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 conduct
substantial general business activities.
McKee Elec. Co. v. Rauland-Borg Corp., 20 N.Y.2d 377, 283
N YS.2d 34, 38, 229 N.E.2d 604 (1967). Thus, New York's
highest court eschewed an interpretation of Section 302 that
would find jurisdiction over "every corporation whose officers
or sales personnel happen to pass the time of day with a New
York customer in New York. . . ." Id. at 37, 229 N.E.2d 604.
There is no question that Dellorfano is amenable to suit in New
York for the alleged breach of the Escrow Agreement. Dellorfano
attended a meeting in New York on the Escrow Agreement prior to
its execution and executed it in New York. Moreover, the
relevant performances, including a transfer of the money to
Dellorfano's account and an agreement to return the funds after
ten days, are contemplated to take place in New York. As a
result, Dellorfano's activities in connection with the Escrow
Agreement constitute "transacting business" within the meaning
of section 302(a). See George Reiner, 394 N.Y.S.2d at 847,
363 N.E.2d 551.
The other two claims, the first and sixth causes of action
allege breaches of the Truck Agreement.*fn2 Under New York
in order for meetings in New York which are subsequent to the
formation of the contractual relationship to confer
jurisdiction [under Section 302(a)(1)], the meeting must be
essential to the business relationship or at least
substantially advance it.
Kahn Lucas Lancaster, Inc. v. Lark Int'l Ltd., 956 F. Supp. 1131,
1136 (S.D.N.Y. 1997). See also APC Commodity Corp. v.
Ram Dis Ticaret, A.S., 965 F. Supp. 461, 465 (S.D.N.Y. 1997)
("The defendant purposefully availed itself of the privilege of
conducting activities in New York that were critical to the
transaction at issue in this case."); Cosmetech Int'l v. Der
Kwei Enter. and Co., 943 F. Supp. 311, 318 (S.D.N.Y. 1996) ("In
considering relevance of [defendant's] visits to New York, the
Court must look to the specific facts of each visit, and
determine whether the Defendant performed purposeful acts in
New York in relation to the contract.").