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CORTLANDT RACQUET CLUB, INC. v. OY SAUNATEC

September 29, 1997

CORTLANDT RACQUET CLUB, INC., 87 Albany Road, Montrose, NY 10548, Plaintiff, against OY SAUNATEC, LTD. Pohj Pallbont 1 FI-10901 Hanko Finland, and SAUNATEC, INC. 575 E. Cokato Street Cokato, MN 55321 and H.B.C., Inc. d/b/a HELO SAUNAS FROM FINLAND 601 Lewis Avenue, North, Watertown, MN 55388 and ELECTRO-GERATEBAU GmbH Postfach 1180 D-76032 Oberderdingen Germany, Defendants.


The opinion of the court was delivered by: SOTOMAYOR

 OPINION AND ORDER

 Plaintiff Cortlandt Racquet Club, Inc. ("Cortlandt") brings this action to recover damages in connection with a fire at plaintiff's health club allegedly caused by a high-limit switch manufactured by defendant E.G.O. Elektro-Geraetebau GMBH ("EGO"). Defendant EGO moves for summary judgement seeking to be dismissed from this action based on a lack of personal jurisdiction. For the reasons to be discussed, defendant's motion is GRANTED.

 BACKGROUND

 EGO is a German corporation duly organized under the laws of the Federal Republic of Germany with its principle place of business in Germany. EGO is engaged in the design, manufacture and sale of thermostats, high-limit switches and other products. At issue is a high-limit switch whose final destination was a sauna in a health club in New York State.

 Over the five-year period from 1991 to 1996, EGO transferred $ 24.9 million worth of EGO products for distribution in the United States to EGO Products, Inc., ("EPI") a Georgia corporation characterized by defendant, and recognized by plaintiff, as EGO's "exclusive" United States distributor. (Opp. at 16.) EGO derives a 15% commission from EPI's sales of these goods. Over the same five-year period, EPI sold approximately $ 358,000 worth of EGO products to New York customers, with EGO's commissions totaling $ 53,738.03.

 The high-limit switch at issue in this action was not distributed through EPI. (Letter from Harrington of 9/24/97; Letter from Ruff of 9/25/97.) EGO manufactured the high-limit switch in question in Germany and sold it to Elektro-Geraete AG Zug ("EGO Zug"), a Swiss corporation. *fn1" EGO Zug then sold the switch to its Norwegian subsidiary, EGO Nordisk. EGO Nordisk, in turn, sold the switch to Helo Saunas, an unrelated Finnish corporation. Next, Helo Saunas installed the switch into one of its products in Finland. From there, the sauna somehow "found its way" into New York -- as plaintiff puts it -- but neither side details precisely how. (Letter from Harrington of 9/24/97.)

 Plaintiff Cortlandt owned and operated a health club known as the Club at Montrose (the "Club") located in Montrose, New York. On or about February 8, 1994, Cortlandt purchased a model SKLE 120 sauna heater, Serial Number A40778-102, designed and manufactured by Oy Saunatec Ltd. and distributed and sold by Saunatec, Inc. and H.B.C., Inc. for use in the men's sauna at the Club. The aforementioned sauna heater was equipped with the high-limit switch manufactured by EGO in Germany.

 On or about August 30, 1994, the aforementioned sauna heater caused a fire in the men's sauna at the Club causing extensive damage. Plaintiff brings this action against Oy Saunatec, Ltd., Saunatec, Inc., H.B.C., Inc., and EGO seeking damages. EGO has moved for summary judgement, pursuant to Rule 56 Fed. R. Civ. P., seeking dismissal of the action against it for lack of personal jurisdiction.

 DISCUSSION

 I. Summary Judgement

 Summary judgment may not be granted unless the submissions of the parties taken together "show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Allen v. Coughlin, 64 F.3d 77, 79 (2d Cir.1995). It is the moving party who bears the initial responsibility of informing the court of the basis for its motion, and identifying those portions of "'the pleadings, depositions, answers to interrogatories, and affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Federal Deposit Ins. Corp. v. Giammettei, 34 F.3d 51, 54 (2d Cir.1994) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)). Once the moving party has provided sufficient evidence to support a motion for summary judgment, the opposing party must "set forth specific facts showing that there is a genuine issue for trial," and cannot rest on "mere allegations or denials" of the facts asserted by the movant. Fed. R. Civ. P. 56(e); accord Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522, 525-26 (2d Cir.1994). When deciding a motion for summary judgment, this Court must "view the evidence in a light most favorable to the non-moving party and draw all reasonable inferences in its favor." American Casualty Co. v. Nordic Leasing, Inc., 42 F.3d 725, 728 (2d Cir. 1994). Summary judgement is appropriate if, after drawing all reasonable inferences and ambiguities in the nonmovant's favor, no genuine issues of material fact exist and the movant is entitled to judgement as a matter of law. Fed. R. Civ. P. 56(c); see also Greene v. United States, 13 F.3d 577 (2d Cir. 1994); Metropolitan Life Insurance Company v. Jackson, 896 F. Supp. 318 (S.D.N.Y. 1995).

 II. Personal Jurisdiction

 Subject matter over the claim against EGO is based on diversity of citizenship, 28 U.S.C. § 1332. Therefore, the issue of personal jurisdiction is determined by the law of the forum state. See Savin v. Ranier, 898 F.2d 304, 306 (2d Cir. 1990) (citing Arrowsmith v. United Press Intern., 320 F.2d 219, 222-25 (2d Cir. 1963)). In particular, plaintiff alleges that defendant EGO is subject to jurisdiction pursuant to either of two provisions of New York law, N.Y. Civ. Prac. L. & R. § ...


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