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Maloney v. McFarland Johnson

July 27, 2006

J. MICHAEL MALONEY AND LINDA R. MALONEY, PLAINTIFFS,
v.
MCFARLAND JOHNSON, INC., C&S ENGINEERS INC., CENTRAL AVIATION, INC. AND S&S AVIATION, INC. D/B/A RICE LAKE AIR CENTER, DEFENDANTS.



The opinion of the court was delivered by: John T. Elfvin S.U.S.D.J.

MEMORANDUM and ORDER*fn1

INTRODUCTION and BACKGROUND

On September 16, 2002, commercial airline pilot, J. Michael Maloney began to execute a take-off in his private aircraft from Runway 31 at the Canandaigua Airport in Canandaigua, N.Y. Momentarily after take-off the aircraft suffered a complete loss of engine power, necessitating an emergency landing in an area of the airport containing a surface water retaining pond located near the runway. Maloney was seriously injured.

He and his wife, Linda R. Maloney (hereinafter "the plaintiffs"), residents of Illinois, commenced this diversity action on September 16, 2004 wherein they sued defendants S&S Aviation, Inc. d/b/a Rice Lake Air Center, ("Rice Lake") and Central Aviation, Inc. ("Central") (both Wisconsin corporations) on a theory of negligent maintenance and repair with respect to work performed on the aircraft. Defendant McFarland Johnson, Inc., ("McFarland") (a New York corporation) was sued on a theory of negligent design and engineering with respect to the design and construction of the runway and retaining pond.

McFarland answered (Dkt. #5) on December 10, 2004, interposing various affirmative defenses and cross-claiming against Rice Lake and Central for contribution and/or indemnification. Central answered the complaint on January 3, 2005, interposing various affirmative defenses and cross-claiming against Rice Lake and McFarland for contribution and/or indemnification (Dkt. #11). In lieu of an answer, Rice Lake has moved to dismiss the complaint against it for lack of personal jurisdiction (Dkt #17). On April 6, 2005, Central also made a motion for summary judgment for lack of personal jurisdiction (Dkt. #28).

On September 15, 2005, plaintiffs made a motion for leave to serve and file an amended complaint (Dkt. #54). A stipulation and order was filed on November 3, 2005 which allowed the filing of an amended complaint in order to reflect Rice Lake's corporate name as S&S Aviation, Inc. and to add C&S Engineers, Inc. ("C&S") (a New York corporation) as a defendant. The stipulation also preserved the existing defendants' affirmative defenses and their positions regarding lack of personal jurisdiction as set forth in the pending motions (Dkt. #61). The amended complaint was filed on December 16, 2005 (Dkt. #66). Like McFarland, C&S was sued on a theory of negligent design and engineering relating to the design and construction of the runway and retaining pond. In lieu of an answer, C&S has moved pursuant to F.R.Cv.P. 12(b)(6), to dismiss on statute of limitations grounds (Dkt. #80).

Because they were made against the original complaint, Rice Lake's motion to dismiss (Dkt. #17) and Central's motion for summary judgment (Dkt. #28) are technically moot. However, because the parties' clear intent was that the motions survive the filing of the amendment to the complaint (see the aforementioned stipulation at Dkt. #61) and involve personal jurisdictional issues not altered by the filing of the amended complaint, in the interest of judicial economy the Court will consider them. Plaintiffs' have now moved pursuant to F.R.Cv.P. 15 to file a second amended complaint (Dkt. #62).

DISCUSSION

The Motions to Dismiss for Lack of Personal Jurisdiction

As stated, supra, the claims against Rice Lake and Central are not affected by plaintiff's second motion to amend. Hence, they will be addressed first. "The amenability of a foreign corporation to suit in a federal court in a diversity action is determined in accordance with the law of the state wherein the court sits, with 'federal law' entering the picture only for the purpose of deciding whether a state's assertion of jurisdiction contravenes a constitutional guarantee." Ivoclar Vivadent, Inc. v. Ultident, Inc., 2005 WL 1421805, *2 (W.D.N.Y. 2005)(quoting Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir.1996); see also Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 198 (2d Cir. 1990), Kirkpatrick v. Rays Group, 71 F.Supp.2d 204, 217 (W.D.N.Y. 1999).

It is undisputed that defendants Rice Lake and Central are non-domiciliaries and that the tortious acts plaintiffs allege they committed ( i.e., the negligent repairs in 1999 and 2002, respectively) occurred outside the State of New York, allegedly causing the crash and injuries inside the State. The Court will therefore apply Section 302(a)(3) of New York's Civil Practice Law and Rules ("C.P.L.R.") to the allegations in this action to determine if it has personal jurisdiction over defendants. If it has, and if necessary, the Court will determine whether the exercise of such jurisdiction comports with due process. See ibid. C.P.L.R. §302(a) allows a court in New York to exercise jurisdiction over a non-domiciliary who 3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he

(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or

(ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce.

Rice Lake's Motion

Rice Lake seeks dismissal of the complaint pursuant to F.R.Cv.P. 12(b)(2) for lack of personal jurisdiction. Rice Lake is a Wisconsin company which operates an aircraft maintenance and repair facility out of the Rice Lake Airport in Cameron, Wisconsin. Plaintiffs' claims against Rice Lake allege negligent maintenance and repair work performed by Rice Lake on the subject aircraft in 1999 which contributed to the engine malfunction and caused the plane to crash. Plaintiffs did not own the subject aircraft in 1999. The work referred to in the complaint was performed by Rice Lake in Wisconsin for the previous owner, a Wisconsin resident.

Although they initially claimed to have no connection to New York by way of either personal or business transactions, the current owner of Rice Lake later recalled an instance where an employee traveled to the Genesee County Airport in Batavia, N.Y. on two occasions in 2004.*fn2 The employee stayed in New York for approximately six days to perform work on the aircraft of a single customer. This was characterized as an established customer from Wisconsin who was in New York when the aircraft had been damaged and sought out Rice Lake to do some of the repairs there. Rice Lake's fee for its portion of the New York repairs totaled approximately $9,200.00. As an additional contact, the previous owner of the company stated that, with respect to the charter business they conducted before November 2003, he recalled possibly one charter flight that went to New York. Rice Lake also maintains a website which can conceivably be accessed by anyone around the world, but does not affirmatively direct any of its activity or marketing to New York. Other unrelated websites utilize hyperlinks that can direct people to Rice Lake's site, but Rice Lake maintains no control over these websites. Rice Lake urges that these limited contacts are not sufficient to confer personal jurisdiction. With respect to C.P.L.R. §302(a)(3)(i), Rice Lake claims that it does not regularly do or solicit business, engage in a persistent course of conduct or derive substantial revenue from activity in New York. With respect to C.P.L.R. §302(a)(3)(ii), although Rice Lake admits that it derives substantial revenue from interstate or international commerce, it disputes that it should have reasonably expected that the work it performed on the subject aircraft for the aircraft's previous owner could have consequences in New York.

The Court is obligated to view the allegations as plaintiff has stated them.

"While plaintiff bears the ultimate burden of establishing jurisdiction over defendant by a preponderance of the evidence if such is raised at trial, in cases like this where jurisdiction is challenged prior to discovery, plaintiff may overcome the challenge simply by making a good faith pleading to that effect. See Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir.1998). In making this prima facie jurisdictional determination, the Court is to consider the pleadings and affidavits in the light most favorable to plaintiff. See Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.1990). Inasmuch as no discovery has been conducted herein, the truth of plaintiff's allegations will be assumed for purposes of the jurisdiction issue pursuant to FRCvP 12(b)(2) and doubts will be resolved in plaintiff's favor, notwithstanding a controverting presentation by defendant. Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d ...


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