Henkin v. Gibraltar Private Bank & Tr. Co.

EDWARD R. HENKIN, Plaintiff, v. GIBRALTAR PRIVATE BANK & TRUST COMPANY, Defendant.

CV 16-5452

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

January 22, 2018

MEMORANDUM AND ORDER

(Wexler, J.)

APPEARANCES:

ARONOW LAW P.C.

By: Darren Aronow, Esq.

20 Crossways Park Drive, North Suite 210

Woodbury, New York 11797

and

BAXTER & BAXTER, LLP

By: Justin Baxter, Esq.

8835 S.W. Canyon Lane, Suite 130

Portland, Oregon 97225

Attorneys for Plaintiff

BUCKLEY SANDLER LLP

By: Ross E. Morrison, Esq. and Dana W. Kumar, Esq.

1133 Avenue of the Americas, Suite 3100

New York, New York 10036

Attorneys for Defendant

WEXLER, District Judge:

Plaintiff Edward R. Henkin ("Henkin" or "Plaintiff") commenced this action alleging two violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., by defendant Gibraltar Private Bank & Trust Company ("Gibraltar" or "Defendant"). Currently before the Court is defendant's motion to dismiss the complaint for lack of personal jurisdiction pursuant to Rule 12(b)(2), or alternatively, for improper venue pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure. Motion, Docket Entry ("DE") [27]. Plaintiff opposes the motion, but requests in the alternative that the matter be transferred.

I. BACKGROUND

The facts taken from the complaint are assumed to be true for the purpose of this motion. Plaintiff is a natural person who resides in Suffolk County, New York, and is a "consumer" within the meaning of the FCRA. Gibraltar is a "furnisher of credit information" within the meaning of the FCRA with its headquarters in Coral Gables, Florida. It is duly authorized and qualified to do business in New York and maintains a branch location at 280 Park Avenue, 29^th Floor East, New York, New York.

On December 6, 2007, Henkin and non-party Susan Henkin obtained a second lien loan ("the Loan") from Gibraltar. Attached to the complaint is a Home Equity Line of Credit Note, dated December 6, 2007 and showing a line of credit of $358,000, which was recorded on February 19, 2008 in Miami-Dade County, Florida. The copy of the Note attached to the complaint appears to be incomplete, consisting of a single page. There is no indication where the agreement was signed or negotiated, nor are there any factual allegations in the complaint regarding these issues. In addition, the Property Address on the Note has been redacted and the complaint does not indicate where the property securing the loan was located,

The Loan was paid as shown in a Satisfaction of Mortgage dated May 29, 2013 executed by Gibraltar and recorded on June 4, 2013 in Miami-Dade County, Florida. Compl. Ex. A ("Satisfaction"). Despite the Satisfaction, Defendant continued to report the mortgage loan as delinquent on Henkin's credit report. On October 1, 2014, Plaintiff sent a letter to Defendant and the three major credit bureaus "disputing the manner in which the loan was being reported."The Complaint annexes an Experian report dated March 18, 2015 that shows the loan as "written off" or "paid in full for less than full balance" and indicating that the account would continue on the record until September 2017. Plaintiff alleges that despite being put on notice of the Satisfaction, Gibraltar continued to report the loan as delinquent and verified the debt to the credit bureaus.

As a result of Defendant's actions including inaccurate reporting of delinquencies, Plaintiff was denied credit. He alleges that he was unable to obtain a conventional mortgage and as a result "was forced to sell his family home." He does not indicate where the family home was located. Plaintiff claims actual damages of $269,753.00 plus continuing interest payments as well as damages for inter alia, costs for credit repair and monitoring, liquidation of assets, detriment to his credit rating, and emotional distress from embarrassment and humiliation.

II. DISMISSAL FOR LACK OF PERSONAL JURISDICTION

A. Legal Standards

When opposing a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2), plaintiff bears the burden of showing that the court has jurisdiction over the defendant. Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996). Before discovery has been conducted, "a plaintiff challenged by a jurisdiction testing motion may defeat the motion by pleading in good faith, legally sufficient allegations of jurisdiction. At that preliminary stage, the plaintiff's prima facie showing may be established solely by allegations." Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d 81, 84-85 (2d Cir. 2013) (quoting Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990)); see also Thomas v. Ashcroft, 470 F.3d 491, 495 (2d Cir. 2006) ("In order to survive a motion to dismiss for lack of personaljurisdiction, a plaintiff must make a prima facie showing that jurisdiction exists."). Plaintiff may also make a prima facie showing through his "own affidavits and supporting materials containing an averment of the facts" that would support the court's exercise of jurisdiction. Whitaker v. Am. Telecasting Inc., 261 F.3d 196, 208 (2d Cir. 2001) (internal quotation and citation omitted). Here, only Defendant has submitted an affidavit, but at this juncture, the Court may assess only Plaintiff's submissions "notwithstanding any controverting presentation by [defendant]." Dorchester, 722 F.3d at 86 (quoting Marine Midland Bank v. Miller, 664 F.2d 899, 904 (2d Cir. 1981)).

In federal question cases where the federal statute at issue does not contain its own jurisdictional provision, personal jurisdiction is determined in accordance with the laws of the forum state. Penguin Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 35 (2d Cir. 2010); see also Shostack v. Diller, No. 15CIV2255, 2016 WL 958687, at *2 (S.D.N.Y. Mar. 8, 2016) (determining personal jurisdiction under New York law in federal question case alleging claims under, inter alia, the FCRA). Courts may exercise either general or specific personal jurisdiction. "General jurisdiction allows a court to adjudicate 'any and all' claims against a defendant, regardless of whether the claims are connected to the forum state." Bonkowski v. HP Hood LLC, 2016 WL 4536868, at *2 (E.D.N.Y. Aug. 30, 2016) (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 131 S. Ct. 2846, 180 L.Ed.2d 796 (2011); Brown v. Lockheed Martin Corp., 814 F.3d 619, 624 (2d Cir. 2016)). "Specific jurisdiction exists when 'a State exercises personal jurisdiction over a defendant in a suit arising out of or related to the defendant's contacts with the forum.'" Chloé v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 164 (2d Cir. 2010) (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408,414 & n. 8, 104 S. Ct. 1868, 80 L.Ed.2d 404 (1984)). The exercise of personal jurisdiction, whether general or specific, must comport with requirements of Due Process, "which requires that any jurisdictional exercise be consistent with 'traditional notions of fair play and substantial justice.'" Brown, 814 F.3d at 625 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L.Ed. 95 (1945)). Plaintiff claims that this Court has personal jurisdiction over Defendant pursuant to both New York's general jurisdiction provision, Civil Practice Law and Rules ("CPLR") §301 and its long-arm statute, CPLR §302(a).

B. General Jurisdiction

General jurisdiction over a foreign corporation may be found under CPLR §301 if that corporation "has engaged in such a continuous and systematic course of 'doing business' here that a finding of its 'presence' in this jurisdiction is warranted." Landoil Resources Corp. v. Alexander & Alexander Servs., 77 N.Y.2d 28, 33, 563 N.Y.S.2d 739, 565 N.E.2d 488 (1990). New York's jurisprudence regarding the "doing business" standard has been put into serious question by the Supreme Court's ruling in Daimler AG v. Bauman, -- U.S. --, 134 S. Ct. 746, 187 L. Ed. 2d 624 (2014). After Daimler, the inquiry is "not whether a foreign corporation's in-forum contacts can be said to be in some sense 'continuous and systematic,' it is whether that corporation's 'affiliations with the State are so 'continuous and systematic' as to render [it] essentially at home in the forum State.'" Daimler AG, 134 S. Ct. at 761 (quoting Goodyear, 564 U.S. at 920). The Second Circuit has determined that under Daimler, "except in a truly 'exceptional' case, a corporate defendant may be treated as 'essentially at home' only where it is incorporated or maintains its principal place of business." Brown, 814 F.3d at 627 (2d Cir. 2016); see also Gucci Am., Inc. v. Weixing Li, 768 F.3d 122, 136 (2d Cir. 2014) (noting thatprior to Daimler, existence of NY branch would have been sufficient "because through the activity of its New York branch, it engaged in a continuous and systematic course of doing business in New York").

Here, Gibraltar's principal place of business is Florida, and thus it is "essentially at home" only in that jurisdiction. As such, there can only be general jurisdiction over Defendant if this is an "exceptional case" in which Gibraltar's operations in New York are "so substantial and of such a nature as to render the corporation at home" in the state. Daimler AG, 134 S. Ct. at 761, n.19. In assessing the extent of a party's contacts in New York, the court examines those contacts "not in isolation but in the context of the company's overall activity." Brown, 814 F.3d at 629 (emphasis in original). Plaintiff's lone allegation regarding Gibraltar's contacts with New York is the claim that it has a single branch office in New York that is authorized to do business in the state.¹ As this evidence is clearly insufficient to carry Plaintiff's burden of showing that Gibraltar's contacts constitute an "exceptional case," there is no general jurisdiction over the Defendant.

Plaintiff argues that as a national association, Gibraltar's "place of incorporation is the United States," including New...