The opinion of the court was delivered by: Glasser, District Judge.
Plaintiff Steven Pfeffer ("Pfeffer") filed this Complaint
asserting three causes of action arising out of a commercial
dispute he had with the defendants, Jonathan Mark ("Mark") and
Mark Athletic Ltd. ("Mark Athletic"). Pfeffer seeks an
accounting, his unpaid salary and the repayment of a loan he
allegedly made to Mark Athletic. The defendants now move,
pursuant to Federal Rule of Civil Procedure 12(b)(2), to dismiss
the Complaint for lack of personal jurisdiction. For the reasons
that follow, the defendants' motion is denied.
For the purposes of deciding this motion only, the following
facts are assumed to be true. Mark Athletic is a corporation
incorporated under the laws of the State of New Jersey and
authorized to do business only in that State. Mark, a New Jersey
resident, is the President and Chief Executive Officer of Mark
Athletic. Pfeffer's family business, situated in New York, bought
goods from GMP Sales, which had facilities in New York and New
Jersey.*fn1 Mark was a principal of GMP Sales.
In August, 1995 Mark approached Pfeffer to discuss starting a
new company together. Mark and Pfeffer met at a restaurant in New
York City to discuss the relationship and on January 1, 1996
formed the corporate entity known as Mark Athletic, Ltd.
The January 1, 1996 agreement between Mark, Mark Athletic and
Pfeffer provided for the issuance, ownership and disposition of
the shares, and the conduct of the management and business of
Mark Athletic — a corporation created for the purpose of
importing, marketing and selling active sportswear.
Despite the fact that the written agreement was never executed,
Pfeffer began working as Vice President and Secretary of Mark
Athletic in January 1996. In October of that year, he started to
work as Vice President of Sales for Mark Athletic. Pfeffer's
employment with Mark Athletic ended on October 15, 1998 when he
was told by Mark that the company was going out of business.
Pfeffer's claims against the defendants concern distributions
of funds that were not made by Mark Athletic to the plaintiff and
the defendants' refusal to allow Pfeffer to participate in the
control of the company. In addition, the plaintiff states that he
is owed backpay for his work at Mark Athletic.
The plaintiff has the burden of establishing that this Court
has personal jurisdiction over the defendants. Roper Starch
Worldwide v. Reymer & Assocs., 2 F. Supp.2d 470, 472 (S.D.N Y
1998). Where no evidentiary hearing has been held, the plaintiff
need only make a prima facie showing that jurisdiction exists.
Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d
Cir. 1985). In addition, all pleadings and affidavits are
construed in the light most favorable to plaintiff. Id.
Personal jurisdiction over a foreign corporation in a diversity
action is determined in accordance with the law of the state in
which the court sits. Id. The parties agree that this Court
must resolve jurisdictional issues according to New York law, and
that Sections 301 and 302(a)(1) of the New York Civil Practice
Law and Rules govern the determination of whether this Court has
personal jurisdiction over the defendants.
Under CPLR § 301, a foreign corporation may be subject to
jurisdiction in New York if that corporation is present in the
state "not occasionally or casually, but with a fair measure of
permanence and continuity." Tauza v. Susquehanna Coal Co.,
220 N.Y. 259, 267, 115 N.E. 915 (N.Y. 1917). The determination of
whether the foreign corporation is doing business in the states
is unique to each case. Katz Agency, ...