The opinion of the court was delivered by: DAVID N. HURD
This is a negligence action carrying diversity of citizenship and involving questions of long-arm jurisdiction. Defendants Jacobsen Race Cars, Inc. ("JRC, Inc.") and Troy Evans ("Evans"), have moved this court for summary judgment, or in the alternative, for a change of venue.
Former defendant Ted Hughes ("Hughes"), a resident of Nebraska, purchased a 1964 Corvette dragster in 1989 for his personal use. In an effort to obtain a new dragster, he decided to sell the dragster in 1992. He placed an ad in the classified section of National Dragster, a racing magazine, and was contacted in early 1993 by the plaintiff, a New York resident. Plaintiff agreed by telephone to purchase the car for $ 17,000.00, and wired $ 4000.00 to Hughes in Nebraska. The car was then delivered to plaintiff in South Bend, Indiana, on March 13, 1993, where the balance of the proceeds was paid. Less than two months later, while driving the dragster on May 2, 1993, in New York State, the plaintiff was involved in an accident, in which he sustained personal injuries and damage to the vehicle.
The remaining defendants are being sued for their involvement with design, construction, and maintenance work performed on the dragster prior to the sale from Hughes to plaintiff. It is alleged that JRC, Inc. and defendant Jacobsen Racing, Inc. (two separate corporations)
performed mechanical and design work on the car, and did so negligently. Evans, a resident of Nebraska, was employed by Jacobsen Racing, Inc. from December 1990 through May 1992, when he became president of JRC. Inc. Defendant John Jacobsen, also a resident of Nebraska, became president of Jacobsen Racing, Inc. in May 1992. Hughes had no employment relationship to either Jacobsen company, and all claims against him have been dismissed. Other than Hughes, none of the defendants had any direct contact with plaintiff.
JRC, Inc. was incorporated for the purpose of custom design and fabrication of race cars. It derived 80% of its business from outside Nebraska borders, and goods have been shipped to nine states, including New York, in the regular course of business. However, JRC, Inc. has entered into only three transactions involving goods or services shipped to New York, in the four years preceding this action. The combined value of those three transactions totaled $ 1619.20. Finally, JRC, Inc. advertises in National Dragster, a nationally circulated magazine that includes New York in its circulation.
Plaintiff originally commenced this action in Supreme Court, County of Schenectady, for personal injuries received in the May 2, 1993 automobile accident. On September 17, 1993, pursuant to 28 U.S.C. 1441 and 1446, JRC, Inc. and Evans, served and filed a notice of removal to this court on the basis that complete diversity of citizenship exists between plaintiff (a resident of New York) and defendants (all residents or corporations of Nebraska); and that the amount in controversy exceeds $ 50,000. After the filing and service of an amended complaint and answers, JRC, Inc. and Evans moved to dismiss the (amended) complaint pursuant to Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction, or in the alternative, to transfer to the District Court of Nebraska pursuant to 28 U.S.C. § 1404(a). Hughes moved for summary judgment pursuant to Fed. R. Civ. P. 56 on the grounds that the court lacked personal jurisdiction over said defendant.
On March 2, 1994, both of these motions were denied without prejudice to renew after limited discovery had been conducted.
Hughes renewed his motion for summary judgment on June 14, 1994, which was granted on July 26, 1994. JRC, Inc. and Evans, likewise renewed their motion on June 15, 1994, this time bringing it in the form of a summary judgment motion. It is this motion upon which we now focus.
JRC, Inc. and Evans, as citizens or corporations of Nebraska, may be subjected to jurisdiction of this court if elements of New York's long-arm statute are met. It is well settled that the District Court borrows the long-arm statute of the forum. Fed. R. Civ. P. 4(e); Mellon Bank (EAST) PSFS, N.A. v. DiVeronica Bros., Inc., 983 F.2d 551 (3d Cir. 1993); Leasco Data Processing Equip. Corp. v. Maxwell, 468 F.2d 1326 (2d Cir. 1972). Therefore, when determining the application of a state's long-arm statute in a diversity action, it is the state law on the issues of interpretation that is controlling. In this case, Civ. Pract. L. & R. § 302 is the New York State long-arm statute. The plaintiff argues that subdivisions (a)(3)(i) and (a)(3)(ii) of § 302, give him personal jurisdiction over the Nebraska defendants.
The applicable provisions of Civ. Pract. L. & R. § 302 read as follows:
(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any ...