The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.
This is an action for damages alleging breach of contract and
fraud. Jurisdiction is based on diversity of citizenship.
28 U.S.C. § 1332. Defendants Nycal Corporation ("Nycal"),
Arimathaea Holdings Ltd. ("Arimathaea"), Shephard Insurance
Group Ltd. ("Shephard") and Graham Lacey ("Lacey") move: (1)
pursuant to Fed.R.Civ.P. 12(b)(2) to dismiss the complaint for
lack of personal jurisdiction; (2) pursuant to Fed.R.Civ.P.
12(b)(6) to dismiss plaintiff's fraud claim for failure to
state a claim upon which relief may be granted; (3) pursuant to
Fed.R.Civ.P. 12(b)(1) to dismiss the complaint against Shephard
for lack of subject matter jurisdiction; and (4) pursuant to
28 U.S.C. § 1404(a) to transfer this action to the United States
District for the District of Columbia. For the reasons set
forth below, defendants' motion is granted in part and denied
Milgrim's complaint alleges that during 1989 and 1990, it was
retained by Lacey to perform various legal services for each of
the defendant corporations. The several agreements for Milgrim
to render and for the defendants to pay for legal services were
reached at meetings between Lacey and Milgrim partner Raymond
Mantle in New York City. Milgrim further charges that at these
meetings Lacey fraudulently represented his intention to cause
the defendants to pay for Milgrim's services.
Milgrim asserts that pursuant to these agreements, it
rendered legal services to the various defendants during 1989
and 1990. In addition, Milgrim claims that at defendant
Shephard's request it retained the Chicago law firm of McBride
Bakes and Coles ("the McBride firm") to serve as Shephard's
local counsel in an Illinois transaction.
Milgrim has filed suit against the various defendants.
Milgrim charges that portions of its legal fees have gone
unpaid. Milgrim also alleges that the McBride firm has sued
Milgrim to recover $36,084.36 in unpaid fees and disbursements
for services rendered on behalf of Shephard. Therefore, Milgrim
also seeks from Shephard the costs of defending the McBride
suit and any damages to be incurred therein. An additional
claim charges Lacey with causing the services for the
corporations to be performed by means of fraud and seeks the
entire indebtedness from him personally.
I. MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
The defendants move pursuant to Fed.R.Civ.P. 12(b)(2) to
dismiss the complaint for lack of personal jurisdiction. The
plaintiff has the ultimate burden of establishing jurisdiction
over the defendant by a preponderance of the evidence.
Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir.
1981). At this stage of the litigation, however, Milgrim need
only make out a prima facie case for jurisdiction through its
pleadings and affidavits. Cutco Industries, Inc. v. Naughton,
806 F.2d 361, 365 (2d Cir. 1986). Pleadings and affidavits are
to be construed in the light most favorable to the plaintiff,
and all doubts must be resolved in the plaintiff's favor.
Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d
Personal jurisdiction over a defendant in a diversity action
is determined by the law of the state in which the court sits.
Savin v. Ranier, 898 F.2d 304, 306 (2d Cir. 1990), citing
Arrowsmith v. United Press International, 320 F.2d 219, 223 (2d
Cir. 1963). Therefore, New York law governs this issue.
Milgrim argues that this Court has personal jurisdiction over
the corporate defendants pursuant to N.Y.Civ.Prac.L. & R. §
302(a), New York's long-arm statute.*fn1 Specifically,
plaintiff points to § 302(a)(1). To establish jurisdiction
under this subsection, a two-part test must be satisfied:
first, the defendant must "transact business" within New York;
second, the claim must arise from that business activity.
Cutco, 806 F.2d at 365. A non-domiciliary is said to transact
business within the meaning of § 302(a)(1) when he "purposely
avails [himself] of the privilege of conducting activities
within [New York], thus invoking the benefits and protections
of its laws." Id.
Milgrim and the defendants set forth vastly different
versions of the events leading to the formation of their
contractual relationships. Construing the pleadings and
affidavits in favor of Milgrim, this Court finds each of the
corporate defendants did transact sufficient business with
plaintiff in New York to support the ...