The opinion of the court was delivered by: Sweet, District Judge.
Defendants Travel Committee, Inc. ("TCI"), World Travel,
Inc. ("WTI"), Travel Destinations, Inc. ("TDI"), Stanley L.
Levin ("Levin") and Ira S. Weiner ("Weiner") have moved to
dismiss the amended complaint ("the Complaint") of plaintiff
Soviet Pan Am Travel Effort ("SPATE") for lack of personal
jurisdiction, failure to state a claim upon which relief can
be granted, failure to plead fraud with particularity and for
vagueness. In the alternative, they seek an order transferring
this action to the United States District Court for the
District of Maryland pursuant to 28 U.S.C. § 1404. For the
following reasons, the motion to dismiss is granted in part
with leave to replead. The motion to transfer is denied.
SPATE is a New York Partnership with its principal place of
business at 200 Park Avenue in New York City. This same
address serves as the principal place of business of SPATE
partner Pan Am Commercial Services, Inc. The other partner,
the General Department of International Air Services (Aeroflot
Soviet Airlines), operates principally from Moscow. SPATE was
formed as a partnership to obtain and distribute preplanned
air and land package tours to Russia to wholesale tour
operators in the United States.
Weiner and Levin are both residents of Maryland. Each owns
50% of the outstanding capital stock of WTI and TDI and each
is one of the two officers and directors of each of the
In March 1989, SPATE commenced this action for breach of
contract. TCI answered by denying all relevant allegations. On
January 26, 1990 SPATE obtained leave to amend its complaint
to add claims against TCI's parent, successor and principals.
The amended Complaint was served on February 1, 1990. SPATE
added five additional claims to its original contract claim as
well as four new defendants.
The present motion was filed on April 13, 1990. On July 31,
TCI and WTI filed petitions for bankruptcy in Maryland, but
those petitions were dismissed by the bankruptcy court on
August 8. Argument on the motion was finally heard on August
The following facts are derived principally from the
Complaint. It should be noted that many of the allegations are
based on information and belief, without elaboration on the
grounds for most of the beliefs. Although the defendants have
offered an affidavit from Weiner which contradicts a number of
SPATE's assertions, such an affidavit cannot be considered in
the context of a motion to dismiss. See Goldman v. Belden,
754 F.2d 1059, 1065-66 (2d Cir. 1985); Polycast Technology Corp. v.
Uniroyal, Inc., 728 F. Supp. 926, 936 (S.D.N.Y. 1989).
On January 15, 1988, SPATE and TCI entered into an agreement
under which TCI would promote and sell SPATE's tour packages
to the Soviet Union. In the agreement, TCI guaranteed that it
would sell at least 80% of the available tours ("the
Guaranteed Tourist Volume"). The available tours totalled
10,440, for a Guaranteed Tourist Volume of 8,352. In the event
that TCI failed to sell enough tours, it agreed to pay SPATE
$104.10 per passenger for each tour it fell below the
Guaranteed Tourist Volume ("the Penalty Payment"). In fact,
TCI only sold tours to 1,055 passengers, 7,297 passengers
fewer than the Guaranteed Tourist Volume, which would amount
to a Penalty Payment of $756,617.70. TCI has refused to pay
SPATE any part of this amount. In addition to its claim on the
written agreement, SPATE also claims that the parties orally
agreed to the same terms in January 1988.
SPATE's claim against WTI asserts that it operated TCI, its
wholly-owned subsidiary, in such a fashion as to warrant
piercing the corporate veil to reach WTI's assets to satisfy
the claim against TCI. SPATE alleges that WTI and TCI were
both operated and managed by Levin and Weiner as the sole
officers and directors of both corporations and sole
shareholders of the parent WTI, that the corporations shared
the same office space and commingled their bank accounts, and
that WTI "at least partially financed [TCI's] operations,
salaries, and expenses." Complaint ¶ 32. SPATE further alleges
that Levin and Weiner failed to act as TCI's officers and
directors in TCI's best interests, and that both TCI and WTI
disregarded corporate formalities by failing to issue stock or
keep any kind of corporate records. WTI allegedly
undercapitalized TCI, leaving it incapable of meeting normal
business expenses. WTI is alleged to have held TCI out as a
solvent and independent entity when it was in fact merely a
corporate shell, dependent upon its parent for survival.
However, the complaint does not specify exactly how WTI did so.
Finally, SPATE asserts that, not only did Levin and Weiner,
acting as officers and directors of WTI, ignore TCI's
corporate form, but they also personally ignored both WTI's
and TCI's corporate forms, commingling their own funds with
those of both corporations and using corporate funds to cover
their own personal expenses. SPATE claims that Levin and
Weiner controlled and dominated TCI and WTI to such an extent
that the corporate entities were merely alter egos ...