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LACORTE ELEC. CONSTR. & MAINTENANCE v. CENTRON SEC

August 14, 1995

LACORTE ELECTRICAL CONSTRUCTION & MAINTENANCE, INC., Plaintiff,
v.
CENTRON SECURITY SYSTEMS, INC., Defendant.



The opinion of the court was delivered by: DAVID N. HURD

 This is a contract action carrying diversity of citizenship and involves questions of long-arm jurisdiction. Defendant, Centron Security Systems, Inc. ("Centron"), has moved this court for a transfer to the Western District of Kentucky, pointing to that venue as a more convenient and appropriate forum.

 FACTS

 Plaintiff LaCorte Electrical Construction & Maintenance, Inc. ("LaCorte"), a New York corporation with its principal place of business in Troy, New York, allegedly entered into a primary contract in October 1992, with the Regional Airport Authority of Louisville & Jefferson Counties in Kentucky, for the implementation of a card access security system for the airport. LaCorte in turn, subcontracted with Centron in November 1992, for the provision of training, testing, and equipment associated with the card security system. Centron, a New Jersey corporation with its principal place of business in Holiday, Florida, is certified to do business in New York. *fn1" It has no offices, stockholders, officers, directors, employees, agents or representatives in New York, and does not own, use, or possess real property in New York.

 It is not clear where the subcontract in question was executed, although negotiations took place in New York in the form of three separate meetings attended by Centron's president, Karen King. The contract's performance, however, played out completely within Louisville, Kentucky.

 The subcontract contains a choice of law clause naming New York as its choice. However, the primary contract names Kentucky as the law of choice. Apparently a choice of forum clause was not agreed to by the parties to either contract. An action on a bond brought by Centron in Kentucky contains a choice of forum clause naming the state courts of Kentucky as the forum. *fn2"

 PROCEDURAL HISTORY

 Plaintiff originally commenced this action in New York State Supreme Court, County of Rensselaer, on February 21, 1995, alleging breach of subcontract, breach of warranty, and negligence in failing to perform. On March 17, 1995, pursuant to 28 U.S.C. 1441 and 1446, Centron served and filed a notice of removal to this court on the basis that complete diversity of citizenship exists between plaintiff (a New York corporation) and itself, and that the amount in controversy exceeds $ 50,000. The filing and service of an amended complaint was made by LaCorte on May 15, 1995, and an answer by Centron on May 24, 1995.

 On June 14, 1995, Centron itself brought action on a payment bond in the Western District of Kentucky claiming failure on the part of LaCorte to pay for "extra work" required of, and performed by Centron. *fn3" This action is against Insurance Company of North America as the surety on the project. Two days later, on June 16, 1995, Centron moved to transfer this action to the Western District Court of Kentucky pursuant to 28 U.S.C. § 1404(a). It is this motion upon which we now focus.

 JURISDICTION

 Centron, as a corporation of New Jersey, may be subjected to the 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.

 CPLR § 302 (a)(1) sets out as one method of obtaining jurisdiction over a nondomiciliary, a "transaction of business" doctrine. This doctrine "authorizes the court to exercise jurisdiction over nondomiciliaries for tort and contract claims arising from a defendant's transaction of business in this State." Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 198, 522 N.E.2d 40 (1988); see also Paribas Corp. v. Shelton Ranch Corp., 742 F. Supp. 86, 91 (S.D.N.Y. 1990). Section 302(a)(1) provides in pertinent part:

 
(a) As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, . . . who . . . ...

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