Darby v. Compagnie Nat. Air France, 88 Civ. 7604 (RWS).

• Citation: 735 F. Supp. 555
• Decision Date: 13 April 1990
• Docket Number: No. 88 Civ. 7604 (RWS).,88 Civ. 7604 (RWS).
• Parties: Regina L. DARBY, as the Administratrix C.T.A. of the Goods, Chattels and Credits of Peter Shelly Zeller and Regina L. Darby, Individually, Plaintiffs, v. COMPAGNIE NATIONAL AIR FRANCE d/b/a Air France, a corporation of France, Societe Des Hotels Meridien, d/b/a Meridien Hotels, Inc., and Meridien Copacabana, Defendants.
• Court: U.S. District Court — Southern District of New York

735 F. Supp. 555

Regina L. DARBY, as the Administratrix C.T.A. of the Goods, Chattels and Credits of Peter Shelly Zeller and Regina L. Darby, Individually, Plaintiffs, v. COMPAGNIE NATIONAL AIR FRANCE d/b/a Air France, a corporation of France, Societe Des Hotels Meridien, d/b/a Meridien Hotels, Inc., and Meridien Copacabana, Defendants.

No. 88 Civ. 7604 (RWS).

United States District Court, S.D. New York.

April 13, 1990.

COPYRIGHT MATERIAL OMITTED

John DeMaio, New York City, for plaintiffs.

Bower & Gardner, New York City for defendants Societe Des Hotels Meridien and Meridien Copacabana; Richard P. Broder, of counsel.

OPINION

SWEET, District Judge.

Defendant Societe Des Hotel Meridien ("SHM") moves pursuant to Federal Rule of Civil Procedure 12(b)(2) to dismiss the complaint for lack of in personam jurisdiction. For the reasons set forth below the motion is denied.

Prior Proceedings

Darby filed this complaint on October 25, 1988. Oral argument was heard on November 10, 1989 and on the request of parties leave was granted to submit additional papers. This motion was considered fully submitted as of December 15, 1989.

Parties

Plaintiff, Regina L. Darby ("Darby"), was the spouse of the decedent and the Administratrix of his Estate.

Decedent, Peter Shelley Zeiler ("Zeiler"), was forty-three years of age and the late husband of Darby. He drowned off the coast of Rio de Janeiro on December 31, 1986.

Societe Des Hotels Meridien ("SHM") is the owner of certain hotels outside of the United States and the corporate parent of Meridien Gestion S.A. ("SMG").

Meridien Hotels, Inc. ("MHI") is a New York corporation with its principal offices located at 888 Seventh Avenue, New York, N.Y. MHI manages hotels within the United States.

Meridien Gestion S.A. ("SMG") is a French corporation, a wholly-owned subsidiary of SHM, and the principal shareholder of Meridien Hotels, Inc. ("MHI").

Facts

This is an action based upon diversity of citizenship for conscious pain and suffering and wrongful death arising out of the Zeiler drowning in the surf at Rio de Janeiro, Brazil on or about December 31, 1986. Assuming the allegations in Darby's complaint as true for purposes of this motion, Zeiler was a registered guest at a hotel referred to in the caption as "Meridien Copacabana" ("Copacabana"). The allegations set forth that the Copacabana is bordered by treacherous ocean waters and that the coastline is particularly dangerous after extended periods of rain. Darby maintains that the waters were so dangerous and the undertow so strong that the lifeguard, rather than enter the water, would summon helicopters whose pilots used a net to retrieve victims who were drowning. According to Darby, the conspicuous absence of warning signs, safety devices and/or undertow monitoring devices resulted in the needless deaths of several individuals, prior to and including Zeiler.

In November of 1986, Zeiler and Darby, after seeing ads and brochures for the Copacabana, made a reservation through a New York travel agent. All of the brochures and advertisements indicated the Copacabana was a Meridien Hotel without any reference to separate ownership or responsibility.

SHM is not authorized to do business in the State of New York. SHM has no agent designated to accept service of process in New York or in the United States. SHM maintains no offices in New York, nor does it maintain any employees, telephone listing or mailing address in New York. SHM has no assets in New York or anywhere in the United States. SHM maintains no bank accounts in New York. SHM solicits no business in New York, nor does SHM employ any agents for the solicitation of business in New York. SHM did not own, control, manage, or maintain the Copacabana.

According to SHM, MHI does no business on behalf of SHM in New York or anywhere in the United States, nor has it done any business for SHM since December 1986. Prior to the end of 1986, MHI did perform certain hotel-related services for SHM, consisting of hotel reservation bookings, but, according to SHM, that work ended in December 1986 when SHM made a contribution of its hotel management activity to SMG which took over the staff, procedures, and trademark of SHM. Corporate representatives of SHM state that it has no contact with New York or with the United States.

When Darby and Zeiler made their reservations at the Copacabana through a New York travel agent, MHI was, in addition to its own management of hotels within the United States, operating a toll-free telephone reservations system in the United States for the benefit of owners of Meridien-managed hotels in the United States and elsewhere, including the owner of the Copacabana, a company known as Sisal-Rio Hotels Turismo ("Sisal"). Sisal was and still is owned and operated independently and is not affiliated with any Meridien organization entity. At the time of the accident, Meridien do Brasil Turismo, Ltda. ("MdB") a Brazilian subsidiary of SHM, managed the hotel pursuant to a 1976 contract entered into in Brazil between Sisal and SHM. In accordance with Article XV of that contract the hotel was to be operated under the name "Meridien Copacabana" and the parties acknowledged that the name "Meridien" was the exclusive property of SHM.

Under the same contract Sisal was granted the right to participate in the computerized international reservations system available to hotels managed by SHM and its affiliates. Pursuant to Article IX, Section 2, SHM became obligated to provide reservation services for the benefit of the owner of the hotel. Specifically, Section (2)(i) of that agreement state:

S.H.M. will supply or take the necessary measures so that the affiliated companies supply, at the time of the hotel operation and for the benefit of its customers, this enumeration not being limitative, the following services and facilities:

(i) reservations — The recourse by the hotel to the central reservation service S.H.M. The cost will be born sic by the hotel operation prorated on its usage.

The reservations system is known as "Meridien Reservations International". Reservations for space at hotels at international locations (other than the United States, Canada, and the Bahamas) including the Copacabana, were and still are taken through a toll-free 800 number answered in New York City by employees of MHI. The part of the reservations system that is located in New York is operated by MHI for the direct benefits of owners of Meridien-managed hotels, including Sisal. By calling the toll-free number the caller is connected with an MHI employee who, operating a computer terminal, can provide reservations information and take bookings at the Meridien Copacabana, subject to the hotel owner's confirmation policy. MHI's agreement with SHM expressly provides that MHI, as the representative of SHM, "has no authority to enter into any final contracts with guests who desire space in any Hotels or agencies and ... all reservation commitments provided by M.H.I. are subject to acceptance and confirmation by the individual Hotel involved...."

According to SHM, MHI performs nothing more than a "ministerial" function, acting merely as a conduit for information provided by potential guests and by the various Meridien hotels; the reservation agent enters information provided by the caller into the computer and receives information from the hotel as to the availability of accommodations at the particular Meridien hotel. In the case of the Copacabana, the policy of the hotel is to require deposits for after 6:00 p.m. arrivals and at certain times during peak season; at most other times, the computer-generated information is up-to-date and is relied upon to confirm reservations. Where an MHI employee operating a computer terminal as part of the Meridien reservations system can input a reservation as confirmed such employee is doing so only as "a matter of record" because, according to defendants, the hotel itself already has provided information through the computer about the rooms or space that is available to be confirmed.

SHM contends that the management of its obligations with resect to the Copacabana has been delegated to MdB and similarly the management of certain of its obligations performed in the United States has been delegated to its separate United States subsidiary, MHI. The SHM/MHI relationship is a commercial relationship between separate entities, each with its own office, staff, books, records, assets and liabilities. Consequently, SHM characterizes MHI's reservation activities as the soliciting business for the Copacabana's owner, Sisal — not SHM, pursuant to the 1976 commercial assistance contract between Sisal and SHM.

In November of 1986, MdB was still acting as hotel manager for Sisal's Copacabana. By December 24, however, all of SHM's management functions had been transferred to SMG which allegedly took over the Meridien trademark, the staff and the procedures of SHM, as well as the stock of SHM's subsidiary management companies, including MdB and MHI. The record contains only one letter indicating this transfer occurred. The restated Certificate of Incorporation of MHI is consistent with this understanding of the relationship between SHM and its indirect subsidiary MHI. The certificate provides that among the purposes for which MHI was formed is:

To promote the interests of hotels located throughout the world managed by MHI, SHM or any affiliate or franchisee of either MHI or SHM such hotels being hereinafter called Meridien Hotel, by designing, writing, preparing, placing, publishing, distributing, and displaying, in any and every manner, advertisements, brochures and other publicity devices which may bring to the attention of the public the quality and other characteristics of Meridien Hotels.

SHM notes, however, that this purpose contemplates no more than that MHI will solicit business for hotels managed by it, by SHM, and by their respective affiliates....