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PFEFFER v. MARK

February 26, 1999

STEVEN PFEFFER, PLAINTIFF,
v.
JONATHAN MARK AND MARK ATHLETIC, LTD., A CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Glasser, District Judge.

MEMORANDUM & ORDER

BACKGROUND

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.

FACTS

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.

DISCUSSION

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.

I. CPLR § 301

Under CPLR ยง 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, ...


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