horses. In response to the facsimile, Caronia called Carlton for information and eventually purchased livestock mortality insurance for three of his horses. The insurance policy was issued through Lloyds of London and included $ 75,000 in coverage for one of Caronia's thoroughbred horses named "Dominant Prospect."
During their telephone negotiations, the parties agreed that Canadian would forward the insurance policy and all future billing to Caronia's New York residence. Pursuant to this arrangement, Canadian mailed the policy to Caronia in New York, along with a cover letter, dated March 11, 1994, which stated that two invoices were enclosed for the policies on Dominant Prospect and another horse. Several months later, on or about July 13, 1994, Caronia increased the policy coverage of Dominant Prospect from $ 75,000 to $ 200,000, once again through Lloyds of London.
Approximately half a year later, in early 1995, Canadian solicited the renewal of the insurance coverage on Dominant Prospect, and offered Caronia a new policy with a different company, the defendant American Reliable. At this stage of the litigation, it is unclear how Canadian communicated the solicitation. In any event, Caronia apparently agreed to the renewal and increased his coverage of Dominant Prospect from $ 200,000.00 to $ 300,000.00. By a "cover note" mailed to Caronia's New York home, dated March 3, 1995, Canadian documented the increase in coverage and sought payment of the premium. The cover note set forth Caronia as the insured, and listed Caronia's New York home as the insured's address.
Later that year, in December 1995, Canadian sent to Caronia at his New York home a letter soliciting renewal of the coverage for Dominant Prospect. The letter also provided a toll-free number for Caronia to use when contacting Canadian. Caronia responded on February 14, 1996, by placing a phone call to Canadian, and speaking to one of Canadian's employees, a broker named Holly Hewitt. While the facts are in dispute, it is clear that during the conversation, they discussed whether the policy could be modified for several months while Caronia's horses were not racing. According to Canadian's version of the conversation, which Caronia disputes, Caronia told Hewitt that he wanted the insurance coverage of Dominant Prospect to be reduced to $ 50,000. Regardless of the actual content of the conversation, Hewitt immediately relayed instructions to renew and modify the policy to a London intermediary which, on February 15, 1996, issued a cover note reflecting that American Reliable was bound for the reduced amount of $ 50,000 insurance coverage for Dominant Prospect.
Later that month, Dominant Prospect failed to live up to his name and was euthanized due to illness. On March 11, 1996, Caronia signed a livestock proof of loss, and asked for $ 50,000 in insurance coverage plus $ 4,950 for surgical costs. Several weeks later, on April 23, 1996, Caronia signed an amended livestock proof of loss seeking $ 300,000 in coverage, plus $ 11,800 for surgical costs. Subsequently, American Reliable paid Caronia the amount he initially requested -- $ 54,950 -- and refused to pay the greater amount he demanded in his amended livestock proof of loss -- $ 311,800.00.
Thereafter, Caronia commenced a lawsuit against American Reliable in the Supreme Court of the State of New York, Nassau County. The gravamen of Caronia's complaint is that he never requested a reduction from $ 300,000 to $ 50,000 in insurance coverage of Dominant Prospect, and therefore, American Reliable is liable for the higher amount of coverage, less the $ 54,950 the company already paid him. The defendant American Reliable initiated a cross-claim against Canadian for indemnity and contribution. In February 1997, American Reliable filed a Notice of Removal to this Court.
Presently before the Court is the motion of the defendant Canadian to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction. According to Canadian, there is no basis for in personam jurisdiction because the plaintiff has failed to establish the requirements set forth in New York's long-arm statute, New York Civil Practice Law and Rules ("CPLR") §§ 301 and 302. The plaintiff and the defendant American Reliable oppose the motion, arguing that Canadian fulfilled the statutory and constitutional requirements for in personam jurisdiction by "transacting business" within New York State.
A. Personal Jurisdiction Under New York Civil Practice Law And Rules ("CPLR")
Prior to discussing the issues presented by Canadian's motion to dismiss, the Court will set forth several general principles applicable to motions challenging personal jurisdiction.
If the Court relies on the pleadings and affidavits alone, the plaintiff need only make a prima facie showing of jurisdiction in order to defeat the motion to dismiss. PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997); Welinsky v. Resort of World D.N.V., 839 F.2d 928, 930 (2d Cir. 1988). Moreover, the pleadings and affidavits should be construed in the light most favorable to the plaintiff, and all doubts resolved in his favor. The Court should also keep in mind that "personal jurisdiction inquiries are 'necessarily fact sensitive because each case is dependent upon its own particular circumstances.'" PDK Labs, Inc., supra, 103 F.3d at 1108 (quoting Landoil Resources Corp. v. Alexander & Alexander Services, Inc., 918 F.2d 1039, 1043 [2d Cir. 1991]).
Personal jurisdiction over a defendant in a diversity action is determined by the law of the forum state. Cutco Industries, Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986); Arrowsmith v. United Press International, 320 F.2d 219, 223 (2d Cir. 1963)(en banc). Consequently, the Court looks to New York's personal jurisdiction statutes, CPLR §§ 301 and 302, to determine whether the plaintiff has set forth a prima facie showing of in personam jurisdiction over the defendant. See Slapshot Beverage Company, Inc. v. Southern Packaging Machinery, Inc., 980 F. Supp. 684, 686 (E.D.N.Y. 1997).
CPLR § 301 confers jurisdiction over a nondomiciliary defendant "on causes of action wholly unrelated to acts done in New York, . . . when the defendant is 'engaged in such a continuous and systematic course of 'doing business' [in New York] as to warrant a finding of its 'presence' in the jurisdiction." Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 198 (2d Cir. 1990)(quotations omitted), cert. denied, 498 U.S. 854, 111 S. Ct. 150, 112 L. Ed. 2d 116 (1990).
By contrast, CPLR § 302(a)(1) authorizes the exercise of personal jurisdiction over a nondomiciliary "who in person or through an agent . . . transacts any business within the state or contracts anywhere to supply goods or services in the state." "A nondomiciliary 'transacts business' under CPLR 302(a)(1) when he 'purposefully avails [himself] of the privilege of conducting activities within [New York], thus invoking the benefits and protections of its laws.'" Cutco Industries, Inc. v. Naughton, supra, 806 F.2d at 365 (internal citations and quotations omitted). "No single event or contact connecting the defendant to the forum state need be demonstrated; rather, the totality of all defendant's contacts with the forum state must indicate that the exercise of jurisdiction would be proper." Id. (Citing Sterling National bank and Trust Co. Of New York v. Fidelity Mortgage Investors, 510 F.2d 870, 873-74 [2d Cir. 1975]; Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 15 N.Y.2d 443, 457 n.5, 261 N.Y.S.2d 8, 209 N.E.2d 68, cert. denied, 382 U.S. 905, 86 S. Ct. 241, 15 L. Ed. 2d 158 ).
Although it is not mentioned by any of the parties, Section 1101 of the New York Insurance Law sets forth the relevant statutory provision as to what constitutes "doing an insurance business" for jurisdictional purposes under CPLR § 302. This statute provides, in relevant part, the following:
1101. Definitions; doing an insurance business
(a) In this article: (1) "Insurance contract" means any agreement or other transaction whereby one party, the "insurer", is obligated to confer benefit of pecuniary value upon another party, the "insured" or "beneficiary", dependent upon the happening of a fortuitous event in which the insured or beneficiary has, or is expected to have at the time of such happening, a material interest which will be adversely affected by the happening of such event.