Peerless Insurance Co. v. Gateway, Inc. et al. (2010)

MEMORANDUM OF DECISION ON MOTION TO DISMISS (# 112)

On October 26, 2010, the court heard oral argument, concerning the defendant Sanyo Energy (Taiwan) Co., Ltd.'s (Sanyo) motion to dismiss the plaintiff's amended complaint (# 111), for lack of personal jurisdiction.   In support of its motion, Sanyo filed a memorandum of law and a document which it termed an “affidavit,” signed by its president, as well as copies of court decisions.   In response, the plaintiff, Peerless Insurance Company (Peerless), filed an objection (# 119) and copies of caselaw.¹  After considering the parties' written submissions and oral arguments, the court issues this memorandum of decision.

I

Background

In count III of the amended complaint (complaint), Peerless alleges that defendant Gateway, Inc. (Gateway) is a Delaware corporation, with a principal place of business in Irvine, California, which, at all times mentioned in the complaint, was lawfully conducting business in Connecticut.   See complaint, count III, ¶ 2.   Prior to March 7, 2007, Peerless issued a policy of insurance to CT Avenue Commons Condominium Association, Inc., which insured against losses to property and business from fire at a condominium complex located in New London, Connecticut (condominium complex).   See complaint, count III, ¶ 4.

On or about March 7, 2007, a fire occurred in Unit A of the condominium complex causing significant damage to its structure.   See complaint, count III, ¶ 5.   The fire was determined to have started within a laptop computer manufactured by Gateway, which was located within Unit A. See complaint, count III, ¶ 6.

Peerless alleges that Gateway “manufactured, and placed into the stream of commerce the laptop computer in which the fire originated and [its] associated electrical components, including a battery pack and cord.”   See complaint, count III, ¶ 7.   Peerless also alleges that Sanyo “manufactured, and placed within the stream of commerce the battery pack and [its] associated electrical components contained within the Gateway computer.”   See complaint, count III, ¶ 8.   Peerless also alleges that Sanyo is a product seller within the definition of General Statutes § 52-572m of the Connecticut Product Liability Act. See complaint, count III, ¶ 9.

Further, Peerless alleges that the Sanyo battery and/or components were defective and unreasonably dangerous and that Sanyo is liable for damages caused by the Gateway computer.   See complaint, count III, ¶¶ 10-11.   In addition, it alleges that the fire was directly and proximately caused by the unreasonably dangerous condition of Sanyo's product.   See complaint, count III, ¶ 12.   It also alleges that as a result, Peerless was obligated to and did pay its insured substantial losses pursuant to the insurance policy, and that it is subrogated to the rights of its insured.   See complaint, count III, ¶ 13.

In its motion to dismiss, Sanyo asserts that, as a foreign corporation, its conduct does not fit within the terms of Connecticut's long-arm statute, General Statutes § 33-929(f).  It also asserts that, even if the court finds that the long-arm statute applies, conferring jurisdiction would violate due process, since Sanyo did not have the necessary minimum contacts with Connecticut.   In response, Peerless claims that the court has jurisdiction over Sanyo pursuant to General Statutes § 33-929(f)(3) and that the necessary minimum contacts exist.

Additional facts are discussed below.

IIStandard Of Review

“The standard of review for a court's decision on a motion to dismiss is well settled.   A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction ․ When a ․ court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light ․ In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader ․ The motion to dismiss ․ admits all facts which are well pleaded, invokes the existing record and must be decided upon that alone.”  (Internal quotation marks omitted.)  Gold v. Rowland, 296 Conn. 186, 200-01, 994 A.2d 106 (2010).

Practice Book Section 10-31(a)(2) provides that “[t]he motion to dismiss shall be used to assert ․ lack of jurisdiction over the person ․” “[The motion to dismiss] shall always be filed with a supporting memorandum of law, and where appropriate, with supporting affidavits as to facts not apparent on the record.”   See Practice Book § 10-31(a).  “[I]f a challenge to the court's personal jurisdiction is raised by a defendant, either by a foreign corporation or by a nonresident individual, the plaintiff must bear the burden of proving the court's jurisdiction ․ [A] challenge to the jurisdiction of the court presents a question of law ․” (Citation omitted;  internal quotation marks omitted.)  Ryan v. Cerullo, 282 Conn. 109, 118, 918 A.2d 867 (2007).

“In view of the dual roles of a motion to dismiss-that is, as a motion to erase and as a plea in abatement-[the Supreme Court] has previously considered the undisputed factual allegations in the complaint as well as the undisputed factual allegations in the various affidavits when adjudicating the motion where no evidentiary hearing has been held.”  (Footnote omitted.)  Knipple v. Viking Communications, Ltd., 236 Conn. 602, 608, 674 A.2d 426 (1996).

“A motion to dismiss may ․ raise issues of fact and would, therefore, require a ․ hearing [to determine the facts] ․ [A]ffidavits are insufficient to determine the facts unless, like the summary judgment, they disclose that no genuine issue as to a material fact exists ․ In almost every setting where important decisions turn on questions of fact, due process requires an opportunity to confront and cross-examine adverse witnesses.”   (Citation omitted;  internal quotation marks omitted.)  Standard Tallow Corp. v. Jowdy, 190 Conn. 48, 56, 459 A.2d 503 (1983).   Here, concerning the motion to dismiss, there are no disputed facts, and neither party requested an evidentiary hearing.   An evidentiary hearing was not required.

“Because an evidentiary hearing was not requested in this case by either party, the trial court properly accept[s] all undisputed factual allegations for the purpose of determining whether the plaintiff sustained [its] burden of proving that the court had personal jurisdiction over the defendant under the long arm statute.”  Walshon v. Ballon Stoll Bader & Nadler, P.C., 121 Conn.App. 366, 371, 996 A.2d 1195 (2010).   Since it is “the plaintiff's burden both to request an evidentiary hearing and to present evidence that establishes disputed factual allegations in support [of] an evidentiary hearing, and the plaintiff failed to do either,” id., here, as discussed below, the court decides the motion on the basis of the allegations in the complaint and on the basis of Sanyo's admissions.

III

Discussion

“When a defendant challenges personal jurisdiction in a motion to dismiss, the court must undertake a two part inquiry to determine the propriety of its exercising such jurisdiction over the defendant.   The trial court must first decide whether the applicable state long-arm statute authorizes the assertion of jurisdiction over the [defendant].   If the statutory requirements [are] met, its second obligation [is] then to decide whether the exercise of jurisdiction over the [defendant] would violate constitutional principles of due process.”   (Internal quotation marks omitted.)  Cogswell v. American Transit Insurance Co., 282 Conn. 505, 514-15, 923 A.2d 638 (2007).

Thus, the court must determine first whether the long-arm statute, General Statutes § 33-929(f)(3), properly applies to Sanyo, and, second, “if the statutory threshold is met, whether the defendant has the requisite minimum contacts with this state sufficient to satisfy constitutional due process concerns.”  Cogswell v. American Transit Insurance Co., supra, 282 Conn. 515.

Section 33-929(f)(3) provides, “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 not 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 as follows:  ․ out of the production, manufacture or distribution of goods by such corporation with the reasonable expectation that such goods are to be used or consumed in this state and are so used or consumed, regardless of how or where the goods were produced, manufactured, marketed or sold or whether or not through the medium of independent contractors or dealers ․” See Thomason v. Chemical Bank, 234 Conn. 281, 296, 661 A.2d 595 (1995) (plaintiff need only demonstrate reasonable forseeability).

As discussed above, for the purposes of adjudicating the motion to dismiss, the court takes the facts to be those alleged in the complaint.   These include that Sanyo manufactured, and placed within the stream of commerce the battery pack and its components contained within the Gateway computer, that Sanyo is a product seller, that the Sanyo battery and/or components were defective and unreasonably dangerous, and that the fire was directly and proximately caused by the unreasonably dangerous condition of Sanyo's product.

In its argument, Peerless also relies on some of the statements made in the “affidavit” of Sanyo's president, Fumitsugu Tachihara, which was submitted in support of Sanyo's motion.   As discussed below, this document, although styled as an affidavit, does not contain the requisite formality of having been sworn to before an officer authorized to administer oaths.

“An ‘affidavit’ is defined as [a] voluntary declaration of facts written down and sworn to by a declarant before an officer authorized to administer oaths ․” (Emphasis added.)  State v. Sunrise Herbal Remedies, Inc., 296 Conn. 556, 571, 2 A.3d 843 (2010).   In Connecticut, notaries public and commissioners of the Superior Court may administer oaths.   See General Statutes §§ 1-24(2), 51-85.   Concerning the taking of an oath, General Statutes § 3-94a(6) provides that “ ‘[o]ath’ or ‘affirmation’ means a notarial act or part thereof in which a notary public certifies that a person has made a vow in the presence of the notary public on penalty of perjury.”

In the absence of an attestation that the declarations contained therein were made under oath before a proper officer, a statement is not an affidavit.   See Willametz v. Susi Contracting Co., 9 Conn.App. 1, 7, 514 A.2d 383, cert. denied, 201 Conn. 814, 517 A.2d 631 (1986).  “[A]lthough it is preferable that every affidavit contain a completed jurat,² the omission of, or a defect in, the jurat does not affect the validity ․ when it is proven by extrinsic evidence that the ․ affidavit was properly sworn to ․” State v. Colon, 230 Conn. 24, 36, 644 A.2d 877 (1994).

No extrinsic evidence has been presented to the court to show that the “affidavit” properly was sworn to before an officer authorized to administer oaths.   Instead, the “affidavit” contains an undated statement signed by the plaintiff's counsel, as a commissioner of the Superior Court, as follows:  “The above information contained in this affidavit has been sworn to be true and accurate by the deponent.”   Clearly, this statement does not say that Mr. Tachihara swore to the truth of the matters stated therein before plaintiff's counsel or before any other officer authorized to administer oaths.   No basis is provided for plaintiff's counsel's statement.   The “affidavit” also does not contain a date or any indication of where the statements were made.   This document is not an affidavit.

Nevertheless, the court has been asked by Peerless to consider parts of it.   The document is signed by Sanyo's president, and was presented by Sanyo.   Connecticut Code of Evidence § 8-3(1) provides a hearsay exception for “[a] statement that is being offered against a party and is (A) the party's own statement, in either an individual or a representative capacity, [or] (B) a statement that the party has adopted or approved ․” “[T]here is no requirement that the statement of a party necessarily be against the party's interest either when made or offered in order to be admissible.”  (Internal quotation marks omitted.)  State v. John F.M., 285 Conn. 528, 540, 940 A.2d 755 (2008).   Here, the statement is not precluded as hearsay, and portions of it may be considered as a statement by a party opponent, since it was made in a representative capacity by Sanyo and was adopted and approved by Sanyo.

Accordingly, as sought by Peerless, in its objection, pages 2, 4, the court has considered parts of the “affidavit.”   In paragraph 3, Tachihara states that Sanyo's principal business is the manufacture of batteries.   In paragraph 9, he states that Gateway is one of Sanyo's customers, and, in paragraph 10, that batteries manufactured by Sanyo are sold to many different customers, including Gateway.

Peerless argues that, pursuant to § 33-929(f)(3), Sanyo knew or reasonably should have known that its goods were to be used or consumed in Connecticut, that its product would find its way into the stream of commerce in Connecticut.   It contends, at page 4 of its objection, that “when Sanyo sells its batteries to Gateway, a United States based corporation which is the third largest personal computer retailer in the world it ․ reasonably should know that the batteries will reach every state in the United States including Connecticut.”   At page 6, the objection states that “Sanyo is a multinational corporation distributing [its] products, including batteries worldwide ․ Gateway sells and distributes computers throughout the United States including Connecticut.   It is a reasonable conclusion that Sanyo delivers [its] batteries into the stream of commerce with the expectation that they will be purchased by consumers in Connecticut as well as other states.”

The allegations that Gateway is the third largest personal computer retailer in the world;  that Gateway sells and distributes computers throughout the United States, including Connecticut;  and that Sanyo is a multinational corporation which distributes its products worldwide, are not contained in the complaint, and are not necessarily implied from the complaint's allegations.   Likewise, they are not admissions found in Tachihara's statement.

Rather, these parts of Peerless' presentation are merely the arguments of counsel, which the court may not consider.  “[R]epresentations of the plaintiff ['s] counsel are not ‘evidence’ and certainly not ‘proof.’  “ Cologne v. Westfarms Associates, 197 Conn. 141, 153, 496 A.2d 476 (1985).  “Statements or comments made by attorneys in the course of ․ argument are not facts in evidence, and may not properly be considered ․” State v. Duntz, 223 Conn. 207, 236, 613 A.2d 224 (1992).

Peerless' reliance on Noon v. Calley and Currier Co., Inc., Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. CV 93 521514 (March 9, 1995, Norko, J.) (14 Conn. L. Rptr. 132), is misplaced.   There, in contrast to the skeletal facts about Sanyo which are set forth above, the third-party plaintiff ESCO was a nationwide distributor of products for a Korean company (Hinomoto), with whom it had a purchasing arrangement for fifteen years.   See id.   Hinomoto knew that ESCO distributed its bolts nationwide, including in 90% of the United States.   The bolt sales of Hinomoto to ESCO equaled 4.6% of Hinomoto's total sales of bolts in the United States.   See id.   The states in which ESCO distributed the devices included Connecticut.   See id., n.1.

From these facts, the Noon court concluded “Hinomoto had a ‘reasonable expectation’ that its bolts would be used in Connecticut ․ Hinomoto may not have actually known that its bolts ended up in Connecticut but it is a reasonable inference that a sale of their bolts to ESCO that resells them to 45 states including directly in Connecticut will generally result in the sale-or at least use-of their bolts in Connecticut.”  Id. Thus, Hinomoto's business practices were found to come within the long-arm statute.   See id.

The record before this court is devoid of similar facts.   While Sanyo sold batteries to Gateway, there are no facts showing that Sanyo should have had a “reasonable expectation that [its] goods are to be used or consumed in this state and are so used or consumed[.]”  See General Statutes § 33-929(f)(3).

For example, the facts here do not show that Sanyo agreed to grant to a nationwide marketing organization an exclusive right to market its product, showing that “it clearly did so with the reasonable expectation that that product would be marketed throughout the United States, and thus that it would reach and be used or consumed in the State of Connecticut.”   Goldstein v. Nutrition Now, Inc., Superior Court, Complex Litigation Docket, judicial district of Waterbury, Docket No. CV 96 0150429 (August 11, 1999, Sheldon, J.).

Similarly, the facts here differ from those in Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 239 (2d Cir.1999) (applying New York long-arm statute), where the facts shown were sufficient to meet the reasonable expectation requirement.   There, a Japanese manufacturer of a hot stamping press had a sales agreement with a Pennsylvania corporation (Kurz-Hastings), under which Kurz-Hastings was granted the exclusive right to sell and promote the manufacturer's products in any country other than 17 specified Asian countries.   See id.   In addition, there was an oral agreement with Kurz-Hastings to manufacture the model of press at issue, and the manufacturer's president's affidavit stated that he had “general knowledge” that Kurz-Hastings would resell the subject machine somewhere in the United States.  Id. The court concluded that the manufacturer did attempt to serve the New York market, even though the agreement did not specify New York, since it permitted the sale of presses throughout the world, except for the specified countries.   See id., 242.   Here, in contrast, the facts do not include a distribution agreement with a specified area of exclusion or evidence of knowledge by Sanyo as to where its products would be sold by Gateway.

Accordingly, Peerless has not met its burden to show that the applicable long-arm statute authorizes the assertion of jurisdiction over Sanyo.   See Cogswell v. American Transit Insurance Co., supra, 282 Conn. 514-15.   Since this statutory requirement is not met, the court need not consider whether the exercise of jurisdiction over Sanyo would violate constitutional principles of due process.   See id.

CONCLUSION

Based on the foregoing reasons, Sanyo's motion to dismiss for lack of personal jurisdiction over Sanyo is granted.   The court's ruling does not pertain to any other defendant;  this matter remains pending as to them.   It is so ordered.

BY THE COURT

ROBERT B. SHAPIRO

JUDGE OF THE SUPERIOR COURT

FOOTNOTES

FN1. Peerless also filed a request for discovery on motion to dismiss (# 118).   At oral argument, this request was withdrawn..  FN1. Peerless also filed a request for discovery on motion to dismiss (# 118).   At oral argument, this request was withdrawn.

FN2. “ ‘Jurat’ means a notarial act in which a notary public certifies that a signatory, whose identity is personally known to the notary public or proven on the basis of satisfactory evidence, has made, in the notary public's presence, a voluntary signature and taken an oath or affirmation vouching for the truthfulness of the signed document.”   See General Statutes § 3-94a(2)..  FN2. “ ‘Jurat’ means a notarial act in which a notary public certifies that a signatory, whose identity is personally known to the notary public or proven on the basis of satisfactory evidence, has made, in the notary public's presence, a voluntary signature and taken an oath or affirmation vouching for the truthfulness of the signed document.”   See General Statutes § 3-94a(2).

Shapiro, Robert B., J.