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