Boryk v. Aerolineas Argentinas

• Decision Date: 08 April 1964
• Citation: 228 F. Supp. 528
• Parties: Helen BORYK, as Administratrix of the Estate of William Boryk, Jr., Deceased, Helen Boryk, individually and as surviving widow of William Boryk, Jr., Helen Boryk, as Natural Guardian of Stephanie Boryk, an infant, Plaintiff, v. AEROLINEAS ARGENTINAS, The de Havilland Aircraft Co., Ltd., and de Havilland Aircraft Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

228 F. Supp. 528

Helen BORYK, as Administratrix of the Estate of William Boryk, Jr., Deceased, Helen Boryk, individually and as surviving widow of William Boryk, Jr., Helen Boryk, as Natural Guardian of Stephanie Boryk, an infant, Plaintiff, v. AEROLINEAS ARGENTINAS, The de Havilland Aircraft Co., Ltd., and de Havilland Aircraft Inc., Defendants.

United States District Court S. D. New York.

April 8, 1964.

Speiser, Shumate, Geoghan & Law, New York City, for plaintiff, Edward M. O'Brien, New York City, of counsel.

Mendes & Mount, New York City, for defendant The de Havilland Aircraft Co., Ltd., B. E. Haller, J. F. Byrne, New York City, of counsel.

FREDERICK van PELT BRYAN, District Judge.

Plaintiff, a resident of Connecticut sues in her respective capacities as administratrix of decedent's estate, his surviving widow and guardian of their daughter, to recover for his wrongful death in the crash of a Comet IV jet airliner at Sao Paulo, Brazil, on November 23, 1961.

The aircraft was owned and operated by defendant Aerolineas Argentinas (Argentinas), an Argentinian corporation doing business in New York. It had been designed and manufactured by defendant The de Havilland Aircraft Co., Ltd. (Limited), a corporation organized under the laws of the United Kingdom with its principal place of business in England. The third defendant, de Havilland Aircraft, Inc. (Incorporated), is a Delaware corporation authorized to do business in New York with its principal place of business there. Jurisdiction is based on diversity of citizenship under 28 U.S.C. § 1332(a).

Defendant Limited, appearing specially, moves to dismiss the complaint as to it and to quash service of process upon it upon the grounds (a) that it is an alien corporation not present in this state and therefore not subject to the jurisdiction of this court, and (b) that process has not been served on anyone entitled to be served on its behalf. In the alternative, Limited seeks dismissal upon the ground of improper venue.

The other two defendants have not contested service and have answered the complaint.

The claim against Limited is predicated upon alleged negligence in the design, assembly, manufacture and servicing of the Comet IV aircraft in which decedent was killed and breach of express and implied warranties that the aircraft and its parts were fit for the purposes for which they were sold and intended. None of the acts upon which liability is asserted are alleged to have occurred in New York. Plaintiff claims to have made service of process on defendant Limited by personally delivering copies of the summons and complaint to Ian S. Fossett individually and as president of Incorporated. Plaintiff maintains that Limited is subject to jurisdiction here and that Fossett or Incorporated, or both, were in fact the managing agents of Limited in this state.

Limited, on the other hand, relying on an affidavit of Fossett in support of its motion to dismiss, denies that it conducted any significant activities here which would subject it to jurisdiction and that either Fossett or Incorporated was its managing agent.

After Limited had made its motion to dismiss, plaintiff submitted extensive interrogatories to Limited concerning facts claimed to bear on the question of jurisdiction, and Limited has answered those interrogatories. Plaintiff then took the deposition of Fossett on the same questions. She relies largely on facts obtained from these two sources as delineated in an affidavit by one of her attorneys, to sustain her burden of establishing jurisdiction. Defendant Limited has not replied to the answering affidavits but contends that the facts presented do not sustain plaintiff's burden. Neither side has asked for a hearing or for further discovery, and both are content to have the motion decided on the papers before me.

Facts

Limited is a leading British manufacturer of military and civilian aircraft. Together with its wholly owned engine and propeller subsidiaries, which are also British companies, it has its principal offices in Hertfordshire, England, and its various manufacturing and assembly plants and facilities are also in that country.¹

Limited produced the Comet IV commercial airliner involved in this case as well as the Dove and the Heron, which are private or executive planes. It has also been developing and is producing the Trident, a new commercial airliner, and a new and improved Dove 800. Limited makes component parts and equipment for the planes which it manufactured. It is presently a member of the Hawker-Siddeley Group representing United Kingdom aviation interests in world competition.

Limited has not qualified to do business in New York and has designated no agent here for the service of process. It has no offices and no assets in this state. Its name is not listed in any New York telephone directory. It has no bank accounts here and has sold no airplanes in New York.

Incorporated is a wholly owned subsidiary of Limited, organized under the laws of Delaware in 1954. Its main offices and storeroom are at the Marine Terminal, LaGuardia Airport in Flushing. Jane's All The World's Aircraft lists Incorporated as one of Limited's associated companies overseas and the World Aviation Directory lists Incorporated as distributor for Limited.

Prior to 1954 Fossett, a British subject, was the American representative of Limited and a salaried employee of that company. From April 1952 until 1954 he maintained offices in that capacity at Linden, New Jersey. The nature and extent of his activities on behalf of Limited during this period are by no means clear. Apparently, however, Fossett was concerned with the promotion of sales of Dove and Heron planes manufactured by Limited, substantial numbers of which were sold in this country through distributors, and of parts and equipment for such planes.

In October 1954 Incorporated was organized at the instance of Limited, which is its sole stockholder. Fossett became its president. Upon its organization Incorporated took over premises at the Marine Terminal in LaGuardia Airport which had been leased by Limited from the Port Authority in August of 1954, and carried out the obligations under that lease until May 1956 when it entered into its own lease with the Port Authority. Apparently Fossett discontinued whatever activities he had previously carried on for Limited when Incorporated commenced business, though he continued on Limited's payroll until the end of 1955, during part of which time he was convalescing from a motor accident. Thereafter his salary was fully paid by Incorporated and he has received no compensation from Limited since. Since it commenced operations in 1954, Incorporated has had its own officers and employees, some 16 in number, none of whom were officers or employees of Limited. It has paid their salaries and all of its own expenses and has kept its own books, records and accounts, which have not been consolidated in any way with those of its parent.

The original board of directors of Incorporated consisted of four British officers and directors of Limited or its subsidiaries, Fossett and a member of a New York law firm. In 1962, at the time of the commencement of the action, it appears that three of the members of its board were officers and directors of Limited, and the others were Fossett, the president of Incorporated, Royce, its vice president, who was the original lawyer director, and Hoffman, its secretary and treasurer.

From 1954 to 1962 the largest part of the business conducted by Incorporated was the sale of parts and equipment for de Haviland Dove and Heron aircraft owned and operated in this country. The major portion of these products was purchased from Limited and its subsidiaries in England. Other parts, when interchangeable, were obtained in this country. Incorporated maintained stock levels of parts at its storeroom at LaGuardia Airport and purchased as it saw fit from Limited and others to maintain the necessary levels. It sold to numerous purchasers throughout the country.

Incorporated also sold spare parts for Avro and Argosy aircraft manufactured in England by other companies which were members of the Hawker-Siddeley Group and did a substantial volume of such business, though some three-quarters of its spare part business appears to have been for de Havilland aircraft. In addition Incorporated was the distributor for Vallay Industries, Limited, a British corporation which manufactured aircraft polish.

Incorporated also sold Dove and Heron aircraft produced by Limited, and Otter and Beaver aircraft manufactured by Limited's Canadian subsidiary. However, the numbers of such aircraft which it sold were relatively small, and its aircraft sales were secondary to its spare parts business.

In January 1956 Incorporated entered into an agreement with Limited and its engine and propeller subsidiaries which, with some changes not material here, continued in force until September 30, 1961. This agreement gave Incorporated the sole right to purchase de Havilland Doves and Herons and the engines, propellers, parts and other equipment for such aircraft from Limited and its subsidiaries for sale anywhere in the United States. Limited and its subsidiaries agreed to supply such aircraft and products upon order from what was next available in their production lines with payments to be made by Incorporated within thirty days at current list price less discount. Incorporated was authorized to resell aircraft, parts and equipment so purchased at prices determined by it, acting as principal and not as agent of Limited or its subsidiaries. On such resale Incorporated was required to give to the purchaser warranties no less favorable than the standard warranties issued by the English companies. It was free to carry on other business provided it was non-competitive.

Under the agreement Incorporated undertook to provide after-sale service for Dove and Heron aircraft...