decisions is important, yet it is clear that "the `law of the
case' does not rigidly bind a court to its former decisions,
but is addressed only to its good sense." Higgins v.
California Prune & Apricot Grower, Inc., 3 F.2d 896, 898 (2d
Cir. 1924) (Hand, J.). If a court believes a prior ruling to be
incorrect, the only just and sensible course is to change the
prior ruling and proceed with the litigation.
On April 11, 1989, defendants filed a motion to dismiss the
complaint for lack of personal jurisdiction, or, in the
alternative, to transfer the case pursuant to 28 U.S.C. § 1404(a)
to the District Court for the Northern District of Alabama. On
May 2, plaintiff filed the Feigenbaum affidavit, in addition to
other submissions, in opposition to defendants' motions. On
June 9, 1989, the Court denied defendants' motion to transfer
and withheld decision on the motion to dismiss for lack of
personal jurisdiction. On July 5, 1989, defendants filed a
motion to dismiss the complaint pursuant to Fed.R. Civ.P.
12(b)(6) and 9(b). On October 27, 1989, the Court ruled that no
personal jurisdiction over defendants existed, and that the
complaint should be dismissed.
The Court did indeed fail to consider the Feigenbaum affidavit
in issuing its October 27, 1989 decision to dismiss the
complaint for lack of personal jurisdiction. Such a judicial
oversight is proper grounds for reconsideration of the motion
to dismiss. Defendants' protestations that plaintiff should not
have included a copy of the Feigenbaum affidavit as an exhibit
to the motion for reargument is meritless, as the affidavit was
clearly before the Court with regard to plaintiff's initial
submissions opposing defendants' motion to dismiss for lack of
The New York long-arm statute provides that a New York court
has jurisdiction over a nondomiciliary who "contracts anywhere
to supply goods or service in the state." CPLR § 302(a)(1).
This language was added to the statute in 1979 to extend
"long-arm jurisdiction to non-domiciliaries who make contracts
outside New York calling for performance in this state and who
then totally fail to perform." Supplementary Practice
Commentaries, C302:13 (McKinney's Supp.Pamph. 1990). In this
vein, the amendment abrogated the "mere shipment" rule, which
had previously precluded the jurisdiction of New York courts
over a nondomiciliary who merely shipped goods into New York
without physically entering the state. West Mountain Corp. v.
Seasons of International, Inc., 82 A.D.2d 931, 931,
440 N.Y.S.2d 729, 730 (3d Dep't 1981). The only judicial
requirement added to the language of the statute is that the
cause of action must "`bear a substantial relationship to the
transaction out of which the instant cause of action arose.'"
Beacon Enterprises, Inc. v. Menzies, 715 F.2d 757, 764 (2d
Cir. 1983) (quoting McGowan v. Smith, 52 N.Y.2d 268, 272,
437 N.Y.S.2d 643, 645, 419 N.E.2d 321 (1981)). It is this nexus
which differentiates jurisdiction under CPLR § 302(a)(1) from
traditional long-arm jurisdiction under CPLR § 301, which
requires that a plaintiff establish that a nondomiciliary
defendant "does business" in the state. Id. (citing McGowan,
supra, 52 N.Y.2d at 272, 437 N.Y.S.2d at 645, 419 N.E.2d 321).
Reading the pleadings and affidavits in a light most favorable
to plaintiff, see Hoffritz for Cutlery, Inc. v. Amajac, Inc.,
763 F.2d 55, 57 (2d Cir. 1985), it is clear that the Court has
jurisdiction over defendants pursuant to CPLR § 302(a)(1).
According to the Feigenbaum affidavit, defendants entered a bid
to supply plaintiff with marble for plaintiff's planned
sculpture in New York. Feigenbaum aff., ¶¶ 7-10. Feigenbaum's
alleged acceptance of defendants' offer establishes a prima
facie case for purposes of this motion that a contract was
entered into between the parties. Feigenbaum aff., ¶ 11. The
affidavit further asserts that defendants agreed to do field
measurements for the project on site in New York. Feigenbaum
aff., ¶¶ 7, 11, 15-16, 18; see affidavit of Herbert Lackner,
sworn to on April 24, 1989, ¶¶ 4-5.*fn1 Defendants also
agreed to transport the
cut marble to the job site in New York City, employing a
trucking company owned by defendant Cradock. Feigenbaum aff., ¶
9; see also Price Confirmation — Proposal, dated August 12,
1988, Exhibit 1 annexed to Feigenbaum aff.*fn2 For these
reasons, the Court vacates its Order and Opinion of October 27,
1989, and hereby denies defendants' motion to dismiss the
complaint for lack of personal jurisdiction.
B. Motion to Dismiss Count Two of the Complaint
Defendants have moved to dismiss count two of the complaint
which alleges common law fraud in the making of the
contract.*fn3 Defendants argue that the allegations
contained in the complaint state a claim solely for breach of
contract, and that the fraud claim is "conclusory" and should
be dismissed pursuant to Fed.R.Civ.P. 9(b) and 12(b)(6).
Plaintiff argues in response that the complaint alleges that
defendants made promises to plaintiff with no intention of
fulfilling them, thereby inducing plaintiff to enter the
contract and committing common law fraud.
The well-known standard in applying Rule 12(b) dictates that a
district court should deny the motion "unless it appears beyond
doubt that the plaintiff can prove no set of facts in support
of his claim which would entitle him to relief." Conley v.
Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80
(1957) (footnote and citations omitted). "The allegations in
the complaint, moreover, must be liberally construed." Rauch
v. R.C.A. Corporation, 861 F.2d 29, 30 (2d Cir. 1988) (citing
Dahlberg v. Becker, 748 F.2d 85, 88 (2d Cir. 1984), cert.
denied, 470 U.S. 1084, 105 S.Ct. 1845, 85 L.Ed.2d 144 (1985)).
The purpose of a motion to dismiss under Rule 12(b) is to
assess the legal feasibility of the complaint, not to weigh the
evidence which the plaintiff offers or intends to offer. Ryder
Energy Distribution Corp. v. Merrill Lynch Commodities, Inc.,
748 F.2d 774, 779 (2d Cir. 1984). The district court should not
grant the motion simply because the possibility of ultimate
recovery is remote. Id. at 779 (citing Scheuer v. Rhodes,
416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974)).
Similarly, in a motion to dismiss a complaint for failure to
plead fraud with sufficient particularly pursuant to Fed.R.
Civ.P. 9(b), a plaintiff's allegations must be taken as true.
See, e.g., Luce v. Edelstein, 802 F.2d 49, 52 (2d Cir. 1986).
The allegations of fraud contained in the complaint must be
specific enough to allow the defendant "a reasonable
opportunity to answer the complaint" and must give "adequate
information" to allow the defendant "to frame a response."
Ross v. A.H. Robins Co., 607 F.2d 545, 557-58 (2d Cir. 1979),
cert. denied, 446 U.S. 946, 100 S.Ct. 2175, 64 L.Ed.2d 802
(1980). To satisfy the pleading requirements of Rule 9(b), the
complaint must identify the actionable false and misleading
statements, whether oral or written, must allege the time,
place, and circumstances of the statements, and must allege
scienter on the part of the defendants, or conditions under
which scienter may be inferred. Klein v. Computer Devices,
Inc., 591 F. Supp. 270, 279 (S.D.N.Y. 1984); Ross, supra, 607
F.2d at 558.
The New York Appellate Division*fn4 has provided the
following concise and accurate statement of the New York common
law of fraud in the context of contractual relations:
It is the general rule that fraud cannot be predicated upon
statements which are promissory in nature at the time they are
made and which relate to future actions or conduct. Mere
unfulfilled promissory statements as to what will be done in
the future are not actionable as fraud and the injured parties'
remedy is to sue for breach of contract. An exception to this
rule is that where the defendant makes a promise as to future
action for the purpose of inducing the plaintiff to enter into
a contract, and does not fulfill that promise, a party who
relies thereon to his detriment may recover for fraud where he
can prove that at the time the promise was made the defendant
had no intention of carrying it out.
Brown v. Lockwood, 76 A.D.2d 721, 731-32, 432 N.Y.S.2d 186,
194 (2d Dep't 1980) (citations omitted); accord Vanderburgh v.
Porter Sheet Metal, Inc., 86 A.D.2d 688, 688-89, 446 N.Y.S.2d 523,
525 (3d Dep't 1982); Miller v. Volk & Huxley Inc.,
44 A.D.2d 810, 810, 355 N.Y.S.2d 605, 606-07 (1st Dep't 1974); 24
N YJur., Fraud and Deceit, § 50.
Despite the liberal rules of pleading, the complaint in its
present form fails to state a claim for common law fraud. Aside
from one conclusory paragraph which alleges that defendants
misrepresented their ability and intention to perform the
contract, the complaint does not allege facts which give rise
to a fraud claim. See Complaint, ¶ 24. The cause of action as
currently stated in the complaint is merely one for breach of
contract. There are no specific references in the complaint to
false written or oral statements which would underpin a claim
for fraud.*fn5 Plaintiff's assertion that "[d]efendants have
misrepresented and distorted facts and events in dealing with
other subcontractors to whom [plaintiff] has contractual
obligations in connection with the Memorial" fails the
particularity requirements of Rule 9(b). See Complaint, ¶ 18.
Plaintiff's second claim for relief is hereby dismissed without
Plaintiff's claim for punitive damages must be dismissed as
well, as "punitive damages are not available in New York for
breach of contract." Vanderburgh, supra, 86 A.D.2d at 689,
446 N.Y. So.2d at 525; see Value Time, Inc. v. Windsor Toys,
Inc., 700 F. Supp. 6, 7 (S.D.N.Y. 1988).
Plaintiff's motion for reargument is granted. The Court hereby
vacates its Order and Opinion of October 27, 1989, and denies
defendants' motion to dismiss the complaint for lack of
personal jurisdiction. Defendants' motion to dismiss the second
count of the complaint pursuant to Fed.R. Civ.P. 12(b)(6) and
9(b) is granted. This dismissal is without prejudice, and the
Court grants plaintiff leave to replead. Plaintiff's request
for punitive damages is hereby struck from the complaint.