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STORWAL INTL., INC. v. THOM ROCK REALTY CO.

February 26, 1992

STORWAL INTERNATIONAL, INC., Plaintiff, against THOM ROCK REALTY COMPANY, L.P., Defendant.


The opinion of the court was delivered by: ROBERT W. SWEET

 Sweet, D. J.

 Defendant Thom Rock Realty Co., L.P. ("Thom Rock"), has moved pursuant to Rule 15 of the Federal Rules of Civil Procedure to amend its answer to assert an affirmative defense and for an order dismissing the action on the ground that Plaintiff Storwal International Inc. ("Storwal International") is not authorized to do business in New York. For the reasons set forth below, Thom Rock's motion is denied.

 Prior Proceedings and Facts

 Storwal International is a Canadian corporation engaged in the manufacture and wholesale of steel file cabinetry and pedestals for professional commercial offices. Its principal place of business is in Pembroke, Ontario, Canada, and it has not obtained a certificate of authority to do business in New York.

 Storwal New York, Inc. ("Storwal New York"), is a New York Corporation with its principal place of business in New York. It is a wholly-owned subsidiary of Storwal Inc., a Delaware Corporation, which in turn is a wholly-owned subsidiary of Storwal International. Storwal New York is in good standing with New York's Secretary of State.

 Thom Rock is a New York limited partnership having its principal place of business in New York, New York. Thom Rock develops and owns real estate.

  The underlying facts at issue are fully set forth in the Court's previous opinion denying Thom Rock's motion for summary judgment, familiarity with which is presumed. See Storwal International Inc. v. Thom Rock Realty Co., 768 F. Supp. 429 (S.D.N.Y. 1991). The present motion is based on Storwal International's admission during discovery that it does not have a certificate of authorization to do business in New York.

 Storwal International entered into the lease in question with Thom Rock in April 1986. The leased space was in Long Island City, New York, and intended for use as a showroom for displaying and marketing Storwal International's products. Employees of Storwal International negotiated the lease and Storwal International made the monthly lease payments.

 Storwal New York was incorporated on October 21, 1986. Its employees are employees of Storwal New York, *fn1" and have no authority to enter into contracts on behalf of Storwal International. Rather, they forward proposed orders for the purchase of Storwal International's products to Storwal International in Canada. There the proposed orders are analyzed and modified as need be, and contracts negotiated, drafted, and executed. Goods sold pursuant to these contracts are manufactured in and shipped from Canada. *fn2" Payment is made to Storwal International and deposited into its Toronto bank account.

 From April 1984 to February 28, 1986, Storwal International used an independent contractor to solicit business for it in New York. The contractor forwarded orders to Storwal International in a manner similar to that of Storwal New York.

 Storwal New York recently entered into a lease for office and showroom space in Manhattan.

 The instant motion was filed by Thom Rock on November 13, 1991. Oral argument was heard on January 13, 1992, and ...


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