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.
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
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
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
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.
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 ...