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MANCHESTER EQUIPMENT CO., INC. v. AMERICAN WAY

August 9, 1999

MANCHESTER EQUIPMENT CO., INC., PLAINTIFF,
v.
AMERICAN WAY AND MOVING CO., INC., A SUBSIDIARY OF MAYFLOWER TRANSIT, INC., LOUDERBACK TRANSPORTATION CO., INC., A SUBSIDIARY OF MAYFLOWER TRANSIT, INC., MAYFLOWER TRANSIT, INC., A SUBSIDIARY OF UNIGROUP, INC. AND UNIGROUP, INC., DEFENDANTS.



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

  MEMORANDUM AND ORDER

Plaintiff Manchester Equipment Co., Inc. ("Manchester") is a computer equipment distributing and servicing company. In this diversity action, Manchester seeks to hold defendants liable for the loss of approximately $500,000 worth of computer equipment stolen from Manchester by an individual posing as a Manchester client. All defendants exception Mayflower Transit, Inc. ("Mayflower") have been dismissed for lack of personal jurisdiction. Presently before the court is Mayflower's motion for summary judgment. For the reasons set forth below, the motion is granted.

BACKGROUND

I. Factual Background

The facts leading to the loss of Manchester's computer equipment are summarized in the parties' submissions to this court. For purposes of this motion, the facts are construed in the light most favorable to Manchester, the non-moving party. See Anderson v. Liberty Lobby, 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Covington v. City of New York, 171 F.3d 117, 121 (2d Cir. 1999).

Sometime in May of 1997, a Manchester officer received a telephone call from an individual who identified himself as David Lancaster. Mr. Lancaster stated that he was a Vice President of Time-Warner, an established Manchester client. Lancaster placed an order with Manchester for a large quantity of computer equipment valued at approximately $500,000. A Manchester sales manager testified at deposition that he verified Lancaster's identity as a Time-Warner officer with a Time-Warner executive in New York and with a representative of a Time-Warner affiliate.

In June of 1997, Manchester received a written purchase order from Lancaster for the computer equipment referred to in the May telephone call. This purchase order listed an address in Wilmington, Delaware as the shipping destination. Lancaster identified the Wilmington address as a Time-Warner distribution center. In reality, however, the address provided by Lancaster was the address of American Way Moving and Storage Co., Inc. ("American Way"). American Way is engaged, inter alia, in the business of providing moving and storage services. Unbeknownst to Manchester, once the order was placed, Lancaster contacted American Way to arrange for delivery of the equipment. Specifically, Lancaster contacted American Way's terminal manager, identified himself as a Time-Warner Vice President and explained that he wished to purchase 2,500 feet of storage space for computer equipment. Lancaster told the American Way representative that the computer equipment would need to be stored for a short period of time and would be picked up by Time-Warner trucks for shipment to a Warner Communications facility in Pennsylvania.

Manchester shipped the computers ordered by Lancaster in two separate shipments to the Delaware address. The computers were received by American Way on June 12 and 13, 1997. They were thereafter released to Lancaster's drivers. At the time of pick-up, Manchester had not been paid for the equipment. Invoices sent to Time-Warner's offices to the attention of David Lancaster were returned to Manchester as undeliverable.

II. Plaintiff's Complaint

III. The Present Motion

As noted above, all defendants, except for Mayflower, have been dismissed for lack of personal jurisdiction. Mayflower, the parent company of American Way, now moves for summary judgment.

Mayflower argues several grounds in support of its motion. First, Mayflower, sued solely in its capacity as the parent company of American Way, argues that the facts do not support imposition of liability based on this relationship. Mayflower also argues that it had no relationship with Manchester whatsoever and therefore owed Manchester no duty of care. Turning to the merits of plaintiff's claim, Mayflower argues that Manchester will be unable to prove American Way's liability, therefore it will be impossible to impose liability upon Mayflower. Finally, Mayflower argues that Manchester's own negligence in allowing itself to be "duped" by Lancaster should estop Manchester from recovering its loss from Mayflower.

In response to Mayflower's motion, Manchester states the issue succinctly. "The question for the court is whether the negligence of the subsidiary non-party, American Way, can be attributed to its ...


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