KEVIN NATHANIEL FOX, United States Magistrate Judge.
Christopher Carter Sanderson ("Sanderson") commenced this action against Horse Cave Theatre, d/b/a Kentucky Repertory Theatre ("KRT"), seeking damages for breach of an employment contract. The parties consented to proceed before a magistrate judge for all purposes, pursuant to 28 U.S.C. § 636(c) and Fed.R.Civ.P. 73. Before the Court is KRT's "Motion to Dismiss for Improper Venue and Lack of Personal and Subject Matter Jurisdiction," made pursuant to Rule 12 of the Federal Rules of Civil Procedure. Sanderson opposes the motion.
Sanderson alleged the following in his complaint:
Since January 1, 2011, he has been "a citizen of New York and resides" in Brooklyn, New York. KRT "is a nonprofit corporation, incorporated under the law[s] of Kentucky," with its principal place of business in Horse Cave, Kentucky. Sanderson is a director, producer, playwright and composer, who, over the past 18 years, had 16 plays reviewed by the New York Times. In 2011, Sanderson was awarded a theatrical development Fulbright Grant. On or about January 1, 2011, KRT advertised the position executive director, in ArtSearch, a publication that advertises positions available in the arts, and ArtsOpportunities, a Web site that posts theater-related jobs, both of which are published by the Theatre Communications Group, located in New York. Sanderson applied for the position.
On or about February 5, 2011, KRT contacted Sanderson to express interest in interviewing him for the executive director position. Shortly thereafter, KRT conducted a telephonic interview and a followup Skype interview with Sanderson, and it brought him to Kentucky for an in-person interview. At the time of the interviews, Sanderson was in Norway, performing duties in connection with his Fulbright Grant. During the interviews, KRT expressed interest in Sanderson's strong reputation and network of contacts in the New York theatrical community. Sanderson inquired, at a KRT board meeting, how KRT defined success for an executive director and was told that it is defined, in large part, as "transferring shows between KRT and New York." KRT told Sanderson that it would expect him to use his New York contacts with the press, directors, actors and theater network to assist KRT in producing and transferring shows to and from New York.
From February 15 to 25, 2011, "while Sanderson was in New York, KRT and Sanderson continued discussions and contract negotiations concerning the position of Executive Director via telephone and email." Subsequently, KRT sent Sanderson, electronically, a nonbinding Memorandum of Understanding ("MOU") which included the material terms of their employment agreement. On February 25, 2011, Sanderson signed the MOU in New York and transmitted a copy of it to KRT. Sanderson ended the work he was performing under his Fulbright Grant prematurely, and arrived in Kentucky on March 5, 2011. On March 7, 2011, Sanderson and KRT signed an employment agreement.
Sanderson was employed by KRT from March 1 to December 6, 2011. When he assumed his duties, Sanderson engaged Dash Media/PR, a New York City public relations agency specializing in the New York theater, to represent KRT. Dash Media/PR obtained publicity for KRT in Kentucky and New York City. During his employment with KRT, Sanderson, on behalf of KRT, "contacted, networked and otherwise leveraged his New York connections in the following ways," he: (a) reached out to the acting community in New York by contacting numerous actors and recruited many New York actors on behalf of KRT, including members of the No. 11 Production Theater Company and Brett Hunter Levenson, an actor with Broadway credits, to act in a KRT production in Kentucky; (b) contacted various individuals in New York City to recruit directors, including the Artistic Director of the New York Shakespeare Festival, the Associate Director of the New York Theater Workshop, the Artistic Director of
Prior to and during his employment with KRT, KRT encouraged Sanderson to maintain his connection with the Gorilla Repertory Theater, which Sanderson founded in 1992, to stage free productions of classical plays in public spaces in New York City. While serving as KRT's executive director, Sanderson brought new and original programming to the theater and "brought shows from New York to KRT and from KRT to New York." From about May 23 to 30, 2011, and from October 1 to 5, 2011, Sanderson conducted business in New York on behalf of KRT.
On or about October 6, 2011, at a KRT board meeting, "Sanderson emphasized KRT's financial situation and offered to take a temporary voluntary furlough and to defer $2,000 in back pay then owed to him so that KRT could put on the Christmas special and follow-through on KRT's co-production obligations with Gorilla Rep. KRT accepted this offer." On December 6, 2011, KRT gave Sanderson notice that his employment was terminated, "for cause," stating, inter alia:
On or about December 15, 2011, KRT informed the press that it had terminated Sanderson's employment.
KRT contends that venue does not lie with this court because "[t]he contract which is the issue in this case is an employment contract to be performed in the Commonwealth of Kentucky." According to KRT, "Kentucky is the only venue in which a substantial part of the events, in fact all of the events, giving rise to the claim of breach occurred," namely: (a) Sanderson's allegation that "at a KRT board meeting, on or about October 6, 2011, Sanderson voluntarily took a furlough from his Executive Director position due to financial conditions of KRT"; (b) KRT's "position that he was laid off by the
KRT also contends that the "litany of facts Sanderson cites as support for his personal jurisdiction argument are [sic] insufficient to subject KRT to this court's personal jurisdiction" because the breach of contract occurred in Kentucky and "Sanderson's contacts in New York on behalf of KRT are irrelevant to this action of breach of an employment contract by termination." Moreover, Sanderson does not satisfy the amount of damages required for subject matter jurisdiction because the amount of damages alleged in the complaint is "in contradiction to the plain language of the Employment Contract," which "limits the amount of money Sanderson could receive after notification of the employment agreement to wages and benefits for only a six month period," namely "$32,640.00." According to KRT,
KRT maintains that "Sanderson has not established, or asserted in his complaint, that such damages are allowed for a breach of employment contract claim under Kentucky law, which KRT asserts they are not."
In support of its motion, KRT submitted Exhibit 2, an affidavit by Lyn Taylor Long ("Long"), president of KRT's board of directors, who stated that she was a member of the board of directors at the time of the events at issue in this action. Long explained that KRT is a regional theater whose primary business is "the production of theatrical performances presented to the general public," except that "[w]hile on rare occasions KRT may present plays in other than its facility at Horse Cave, those venues have always been in Kentucky and in the region of Horse Cave, Hart County, Kentucky." Long stated that at the end of 2010, KRT began its search for a new executive director and advertised the position "in numerous professional publications including but not limited to Art Search and Arts Opportunities." According to Long, in January 2011, "Sanderson emailed Judge [Kelly Mark] Easton[, then president of KRT's board of directors,] and expressed his desire to be considered for the Executive Director position." Subsequently, Long exchanged e-mail communications with Sanderson and, in February 2011, an interview was scheduled for Sanderson,
Attached to KRT's memorandum of law are also the following: (1) "Exhibit 1, Kentucky Secretary of State web site general information"; (2) Exhibit 3
However, in her affidavit, Long failed to identify "all documents attached to KRT's memorandum" or explain what each document is and for what purpose each is being offered. The only exhibit attached to KRT's memorandum of law to which Long refers in her affidavit is Exhibit 4, "an email exchange" with Sanderson, in January 2011. Although Long stated that "all documents attached to KRT's memorandum" are "kept in the ordinary course of business," that statement, without more, does not satisfy Rule 803 of the Federal Rules of Evidence. That is so because to qualify as an exception to the rule against hearsay under Rule 803(6), the custodian of the record(s) or other qualified witness needs to show not only that the record(s) is "kept in the course of a regularly conducted activity of a business," but also that: (i) "the record was made at or near
Here, in addition to not identifying any exhibit attached to the defendant's memorandum of law, Long failed to show that the unidentified records to which she refers in her affidavit were made at or near the time of an act, event, condition or opinion, or from information transmitted by someone with knowledge and that making the records was a regular practice of KRT's regularly conducted activity. For example, Exhibit 9 attached to the defendant's memorandum of law purports to be Sanderson's "web page posting, [showing that] Sanderson no longer lives in New York." Exhibit 9 appears to be a document printed from the Web on March 25, 2012, more than one year after Sanderson's employment was terminated by the defendant and more than two months after this action commenced. Long did not show that Exhibit 9 was made by or from information transmitted by someone with knowledge of Sanderson's personal Web page or that making the record, i.e. printing and retaining data from the personal Web page of a former employee more than one year after he was terminated for cause, was a regular practice of KRT's regularly conducted activity, as required by Rule 803(6). The circumstances of the preparation of Exhibit 9 suggest that it is a document that was prepared solely for the purpose of this litigation and the method of preparation suggests the document lacks trustworthiness, because Long did not show that she has any knowledge respecting whether Exhibit 9 is what it purports to be or who prepared Exhibit 9, how it was prepared or why it was prepared. Other exhibits attached to the defendant's memorandum, except Exhibit 4, similarly, do not satisfy the Rule 803(6) exception to the rule against hearsay.
Moreover, apart from Exhibit 4, which is authenticated by Long's affidavit, no affidavit or declaration was submitted with any other exhibit attached to KRT's memorandum of law authenticating it, as required by Local Civil Court Rule 7.1 and the Federal Rules of Evidence. Even assuming that, apart from Exhibit 4, other exhibits attached to KRT's memorandum of law have been authenticated, they are irrelevant to the instant motion because no dispute exists or challenge is made to: (i) KRT's business address and location; (ii) Sanderson's education and experience; (iii) the text of the March 7, 2011 employment agreement between Sanderson and KRT; and (iv) Sanderson's receiving unemployment insurance from Kentucky. Similarly, KRT does not dispute that this action is between citizens of different states, making Exhibit 6 and Exhibit 11 irrelevant. Accordingly, Exhibit 4, "an email exchange" between Sanderson and Long in January 2011, authenticated by Long, and Exhibit 10, the December 6, 2011 letter of termination, attached as an exhibit to the complaint, will be considered as evidence in support of KRT's motion.
Sanderson contends that the Court has subject matter jurisdiction over this action based on complete diversity of citizenship, and he "seeks expectation damages of $256, 701.30," because his employment contract was a five-year contract and he was discharged wrongfully prior to its termination. Sanderson also seeks "damages for reputational harm and attorney's fees." According to Sanderson, although KRT's argument that the employment agreement "limits Sanderson's remedy to six months's
Sanderson maintains that, "absent a forum selection clause, this Court must apply New York law (limited, if relevant, by the boundaries of constitutional due process) to determine whether personal jurisdiction is proper." He alleges that the Court has specific jurisdiction over KRT because "KRT's solicitation of Sanderson's services in New York constituted a purposeful availment `of the privileges of conducting activities within the forum State,'" and "KRT hired Sanderson as Executive Director so that he would use his New York connections to obtain press, transfer shows between KRT and New York, and bring other New York theater personnel to KRT." Moreover, Sanderson contends, the court has long-arm jurisdiction over KRT because "KRT purposefully availed itself of the benefits of doing business in the forum when it engaged Sanderson to act in New York on KRT's behalf pursuant to the 5-Year Contract." Sanderson maintains that he fulfilled a primary function of his contract with KRT when he "traveled to New York (the center of the theater industry in the United States) to recruit personnel for KRT," and all of his "many transactions with New York during his tenure at KRT ... were done with the approval of and on behalf of KRT to fulfill his duties under the 5-Year Contract." Moreover, Sanderson contends, "KRT also transacted business in New York when it discussed and negotiated the 5-Year Contract with Sanderson via telephone and e-mail while he was in New York," and "KRT also sent a Memorandum of Understanding to Sanderson in New York, which he then signed (also in New York) and sent back to Kentucky."
Sanderson contends that venue is proper in this court because "parts of the 5-Year Contract were negotiated and executed in New York," and he "was to perform the 5-Year Contract in both Kentucky and New York." Moreover, "the breach occurred in New York at least in part because KRT sent its December 6, 2011 termination letter to New York," and "the harm of the breach occurred in New York because Sanderson accepted the position with KRT in part in order to secure subsequent employment in New York theater." According to Sanderson, transferring this action to a different venue would be improper, because he would "be unable to bear the expense related to prosecuting this action in Horse Cave, Kentucky," given that his "only source[s] of income are unemployment benefits and food stamps."
In support of his opposition to KRT's motion, Sanderson submitted his affidavit, made in the State of New York, County of New York, and notarized by Jeffrey Curtis, Notary Public for the Commonwealth of Virginia. However, a notary public must be appointed and commissioned in New York in order to notarize an affidavit within New York. See New York Executive Law §§ 130-138. Since Sanderson's affidavit, made in New York, was not notarized by a notary public commissioned in New York, it cannot be considered as evidence by the Court.
KRT contends that "[t]he term of the contract was five years but that term was subject to the other provisions of the contract, including the termination with six month notice clause," and six months of pay is, "at most," what Sanderson could recover if he prevails in this action, given that the letter announcing his termination
On a motion to dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, the non-conclusory factual allegations in the complaint, unless contradicted by evidence, are taken as true and all reasonable inferences drawn from those factual allegations are construed in favor of the plaintiff. See Amidax Trading Group v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir.2011). "On a Rule 12(b)(1) motion challenging the district court's subject matter jurisdiction, the court may resolve the disputed jurisdictional fact issues by referring to evidence outside of the pleadings, such as affidavits, and if necessary, hold an evidentiary hearing." Zappia Middle East Constr. Co. Ltd. v. Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir.2000).
"The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ... citizens of different States." 28 U.S.C. § 1332(a)(1). KRT does not dispute that this action is between citizens of different states, but contests the amount in controversy.
In this circuit "a rebuttable presumption [exists] that the face of the complaint is a good faith representation of the actual amount in controversy." Wolde-Meskel v. Vocational Instruction Project Cmty. Servs., Inc., 166 F.3d 59, 63 (2d Cir.1999). "To overcome the face-of-the-complaint presumption, the party opposing jurisdiction must show `to a legal certainty' that the amount recoverable does not meet the jurisdictional threshold." Scherer v. Equitable Life Assurance Soc'y of the U.S., 347 F.3d 394, 397 (2d Cir.2003) (citation omitted). "Legal certainty is analyzed by what appears on the face of the complaint," and subsequent events, including an actual recovery below the minimum jurisdictional amount, are irrelevant. Wolde-Meskel, 166 F.3d at 63. "[E]ven where [the plaintiff's] allegations leave grave doubt about the likelihood of a recovery of the requisite amount, dismissal is not warranted." Zacharia v. Harbor Island Spa, Inc., 684 F.2d 199, 202 (2d Cir. 1982).
No bad faith is asserted against Sanderson by KRT. Sanderson alleges that, on or about March 7, 2011, he entered into a five-year employment contract with KRT, which provided for his termination upon either six-months prior written notice or for cause. Sanderson asserts
"This prima facie showing `must include an averment of facts that, if credited by the ultimate trier of fact, would suffice to establish jurisdiction over the defendant.'" Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 59 (2d Cir.2012) (quoting Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 163 (2d Cir.2010)).
Three requirements must be satisfied for a federal court to have personal jurisdiction: (1) "the plaintiff's service of process upon the defendant must have been procedurally proper"; (2) "there must be a statutory basis for personal jurisdiction that renders such service of process effective"; and (3) "the exercise of personal jurisdiction must comport with constitutional due process principles." Id. at 59-60. "A district court's personal jurisdiction is determined by the law of the state in which the court is located." Spiegel v. Schulmann, 604 F.3d 72, 76 (2d Cir.2010). Here, New York law determines whether personal jurisdiction over KRT is available in New York, the state in which this district court is located.
"By this single act statute ... proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted." Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., 7 N.Y.3d 65, 71, 818 N.Y.S.2d 164, 166-67, 850 N.E.2d 1140 (2006) (quotation marks and citation omitted). Under New York law, "the minimum contact [is characterized] as being `some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'" McKee Elec. Co. v. Rauland-Borg Corp., 20 N.Y.2d 377, 382, 283 N.Y.S.2d 34, 37-38, 229 N.E.2d 604 (1967) (citation omitted). However, "New York's long-arm statute `does not confer jurisdiction in every case where it is constitutionally permissible.'" Ehrenfeld v. Bin Mahfouz, 9 N.Y.3d 501, 512, 851 N.Y.S.2d 381, 389, 881 N.E.2d 830 (2007) (citation omitted).
KRT does not dispute that service was proper. Sanderson does not assert that KRT is subject to general personal jurisdiction, pursuant to CPLR § 301. He asserts that KRT is subject to specific personal jurisdiction, pursuant to CPLR § 302(a)(1). Since no discovery has taken place and no evidentiary hearing has been conducted, Sanderson "may defeat a motion to dismiss based on legally sufficient allegations of jurisdiction." Metropolitan Life Ins. Co., 84 F.3d at 566-67.
Here, Sanderson asserts in his complaint that KRT placed advertisements seeking to fill the executive director position in ArtSearch and ArtsOpportunities, both published by the Theatre Communications Group located in New York. Sanderson applied for the position, "while living in Brooklyn, New York, and domiciled in New York." Although Sanderson's interview for the position occurred in Kentucky, he alleges that during that interview he was told "that KRT defines success in the position of Executive Director in large part as transferring shows between KRT and New York," and by recruiting stars, such as "Diane Wiest, Jesse Green, Michael
Sanderson's allegations establish that KRT transacted business in New York, within the meaning of New York's long-arm statute, when: (i) it advertised for the executive director position in New York; (ii) negotiated Sanderson's employment contract in New York, via telephone and mail; (iii) Sanderson, while in New York, signed the Memorandum of Understanding containing the material terms of the contract and transmitted it to KRT; (iv) it required Sanderson to use his connections to recruit theater industry personnel in New York in order to transfer shows between Kentucky and New York; (v) Sanderson used his connections in New York on behalf of KRT; (vi) Sanderson traveled to New York to hire and hired theater industry personnel in New York, on behalf of KRT; (vii) Sanderson contracted, on behalf of KRT, with Dash Media/PR, a New York public relations firm which obtained media coverage for KRT in New York; (viii) Sanderson brought shows from New York to KRT and from KRT to New York, on behalf of KRT; and (ix) it sent a letter to Sanderson, in New York, terminating his employment contract. Although the contract was executed in Kentucky, its materials terms were negotiated and Sanderson signed a document in New York memorializing them. The contract required that Sanderson perform a substantial number of activities in New York, which he did, on behalf of and with the approval of KRT. Therefore, although KRT did not enter New York, its activities in New York, including negotiating Sanderson's employment contract and the activities Sanderson performed, on KRT's behalf, as part of his executive director's job, were purposeful and a substantial relationship between KRT's New York transactions and Sanderson's claim is asserted in the complaint. See Deutsche Bank Sec., Inc., 7 N.Y.3d at 71, 818 N.Y.S.2d at 166-67, 850 N.E.2d 1140.
KRT does not deny Sanderson's allegations, but contends that his "contacts in New York on behalf of KRT are irrelevant to this action of breach of the employment contract," and "[t]here is absolutely no relationship between KRT, New York and the specific type of litigation involved in this case." However, KRT fails to make citation to any authority for the proposition that "Sanderson's contacts in New York on behalf of KRT are irrelevant to this action of breach of an employment contract by termination," and, more specifically, KRT does not explain why the activities Sanderson performed in New York, under the contract, are irrelevant to determining KRT's contacts with New York and whether it is reasonable for the Court to exercise personal jurisdiction over KRT under the circumstances of this case.
With respect to the due process element of personal jurisdiction, the Court finds that the strength of KRT's contacts with New York was sufficient, such that those contacts justify the Court's exercise of personal jurisdiction over KRT in light of the
Furthermore, although KRT does not contend, in its memorandum of law, that subjecting it to personal jurisdiction in New York would impose any burden on it, KRT contends in its reply memorandum that, "[i]f KRT could not afford to pay Sanderson's salary," as he alleged in the complaint, "it could hardly be expected that KRT, a non-profit organization, could send its non paid board members and other witnesses to New York to testify," and "[a]ny cost to Sanderson to prosecute the case in Kentucky ... is heavily outweighed by the cost of KRT to defend in New York." KRT's attempt to use Sanderson's allegation that KRT could not pay his salary to support its argument that litigating this case in New York would impose a financial burden on KRT is frivolous because KRT's letter terminating Sanderson's employment states that Sanderson was terminated "after a report from [him] that KRT was financially unable to pay [his] salary," which KRT viewed as "slanderous and libelous."
"While the exercise of jurisdiction is favored where the plaintiff has made a threshold showing of minimum contacts at the first stage of the inquiry, it may be defeated where the defendant presents `a compelling case that the presence of some other considerations would render jurisdiction unreasonable.'" Chloé, 616 F.3d at 165 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 2185, 85 L.Ed.2d 528 (1985)). KRT presented no arguments or other considerations that would render jurisdiction unreasonable in the circumstance of this case. Therefore, exercising personal jurisdiction over KRT comports with the Due Process Clause. The Court finds that Sanderson established that KRT is subject to the personal jurisdiction of the Court.
On a motion to dismiss for improper venue, pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure, "[i]f the court chooses to rely on pleadings and affidavits, the plaintiff need only make a prima facie showing of [venue]. But if the court holds an evidentiary hearing ... the plaintiff must demonstrate [venue] by a preponderance of the evidence." Gulf Ins. Co. v. Glasbrenner, 417 F.3d 353, 355 (2d Cir.2005). "The court must take all allegations in the complaint as true, unless contradicted by the defendants' affidavits." McKeown v. Port Authority of New York and New Jersey, 162 F.Supp.2d 173, 183 (S.D.N.Y.2001).
No evidentiary hearing was conducted in connection with this motion. The contract at issue does not contain a forum selection clause. Sanderson asserts a breach of contract claim, namely that KRT breached the contract when it terminated his employment "for cause," by a letter dated December 6, 2011, in contravention to the material terms of the contract, which provided that he can be terminated upon six-months prior written notice or "immediately for cause." The term "cause" is defined by the contract to mean that Sanderson "shall be found guilty of willful misconduct regarding duties under the agreement, dishonesty, or fraud AND OR any offense involving property, reputation, or goodwill of the THEATRE." Sanderson alleges that: (a) he was not provided with six-months prior written notice of his termination; (b) he did not commit or was alleged to have committed any acts enumerated under the term "cause" in the contract; and (c) he was never found guilty of any misconduct enumerated under the term "cause" in the contract. Sanderson's allegations about his efforts to recruit theater industry personnel in New York to perform for KRT and his activities in connection with bringing KRT to New York, are material to establishing that: (i) Sanderson is entitled to damages because he performed under the contract, while KRT did not; and (ii) his termination was wrongful.
KRT's contention that "[a]s an Executive Director, a primary function of his job is to get acts to come to KRT in Kentucky to entertain KRT's patrons" is not supported by any evidence. In addition, no evidence has been presented to support KRT's contention that Sanderson's contacts with New York "were ancillary to the performance of his duties and [sic] Executive Director." Therefore, Sanderson's allegation, that he discharged a substantial part of his duties by conducting various activities in New York, is not contradicted by any evidence and must be taken as true. See McKeown, 162 F.Supp.2d at 183. While the determination to terminate Sanderson's employment, a significant event material to the breach of contract claim, was made in Kentucky, the civil venue statute permits venue in this district as long as a substantial part of the underlying events took place in this district. See Gulf Ins. Co., 417 F.3d at 356. Although the material terms of the contract were negotiated with Sanderson, via telephone and mail, while he was in Brooklyn, New York, which is in the Eastern District of New York, a significant part of the
For the foregoing reasons, the defendant's motion to dismiss the complaint for lack of subject matter jurisdiction, lack of personal jurisdiction and improper venue, Docket Entry No. 6, is denied.
SO ORDERED.
