco Polo meeting, A. Duva and Ca-taldo agreed that A. Duva would purchase the restaurant’s assets for $1.3 million with $50,000 to be paid upon execution of the sales agreement, another $450,000 to be paid upon closing, and the remaining $800,000 to be paid over six years at 6% interest.

Although A. Duva originally planned to purchase Tony’s on his own, in May 2006, he entered into an agreement with Leone to purchase the restaurant jointly. After Leone became partners with A. Duva, he made several visits to Tony’s. Additionally, Cataldo spoke frequently to Leone on his cell phone regarding the sale of the restaurant. Cataldo initiated many of these calls to Leone, who received them in Pennsylvania.

In October 2006, Leone and A. Duva received sales and confidentiality agreements from Cataldo. They traveled to New York to give Cataldo the signed agreements and a $50,000 deposit. The final sales agreement contained many of the same terms discussed during the April 2006 meeting in Pennsylvania, but some of the terms were modified. First, the purchase price was reduced to $1.1 million, including a $50,000 down payment upon execution, $550,000 payable at closing, and $500,000 payable at 6% interest over a six year period and amortized over six years. Second, A. Duva and Leone agreed to purchase the corporation rather than the restaurant’s assets. Third, the warranty of weekly gross income was reduced to $50,000.

On November 30, 2006, A. Duva and Leone signed an agreement to lease the building that housed Tony’s. On December 1, 2006, A. Duva and Leone closed the sale of Tony’s. On December 29, 2006, A. *477 Duva and Leone signed the Memorandum of Lease. All of these events took place in New York.

II. PERSONAL JURISDICTION

According to Fed.R.Civ.P. 12(b)(2), a court must grant a motion to dismiss if it lacks personal jurisdiction. “To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff bears the burden of establishing the court’s jurisdiction over the moving defendants.” Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir.2004). If no evidentiary hearing is held on the motion to dismiss, “the plaintiff need only establish a prima facie case of personal jurisdiction and the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its favor.” Id. “However, if the Court conducts an evidentiary hearing, the plaintiff has the more substantial burden of proving that personal jurisdiction is proper by a preponderance of the evidence.” Atiyeh v. Hadeed, No. 04-2621, 2007 WL 853816, at *4, 2007 U.S. Dist. LEXIS 19534, at *14-15 (E.D.Pa. Mar. 20, 2007). See also Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 154 (2d Cir.1999); Data Disc, Inc. v. Systems Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir.1977).

A court may have either general or specific personal jurisdiction over a nonresident defendant. Dollar Sav. Bank v. First Sec. Bank of Utah, N.A, 746 F.2d 208, 211 (3d Cir.1984). Because Leone and A. Duva concede that the Court lacks general jurisdiction over the defendant, the only question is whether the Court has specific jurisdiction. Specific jurisdiction exists “when the claim is related to or arises out of the defendant’s contacts with the forum.” Id.

Usually, a court determines specific jurisdiction on a claim-by-claim basis. O’Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 318 n. 3 (3d Cir.2007).

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