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ASSOCIATED TRADE DEV. v. CONDOR LINES

June 4, 1984

ASSOCIATED TRADE DEVELOPMENT, INC., d/b/a Transworld Systems, Plaintiff, against CONDOR LINES, INC., Defendant.


The opinion of the court was delivered by: KEENAN

JOHN F. KEENAN, United States District Judge:

Defendant, Condor Lines, Inc. ("Condor"), moves to dismiss the complaint pursuant to rules 12(b) and 37(b) of the Federal Rules of Civil Procedure, on the grounds that this Court lacks personal jurisdiction over defendants, insufficiency of service of process was insufficient, and discovery has not been provided as ordered by this Court. Having carefully considered the affidavits and memoranda of law submitted by the parties, and having heard oral argument on the motion on May 18, 1984, for the reasons set forth below, the motion is granted.

Plaintiff, Associated Trade Development, Inc. ("Transworld"), is a New York corporation engaged in the transportation of goods by ocean-going travel. Condor is a Maryland corporation, also engaged in the transportation of goods by ocean-going travel. Transworld brought this action to recover a balance of $14,841.60, monies allegedly collected for it by Condor which Condor has failed to transfer to plaintiff.

 Plaintiff asserts two independent bases upon which this Court may assert personal jurisdiction over the defendant, a foreign corporation. First, plaintiff contends that defendant's activities in New York, through its agent, Meridian Ship Agency, Inc., ("Meridian") constitute "doing business" in this state within the meaning of N.Y.CPLR § 301.In the alternative, plaintiff contends that jurisdiction exists over defendant by virtue of the New York "long-arm" statute, N.Y.CPLR § 302(a)(3). Because neither statute is applicable, defendant is not subject to this Court's jurisdiction.

 In order to obtain personal jurisdiction over defendant under N.Y.CPLR § 301, plaintiff must show that Condor is "engaged in such a continuous and systematic course of "doing business' as to warrant a finding of its "presence" in this jurisdiction." Frummer v. Hilton Hotels International, Inc., 19 N.Y.2d 533, 536, 281 N.Y.S.2d 41, 43, 227 N.E.2d 851, 853 (1967). Plaintiff does not contend that Condor personally has engaged in a course of business in New York to subject it to the personal jurisdiction of this Court. Rather, it alleges that Meridian, Condor's parent company, is defendant's agent in New York and that it solicited business on Condor's behalf in New York, including the shipments which underly this lawsuit. Plaintiff argues that these actions by Condor's "agent" in New York, constitute "doing business" for purposes of N.Y.CPLR § 301.

 Condor denies plaintiff's allegations, stating:

 The Defendant, Condor, has not at any time maintained an office in New York; it has never sent or maintained officers, agents or employees to or in the State of New York to solicit business or to carry out or perform any business function or transaction; it has never supplied goods or services and it has never executed or delivered any written contracts within the State of New York; it does not own real estate in the State of New York; it does not lease any real or personal property in the State of New York and it does not have a bank account, telephone number or post office box in the State of New York. Neither Condor nor any or its directors, officers, agents, employees or representatives was ever dispatched to or present in the State of New York in the course of transactions which are the subject of the present lawsuit.

 Although Meridian is the parent corporation of Condor, Meridian is a separate and distinct corporate entity which serves as a representative for a number of steamship lines. At the times of the transactions which are the subject of the present lawsuit, Condor was only one of five or six separate clients which Meridian represented.Neither Meridian nor any of its directors, officers, agents, employees or representatives has even been authorized to act on behalf of or in the name of Condor in the State of New York, and on information and belief, has never done so.

 (Shotto Affidavit, Paragraphs 4 and 5).It is in this posture that we must decide whether the acts of Meridian on behalf of Condor constitute "doing business" in New York.

 A foreign corporation may be found to be present in New York through an agent who continuously and systematically solicits business within the state on the foreign corporation's behalf. Mere solicitation, however, is not enough. To subject a foeign corporation to jurisdiction, solicitation by an agent must be in combination with other activities within the state on behalf of the foreign corporation. Cohen v. Vaughan Bassett Furniture, Co., Inc., 495 F. Supp. 849, 851 (S.D.N.Y. 1980), citing Miller v. Surf Properties, 4 N.Y.2d 475, 480, 176 N.Y.S.2d 318, 151 N.E.2d 874 (1958).

 In support of its contention that Meridian regularly solicited business on Condor's behalf in New York, plaintiff has produced a handwritten memorandum, dated July 13, 1981, prepared by plaintiff and addressed to "Donna at Meridan." The memorandum requests:

 (1) that Donna prepare Condor bills of lading for shipments which are the subject of this action because Transworld was out of forms; and,

 (2) that Donna furnish plaintiff with additional blank Condor bills of lading. This memorandum is the only evidence offered by plaintiff of Meridian's representation of Condor. All other documents produced by plaintiff evidence direct dealings between it and Condor in Baltimore. There is no evidence that the memorandum was sent to Meridian in New York. It bears no address and plaintiff has not offered any evidence that a person called "Donna" is employed by Meridan in New York. Accordingly, the memorandum does not establish that Meridian was Condor's agent in New York.

 Further, the memorandum does not establish by a preponderance of the evidence that Meridian solicited substantial business on Condor's behalf. It documents plaintiff's belief that Meridian had access to Condor bills of lading, nothing more. Defendant, on the other hand, has produced the affidavit of its president, John R. Shotto, stating expressly that Condor has never sent or maintained an agent to or in New York to solict or transact any business ...


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