The opinion of the court was delivered by: Cote, District Judge.
Plaintiffs seek to recover against the defendants for a veriety
of actions relating to the sale and export of a number of
trucks. Defendant Fred M. Dellorfano ("Dellorfano"), who was
involved with plaintiffs' subcontractor, has filed a motion to
dismiss on the ground that this Court lacks personal
jurisdiction over him. For the reasons stated, Dellorfano's
motion is denied.
This case involves a fairly complex sales transaction, many of
the facts of which are described in this Court's Opinion and
Order dated January 5, 1999, granting the motion for summary
judgment of National Bank of Kuwait, New York, New York ("NBK
New York"). NBK New York was the advising and confirming bank
under the letter of credit that was used to effect payment for
the sales transaction.
The relevant facts for this motion to dismiss are undisputed.
Dellorfano was never a resident of New York and has never
maintained a place of business in New York. Dellorfano does not
have any employees or agents in New York and has never
maintained an office, mailing address, or telephone number in
New York. Dellorfano has never owned any assets, never paid any
taxes, or maintained a bank account in New York.*fn1
The principal New York actions alleged by plaintiffs consist of
(1) Dellorfano participating in a meeting in New York on
October 10, 1991, where a performance bond was presented and
Dellorfano received an assignment of proceeds for 10%, equal to
$303,662.50, of the letter of credit amount to facilitate the
sale of the trucks, and (2) another meeting on December 9,
1991, in New York that resulted in Dellorfano entering into an
escrow agreement for the release of funds equaling $440,000
under the letter of credit ("Escrow Agreement") to his escrow
account in Massachusetts. Dellorfano admits that during the
course of the sales transaction, he had two or three meetings
with plaintiffs at the offices of NBK New York with respect to
draws on the letter of credit. Dellorfano alleges, however,
that at these meetings he was present as attorney-in-fact for
Florida Fleet Sales, Inc. ("Florida Fleet"), a Florida entity
that was a second beneficiary under the letter of credit and a
subcontractor of plaintiffs. Plaintiffs had subcontracted with
defendant Roccanti to supply the trucks through either Florida
Fleet or another entity controlled by him (the "Truck
Agreement"). The Truck Agreement
was entered into in Atlanta, Georgia in September or October of
This action was filed on December 16, 1997, and alleges six
causes of action. Dellorfano states that a similar action is
pending in federal court in the District of Massachusetts.
Three of the six causes of action in this District's complaint
name Dellorfano. Each of these sound in contract rather than
tort. The first and sixth causes of action allege that
Dellorfano breached the Truck Agreement by failing to deliver
the trucks. The fifth cause of action alleges that Dellorfano
breached the Escrow Agreement.
In a diversity case or a case arising under a federal law that
does not provide for service of process on a party outside the
state, the issue of personal jurisdiction must be determined
according to the law of the forum state. See Agency Rent A Car
Sys., Inc. v. Grand Rent A Car Corp., 98 F.3d 25, 29 (2d Cir.
1996). "If the exercise of jurisdiction is appropriate under
[the state's statutes], the court then must decide whether such
exercise comports with the requisites of due process."
Bensusan Restaurant Corp. v. King, 126 F.3d 25, 27 (2d Cir.
1997). It is well established that on a Rule 12(b)(2) motion to
dismiss for lack of personal jurisdiction, "the plaintiff bears
the burden of showing that the court has jurisdiction over the
defendant." Metropolitan Life Ins. Co. v. Robertson-Ceco
Corp., 84 F.3d 560, 566 (2d Cir. 1996). Where, as here,
discovery has taken place, this showing includes factual
allegations that would establish jurisdiction. See id.
Plaintiffs argue both (1) that this Court has general
jurisdiction over Dellorfano under CPLR § 301, and (2) that
this Court has specific jurisdiction over defendant under CPLR
§ 302(a). Dellorfano denies that the Court has general
jurisdiction over him. He does not deny that his contacts with
New York provide a basis for jurisdiction under Section 302(a)
for all three causes of action. He argues, however, that the
facts as alleged in the amended complaint are insufficient as a
matter of law and that he is protected by the fiduciary shield
doctrine. Plaintiff is not limited to the facts pleaded in the
complaint and may meet its jurisdictional burden through facts
pleaded in response to the Rule 12(b)(2) motion. See Ball v.
Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.
1990). Similarly, Dellorfano's reliance on the fiduciary shield
doctrine is misplaced; the New York Court of Appeals held in
Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 527 N.Y.S.2d
195, 199, 522 N.E.2d 40 (1988), that this doctrine should not
apply to any provision of New York's long-arm statute. See
also Retail Software Serv. Inc. v. Lashlee, 854 F.2d 18, 22
(2d Cir. 1988).
There is personal jurisdiction over Dellorfano for the causes
of action at stake here. Under CPLR § 302(a)(1), New York's
long-arm statute, a court may exercise personal jurisdiction
over an out-of-state defendant if that defendant "transacts any
business within the state" and the cause of action "arise[s]
from" those transactions. See Agency Rent A Car, 98 F.3d at
29. This test must be met for each cause of action asserted.
See CPLR § 302(c). With respect to the "arising under" prong,
a claim arises out of a party's transaction of business in New
York if there is "a substantial nexus" between the transaction
of business and the cause of action sued upon. See, e.g.,
Agency Rent A Car, 98 F.3d at 31; McGowan v. Smith,
52 N.Y.2d 268, 437 N.Y.S.2d 643, 645, 419 N.E.2d 321 (1981).
In order to meet the "transacting business" element, a
plaintiff must show that the defendant "purposefully avail[ed]
[itself] of the privilege of conducting activities within [New
York], thus invoking, the benefits and protections of its
laws." CutCo Indus., 806 F.2d at 365 (citation and quotation
marks omitted). Courts should examine the totality of
defendant's contacts with New York, rather than focus on each
isolated event. Id.
Although a single purposeful act in New York can be sufficient
to support jurisdiction, see Kreutter v. McFadden Oil Corp.,
71 N.Y.2d 460, 527 N.Y.S.2d 195, 198, 522 N.E.2d 40 (1995), the
nature and quality of the New York contacts must be examined to
determine their significance. George Reiner & Co. v.
Schwartz, 41 N.Y.2d 648, 394 N.Y.S.2d 844, 847, 363 N.E.2d 551
(1977). In judging whether there are sufficient contacts, the
New York Court of Appeals has cautioned that
we should not forget that defendants, as a rule, should be
subject to suit where they are normally found, that is, at
their pre-eminent headquarters or where they ...