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IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN REKK DIVINE DESTINATIONS, LLC, ) CASE NO. ST-2013-CV-307 ) Plaintiff, ) ACTION FOR: TORTIOUS v. ) INTERFERENCE OF CONTRACTUAL ) RELATIONSHIPS, BREACH OF DESTINATION BON VOYAGE, LLC __) CONTRACT, BREACH OF IMPLIED d/b/a) MAX TRAVEL, CONUNDRUM __) COVENANT OF GOOD FAITH AND MARKETING, LLC, BRADLEY G. ) FAIR DEALING, and SISNEROS, ADRIANA SISNEROS, ) PUNITIVE DAMAGES MICHAEL G. SISNEROS, THEODORE ) THORNTON, LAWRENCE DURKEY, ) JURY TRIAL DEMANDED JOHN BARZE, ALEXEY DUBOVOY, _) ANGEL DUBOVOU, WALTER D. ) MCPHERSON, NANCY M. HICKS, ) MEMBER SERVICES GROUP, INC., _) MARK WISNIEWSKI, and ) JOHN DOES 1-5, ) Defendants. _) MEMORANDUM OPINION Before the Court is a Motion and Memorandum to Dismiss for Lack of Personal Jurisdiction Pursuant to Fed. R. Civ. P. 12(b)(2) (the “Motion”), which was filed by eight of the fourteen Defendants. The moving Defendants are Destination Bon Voyage, LLC (“Bon Voyage”), Michael Sisneros (“Sisneros”), John Barze (“Barze”), Alexey Dubovoy, Angel Dubovou,' Walther D. McPherson (“McPherson”), Nancy M. Hicks (“Hicks”), Member Services Group, Inc. (“Member Services Group”), and Mark Wisniewski (“Wisniewski”) (collectively, the “Movants”).” Plaintiff has not filed a response in opposition. Plaintiff has failed to state a prima facie case for the exercise of personal jurisdiction over any of the Movants, and consequently, this Court cannot exercise personal jurisdiction over the Movants. The Motion will be granted, and all claims against the Movants will be dismissed. BACKGROUND This is an action for tortious interference with contractual relations, breach of contract, and breach of implied covenant of good faith and fair dealing that was filed by Plaintiff on June 21, 2013. Plaintiff purports to allege seventeen causes of action‘ that are premised on the interpretation ' The caption of Plaintiff's Complaint identifies this defendant as “Angel Dubovou,” but the body of the Complaint consistently refers to this defendant as “Angel Wild Dubovoy.” Consistent with the caption of Plaintiff's Complaint, this Memorandum Opinion will refer to this defendant as “Angel Dubovou,” even though Plaintiff may have made a typographical error in its Complaint. ? Defendants Conundrum Marketing, LLC, Bradley G. Sisneros, Adriana Sisneros, Theodore Thornton, and Lawrence Durkey have not joined in this Motion. 3 Attorney Carl R. Williams represents the Plaintiff. Attorney Michael Sheesley represents the Defendants. * The Complaint only contains sixteen causes of action; Count 17 is a request for punitive damages and the Virgin Islands does not recognize a claim for punitive damages as an independent cause of action. Anthony v. FirstBank Virgin Islands, 58 V.1. 224, 227 n.4 (V.I. 2013). Divine Destinations, LLC v. Destination Bon Voyage, LLC et al. Case No. ST-2013-CV-307 Memorandum Opinion of—and alleged breach and interference with—three contracts: 1.) an independent contractor agreement (“ICA”) between Plaintiff and Defendant Theodore Thornton (“Thornton”); 2.) an ICA between Plaintiff and Defendant Lawrence Durkey (“Durkey”); and 3.) a document entitled Membership Interest Purchase Agreement (the “MIPA”), under which Plaintiff bought back a forty-five percent (45%) interest in itself from Defendant Conundrum Marketing, LLC. Plaintiff alleges that the Movants encouraged, solicited, or otherwise facilitated various breaches of these contracts. The Movants argue that they fall outside the reach of the Virgin Islands long-arm statute and that the exercise of personal jurisdiction would violate the Movants’ right to due process under the United States Constitution. Each Movant has provided the Court with an affidavit in support of the Motion. Each affidavit provides the affiant’s state of residency and contains allegations that demonstrate the absence of connections between the affiant and the Virgin Islands. STANDARD OF REVIEW In order for this Court to exercise personal jurisdiction over the Movants, the factual allegations of Plaintiff's Complaint must establish a prima facie case for the exercise of personal jurisdiction. Because Plaintiff has alleged that the Movants are all residents of different states, Plaintiff can only carry its burden by “demonstrat[ing] the existence of every fact required to satisfy ‘both [the Virgin Islands] long arm statute and the Due Process Clause of the Constitution.””° In determining whether Plaintiff has made this showing, the Court must “accept as true all of [P]laintiffs factual allegations that are supported by affidavits or other competent evidence which would be admissible at trial and must resolve all factual disputes in the [P]laintiffs favor.”’ The Virgin Islands long arm statute permits this Court to exercise personal jurisdiction over an out-of-state defendant under any of eight circumstances, so long as those circumstances relate to a plaintiff's claim for relief. The pertinent subsections of the Virgin Islands long arm statute read as follows: A court may exercise personal jurisdiction over a person who acts, either directly or through an agent, as to a claim for relief arising from the person’s (1) transacting business in this territory; 2K (3) causing tortious injury by an act or omission in this territory; (4) causing tortious injury in this territory by an act or omission outside this territory if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this territory... .° 5 Molloy v. Independent Blue Cross, 56 V.1. 155, 172 (V.I. 2012) (citations omitted). If the Court elects to hold an evidentiary hearing on the issue of personal jurisdiction, a plaintiff “must come forward with evidence to prove the court’s jurisdiction by a preponderance of the evidence.” /d. (citing Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003)). ° Id. at 173 (quoting United Electrical Radio and Machine Workers of America, (UE)., v. 163 Pleasant Street Corp., 987 F.2d 39, 44 (1st Cir. 1991)). 7 Id. (citing Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009)). * V.I. CODE ANN. tit 5, § 4903(1), (3), (4). Subsections (2) and (5)-(8) have no application in this case. Divine Destinations, LLC v. Destination Bon Voyage, LLC et al. Case No. ST-2013-CV-307 Memorandum Opinion To determine whether the exercise of jurisdiction satisfies the Due Process Clause of the Constitution, the Court must examine “whether the quality and nature of the defendant's activity is such that it is reasonable and fair to require [that he] conduct [his] defense in that state.”” “It is essential . . . that there be some act by which the defendant purposefully avails itself of the privilege of conduct activities within the [Virgin Islands] . . . , thus invoking the benefits and protections of its laws.”'° This requirement ensures that a defendant will not be forcibly drawn into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts." ANALYSIS I. PLAINTIFF HAS NOT ESTABLISHED A PRIMA FACIE CASE FOR THE EXERCISE OF PERSONAL JURISDICTION OVER BON VOYAGE. Plaintiff purports to state three causes of action against Bon Voyage. The first, Count Three of Plaintiff's Complaint, alleges that Bon Voyage intentionally interfered with the ICA between Thornton and Plaintiff!” by recruiting Thornton away from Plaintiff,'> by encouraging the other Movants to recruit Thornton away from Plaintiff,'* and by encouraging Durkey to recruit Thornton away from Plaintiff.'> The second, Count Four of Plaintiff's Complaint, contains the same allegations with respect to the alleged recruitment of Durkey away from Plaintiff.'° The third, Count Five of Plaintiff's Complaint, alleges that Bon Voyage intentionally interfered with the MIPA.!7 The allegations of Plaintiff's Complaint do not establish that Bon Voyage falls within the reach of the Virgin Islands long arm statute. Plaintiff alleges that Bon Voyage is “a vacation sales and marketing firm, organized as a [LLC] pursuant to the laws of the state of Washington, and maintains its principal place of business at 2211 Elliott Avenue, Suite 200, Seattle, Washington, 98121-3622.”'® Plaintiff has not alleged that Bon Voyage transacts any business in the Virgin Islands. Such an allegation is necessary to bring Bon Voyage under subsection (1) of the Virgin Islands long arm statute. Nor has Plaintiff alleged that Bon Voyage’s alleged contractual interference took place within the Territory. The absence of such an allegations precludes subsection (3) of the Virgin Islands long arm statue from applying to Bon Voyage. Finally, Plaintiff has not alleged that Bon Voyage “regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or service rendered” in the Virgin Islands. Consequently, subsection (4) of the Virgin Islands long arm statute cannot apply to Bon Voyage. ° In re. Najawicz, 52 V.1. 311, 337 (V.1. 2009) (quoting Metcalfe, 566 F.3d at 334) (internal quotations omitted). '0 Td. (quoting BP Chemicals Ltd. v. Formosa Chemical and Fibre Corp., 229 F.2d 254, 260 (3d Cir. 2000)). '! Td. (quoting BP Chemicals, Ltd., 229 F.2d at 260). !2 Compl. ff] 60-66. '3 Td. 424. 4 Td. 4925. 'S Td. 4 26. '6 Td. 9§ 67-73. '7 Td. 99] 74-80. 8 1d.43. Divine Destinations, LLC v. Destination Bon Voyage, LLC et al. Case No. ST-2013-CV-307 Memorandum Opinion Because Plaintiff has not pled allegations demonstrating that Bon Voyage falls within the reach of the pertinent provisions of the Virgin Islands long arm statute, there is no need to determine whether the exercise of personal jurisdiction would deprive Bon Voyage of its Constitutional Due Process Rights. Consequently, Plaintiff has not made out a prima facie case for the exercise of personal jurisdiction over Bon Voyage. Il. PLAINTIFF HAS NOT ESTABLISHED A PRIMA FACIE CASE FOR THE EXERCISE OF PERSONAL JURISDICTION OVER SISNEROS. Plaintiff's claims against Sisneros are the same as Plaintiff's claims against Bon Voyage. According to Plaintiff, Sisneros “is an adult citizen and resident of Seattle, Washington,” and is “either a member, officer, employee, servant or agent of Bon Voyage.”!? But Plaintiffs claims against Sisneros are as unsupported by factual allegations as Plaintiff's claims against Bon Voyage. Plaintiff has not alleged that Sisneros transacts any business in this territory, caused tortious injury by act or omission in this territory, or regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or service rendered in the Virgin Islands. Consequently Plaintiff has not established that subsections (1), (3), and (4) of the Virgin Islands long arm statute apply to Sisneros, and has thus failed to state a prima facie case for the exercise of personal jurisdiction over Sisneros. Ill. PLAINTIFF HAS NOT ESTABLISHED A PRIMA FACIE CASE FOR THE EXERCISE OF PERSONAL JURISDICTION OVER BARZE. Plaintiff's claims against Barze are the same as Plaintiff's claims against Bon Voyage and Sisneros. Plaintiff alleges that Defendant John Barze “is a citizen and resident of Seattle, Washington,” and is “either a member, officer, employee, servant or agent of Bon Voyage.””° Although Plaintiff has alleged that Barze was once an independent contractor of Caribbean Fun Stays, LLC,”! a nonparty to this suit, Plaintiff has not alleged that Barze transacts business in this territory.” This fact precludes the application of subsection (1) of the Virgin Islands long arm statute to Barze. Subsection (3) cannot apply, as Plaintiff has not claimed that Barze’s allegedly- tortious conduct took place in the Virgin Islands. Finally, Subsection (4) cannot apply because Plaintiff has not alleged that Barze regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or service rendered in the Virgin Islands. Because Plaintiff has failed to establish that the pertinent provisions of the Virgin Islands long arm statute embrace Barze’s alleged misconduct, Plaintiff has failed to state a prima facie case for the exercise of personal jurisdiction over Barze. '9 Id. 46. 20 Td. 4 8. 21 Id. 4 26. ?? Plaintiff has not alleged that Barze’s business with Caribbean Fun Stays, LLC gives rise to this action. Plaintiff has alleged that Barze solicited Thornton and Durkey. /d. But Plaintiff has not alleged that the solicitation occurred within this Territory. Even assuming that said solicitation constitutes “transacting business” within the meaning of the Virgin Islands long arm statute, the business must be transacted within this Territory in order for the Virgin Islands long arm statute to reach an out-of-state defendant. Divine Destinations, LLC v. Destination Bon Voyage, LLC et al. Case No. ST-2013-CV-307 Memorandum Opinion IV. PLAINTIFF HAS NOT ESTABLISHED A PRIMA FACIE CASE FOR THE EXERCISE OF PERSONAL JURISDICTION OVER ALEXEY DUBOVOY. Plaintiff's claims against Alexey Dubovoy are the same as Plaintiff's claims against Bon Voyage, Sisneros, and Barze. Plaintiff alleges that Defendant Alexey Dubovoy “is a citizen and resident of Seattle, Washington,” and is “either a member, officer, employee, servant or agent of Bon Voyage.”*? As with Barze, Plaintiff has alleged that Alexey Dubovoy was once an independent contractor of Caribbean Fun Stays, LLC. But Plaintiff has not alleged that Alexey Dubovoy transacts business in the Territory, or that his allegedly-tortious conduct occurred in this Territory.”* Finally, Plaintiff has not alleged that Alexey Dubovoy regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or service rendered in the Virgin Islands. Like with Barze, Plaintiff has failed to establish that the pertinent provisions of the Virgin Islands long arm statute apply to Alexey Dubovoy’s alleged misconduct. Consequently, Plaintiff has failed to state a prima facie case for the exercise of personal jurisdiction over Alexey Dubovoy. V. PLAINTIFF HAS NOT ESTABLISHED A PRIMA FACIE CASE FOR THE EXERCISE OF PERSONAL JURISDICTION OVER ANGEL DUBOVOU. Plaintiff's claims against Angel Dubovou are the same as Plaintiff's claims against Bon Voyage, Sisneros, Barze, and Alexey Dubovoy. Plaintiff alleges that Defendant Angel Dubovou “is a citizen and resident of Seattle, Washington,” and is “either a member, officer, employee, servant or agent of Bon Voyage.””° As with the preceding Movants, Plaintiff's Complaint is devoid of the allegations necessary to establish that subsections (1), (3), or (4) of the Virgin Islands long arm statute embrace Angel Dubovou’s alleged misconduct. Consequently, Plaintiff has failed to state a prima facie case for the exercise of personal jurisdiction over Angel Dubovou. VI. = PLAINTIFF HAS NOT ESTABLISHED A PRIMA FACIE CASE FOR THE EXERCISE OF PERSONAL JURISDICTION OVER MCPHERSON, HICKS, OR MEMBER SERVICES GROUP. Plaintiff's claims against McPherson, Hicks, and Member Services Group are the same as Plaintiff's claims against Bon Voyage, Sisneros, Barze, Alexey Dubovoy, and Angel Dubovou. Plaintiff alleges that McPherson “is a resident of Little River, South Carolina,” and either “a member, officer, employee, servant or agent of Defendant Member Services Group, Inc.”?° Plaintiff describes Member Services Group as “a corporation registered to do business in South Carolina, that provides the servicing of travel club contracts to [] Bon Voyage and previously provided servicing of travel club contracts to Caribbean Fun Stays, LLC in St. Thomas, USVI.”?’ Finally, Plaintiff describes Hicks as “a resident of Little River, South Carolina” who is either “a member, officer, employee, servant or agent” of Member Services Group.”° 31d. 499. *4 As with Barze, Plaintiff has not alleged that the business conducted by Alexey Dubovoy’s for Caribbean Fun Stays, LLC constitutes the contractual interference complained of in Plaintiff's Complaint. 5 Td. 4 10. 26 Td. 12. 27 Td. 414. 28 Td. 4 13. Divine Destinations, LLC v. Destination Bon Voyage, LLC et al. Case No. ST-2013-CV-307 Memorandum Opinion Plaintiff has alleged that each of these three Movants committed tortious conduct, but Plaintiff has not alleged that the allegedly-tortious conduct occurred in this Territory. The absence of such an allegation precludes Plaintiff from applying subsection (3) of the Virgin Islands long arm statute to any of these three Movants. Plaintiff has also failed to allege that subsections (1) and (4) apply to McPherson and Hicks because Plaintiff has not alleged that McPherson and Hicks, in their individual capacities, transact business in this Territory or are regularly doing or soliciting business, engaging in any other persistent course of conduct, or deriving substantial revenue from goods used or consumed or service rendered in the Virgin Islands. Consequently, Plaintiff has not pled sufficient factual allegations to establish that the Virgin Islands long arm statute embraces McPherson and Hicks’ alleged misconduct. Plaintiff has not alleged that Member Services Group has made any act or omission with respect to Thornton or Durkey’s ICAs, or with respect to the MIPA. Plaintiff alleges that Member Services Group is a party in this lawsuit because McPherson and Hicks “were members, officers, employees, servants or agents” of Member Services Group, and “[t]hrough this affiliation, [McPherson] and [Hicks] because familiar with the restrictive covenants” in Thornton and Durkey’s ICAs.”? Plaintiff has alleged that Member Services Group “was a service provider to Caribbean Fun Stays LLC’*° and provided “the servicing of travel club contracts” to both Caribbean Fun Stays LLC and Bon Voyage.*' But although Plaintiff alleges that Member Services Group had transacted business in the Virgin Islands, Plaintiff has not alleged that Member Services Group’s business has interfered with Thornton and Durkey’s ICAs or the MIPA. Because Plaintiff's alleged right to relief does not arise from Member Services Group’s business in the Virgin Islands, the pertinent subsections of the Virgin Islands long arm statute do not reach Member Services Group. The Virgin Islands long arm statute does not embrace McPherson, Hicks, or Member Services Group. Consequently, Plaintiff has failed to state a prima facie case for the exercise of personal jurisdiction over any of these three Movants. VII. PLAINTIFF HAS NOT ESTABLISHED A PRIMA FACIE CASE FOR THE EXERCISE OF PERSONAL JURISDICTION OVER WISNIEWSKI. Plaintiff's claims against Wisniewski are the same as Plaintiffs claims against Bon Voyage, Sisneros, Barze, Alexey Dubovoy, Angel Dubovou, McPherson, Hicks, and Member Services Group. Plaintiff alleges that Wisniewski “is a citizen and resident of Seattle, Washington,” and that he is “either a member, officer, employee, or agent of Bon Voyage.”*? The only other factual allegation pertaining to Wisniewski in Plaintiff's Complaint is that Wisniewski, along with others, “jointly and severally[] encouraged [Durkey] to recruit [Thornton] and/or encouraged [Thornton] to recruit [Durkey] away from the employ of Plaintiff and into the employ of Bon Voyage.”*? Plaintiff does not allege that Wisniewski transacts business in this Territory, that Wisniewski’s allegedly-tortious conduct occurred in the Territory, or that Wisniewski regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or service rendered in the Virgin Islands. Since 21d 411. 3 Id. 925. Divine Destinations, LLC v. Destination Bon Voyage, LLC et al. Case No. ST-2013-CV-307 Memorandum Opinion Plaintiff has pled no facts upon which this Court could conclude that the pertinent subsections of the Virgin Islands long arm statute apply to Wisniewski, Plaintiff has not established a prima facie case for the exercise of personal jurisdiction over this Movant. CONCLUSION Before this Court may exercise personal jurisdiction over the Movants, the factual allegations of Plaintiff's Complaint must set forth a prima facie claim for the exercise of personal jurisdiction. The first step in making such a showing in a lawsuit against defendants that do not reside in this Territory is to demonstrate that the defendants have engaged in one of the acts listed in the Virgin Islands long arm statute. Here, the factual allegations of Plaintiff's Complaint do not establish that the exercise of personal jurisdiction over any of the Movants would be proper under the Long Arm Statue. The Court need not consider the Due Process implications of exercising personal jurisdiction over the Movants because Plaintiff has already failed at stating a prima facie case for the exercise of personal jurisdiction over any of them. This Court does not have personal jurisdiction over the Movants, and all claims against them shall be dismissed. An appropriate order shall follow. Dated: June [ , 2015 ALLL) m DENISE M. FRANCOIS Judge of the Superior Court ATTEST: of the Virgin Islands Estrella H. George ing Clerk ef the Court A LISD