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Zaveri v. Condor Petroleum Corp.

August 10, 2009


The opinion of the court was delivered by: Michael A. Telesca United States District Judge



Plaintiffs Ashvin Zaveri, Red Fox Run Corporation, and Zaveri Oil & Gas, Ltd. bring this action against defendant Condor Petroleum Corporation ("Condor") claiming that the defendant has inter alia, breached an agreement between the parties to develop oil and gas reserves located in Louisiana, and to share in the profits of the development. Specifically, plaintiffs contend that they are investors who became part-owners of an oil field with Condor, a company specializing in oil and gas exploration. Plaintiffs contend that Condor has unjustifiably stopped sharing profits with them, and has failed to provide an accounting of revenue and expenses for the oil field. Plaintiffs also allege a federal cause of action claiming that the defendant violated Section 10(b) of the Exchange Act by employing deceptive devices in the selling of securities.

Defendant moves to dismiss the Complaint on grounds that this court lacks personal jurisdiction over it. Specifically, Condor contends that as a foreign corporation with no contacts with the State of New York, this court lacks personal jurisdiction over the company pursuant to New York's long-arm statute.

Plaintiffs oppose defendant's motion, and contend that because Condor had sufficient contacts with New York State, this court has personal jurisdiction over the defendant. Plaintiffs further contend that venue in the Western District of New York is appropriate.

For the reasons set forth below, I find that this court lacks personal jurisdiction over Condor, and, in the interests of justice, I hereby transfer this action to the Western District of Louisiana.


The following allegations are set forth in the plaintiffs' Complaint. In 1991, defendant Condor Petroleum Corporation, a Louisiana Company, approached plaintiff Ashvin Zaveri, a resident of New York State, with a proposal to jointly develop an oil field located in Louisiana. Condor, which is in the business of developing oil fields, sought investment monies from Zaveri for the purpose of developing the North Ossun Field located in Lafayette Parish, Louisiana.

In 1993, Zaveri and Condor entered into an Operating Agreement ("the Agreement") in which Zaveri agreed to invest in the development of the North Ossun Oil Field in return for a 50% ownership interest in the development. In turn, Zaveri and/or his corporations (plaintiffs Red Fox Run Corporation and Zaveri Oil and Gas), established several partnerships with additional investors in New York State to develop individual wells in Louisiana.

Pursuant to the joint venture between plaintiffs and defendant, Condor sent to the plaintiffs revenue payments in excess of $5,000,000.00. Plaintiffs claim that in 2002, however, Condor started reducing payments for no apparent reason, and stopped providing an accounting of its operations. Plaintiffs contend that to their knowledge, the oil fields remain profitable, and that Condor has breached its obligation to provide revenue payments.


I. Personal Jurisdiction under New York State's Long Arm Statute

Condor moves to dismiss the Complaint pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure on grounds that this Court has no personal jurisdiction over the company. Where no federal statute governing personal jurisdiction is applicable, the long arm statute of the State in which the District Court sits is applicable. See Insurance Corp. of Ireland v. Compagnie Des Bauxites, 456 U.S. 694 (1982). Section 302 of the New York State Civil Practice Law and Rules ("CPLR"), New York State's "long arm" statute, provides in relevant part that "[a]s to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent . . . [t]ransacts any business within the state . . . ." New York CPLR § 302(a)(1) (McKinney's 2001). To establish that a defendant has "transacted business" in New York, pursuant to Section 302(a)(1), a plaintiff need only demonstrate that the defendant engaged in a single business transaction within the state, provided that the transaction is the basis of the plaintiff's claim. Bank Brussels Lambert v. Fiddler, Gonzalez, & Rodriguez, 171 F.3d 779 (2nd Cir., 1999).

In cases where the defendant is alleged to have committed a tortious act outside of New York State that injured a person or property within the state, New York State courts may assert personal ...

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