Frummer v. Hilton Hotels Intern., Inc.

• Decision Date: 18 May 1967
• Citation: 19 N.Y.2d 533,281 N.Y.S.2d 41,227 N.E.2d 851
• Parties: , 227 N.E.2d 851 Jack FRUMMER, Respondent, v. HILTON HOTELS INTERNATIONAL, INC., et al., Appellants.
• Court: New York Court of Appeals Court of Appeals

Page 41

281 N.Y.S.2d 41

19 N.Y.2d 533, 227 N.E.2d 851

Jack FRUMMER, Respondent, v. HILTON HOTELS INTERNATIONAL, INC., et al., Appellants.

Court of Appeals of New York.

May 18, 1967.

Milton B. Pfeffer and Max J. Gwertzman, New York City, for appellants.

Irving A. Scheinberg, Brooklyn, for respondent.

FULD, Chief Judge.

This appeal calls upon us to determine whether jurisdiction was validly acquired over one of the defendants, Hilton Hotels (U.K.) Ltd., a British corporation (hereafter referred to as Hilton (U.K.)).

The plaintiff alleges that in 1963 when he was on a visit to England he fell and was injured in his room at the London Hilton Hotel while attempting to take a shower in an 'ovular', modernistic type bathtub. He seeks $150,000 in damages not only from the defendant Hilton (U.K.) but also from the defendants Hilton Hotels Corporation and Hilton Hotels International, both of which are Delaware corporations doing business in New York. The defendant Hilton (U.K.), which is the lessee and operator of the London Hilton Hotel, has moved (pursuant to CPLR 3211, subd. (a), par. 8), for an order dismissing the complaint against it on the ground that the court lacks jurisdiction of the defendant's person.

Both parties argue that 'the applicable statute' is CPLR 302 (subd. (a), par. 1) which authorizes our courts to exercise personal jurisdiction over a foreign corporation if it 'transacts any business within the state' and the cause of action asserted against it is one 'arising from' the transaction of such business. (See, e.g., Longines-Wittnauer v. Barnes & Reinecke, 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68; Lewin v. Bock Laundry Mach, Co., 16 N.Y.2d 1070, 266 N.Y.S.2d 391, 213 N.E.2d 686; Gutfreund v. Russ, 16 N.Y.2d 637, 261 N.Y.S.2d 77, 209 N.E.2d 118.) However, the plaintiff does not allege that he had any dealings at all with the British corporate defendant or its agents in this State. Therefore, it may not be said that his cause of action Arose from the British corporation's transaction of any business here, and he is not entitled to avail himself of CPLR 302 (subd. (a), par. 1) in order to bring the defendant within the jurisdiction of our courts. (See Kramer v. Vogl, 17 N.Y.2d 27, 31--32, 267 N.Y.S.2d 900, 903, 215 N.E.2d 159, 161.)

Jurisdiction was, however, properly acquired over Hilton (U.K.) because the record discloses that it was 'doing business' here in the Traditional sense. (CPLR 301; see Public Administrator of County of N.Y. v. Royal Bank of Canada, 19 N.Y.2d 127, 278 N.Y.S.2d 378, 224 N.E.2d 877; Bryant v. Finnish Nat. Airline, 15 N.Y.2d 426, 260 N.Y.S.2d 625, 208 N.E.2d 439; Taca Intern. Airlines v. Rolls-Royce of England, 15 N.Y.2d 97, 256 N.Y.S.2d 129, 204 N.E.2d 329; Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E. 915; International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95.) ¹ As we have frequently observed, a foreign corporation is amenable to suit in our courts if it is 'engaged in such a continuous and systematic course of 'doing business' here as to warrant a finding of its 'presence' in this jurisdiction.' (Simonson v. International Bank, 14 N.Y.2d 281, 285, 251 N.Y.S.2d 433, 436, 200 N.E.2d 427, 429, see, e.g., Bryant v. Finnish Nat. Airline, 15 N.Y.2d 426, 430, 260 N.Y.S.2d 625, 627, 208 N.E.2d 439, 440, supra; Berner v. United Airlines, 3 N.Y.2d 1003, 170 N.Y.S.2d 340, 147 N.E.2d 732; Elish v. St. Louis Southwestern Ry. Co., 305 N.Y. 267, 112 N.E.2d 842; Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E. 915, supra.) Although 'mere solicitation' of business for an out-of-state concern is not enough to constitute doing business (Miller v. Surf Prop., 4 N.Y.2d 475, 480, 176 N.Y.S.2d 318, 320, 151 N.E.2d 874, 876. See International Shoe Co. v. State of Washington, 326 U.S. 310, 315, 66 S.Ct. 154, 158, supra), due process requirements are satisfied if the defendant foreign corporation has 'certain minimum contacts with (the State) such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice ". (International

Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, supra; see Simonson v. International Bank, 14 N.Y.2d 281, 286, 251 N.Y.S.2d 433, 436, 200 N.E.2d 427, 429, supra.)

In Bryant v. Finnish Nat. Airline, 15 N.Y.2d 426, 432, 260 N.Y.S.2d 625, 629, 208 N.E.2d 439, 441--442, supra, the court declared that the 'test for 'doing business' * * * should be a simple pragmatic one,' and, applying that test, went on to hold that the requisite minimum contacts with New York were made out when it appears that the defendant foreign corporation, an airline, 'has a lease on a New York office, * * * employs several people and * * * has a bank account here, * * * does public relations and publicity work for defendant here including maintaining contacts with other airlines and travel agencies * * * transmits requests for space to defendant in Europe and helps to generate business.'

In the case before us, these same services are provided for the defendant Hilton (U.K.) by the Hilton Reservation Service which has a New York office, as well as a New York bank account and telephone number. The Service advertises that it was 'established to provided the closest possible liaison with Travel Agents across the country', that lodging 'rates for certified wholesalers and/or tour operators (could) be obtained (from the Service) on request' and that it could 'confirm availabilities immediately * * * and without charge' at any Hilton hotel including the London Hilton. Thus, it does 'public relations and publicity work' for the defendant Hilton (U.K.), including 'maintaining contacts with * * * travel agents' and tour directors; and it most certainly 'helps to generate business' here for the London Hilton--which, indeed, was the very purpose for which it was established. Moreover, unlike the Bryant case, 15 N.Y.2d 426, 432, 260 N.Y.S.2d 625, 628, 208 N.E.2d 439, 441, supra, where the defendant's New York office did not make reservations or sell tickets, the Hilton Reservation Service both accepts and confirms room reservations at the London Hilton. In short--and this is the significant and pivotal factor--the Service does all the business which Hilton (U.K.) could do were it here by its own officials.

The defendant's reliance on Miller v. Surf Properties, 4 N.Y.2d 475, 176 N.Y.S.2d 318, 151 N.E.2d 874, supra, is misplaced. In that case, we held that the activities of a 'travel agency' were not sufficient to give our courts in personam jurisdiction over a Florida hotel when the agency's services 'amounted to little more than rendering telephone service and mailing brochures' for the hotel and 30 other independent and unassociated Florida establishments (4 N.Y.2d at p. 481, 176 N.Y.S.2d at p. 322, 151 N.E.2d at p. 877). Indeed, in Bryant, 15 N.Y.2d 426, 431, 260 N.Y.S.2d 625, 628, 208 N.E.2d 439, 441, supra, we found it significant that in the Miller case the New York activities were carried on 'not (by) an employee of the defendant (Florida hotel) but an independent travel agency representing defendant in New York City.' Although, in the case before us, the Hilton Reservation Service is not the 'employee' of Hilton (U.K.), the Service and that defendant are owned in common by the other defendants and the Service is concededly run on a 'non-profit' basis for the benefit of the London Hilton and other Hilton hotels.

It is to be borne in mind, contrary to certain intimations in the dissenting opinion, that this appeal deals with the jurisdiction of our courts over a foreign corporation rather than the liability of a parent company for the acts of a wholly owned subsidiary. (Cf. Walkovzky v. Carlton, 18 N.Y.2d 414, 276 N.Y.S.2d 585, 223 N.E.2d 6.) The 'presence' of Hilton (U.K.) in New York, for purposes of jurisdiction, is established by the activities conducted here on its behalf by its agent, the Hilton Reservation Service, and the fact that the two are commonly owned is significant only because it gives rise to a valid inference as to the broad scope of the agency in the absence of an express agency agreement such as the one which existed in the Berner case, 3 N.Y.2d 1003, 170 N.Y.S.2d 340, 147 N.E.2d 732, supra.

We are not unmindful that litigation in a foreign jurisdiction is a burdensome inconvenience for any company. However, it is part of the price which may properly be demanded of those who extensively engage in international trade. When their activities abroad, either directly or through an agent, become as widespread and energetic as the activities in New York conducted by Hilton (U.K.), they receive considerable benefits from such foreign business and may not be heard to complain about the burdens.

Since, then, Hilton (U.K.) was 'doing business' in New York in the traditional sense and was validly served with process in London, as provided by statute (CPLR 313), our courts acquired 'personal jurisdiction over the corporation for any cause of action asserted against it, no matter where the events occurred which give rise to the cause of action.' (Public Administrator of County of N.Y. v. Royal Bank of Canada, 19 N.Y.2d 127, 130, 278 N.Y.S.2d 378, 380, 224 N.E.2d 877, 878, supra).

The order of the Appellate Division should be affirmed, with costs, and the certified question answered in the affirmative.

BREITEL, Judge (dissenting).

The court is in agreement that personal jurisdiction cannot be extended over the defendant, Hilton Hotels (U.K.) Limited, a British corporation, under the provisions of New York's long-arm statute (CPLR 302, subd. (a), par. 1). Disagreement arises only over whether personal jurisdiction may be extended under 'traditional' concepts of doing business in the State or by reason of the foreign corporation's 'presence' in the State (CPLR 301 )¹. The difference in application of the two statutes determines whether judicial jurisdiction may be...