The opinion of the court was delivered by: PETER K. LEISURE
This is an action for breach of contract. Plaintiff General Textile & Processing Corp. ("GTP") is a textile printing and finishing plant. Defendant is a seller of raw, unfinished, textile piece goods. This Court has jurisdiction based on diversity of citizenship. 28 U.S.C. § 1332.
Plaintiff has moved this Court, by way of an order to show cause, for the following relief (1) an order of attachment, pursuant to Fed. R. Civ. P. 64 and Article 6200 of the New York Civil Practice Law and Rules ("CPLR"), upon the property of the defendant up to $ 234,000; and (2) a preliminary injunction, pursuant to Fed. R. Civ. P. 65. In addition, as part of the injunctive relief sought, plaintiff seeks an order from this Court directing defendant to immediately comply with the requirements of the underlying agreement between the parties.
GTP, a textile printing and finishing plant, contracted with defendant to purchase raw unfinished textile piece goods called greige. The general nature of plaintiff's business is to print and finish raw textile greige fabric. Plaintiff then sells the greige fabric to customers, termed textile converters, who in turn resell the fabric to clothing manufactures. Plaintiff uses brokers to assist in their buying and selling of the greige goods.
On or about April 1, 1994, using the services of a broker, GTP agreed to buy 1.4 million yards of cotton greige from Expromtorg. The fabric was to be delivered in three shipments as follows: 300,000 yards in July 1994, 300,000 yards in August 1994, and 200,000 yards each month for the months of September through December 1994. Complaint at P 10. The contract price was $ 0.55 per yard. Id. Since the date of the contract, the market price of the fabric has increased to $ .70 per yard. Id. at 12. The increase was due in part to an increase in worldwide demand. Id. Due to the increased demand and increased price, the parties adjusted the delivery dates of the contract slightly. Since then, defendant has demanded higher prices for its goods, and has failed to deliver the goods as contracted. Id. at P 18, 20. To date, plaintiff has had to purchase over 1 million yards of fabric on the open market in order to cover its contracts with its downstream customers. Affidavit of Michael Glick, sworn to on August 4, 1994 ("Glick Aff."), at P 6.
I. PLAINTIFF SEEKS AN ATTACHMENT
Fed. R. Civ. P. 64 provides that all seizure remedies, including orders of attachment, shall be granted pursuant to the law of the state in which the district court sits.
In New York State, the issuance of an attachment order is governed by CPLR 6201 and 6212. One of the grounds for an order of attachment is that "the defendant is a non-domiciliary residing without the State, or is a foreign corporation not qualified to do business in the State." CPLR 6201(1). It is uncontested that defendant is a foreign corporation not qualified to do business in New York. See Affidavit of Jeffery B. Krongold, sworn to on July 27, 1994 ("Krongold Aff."), at PP 2-3.
Under New York law, to obtain an order of attachment, the movant must show "that there is a cause of action, that it is probable that the plaintiff will succeed on the merits, that one or more grounds for attachment provided in section 6201 exist, and that the amount demanded from the defendants exceeds all counterclaims known to plaintiff." CPLR 6212(a). The burden is on the moving party to establish the grounds for the levy. Graubard Mollen Dannett & Horowitz v. Kostantinides, 709 F. Supp. 428, 432 (S.D.N.Y. 1989). The issuance of an order of attachment, even if the statutory requirements are met, is in the discretion of the court. Thornock v. Kinderhill Corp., 712 F. Supp. 1123, 1132 (S.D.N.Y. 1989); Merrill Lynch Futures Inc. v. Kelly, 585 F. Supp. 1245, 1259 (S.D.N.Y. 1984) ("attachment is a discretionary remedy. It may be denied even when plaintiff otherwise satisfies the statutory requirements").
In the instant action, plaintiff appears to have met the requirement of showing a ground for attachment under CPLR 6201(1). The statute allows a plaintiff to secure, for judgment purposes, funds of a defendant who might otherwise dispose of those assets and flee the jurisdiction of the court. See Landau v. Vallen, 895 F.2d 888, 891-93 (2d Cir. 1990); ITC Entertainment, Ltd. v. Nelson Film Partners, 714 F.2d 217, 220 (2d Cir. 1983). However, as CPLR 6212(a) makes clear, the court cannot issue an order of attachment solely because the requirements of CPLR 6201 have been met. Attachment is a harsh remedy, and should not be lightly granted by the court. See, e.g., Thornock, 712 F. Supp. at 1132; Merrill Lynch Futures, 585 F. Supp. at 1259; Reading & Bates Corp. v. National Iranian Oil Co., 478 F. Supp. 724, 726 (S.D.N.Y. 1979); First National Bank of Downsville v. Highland Hardwoods, Inc., 98 A.D.2d 924, 926, 471 N.Y.S.2d 360, 362 (3rd Dep't 1983).
As the Second Circuit has stated, "although attachment is permitted under CPLR § 6201(1) primarily to afford quasi in rem jurisdiction over a nonresident defendant, the section also serves the independent purpose of providing security for a potential judgment against a nonresident." Cargill, Inc. v. Sabine Trading & Shipping Co., 756 F.2d 224, 227 (2d Cir. 1985) (citing McLaughlin, Practice Commentaries, CPLR § 6201 (1), at 12 (McKinney 1980); ITC Entertainment, 714 F.2d at 220 (2d Cir. 1983)). Generally, this Court has held that attachment for security purposes is only appropriate when plaintiff will have difficulty enforcing a judgment and, accordingly, should issue only upon a showing that drastic action is required. Katz Agency, Inc. v. Evening News Ass'n., 514 F. Supp. 423, 429 (S.D.N.Y. 1981); see Reading & Bates Corp., 478 F. Supp. at 726-27 (S.D.N.Y. 1979) ("When the only purpose for a pre-judgment attachment is security, a different ...