"wooden approach," the Second Circuit held that jurisdiction
existed because the transaction of business was the borrowing
of money, not the act of negotiating and signing replacement
Defendants here rely on Mattgo Enterprises, Inc. v. Aaron,
374 F. Supp. 20 (S.D.N.Y. 1974), and Fontanetta v. American
Board of Internal Medicine, 421 F.2d 355 (2d Cir. 1970), to
support the position that only the circumstances directly
surrounding the negotiation and execution of the Amended and
Restated Agreement should be taken into account for purposes of
determining personal jurisdiction. In Mattgo, the court found
that the defendant had sufficient contacts with New York
relating to the contract which was the basis of the lawsuit to
justify the exercise of jurisdiction. Mattgo, supra, 374
F. Supp. at 24. In doing so, the court refused to consider an
earlier separate and distinct contract between the parties. Id.
at 23. In Fontanetta, the Second Circuit held that the written
and oral parts of an examination for certification as a
specialist in internal medicine were not part of the same
transaction of business for purposes of CPLR 302(a)(1).
Fontanetta, supra, 421 F. Supp. at 359. In reaching this
conclusion, the court took into consideration that the
examinations were completely different in nature, that the
written and oral examinations were separated by four years in
time, and that the oral part of the examination could be
separated by geography at plaintiff's convenience. Id. at 358.
In the instant action, plaintiff is seeking to recover on
defendants' obligation under a guaranty agreement which
restructures previous obligations of defendants to plaintiff.
Even though there are two sets of written guarantees, the
guarantees cover the same obligation. The two sets of
guarantees are therefore not separate and distinct contracts
as in Mattgo, nor are they different in nature as were the
exams in Fontanetta. Rather, as in Van Wezel, the transaction
of business here was the borrowing of money, not the execution
of the Amended and Restated Agreement. This transaction began
when defendants approached Bankers Trust in New York for
financing of the Sutton Place Hotel venture and culminated in
the execution of the Amended and Restated Agreement.
Plaintiff's cause of action to recover payment of a loan
therefore arises directly from the transaction of business in
Defendants next contend that if the transaction of business
is interpreted as including the contacts in New York leading
up to the Amended and Restated Agreement, the contacts of SHC
and SHA with New York should not be attributed to them. In
examining a nondomiciliary's contacts with New York, the acts
of a corporation can be attributed to individuals under an
agency theory for purposes of CPLR 302(a)(1). Kreutter v.
McFadden Oil Corp., 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 199,
522 N.E.2d 40, 44 (1988). A formal agency relationship is not
required between the defendant and the corporate agent. Id.
Rather, a plaintiff need only show that the agent transacting
business engaged in purposeful activity in the state (1) that
related to the transaction underlying the lawsuit, (2) that was
taken for the benefit and with the knowledge of the defendant,
and (3) over which the defendant exercised some control. Id.
It is uncontested that Abramson and Weiser together own 50%
of SHC. Defendants argue that SHC only had 24.5% of SHA, which
owned the Sutton Place Hotel, and that SHA was created without
their consent. Defendants therefore contend that they did not
have sufficient control to have the acts of either SHC or SHA
attributed to them. Defendants, however, mischaracterize the
issue by focusing on control of the Sutton Place Hotel. The
issue is not whether defendants had control of the Sutton
Place Hotel. The issue is whether defendants had sufficient
control over the financial relationship entered into with
Bankers Trust on behalf of SHC. The facts indicate that
defendants clearly had such control.
Defendants each voted as a director of SHC for a corporate
resolution authorizing SHC to borrow money from Bankers Trust
in New York. Defendants each supplied
detailed financial reports to Bankers Trust in New York and
each signed an identical personal guaranty for all liabilities
incurred by SHC in order to induce Bankers Trust to provide
financing for SHC. Without the defendants' votes and without
their personal guarantees, no banking relationship would have
been established. Defendants Abramson and Weiser therefore
exercised more than "some" control; their participation was
essential for SHC to obtain financing from Bankers Trust in
Defendants next contend that even if this control is found
to exist, there are not sufficient contacts with New York to
support jurisdiction. Although designation of New York as the
site for payment of a promissory note is not alone sufficient
to confer jurisdiction, see, e.g., Glass v. Harris, 687 F. Supp. 906
(S.D.N.Y. 1988); Hubbard, Westervelt & Mottelay, Inc. v.
Harsh Building Co., 28 A.D.2d 295, 284 N.Y.S.2d 879 (1st Dept.
1967), an examination of the totality of circumstances in the
instant action reveals that defendants have more connections
with New York than the payment of a promissory note. Defendants
sought out Bankers Trust in New York to obtain financing,
provided Bankers Trust in New York with reports of their
personal financial status, and signed personal guarantees
expressly covered by New York law.*fn1 Defendants were
personally authorized to draw from a line of credit established
by Bankers Trust in New York and SHC sent letters to Bankers
Trust in New York seeking to draw on this line of credit.
Borrowed funds were transferred into a checking account for SHC
in New York and payments by SHC on the line of credit were sent
to Bankers Trust in either White Plains, New York or New York
City. Moreover, SHC submitted applications to Bankers Trust in
New York to change the letter of credit securing Perpetual's
loan to SHA. To draw on the letter of credit, Perpetual is
required to provide written notice to Bankers Trust in New York
that loan payments have not been met. These contacts are more
than sufficient purposeful activity in New York to constitute
the transaction of business within the meaning of CPLR
302(a)(1). See Sterling National Bank and Trust Company of New
York v. Fidelity Mortgage Investors, 510 F.2d 870, 873 (2d Cir.
B. Supply Goods or Services
Defendants are also subject to jurisdiction under CPLR
302(a)(1) for supplying goods and services in New York. Making
a guaranty of payment to a New York corporation is "supplying
goods or services" in the state. Manufacturers Hanover Leasing
v. Ace Drilling Co., 720 F. Supp. 48, 49-50 (S.D.N.Y. 1989);
Gaines Service Leasing Corp. v. Ashkenazy, 635 F. Supp. 805, 807
(E.D.N.Y. 1986); Fashion Tanning, Inc. v. Shutzer Industries,
Inc., 108 A.D.2d 485, 486, 489 N.Y.S.2d 791, 792 (3d Dept.
1985). An agreement between parties which restates a previous
obligation between them need not specify that payment be made
in New York if the previous obligation was payable in New York.
Manufacturers Hanover Leasing, supra, 720 F. Supp. at 49.
Although defendants make much of the fact that the Restated and
Amended Agreement does not specify where payment is to be made,
the notes executed by SHC and guaranteed by defendants were
payable to Bankers Trust in White Plains, New York. Moreover,
as a matter of course, defendants have made payments due to
Bankers Trust by delivering them to Bankers Trust in White
Plains, New York or New York City. Defendants have therefore
supplied goods or services in New York for the purposes of CPLR
For the reasons outlined above, defendants motion to dismiss
is denied in its entirety.