SK's Cosmetic Boutique, Inc. v. J.R. Silverberg Realty, LLC

Background

SK’s Cosmetic Boutique Inc. and Susan Keane sued J.R. Silverberg Realty, LLC, and the Estate of Jeroll Silverberg. The claims were for promissory estoppel and prima facie tort. The plaintiffs alleged that SK’s Cosmetic entered into a five-year lease for a storefront in New Canaan, Connecticut, and later negotiated a second lease. They alleged that J.R. Silverberg assured Keane it would not rent nearby vacant properties to a competing business. After the second lease began, J.R. Silverberg allegedly rented a nearby Connecticut property to Greenwich Pharmacy and Spa, which plaintiffs described as a copy of their business.

The plaintiffs originally filed the case in New York state court on February 10, 2020. Defendants removed it to federal court based on diversity jurisdiction. Defendants then filed an unopposed motion to dismiss under Federal Rules of Civil Procedure 12(b)(2), 12(b)(5), and 12(b)(6). Rule 12(b)(2) concerns personal jurisdiction, meaning the court’s power over a defendant. Rule 12(b)(5) concerns insufficient service of process. Rule 12(b)(6) concerns whether the complaint states a legally sufficient claim.

Service of Process

The court declined to dismiss for insufficient service because defendants’ motion was premature. Under New York law, plaintiffs had 120 days after starting the case to serve defendants. Because the case began on February 10, 2020, the service deadline was June 9, 2020, but defendants filed their motion on April 21, 2020.

Personal Jurisdiction Over J.R. Silverberg

The court dismissed the claims against J.R. Silverberg for lack of personal jurisdiction. In a diversity case, the court first applies the forum state’s jurisdictional law and then considers constitutional due-process requirements if the state-law requirements are met.

The court found that the complaint did not plausibly establish jurisdiction under any provision of New York’s long-arm statute. The allegation that J.R. Silverberg regularly did business in New York was conclusory and lacked factual detail. Defendants submitted a declaration stating that J.R. Silverberg did not own property or conduct business outside Connecticut, had never done business in New York, and had never owned property there. Plaintiffs submitted no affidavits or other evidence to contradict those statements.

The court also found no basis for jurisdiction based on a tort committed in New York or a tort committed elsewhere that caused injury in New York. The alleged decision to rent a nearby Connecticut storefront to a competitor occurred in Connecticut, and the alleged injury was to plaintiffs’ business in Connecticut. Because New York’s jurisdictional requirements were not satisfied, the court did not reach the separate due-process inquiry.

Claims Against the Estate

The court also dismissed the claims against the Estate under Rule 12(b)(6). Rule 17(b) provides that the capacity of a nonindividual, noncorporate party to sue or be sued is determined by the law of the state where the court is located. Applying New York law, the court held that an estate is not a legal entity capable of being sued. An action involving an estate must instead be brought by or against the executor or administrator in that person’s representative capacity. Because plaintiffs sued the Estate rather than an executor or administrator in a representative capacity, the claims against the Estate had to be dismissed.

Disposition

Judge Vincent L. Briccetti granted defendants’ motion to dismiss. The court instructed the Clerk to terminate the motion and close the case. The opinion does not state that the dismissal was with or without prejudice.