LeGarie v. Nurse

Background

Warren LeGarie and LeGarie Management, Inc. sued Nicholas David Nurse. LeGarie is identified as a California resident, and LeGarie Management, Inc. is identified as a California corporation based in San Francisco. The plaintiffs alleged that Nurse breached an oral agreement to pay them a commission for LeGarie’s representation of Nurse in connection with Nurse’s 2020 contract to serve as head coach of the Toronto Raptors.

The relationship began in 2013, when Nurse contacted LeGarie about representing him in connection with a possible assistant-coaching position. The alleged agreement had no written contract and continued from 2013 to 2020. LeGarie stated that he performed 90 percent of his work for Nurse in San Francisco, sent invoices from the company’s San Francisco address, and received payments by checks and wire transfers to California. Nurse stated that he had never been a California resident, owned no California property, worked or maintained an office there, or conducted business there, although he had traveled to California for coaching-related activities.

Motion to Dismiss

Nurse moved under Federal Rule of Civil Procedure 12(b)(2) to dismiss for lack of personal jurisdiction, under Rule 12(b)(3) to dismiss for improper venue, and under Rule 12(b)(6) to dismiss Claim Five, the accounting claim, for failure to state a claim.

Personal Jurisdiction

The court addressed specific jurisdiction because the plaintiffs did not dispute that general jurisdiction was absent. Specific jurisdiction requires purposeful availment or purposeful direction, a claim arising from the defendant’s forum-related activities, and a reasonable exercise of jurisdiction consistent with fair play and substantial justice.

The court found that Nurse purposefully availed himself of the privilege of conducting business in California. Although Nurse’s initial telephone contact with LeGarie and the mere existence of a contract with a California resident were not enough by themselves, the court relied on the parties’ anticipated continuing relationship, the seven-year course of dealing, payments sent to California, and LeGarie’s substantial California-based work for Nurse. The court also found that the plaintiffs’ claims arose from Nurse’s California-related activities because, without the ongoing agreement with a California-based agent who performed most of the work in California, the contract claims would not have arisen.

The court then considered whether exercising jurisdiction would be reasonable. It found that Nurse had not shown a compelling case that litigating in California would be unreasonable. The court concluded that specific jurisdiction existed over Nurse and therefore denied the motion to dismiss for lack of personal jurisdiction.

Venue

The court applied 28 U.S.C. § 1391(b), which permits a civil action to be filed where a substantial part of the events giving rise to the claims occurred. Nurse did not reside in the district, but the court found that substantial events occurred there. LeGarie lived there, his company was based there, and he stated that he performed 90 percent of the work under the agreement there. The court therefore found venue proper in the Northern District of California and denied the venue challenge.

Accounting Claim

The court held that the plaintiffs’ request for an accounting was not properly asserted as a separate cause of action under California law. It granted the motion as to Claim Five. In its analysis, the court stated that Claim Five would be dismissed without leave to amend but without prejudice to the plaintiffs’ seeking an accounting as a remedy connected to their remaining claims. However, the order’s conclusion states that Claim Five was dismissed with prejudice.

Disposition

The court denied Nurse’s challenges to personal jurisdiction and venue and granted the motion with respect to Claim Five. The order did not decide whether Nurse actually breached the alleged oral agreement or whether the plaintiffs were entitled to commissions.