Memorandum Decision
I. BACKGROUND/FACTS
The plaintiff, Robert Milne, brought this, action against the defendants, Catuogno
After a review of the affidavits that the parties submitted, the Court determined that an evidentiary hearing should be held on the matter of personal jurisdiction. The following relevant facts were obtained from the complaint and all documents submitted therewith, as well as our previous decision dated July 18, 2002 [Doc. 16], and from the evidentiary hearing held on September 80, 2002.
Mr. Catuogno is the owner, President, and Chief Executive Officer of CCRS. Also, he owns Sten-Tel partially with his son, and is its Chief Executive Officer. The plaintiff, a certified public aсcountant, alleges that, from 1986 to 2001, he provided accounting services to the defendants and is owed $31,223.25 in unpaid fees for such services. 1 He claims further that the defendants breached an agreement to pay him a bonus or end-of-service fee of $40,000 upon the sale of CCRS.
Presently, the plaintiff resides in West Hartford, Connecticut. He is an accountant licensed to practice in both Massachusetts and Connecticut. At the time he began doing business with the defendants, the plaintiffs office was located in Springfield, Massachusetts. He later closed that office and provided accounting services to the defendants mostly at their places of business, as well as from his home in Connecticut.
Mr. Milne and Mr. Catuogno were very good friends until the fall of 2001. At that time, their friendship had been irretrievably broken. Consequently, Mr. Catuogno fired Mr. Milne by letter sent to his Connecticut residence dated November 17, 2001. Mr. Catuogno testified that at the time he terminated Mr. Milne’s employ with defendant companies, he owed him an estimated $25,000 in unpaid fees for accounting services rendered. This law suit followed. Additional facts will be set forth as necessary.
II. DISCUSSION
We set forth first the legal principles that guide our resolution of the defendants’ motion to dismiss. This diversity case presents a quеstion of personal jurisdiction over a nonresident individual and two foreign corporations. Whether such entities are amenable to suit in federal court is determined by the law of the state in which the court sits. Fed.R.Civ.P. 4(k)(l)(A);
see also Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez,
The defendants challenge the Court’s jurisdiction in this case. It is, therefore, the plaintiffs burden to prove facts establishing that jurisdiction is proper.
Rosenblit v. Danaher,
A. Long-arm Jurisdiction under Conn. Gen.Stat. § 33-929.
There are two subsections that provide long-arm jurisdiction over foreign corporations in section 33-929: subsections 33-929(e) and (f). Subsection 33-929(e) provides in relevant part: “Every foreign corporation which transacts business in this state in violation of section 33-920 ... shall be subject to suit in this state upon any cause of action arising out of such business.” Subsection 33-929(f) provides in relevant part:
Every foreign corporation shall be subject to suit in this state, by a resident of this state or by a person having a usual place of business in this state, whether or nоt such foreign corporation is transacting or has transacted business in this state and whether or not it is engaged exclusively in interstate or foreign commerce, on any cause of action arising ... (2) out of any business solicited in this state by mail or otherwise if the corporation has repeatedly so solicited business, whether the orders or offers relating thereto were accepted within or without the state ....
We consider now whether either of these statutes applies to Sten-Tel and OCRS.
1. Jurisdiction as to Sten-Tel
In accordance with subsection 33-929(e), we may assert jurisdiction over a foreign corporation only upon proof оf “two conditions: the transaction of business in this state, and a cause of action arising out of the transaction of such business.”
Wilkinson v. Boats Unlimited, Inc.,
(b) The following activities, among others, do not constitute transacting business within the meaning of subsection (a) of this section ... (6) soliciting or obtaining orders, whether by mail or thrоugh employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts.
The plaintiff argues that Sten-Tel transacts business within this state because it has a franchise in Connecticut and provides transcription services to businesses here. 3 We disagree.
Sten-Tel’s franchise in Connecticut is known as Sten-Tel 86. The franchise agreement was entered into in Massachusetts. As part of that agreement, Sten-Tel, on at least one occasion, provided and installed computer equipment for the franchisee, thereby allowing it to perform the same type оf transcription services as Sten-Tel. 4 For this, Sten-Tel billed Sten-Tel 86 for $2,907. There is no evidence that Sten-Tel had any other contact with Sten-Tel 86 in that regard. The franchise agreement requires also that the franchisee pay an annual maintenance fee to Sten-Tel, as well as referral fees to Sten-Tel when it refers customers to Sten-Tel 86. The record contains one bill for maintenance fees in the amount of $500, which covered a time period from February 2, 2000 to January 31, 2001. Absent evidence to the contrary, Sten-Tel has no other contacts with Sten-Tel 86. Further, Sten-Tel has no other franchises in Connecticut; it has nо offices, telephone numbers, employees or offices here, and owns no real property or holds any bank accounts in this state.
The evidence reveals that Sten-Tel’s interactions and/or connections with Sten-Tel 86 were limited in the past to providing and installing a computer system. Its present contacts with Sten-Tel 86 are confined to the collection of maintenance and referral fees. Such isolated and limited contacts between Sten-Tel and its Connecticut franchisee are not sufficient, under the particular circumstances of this case, to extend jurisdiction over Sten-Tel. See
Hospitality Sys.,
The plaintiff claims further that by providing telephonic transcription services to businesses in Connecticut, Sten-Tel is transacting business here. Customers utilize Sten-Tel’s sеrvices by dialing a
The record contains insufficient evidence of how often or to what Connecticut businesses Sten-Tel provided such services.
6
Absent such evidence, and based on Connecticut’s somewhat narrow interprеtation of what constitutes transacting business, the plaintiff has failed to show by a preponderance of the evidence that Sten-Tel’s activities amounted to transacting business within subsection 33-929(e).
See Chemical Trading,
Additionally, the plaintiff argues further that because Sten-Tel advertises via an internet web site, it is transacting business under subsection 33-929(e). Based on our discussion below, we find that such solicitation of business falls within one of the enumerated exceptions to “transacting business” in section 33-920. Specifically, section 33—920(b)(6) excludes, “solicitation or obtaining orders ... if the orders require acceptance outside this state before they becоme contracts.... ” Personal jurisdiction over Sten-Tel, therefore, does not lie under subsection 33-929(e). We turn now to jurisdiction under subsection 33—929(f)(2).
The Connecticut Supreme Court has held that, under section 33—929(f)(2), a cause of action “arising ... out of’ a defendant foreign corporation’s contacts with this state “does not require that the cause of action and the contacts be causally connected.”
Thomason v. Chemical Bank,
We will assume that the plaintiff demonstrated that the dеfendant “could reasonably have anticipated being haled into court here by some person who had been solicited in Connecticut and that the plaintiffs cause of action is not materially different from an action that might have resulted directly from that solicitation.” Id. Nevertheless, the plaintiff has failed to show that Sten-Tel has repeatedly so solicited business in this state, as the statute requires.
The only facts the plaintiff avers in support of his solicitation argument is that Sten-Tel advertises its services via an in
Sten-Tel’s web site is passive and informational in nature. “There is no evidence that any user in Connecticut accessed [Sten-Tel’s] Web site or purchased [services] based upon the Web site advertisement. There is also no evidence that this Web site advertisement was directed at Connecticut anymore than anyplace else in the nation.”
Edberg v. Neogen Corp.,
Having determined that Connecticut’s long-arm statutes do not extend to Sten-Tel’s activities in this state, we lack personal jurisdiction over it. We turn now to the question of jurisdiction as it pertains to CCRS.
2. Jurisdiction as to CCRS
At the outset, we note that our basis for estаblishing jurisdiction over CCRS is Conn. GemStat. § 33-929(f)(2) and, therefore, we need not address subsection 33 — 929(e).
Applying subsection 33-929(f)(2) to the following facts demonstrates that “the defendant could reasonably have anticipated being haled into court here by
some person who had been solicited
in Connecticut and that the plaintiffs cause of action is not materially different from an action that might have resulted directly from that solicitation.”
Thomason,
At the time CCRS advertised its services in Connecticut through telephone listings, magazine publications and personal solicitation, it was foreseeable that at least one Connecticut business would re
Having determined as such, we consider next whether CCRS has “repeatedly so solicited” business in Connecticut. CCRS has performed, and continues to perform, transcription services for a number of Connecticut businesses. The defendant’s activities can be “characterized as affirmative measures designed to attract Connecticut customers in that they constitute the creation of an organizational network that is likely to prompt a significant number of Connecticut” medical and legal professionals, as well as insurance companies, to place business with CCRS.
Thomason,
Consequently, Conn. Gen.Stat. § 33-929(f)(2) brings CCRS within the personal jurisdiction of this state. We examine next whether section 52-59b reaches Mr. Catuogno.
3. Jurisdiction as to Mr. Catuogno
Section 52-59b confers jurisdiction over nonresident individuals upon Connecticut courts, and this court, provided certain conditions are met. It provides in relevant part: “(a) As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nonresident individual ... who in person or through an agent: (1) Transacts any business within the state....” The Connecticut Supreme Court construes the term “ ‘transacts any business’ to embrace a single purposeful business transaction.”
Zartolas v. Nisenfeld,
Because the plaintiff relies on the same jurisdictional theories to assert jurisdiction over Mr. Catuogno as he did to assert jurisdiction over CCRS and Sten-Tel, he has failed to allege facts necessary to satisfy the requirements of section 52-59b.
Accordingly, in the absence of facts showing that Mr. Catuogno conducted any business other than through the businesses he controlled, he is not subject to personal jurisdiction under section 52-59b. Because we find that the plaintiff has failed to show by a preponderance of the evidence that Connecticut’s longarm statutes reach Sten-Tel and Mr. Catuogno, our jurisdictional inquiry ends in that regard. Having determined, however, that Conn. Gen.Stat. § 33 — 929(f)(2) extends Connecticut’s jurisdiction to the defendant CCRS, we turn now to whether asserting such jurisdiction offends constitutional principles of due process.
B. Federal Due Process
The due process clause permits “in personam jurisdiction over a nonresident corporate defendant that has certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.”
Thomason,
The following facts establish that CCRS’s contacts with this state satisfy the minimum contacts component of thе due process analysis. CCRS actively solicited business from insurance companies in Connecticut. For example, on behalf of CCRS, Mr. Catuogno traveled to Connect icut and personally solicited business from AETNA. Such solicitation continued through CCRS’s agent, an insurance specialist, whose job was to procure business from insurance companies in Connecticut. Presently, at least one insurance company, The Hartford, does business with CCRS. CCRS’s focus, however, has not been confined to insurance companies. It has solicited staff members of various medical facilities located in Connecticut through magazinе publications received there. CCRS has provided services to several such facilities throughout the Hartford, Connecticut area. CCRS solicits business also from many law firms within this state; it does business for many of them as well. “On a very occasional basis,” CCRS has sent one of its court'reporters into Connecticut to provide services to law firms located here. (Def.’s Aff. Ex. A. at 1). Furthermore, CCRS has maintained a Hartford telephone number listing for the convenience of Connecticut businesses since 1984, and rented office space here to accommodate its clients. 7
Though CCRS hired the plaintiff when he resided in Massachusetts, he hаs lived in Connecticut since 1989. CCRS, therefore, knowingly employed a resident of this state for over a decade. Mr. Catuogno admits to having telephoned the plaintiff at his home in Connecticut to discuss business, but claims that such conversations were rare and not of an appreciable nature; he engaged in such conduct nevertheless. Finally, Mr. Catuogno fired the plaintiff from his employ with the defendants by letter sent to his home here.
The plaintiff argues that the defendant’s interactions with Connecticut residents and businesses should subject it to general jurisdiction in this case. CCRS’s contacts, however, have not been of the “continuоus and systematic” nature necessary to confer such broad jurisdiction. See
Helicopteros,
The defendant’s contacts with Connecticut “are not the kind of random, fortuitous, or attenuated contacts or unilateral activity of another party or a third person that the purposeful availment requirement is designed to eliminate as a basis for juris
Based on the totality of the circumstances, CCRS has purposely availed itself of the rights and privileges of this state by soliciting and conducting business here, and through its volitional use of a Connecticut accountant. Further, the defendant’s activities here demonstrate a relationship among the defendant, the forum, and the litigation.
See Helicopteros,
The second part of the jurisdictional analysis asks whether the assertion of personal jurisdiction comports with “traditional notions of fair play and substantial justice” — that is, whether it is reasonable under the circumstances of the particular case. Courts are to consider five factors in evaluating reasonableness: (1) the burden that the exercise of jurisdiction will impose on the defendant, (2) the interests of the forum state in adjudicating the case; (3) the plaintiffs interest in obtaining convenient and effeсtive relief; (4) the interstate judicial system’s interest in obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states in furthering substantive social policies. Where a plaintiff makes the threshold showing of the minimum contacts required for the first test, a defendant must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable. The import of the “reasonableness” inquiry varies inversely with the strength of the “minimum contacts” showing-a strong (or weak) showing by the plaintiff on “minimum contacts” reduces (or increases) the weight given to ‘reasonableness.’
See Bank Brussels Lambert,
We consider now each reasonableness factor separately.
1. Burden on the Defendant.
The defendant claims that defending a lawsuit here would result in “unwarranted expense and inconvenience” and that it is “patently unfair to require [him] and [CCRS] to respond to litigation in a foreign state where no appreciable business was conducted.” Def.’s Aff. at 2. The defendant supports his argument by stating that both the law firm he does business with and his office are located two blocks from the federal court house in Springfield. We recognize that it would be much more convenient for the defendant to litigate this matter in Springfield, but that does not compel a finding that it is unreasonable for this court assert its jurisdiction. It is always inconvenient and а burden for any party to defendant a lawsuit. Such a burden, however, is not exacerbated by the fact that a more convenient location exists for the defendant. This
2. Interests of Forum State
Connecticut has a “manifest interest in providing effective means of redress for its residents.”
Hallwood Realty Partners, L.P. v. Gotham Partners, L.P.,
3. Interests of Plaintiff in Obtaining Convenient and Effective Relief
Litigating in this state would be obviously more convenient for the plaintiff. “The plaintiffs choice of forum is the best indicator of his own convenience.”
Scott v. Jones,
A Efficient Administration of Justice
“In evaluating this factor, courts generally consider where witnesses and evidence are likely to be located.”
Robertson-Ceco Corp.,
5. Policy Arguments
“This factor requires us to consider the common interests of the several states in promoting substantive social policies.”
Kernan v. Kurz-Hastings, Inc.,
Our consideration of the reasonableness factors shows that they weigh more in favor of asserting jurisdiction over the defendant. The facts of this case simply do not present the sort of “exceptional situation envisaged by the Court in
Burger King,”
whereby asserting jurisdiction would be unreasonable.
Robertson-Ceco Corp.,
III. CONCLUSION
Because CCRS’s activities bring it within the personal jurisdictional reach of Connecticut’s long-arm statute, and the exercise of this jurisdiction is consistent with federal due process, CCRS is subject to suit in this Court. Consequently, the motion to dismiss CCRS for lack of personal jurisdiction [Doc. 5] is DENIED. Additionally, because Connecticut’s long-arm statutes do not reach the defendants, Sten-Tel and Mr. Catuogno, their motion to dismiss for lack of personal jurisdiction [Doc. 5] is GRANTED.
Notes
. At the evidentiary hearing, the plaintiff stated the amount of unpaid fees in question relates to services he provided to the defendants after 1992, and not before that time.
. The plaintiff incorrectly argues that Conn.
. The plaintiff alleges other facts in support of his claim that Sten-Tel is subject to jurisdiction in Connecticut. For instance, he asserts that Sten-Tel has franchises in other states and hired a Connecticut law firm at one time. Further, he claims that Mr. Catuogno "touted" Sten-Tel to him as a nationwide company. Such assertions lend no support to the plaintiff's claim.
. The plaintiff argues that Sten-Tel is subject to jurisdiction in this state under Conn. Gen. Stat. § 52-59b(a)(5) for setting up a computer network at the location of Sten-Tel 86. As we have stated already, that that statute does not apply to foreign corporations. See supra note 2. Further, thе plaintiff presented no evidence or authority showing that the computer system Sten-Tel provided and installed for Sten-Tel 86 was a "computer network” as defined in Conn. Gen.Stat. § 33-451.
. Typists are located throughout the United States. None, however, are located in Connecticut.
. We recognize that the plaintiff claims that CCRS has done business as Sten-Tel, but in suing Sten-Tel as an independent corporation, the plaintiff must show facts sufficient to support jurisdiction over it.
. The parties dispute the length of time that CCRS rented office space in Connecticut. The defendants claim it was for only 18 months, while the plaintiff asserts it was for several years. We will assume it was for the lesser time of 18 months.
