McClain Mktg. Group v. Kyriba Corp.

Opinion

STATI OF IviAL"JE SCPFRIOR COLlH Ct:\!BERLA..'\TI, %. CI VTL ACTIO:--;

Docket No. CV-12-200

T- -/

McCLAIN lv!ARKETNC GROUP, Plaintiff

v. ORDFR

KYRIBA CORP., Defendant

j=>SC"=-'.VE~

Bdore the court is defendant's motion to dismiss for lack of personal junsd.iction.

The court held oral argument on the motion on November 29, 2012. At that time neither party sought an evidentiary hearing nor did any party seck to offer additional fact-. beyond those in the affidavits previously ~ubmitted..-\ccordingly, the court will decide the motion based on the fact'\ contained in the existing record. Sec Dorf v. Complasti~., 1999 ME 133 '['113-14, 735 A.2d 984.

As set forth in the Dorf decision, a plaintiff faced with a motion to dismiss for lack of personal jurisdiction is required to make a factual ~howing based on affidavits or other proof. However, the plaintiff need only make a prima facie showing, and the factual a-.sertions offen•d by plaintiff ~hould be con~ trued in its favor. Id.

The complaint in this case alleges that defendant Kyriba Corporation has breached a contract by failing to pay for certain services provided by plaintiff ~fcCiain Marketing Group and has been unjust enriched as a result. The factual showing made by the ~kCiain Crocp in support of tts assertion of personal junsdiction over Kyriba is contained in the affidavits of Sue-Ellen .\fcClain and Robert Perkins.

:>.!cC!am Group i~ a .\faine corporation whtch maintains offices in both .\faine and 1\ew York City. Its principal offtces and the oajl)rity of tb employees are located in Maine. Sue-Ellen McClain (who is the tlwner and prestdent of the McClain Group) describes the \fcCiain Group's '\ew York office as a "satellite office." Kyriba poinb out, however, that the McClain Croup's New York office and its Maine office arc given equal billing on .\fs. McClain's business card.

Kyriba is a Delaware corporation whose principal place of business is in Califorrua and which mamtain~ offices in ~ew York City and in Furope. According to Ms . .\IcClain's affidavit and the allegations m the complamt, Ky"riba contracted with the McOam Group for certam marketing services, specifically related to branding, logo, and website design.

The assertion of person<~! jurisdiction by McClain is based on Maine's long arm statute. 1-1 \I.R.S. §§ 704-A(2)(A) and 704-:\(2)(1). That statute is co-extenstve \'V'th the pemussiblc exercise of personal jurisdiction under the due process clause. Dorf, 1999 .\IE 133 ':: 9. Due process is satisfied i~ (11 .\faine has a legitimate interest in the subject matter of the litigation; (2) Kyriba reasonably should have anticipated litigation in .\faine; and (3) the exercise of jurisdiction by Maine courts comports with traditional notions of fair play and substantial justice. Fstate of Hoch v. Slife!, 2011 ME::!-! 'i 25, 16 A.3d 137.

1.1£gitim,tte Interest As to whether .\laine has a legitimate interest in the ~ubject m<Jtter, the l.aw Court has repeatedly declared that M<Jine h,ts an intcrt•st in providing a means of redress against nonresidents who incur obligabons to Maine cibz~ns or corporations. E~ !-nrc LLC v. Benoit 2012 ~1£ 1 '[ 7, 3-1 A.3d 1125. :.lame's interest must go beyond mere

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citizenry, but that n:.'<juircment is satisfied here by t.~e prt>sencc of witnesses and records in Maine. Sec id. Kyriba does not cortest that :\Iaine has a lcgitimclte interest m the subject matter of the litigation although it argues that New York has an equal or greater interest in light of the dealings between the parties.

2. Whcth~riba Could Reasonably Have Anticipated Litigation in Maig Thu; is the point of contention between the parties. The affidavits contained in the record indicate that Kyriba first contacted the ~lcOam Group in March 20111 and negotiations ensued that resulted in a ~lay 11, 2011 contract under which the :\-kClain Group would provide branding and web~ite design and development ~erv1ces to Kyriba. Ms. McClain's affidavit states that she conducted the negotiations leading to the contract by telephone and email from the McClain Group's Portland office. The Kvriba representatives w1th whom she negotiated, pnncipally Maurioo Barberi, were located in Kyriba's New York office.

During the performance of the contract, which lasted for approximately 11 months until April 2012, various meetings \\ere !lcld in New York. At least one meeting was also held in New York when the relationship between the parties was unraveling and Kyriba WJS expressing dissatisfaction with the McClain Group's services. No meetings were held in \faine.

:\b. }..kCJam's affidavit states that the meetings were held in New York as a convenience to Kyriba and that Kyriba repr~ntabves were intormcd that the McOam

1 There is no ~vidence a> to wh~rc th~ milia! contact occurred. Affidavits from oificers of Kyriba state that it was important to Kyriba that McClain had a '\;cw York presence and that the fact :.'lat ).1cCl;un 1-:ad a '\;cw York office was a ~1gniiicant factor :n Kyriba's dec1sion to con traer w1th the ~lcC:ain Group.

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Grot.;p personnl'l prim,lTily involved with the ~ervices provided under the contract worked in .\Iaine.

No one from Kyriba ever visited M~ine, bLit the McClain and Perkins affidavits recount that Kyriba personnel exchanged numerous telephone calls and email communications with McClain employees in .Vfaine and that there were a number of telephone conferences m which \.!cClain representative~ participated from \.Iaine. Payments under the contract were sent by Kyriba to the McClain Group's office in \.[aine, and Kyriba representatives made a number of call~ to .\Is. v!cClain in Maine once the di~pute that ultimately resulted in thi~ lawsuit arose.

Citing _t\rdli tectural Woodcraft Co. v. Read, 464 J\.2d 210, 213 (.\1e. 1983), Kyriba argues that a smgle contract with a \Iaine vendor, coupled \,;th the uo;e of :nter~tate

communications, is insufficient to establish tha t Kvriba should reasonablv have - '

antiopated that it could be subjected to litigation in \.lame. \.-lcClain Group responds

that the facts here are not limited to "a single isolated purchase by an out of state buyer" as in Architectural \\'oodcraft 586 A.2d at 1258, but involved exten~ive dealings over an eleven month period resulting in the conclusion that Kyriba availed itself of the privilege of conducting business in Maine and should rea~;,onably have anticipated that it could be subjected to htigation in v!ame. 5~ Electroruc \.Ied1a International v. Pioneer Communication§, 586 A.2d 1256, 1259-60 (Me. 1991).'

:\s in thi» case, it does not appear that any representatives of the out of state dcfend.mt in the Electronic Media ca~e had ever been physically present in Mame.

In f.lectronic Media, the Law Court cited the t:. S. Supreme Court's ded~ion in Burger King v. 2

Rudzew1_g, 4il U.S.462, 478-79 (l()S\5), ;or the proposition that while the exbtence of a contra<"t with an out-of-state party cannot a!on~ estab "" m!.nimu~ contac~s for purposes of personal JUrisctiction, the court mu~t evaluate vanous factors including pnor negotiations and the parties' actual course of dealing in determining whether the out o£ state party should reasonably have a~:idpated the possibility of htigation m the for.;;n state. 586 A2d at 125<1-60.

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However, the Electronic \!celia case incuded one factor that i~ not present here - the simultaneous authori.-:ation by the defendant in rlectronic Mcd@ of a dealership m \laine and its sales in \Iaine through that dealership. 586 A.2d at 1260. The question is whether, without that added factor, the Law Court would have upheld jurisdiction in the Electronic Media case. Taking the Law Court at its word, the court concludes that where the affidavit<; of the plamtiff set forth ongomg business dealings and contacts between the parties over a number of months, those al>Sertions are alone sufficient to lead to the conclusion that the defendant reasonably should have anticipated litigation in \Iaine.'

In this era of electronic communications, where p.lrties can remotely attend out-

of-state meetings through teleconferencing, the job of determining whether a party has purposely availed itself of the privilege of doing business in a state is more difficult than in the days where business was transacted in person. For the reasons set forth above, however, the court cannot sufficienUv distinguish this case from Electronic Media and finds that the McClain Group has met its burden of satisfying the second requirement for Cbtablishing personal jurisdiction.

Kyriba bears the bliTden on this issue and has not demonstrated that the exercise of Jurisdiction m \fame would not comport with traditional notions of fair play and substantial justice. Kyriba has not sub!Iitted any affidavits or other proof that it would

'S<'~ 586 A.2ci at 1260, where:."~ Law Court r~counted business dealings between Electronic Media ana Pioneer over a five month p~riod that led the court to the conclusion thal Pioneer by it8 conduct reasonably should have antopated Ullgiltion in \!rune. The Co~,;rt sta~ed th:s conclusion beiore fi!:ding that Pionee:-'s au:..'1on.tation of a Mam~ dealership provided "further indication" of Pioneer's purposcfu availment of Lhe pnvilege of conducting business m Maine. !d.

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b~ gravely dtfticult and inconvenient to lit:gate in ).faine. Lr.deed, it appear~ to Hw cou:t that litigation in ).Iaine will potentially place burdens on both parties. Since out of ,;tate ddendants ordinarily do not have to ~ubrnit to discovery in the forum ~tate, depo1-itions of Kyriba employees and docu:nent production by Kyriba will probably have to be conducted in New York or at Kyriba's other out-of-state offices, which will potentially mconvenicnce ~[cCiain. On the other hand, if the case got.>s to trial, Kynba's , ..;tnesses wtll have to travel to Maine, which wtll potentially inconvenience Kyriba. The potential that both parties will be inconvenienced to some degree preclude<> a finding that litigation in ~Iaine would be inconsistent with traditional notions of fair play and substantial justice.'

The entry shall be:

Defendant'~ motion to disnus-, is denied. The Clerk is directed to mcorporate this order m the docket by reference pUI'>uant to Rult• 79(a).

Dated: November )'cJ , 2012

Thomas b. \N,1rrcn

Justicc, Superior Court

• Kyribu has al$o raised a forum non conv.>niens argument, but thi$ is not a case whe,e, apply'ng th~ factors set forth m .\1ad.cod v. \1acLcod, 383 A.2d 1'l. 414.2 (".It!. 1978), dhmissal woulci be w ar:anteci or. L'lat grounc.