LP Digital Solutions v. Signifi Solutions, Inc.

921 F. Supp. 2d 997, 79 U.C.C. Rep. Serv. 2d (West) 554, 2013 WL 425091, 2013 U.S. Dist. LEXIS 15028
CourtDistrict Court, C.D. California
DecidedJanuary 31, 2013
DocketCase No. CV12-9067-CAS (FFMx)
StatusPublished

This text of 921 F. Supp. 2d 997 (LP Digital Solutions v. Signifi Solutions, Inc.) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
LP Digital Solutions v. Signifi Solutions, Inc., 921 F. Supp. 2d 997, 79 U.C.C. Rep. Serv. 2d (West) 554, 2013 WL 425091, 2013 U.S. Dist. LEXIS 15028 (C.D. Cal. 2013).

Opinion

DEFENDANT’S MOTION TO DISMISS

CHRISTINA A. SNYDER, Judge.

I. INTRODUCTION & BACKGROUND

On October 22, 2012, plaintiff LP Digital Solutions d/b/a Divistop filed suit against defendant Signifi Solutions, Inc, a Canadian Corporation, erroneously named as Signifi Solutions, Inc., a Delaware Corporation. Dkt. No. 1. Plaintiff alleges that defendant breached its contractual obligations by, inter alia, failing to provide plaintiff with DVD rental kiosks that had Spanish language capabilities. Plaintiff asserts two claims for relief, one for breach of contract and one for breach of warranty.1

Plaintiff alleges that about a year and a half ago, plaintiff and defendant’s Florida-based salesperson, Allan Zinofsky, first had discussions regarding plaintiffs purchase of DVD rental kiosk machines from defendant. Compl. ¶ 5. Plaintiff informed Zinofsky that it desired to purchase the machines with Spanish language capability, because the bulk of plaintiffs anticipated DVD rental business would come from Spanish-speaking individuals. Id. ¶ 6. Zinofsky allegedly assured plaintiff that the machines would have Spanish language capability upon shipment. Id. ¶ 7. Allegedly relying on these representations and others from defendant’s Canadian employees, plaintiff entered into an oral contract to purchase four machines for a total price of $67,030; plaintiff alleges it never signed a written contract, and that it paid in full. Id. ¶ 8. Defendant, however, allegedly failed to perform its contractual obligations by failing to provide DVD kiosks with Spanish language capability. Id. ¶ 9.

Plaintiff further alleges that defendants warranted that their machines would require few, if any, repairs, and that the “upload speed” of the machines was sufficient to meet plaintiffs requirements. Id. ¶ 10. Defendant allegedly breached this warranty by: (1) delivering unreliable machines that required frequent repairs; and (2) that had “software and database issues,” contrary to defendant’s alleged representations. Id. ¶ 11. Plaintiff seeks a return of the price it paid for the machines, in addition to consequential damages in the form of lost sales in the amount of $35,000. Id. ¶ 13.

[1002]*1002In support of its allegations, plaintiff offers the declaration of Alberto Lopez, one of the owners of LP Digital Solutions. Decl. of Alberto Lopez, Dkt. No. 13. Lopez testifies that he was contacted by Zinofsky regarding the DVD kiosk machines in early 2011, at which point he was “pressured” into reaching an agreement quickly because of a “special deal” that was available on the machines. Id. ¶¶ 3, 5. Zinofsky “never mentioned” that the terms and conditions provided that the sale would be governed by the law of Canada, and from conversations with defendant’s finance department, Lopez understood that he could “only negotiate the payment terms” contained in the invoice. Id. ¶¶ 6, 8. Lopez testifies that he and his partner told defendant that they “were not prepared to agree to the terms and conditions by signing the invoice,” but paid the amount provided for anyways because plaintiff feared losing the “special deal.” Id. ¶ 9. Lopez states that had plaintiff known it would have had to litigate any claims in Canada, it would not have entered into the deal.

Along with its motion, defendant submits a copy of the invoice it purportedly supplied to plaintiff before the transaction was completed. Decl. of David Dickson ¶ 17, Ex. A. Defendant’s Vice President of Finance testifies that customers, including plaintiff, are provided a copy of the invoice in advance and are free to negotiate the terms contained therein; he notes that plaintiff negotiated a different payment plan in conjunction with its purchase. Id. ¶ 19. In addition, the “Terms and Conditions” attached to the invoice provide that the agreement shall be governed by the laws of the Province of Ontario, and that any legal action arising out of the agreement must be filed “in the courts of the Province of Ontario.” Id. Ex. A. The agreement also limits defendant’s liability to the amount plaintiff paid for the goods, disclaiming any liability for consequential or incidental damages, including lost profits. Id.2 The invoice is not signed by either party.

Relevant to this motion, plaintiff alleges that defendant has its principal place of business in Mississauga, Ontario, Canada, and is incorporated in Delaware. In addition, defendant does not have an agent for service of process in California, and therefore plaintiff alleges that it served defendant in Delaware. Compl. ¶ 2. In addition, plaintiff offers an online article discussing Public Media Works, Inc, which appeared to operate DVD kiosks in California under the “Spot. The Difference” brand. The article touts Public Media Work’s use of twenty-five DVD kiosks “from Signifi Solutions, Inc.” in Riverside County, California. Nemirow Decl. Ex. 3.3

Defendant’s Vice President testifies that defendant sells its products through inde[1003]*1003pendent contractors all over the world, including much of North America, the United Kingdom, and Africa. Dickson Decl. ¶ 4. Defendant generates this business via its website, which is not directed towards California or any other region in particular. Id. ¶¶ 5-6. Moreover, defendant does not have any employees other than those in Ontario, Canada; does not have any offices outside of Canada; does not advertise in any traditional print or broadcast media; has never owned or leased property in California; and has not paid or been required to pay taxes in California. Id. ¶¶ 7-11. In addition, to “an insignificant portion” of defendant’s total sales and revenue coming from California sales of its products, defendant conducts all shipping, design, and production from its Canadian headquarters. Id. ¶¶ 12-13.

On December 3, 2012, defendant filed a motion to dismiss for lack of subject matter jurisdiction, or alternatively, to dismiss pursuant to the forum selection clause set forth in the invoice. Dkt. No. 8. Plaintiff opposed the motion on December 19, 2012, Dkt. No. 12, and defendant replied on December 27, 2012, Dkt. No. 15. The Court held a hearing on January 14, 2013, at which the Court offered its tentative conclusion that it lacked personal jurisdiction over defendant. Because counsel for plaintiff proffered new facts at the hearing and sought an evidentiary hearing on the matter, the Court directed plaintiff to submit a declaration setting forth the facts proffered by counsel. Dkt. No. 19. After considering the parties’ arguments and the new evidence submitted by plaintiff, along with defendant’s objections thereto, the Court finds and concludes as follows.

II. LEGAL STANDARD

A. Personal Jurisdiction

California’s long-arm jurisdictional statute is coextensive with federal due process requirements, so that the jurisdictional analysis under state law and federal due process are the same. Cal.Civ. Proc.Code § 410.10; Roth v. Garcia Marquez, 942 F.2d 617, 620 (9th Cir.1991).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

International Shoe Co. v. Washington
326 U.S. 310 (Supreme Court, 1945)
Perkins v. Benguet Consolidated Mining Co.
342 U.S. 437 (Supreme Court, 1952)
The Bremen v. Zapata Off-Shore Co.
407 U.S. 1 (Supreme Court, 1972)
Burger King Corp. v. Rudzewicz
471 U.S. 462 (Supreme Court, 1985)
Goodyear Dunlop Tires Operations, S. A. v. Brown
131 S. Ct. 2846 (Supreme Court, 2011)
CollegeSource, Inc. v. AcademyOne, Inc.
653 F.3d 1066 (Ninth Circuit, 2011)
Mavrix Photo, Inc. v. Brand Technologies, Inc.
647 F.3d 1218 (Ninth Circuit, 2011)
Doe 1 v. AOL LLC
552 F.3d 1077 (Ninth Circuit, 2009)
Boschetto v. Hansing
539 F.3d 1011 (Ninth Circuit, 2008)
Doe v. Unocal Corp.
27 F. Supp. 2d 1174 (C.D. California, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
921 F. Supp. 2d 997, 79 U.C.C. Rep. Serv. 2d (West) 554, 2013 WL 425091, 2013 U.S. Dist. LEXIS 15028, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lp-digital-solutions-v-signifi-solutions-inc-cacd-2013.