The opinion of the court was delivered by: Robert L. Carter, District Judge.
Fourth-party defendants Daniel Fettroll and Hadley Cannon
(International) Limited*fn1 ("Hadley") (together, the
"defendants")*fn2 move to dismiss the complaint of
fourth-party plaintiffs Zimmerman, Green Incorporated, George
G. Zimmerman & Co., Inc. and George G. Zimmerman (together, the
"plaintiffs") for lack of personal jurisdiction.*fn3 The
plaintiffs have invoked the court's diversity jurisdiction
pursuant to 28 U.S.C. § 1332. The defendants have submitted
affidavits, and the plaintiffs have submitted affidavits and a
deposition transcript in support of their respective positions.
In March, 1982, Zimmerman, Green, Inc. ("Zimmerman, Green"),
a New Jersey insurance brokerage firm, was retained by the
Manhattan Life Insurance Company ("Manhattan Life"), a New York
insurance company, for the purpose of soliciting quotes for
Manhattan Life for the reinsurance of life insurance contracts
for accidental death and dismemberment. Zimmerman, Green
retained Hadley in London to obtain a quote from A.J. Stratton
Syndicate and other underwriters at Lloyd's London Syndicates
(together, the "Insurance Syndicates"), now defendants and
third-party plaintiffs in this case. Fettroll negotiated the
contract for Hadley and was primarily responsible for
representing Zimmerman, Green.
After negotiations, done in large part by Zimmerman, Green
and Hadley (through Fettroll), Manhattan Life and the Insurance
Syndicates entered into a "losses occurring" policy for
reinsurance,*fn4 and, subsequently, Manhattan Life sought
recovery under the reinsurance contract for a $1.6 million
claim. The Insurance Syndicates denied coverage on the basis
that prior to the date of the reinsurance contract Manhattan
Life received notice of the $1.6 million claim, and, had this
been made known to them, they would not have reinsured on a
losses occurring basis.
Following the Insurance Syndicates' denial of payment,
Manhattan Life commenced this action. The Insurance Syndicates
impleaded Zimmerman, Green and the other third-party
defendants, who in turn impleaded Fettroll and Hadley.
When considering a claim of lack of personal jurisdiction,
the critical factual issue to be determined is the degree and
nature of contacts the defendants have or had with the state of
New York. Defendants state in their affidavit that they are not
domiciliaries of New York, maintain no office or other real
property in New York, and have no New York accounts, telephone
or business listings. Defendants further state that they are
not licenced to do business in New York and, with regard to the
contract for reinsurance at issue, that they did not make any
contract in New York, had no communications or dealings in New
York, supplied no goods or services in New York, and did not
forward any correspondence, mail, telexes or any other writings
to anyone in New York. Defendants maintain that all services
were performed in London, and that all substantial
communication was between London and New Jersey.
Plaintiffs claim that in the past defendants have solicited
and obtained other insurance business in New York, and have
serviced such business, at times travelling to New York to do
so. Specifically regarding the insurance contract at issue,
they claim that Fettroll traveled to New York at least once to
meet with Manhattan Life after placing the contract. Plaintiffs
submit three letters produced by another party in the case
which show that employees of Hadley and Manhattan Life met in
New York on November 7, 1983. These letters make oblique
references to other events, permitting the inference that
Hadley has conducted other business in New York. Additionally,
plaintiffs submit two telexes sent from Hadley to Manhattan
Life in New York, the contents of which are not entirely clear.
In response to plaintiffs' submissions, defendants admit the
existence of the documents,*fn5 but deny that the facts they
establish provide any basis for personal jurisdiction.
Following plaintiffs' submissions, defendants provided the
court with seven additional letters, telexes, or written
evidence of oral communication from them to Manhattan Life
which they claim constitute the entirety of dealings between
the two parties.
Personal jurisdiction in a diversity action is determined by
the laws of the jurisdiction in which the district court sits
and therefore New York law is applicable to this action.
United States v. First National City Bank, 379 U.S. 378,
381-82, 85 S.Ct. 528, 530-31, 13 L.Ed.2d 365 (1965). While a
plaintiff has the ultimate burden of establishing that
jurisdiction is proper by a preponderance of the evidence,
Beacon Enterprises, Inc. v. Menzies, 715 F.2d 757, 762 (2d Cir.
1983), prior to an evidentiary hearing he must only make a
prima facie showing to avoid dismissal, even if the defendant
offers controverting evidence. Hoffrift for Cutlery, Inc. v.
Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985). In determining
whether a plaintiff has made a prima facie showing "all
pleadings and affidavits are construed in the light most
favorable to plaintiff, and where doubts exist, they are
resolved in the plaintiff's favor." Id.
Plaintiffs contend that the court has jurisdiction over the
defendants pursuant to CPLR §§ 301 and 302(a)(1), N.Y. Civ.
Prac. L. & R. §§ 301 and 302(a)(1) (Consolidated 1972 & 1990
Supp. Pamphlet). In addition to the New York statutory
requirements, the court must consider the requirements of
constitutional due process and therefore must examine the facts
of each case using the "minimum contacts" and "traditional
notions of fair play and substantial justice" standards set
forth in International Shoe Co. v. Washington, 326 U.S. 310, 66
S.Ct. 154, 90 L.Ed. 95 (1945) and its progeny.
Generally, the test as to whether personal jurisdiction is
constitutionally permissible is "whether the defendant
purposefully established 'minimum contacts' in the forum
state."*fn6 Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474,
105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985). This requires
"some act by which the defendant purposefully avails itself of
the privilege of conducting activities within the forum State,
thus invoking the benefits and protections of its laws." Id. at
475. "The 'substantial connection' [citations omitted] between
the defendant and the forum State necessary for a finding of
minimum contacts must come about by an action of the defendant