Export Credit Corp. v. Diesel Auto Parts Corp.
| Decision Date | 24 October 1980 |
| Docket Number | No. 79 Civ. 2511.,79 Civ. 2511. |
| Parties | EXPORT CREDIT CORPORATION, Plaintiff, v. DIESEL AUTO PARTS CORPORATION, Ali M. Fouladi, Hassan Fouladi, and Hossein Fouladi, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Curtis, Mallet-Prevost, Colt & Mosle, New York City, for plaintiff.
Proskauer, Rose, Goetz & Mendelsohn, New York City, for defendants Hassan Fouladi and Hossein Fouladi.
Defendants Hassan and Hossein Fouladi (the "individual defendants"), brothers and Iranian citizens, move to dismiss pursuant to Fed.R.Civ.P. 12(b)(2) and (5) for lack of personal jurisdiction and insufficient service of process and also for an order dissolving an existing ex parte order of attachment and awarding them costs and damages. Plaintiff Export Credit Corporation ("ECC") brought this diversity action alleging that Diesel Auto Parts ("DAP" or the "corporate defendant") defaulted on certain loans extended to it by plaintiff and that the Fouladis, guarantors of the DAP loans, defaulted on their guarantees. The individual defendants, along with two other brothers, are said to be the sole shareholders and principals of DAP. On or about May 15, 1979, plaintiff obtained an ex parte order of attachment against the defendants, and the attachment was confirmed on September 7, 1979. Although plaintiff originally alleged in its application for the order of attachment that the Fouladis had consented by contract to jurisdiction in New York, it now urges that this court assert personal jurisdiction over the Fouladi brothers under CPLR § 302(a)(1) on the ground that the cause of action herein arose from business they transacted in the State of New York. Since the disposition of the Fouladis' other requests for relief depends on the resolution of their challenge to personal jurisdiction, I turn first to that question.1
Plaintiff alleges jurisdiction under CPLR § 302(a)(1) based on a variety of acts, some committed outside New York by the Fouladis, others committed within New York by the corporate defendant DAP. More important, plaintiff seeks to found jurisdiction on the Fouladis' omission to perform an act in New York, i. e., their breach of the guarantee agreement. In determining whether minimum contacts exist sufficient to justify the exercise of personal jurisdiction over foreign defendants, acts they committed outside New York quite obviously are irrelevant for purposes of longarm jurisdiction. In addition, acts of the corporation may not be attributed to the individual defendants unless the record justifies disregarding the corporate form. Ferrante Equipment Co. v. Lasker-Goldman Corp., 26 N.Y.2d 280, 283, 309 N.Y.S.2d 913, 916, 258 N.E.2d 202 (1970). Here, plaintiff has not made a showing that would justify piercing DAP's corporate veil. Consequently, unless the remaining New York contact alleged by plaintiff is enough to allow this court to extend its jurisdiction over the individual defendants, I have no alternative but to dismiss for lack of in personam jurisdiction.
In attempting to meet this burden, plaintiff points only to the Fouladis' alleged agreement to guarantee the loans DAP obtained from plaintiff. That guarantee obligated the individual defendants, upon DAP's default, to repay the loans in New York. The...
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