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Gianetti v. Teakwood, Ltd.

United States District Court, D. Connecticut

March 25, 2019

CHARLES GIANETTI, Plaintiff,
v.
TEAKWOOD, LTD., et al., Defendants.

          ORDER ON MOTION TO DISMISS

          STEFAN R. UNDERHILL UNITED STATES DISTRICT JUDGE

         Charles Gianetti (“Gianetti”) filed a fourteen-count suit against the following defendants: Teakwood, Ltd., David Houze, Todd Fentress, 256 Enterprises, Inc., Heritages Resources, Inc., Jack D'Aurora, and Robert J. Behal, alleging: fraudulent concealment and misrepresentation (Count I); conspiracy to commit fraud (Count II); conspiracy to commit fraud by non-disclosure (Count III); negligent misrepresentation (Count IV); professional negligence (Count V); breach of fiduciary duty (Count VI); breach of contract (Count VII); breach of the covenant of good faith and fair dealing (Count VIII); negligent misrepresentation (Count IX); action for discovery (Count X); accounting (Count XI); personal liability for damages (Count XII); disregard of business entity (Count XIII); and successor liability (XIV).

         Defendants argue that the District of Connecticut does not have personal jurisdiction to consider Gianetti's claims against them, and that venue is improper here. Gianetti argues that jurisdiction and venue are both proper. For the following reasons, the motion to dismiss is GRANTED.

         I. Standard of Review

         1. Lack of Personal Jurisdiction

         A plaintiff bears the burden of showing that the court has personal jurisdiction over each defendant. Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996). Where, as here, there has been no discovery on jurisdictional issues and the court is relying solely on the parties' pleadings and affidavits, the plaintiff need only make a prima facie showing that the court possesses personal jurisdiction over the defendant. Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999).

         In diversity cases, courts apply the forum state's law to determine whether the court has personal jurisdiction over a defendant. Arrowsmith v. United Press International, 20 F.2d 219, 223 (2d Cir. 1963). “Connecticut utilizes a familiar two-step analysis to determine if a court has personal jurisdiction. First, the court must determine if the state's long-arm statute reaches the foreign corporation. Second, if the statute does reach the corporation, then the court must decide whether that exercise of jurisdiction offends due process.” Bensmiller v. E.I. Dupont de Nemours & Co., 47 F.3d 79, 81 (2d Cir. 1995) (citing Green v. Sha-Na-Na, 637 F.Supp. 591, 595 (D. Conn. 1986)).

         2. Improper Venue

         The same standard of review is applied to a motion to dismiss for improper venue under Federal Rule of Civil Procedure 12(b)(3) as is applied to dismissals for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). Gulf Ins. Co. v. Glasbrenner, 417 F.3d 353, 355 (2d Cir. 2005). Although the plaintiff bears the burden of demonstrating that venue is proper, Indymac Mortg. Holdings, Inc. v. Reyad, 167 F.Supp.2d 222, 237 (D. Conn. 2001), the plaintiff need only make a prima facie showing of venue if the court relies only on pleadings and affidavits to evaluate the propriety of the forum. Gulf Ins. Co., 417 F.3d at 355 (citing with alteration CutCo Indus. v. Naughton, 806 F.2d 361, 364-65 (2d Cir. 1986). When proceeding on the pleadings and affidavits, the court “must draw all reasonable inferences and resolve all factual conflicts in favor of the plaintiff.” Phillips v. Audio Active Ltd., 494 F.3d 378, 384 (2d Cir. 2007); see also U.S. Envtl. Prot. Agency v. Port Auth. of N.Y. & N.J., 162 F.Supp.2d 173, 183 (S.D.N.Y. 2001) (citing 5B Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1352 (Apr. 2015 Supp.)). If a district court determines that venue is not proper, it may dismiss the case or transfer it to any district in which the case could have been brought. 28 U.S.C. § 1406(a) (2006); see also Minette v. Time Warner, 997 F.2d 1023, 1026 (2d Cir. 1993); but see Gonzalez v. Hasty, 651 F.3d 318, 324 (2d Cir. 2011) (district court should avoid transferring a case that is a “sure loser.” (citing Moreno-Bravo v. Gonzales, 463 F.3d 253, 263 (2d Cir. 2006)).

         II. Background

         The following facts are drawn from the Amended Complaint, Doc. No. 1 (“Am. Compl.”). The claims at issue arise out of Gianetti's interest in Discovery 76, a limited partnership and owner of real estate parcels around Columbus, Ohio. Am. Compl. at ¶¶ 14-15.

         In 1976, Gianetti, a resident of Connecticut, became a limited partner in Discovery 76, a company whose inhabitants received rental subsidies. Id. Gianetti obtained his partnership interest in Discovery 76 as an investment and tax shelter sold through Shearson Hayden Stone, a brokerage company located in Greenwich, Connecticut. Id. at ¶ 15.

         Gianetti attempted to convince Discovery 76 to sell its assets in the real estate but was unsuccessful. Id. at ¶ 26. In December 2003, Discovery 76 was terminated and merged with an LLC known as Teakwood, Ltd., a named defendant in this case. Id. at ¶ 22. Gianetti was informed that his interest in Discovery 76 was now worthless. Id. at ¶ 26.

         Gianetti filed a complaint on March 30, 2018, Doc. No. 1, and an amended complaint on April 16, 2018, Doc. No. 6. Defendants filed their motion to dismiss the amended complaint on August 13, 2018, Doc. No. 13. Gianetti opposed the motion on September ...


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