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February 26, 1991


The opinion of the court was delivered by: William C. Conner, District Judge:


Plaintiff Posadas de Mexico, S.A. de C.V. ("Posadas") brings this action against defendants Gerald D. Dukes and Terence W. Rufer alleging conversion of property in the amount of $221,122.31. Plaintiff seeks compensatory damages in the amount of $221,122.31 plus interest and $150,000 in punitive damages, plus the costs and disbursements incurred in this action. Subject matter jurisdiction is based upon 28 U.S.C. § 1332, as the action is between a citizen of a foreign state and two citizens of different states.

This action is currently before the Court on the motion of defendant Rufer for leave of the Court to amend his answer pursuant to Rule 15, Fed.R.Civ.P. and to dismiss plaintiff's action pursuant to Rule 12(b), Fed.R.Civ.P. Plaintiff has cross-moved for the imposition of sanctions under Rule 11, Fed.R.Civ.P. Defendant Dukes has not joined in either motion. For the reasons stated below, all the motions are denied.


Posadas owns and operates hotels located exclusively in Mexico. As a corporation organized under the laws of Mexico and having its principal place of business in Mexico City, Posadas contends that it never maintained an office, employees or a telephone listing in New York. Posadas further maintains that it is not licensed to do business in New York, does not conduct any intrastate business activity in the state and is engaged entirely in international commerce with the United States. Notwithstanding the foregoing assertions, Posadas admits having maintained bank accounts in New York for the limited purpose of accepting deposits from United States clients for its hotels in Mexico.

For the convenience of Americans wishing to make reservations to stay in its Mexican hotels, Posadas has entered into business relations with independent contractors, many of which have been New York corporations, to take reservations and accept deposits in the United States on its behalf. These independent contractors have also been given the right, during their period of engagement with Posadas, to use the Posadas trademark and tradename.

One of the independent contractors engaged by Posadas to handle reservations and hotel deposits on its behalf was Terence W. Rufer Associates, Inc. ("Rufer, Inc."). Defendant Rufer, a citizen and resident of New York, and defendant Dukes, a citizen and resident of New Jersey, were vice-president and president, respectively, of Rufer, Inc. During the course of its relationship with Posadas, Rufer, Inc. provided accounting, credit, collection, marketing, and reservation services to Mexican hotels managed by Posadas. In particular, Rufer, Inc. collected checks from third parties for reservations placed at hotel properties managed by Posadas. As part of their agreement, Rufer, Inc. was obligated to remit checks collected by it to Posadas by depositing these checks in certain bank accounts for which only officers of Posadas had signature authority.

The contractual relationship between Posadas and Rufer, Inc. terminated by its terms on October 31, 1986. Negotiations towards a new contract were formally terminated by letter from Posadas to Rufer, Inc. dated November 13, 1986. The correspondence of November 13, 1986 also terminated all authority of Rufer. Inc. and its employees as agents of Posadas. Posadas alleges that after the end of its relationship with Rufer, Inc., defendants Rufer and Dukes, without color of any authority or right, began retaining checks that had been sent to the offices of Rufer, Inc. and which were the property of Posadas.

Posadas alleges specifically that defendants Rufer and Dukes opened a checking account under the title "Terence W. Rufer Associates, Inc., Agent For Posadas de Mexico" on November 14, 1986 (the "Account") for the purpose of depositing checks belonging to Posadas. Defendants are accused of retaining exclusive signatory authority over the Account. Posadas further alleges that during the latter part of 1986, defendants systematically deposited funds belonging to Posadas in the Account and commingled their assets with those belonging to Posadas. After defendants began to withdraw funds from the Account in the first part of 1987, Posadas accuses defendants of proceeding to close the Account and retaining the balance of funds therein.

Posadas requests compensatory and actual damages in the amount of $221,122.31 together with interest from the dates of the alleged conversions, and $150,000 in punitive damages. Posadas further demands costs and disbursements incurred in this action, including attorneys' fees.


Defendant Rufer requests leave of the Court to amend his answer to assert an affirmative defense under N.Y.Bus.Corp.L. § 1312.*fn1 On the basis of his proposed affirmative defense, defendant Rufer moves this Court to dismiss plaintiff's action under Fed.R.Civ.P., Rule 12(b). Defendant Rufer argues that plaintiff's failure to conform to the taxation and registration requirements of N.Y.Bus.Corp.L. § 1312 necessitates the dismissal of this action under Rule 12(b). Specifically, dismissal is sought on the ground that plaintiff, as a foreign corporation, has not filed a certificate of authority to transact business in the State of New York under § 1312(a) and is therefore barred from initiating this action in any court within the State of New York.

Before the Court can reach the merits of defendant's proposed motion to dismiss, the Court must direct its attention to the propriety of granting defendant Rufer leave to amend his answer as "the application of the statutory bar under [N.Y.Bus.Corp.L.] § 1312 may only be effected when it has been raised as an affirmative defense." Great White Whale Advertising, Inc. v. First Festival Productions, 81 A.D.2d 704, 438 N.Y.S.2d 655 (3d Dept 1981) (application of statute barring a foreign corporation from maintaining an action may only be effected when it has been raised as an affirmative defense). Because defendant Rufer has served his answer and cannot now amend his pleadings as of ...

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