Gentile v. Conley

• Decision Date: 11 June 2009
• Docket Number: No. 09 Civ. 5142(CM).,09 Civ. 5142(CM).
• Parties: Jack GENTILE, as President of New York Aviation Corporation, and New York Aviation Corporation, Plaintiffs, v. Judith Anne CONLEY and Noel Francis Bracks, as Executors and Trustees of the Estate of John Patrick Conley, and Australian Aircraft Sales (NSW) Pty Ltd., Defendants.
• Court: U.S. District Court — Southern District of New York

636 F.Supp.2d 246

Jack GENTILE, as President of New York Aviation Corporation, and New York Aviation Corporation, Plaintiffs, v. Judith Anne CONLEY and Noel Francis Bracks, as Executors and Trustees of the Estate of John Patrick Conley, and Australian Aircraft Sales (NSW) Pty Ltd., Defendants.

No. 09 Civ. 5142(CM).

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

June 11, 2009.

COPYRIGHT MATERIAL OMITTED

Michael Justin Holland, Condon and Forsyth LLP, New York, NY, for Plaintiffs.

MEMORANDUM DECISION DENYING PLAINTIFFS' APPLICATION FOR AN EX PARTE ORDER OF ATTACHMENT

McMAHON, District Judge.

The court has been presented with an application for an ex parte order permitting the attachment of certain personal property allegedly found in this district belonging to defendants—the estate of an Australian testator and an Australian corporation not authorized to do business in New York. The application does not identify any particular property to be attached; the court does not know whether there is any such property in New York.

The underlying complaint pleads the following facts, which are supported by an affidavit from plaintiff Jack Gentile:

Plaintiffs are aircraft brokers, engaged in the business of consulting with and arranging meetings between buyers and sellers of aircraft. The late John Patrick Conley was Managing Director of defendant Australian Aircraft Sales (AAS).

In 1994, AAS purchased 17 DC 9-32 aircraft from Garuda International Airlines in Jakarta, Indonesia. Plaintiffs, as brokers for AAS, began to remarket these aircraft throughout the world. Gentile negotiated the sale of 7 of the planes (Serial Numbers 47601, 47791, 47794, 47730, 47701, 47744, and 47740) from AAS to Midwest Express Airlines, which the court recognizes as a United States carrier. Plaintiffs allege, on information and belief, that AAS delivered all seven planes to Midwest Express between 1995 and 2003, and that Midwest Express paid AAS for the planes.

During a conference call in October 1995 among Conley, Gentile and a Mr. Van Hoof, the agent of Midwest Express, AAS, through its agent Conley, agreed to pay plaintiffs a commission of $100,000 per plane sold. Plaintiffs assert that Gentile agreed with a third party, a Mr. Chang (who was allegedly an agent of AAS), to reduce the commission for the first two planes sold to $70,000 ($35,000 per plane) in a teleconference in October 1995, and that plaintiffs received that amount. They further allege that, in February 1996, Gentile received another $10,000 on account of the commission of $200,000 due and owing for the next two planes. Plaintiffs, however, objected to the deficiency.

In a telephone call that allegedly took place on February 25, 1996, decedent Conley allegedly told Gentile that plaintiffs would be paid $620,000—the full amount originally promised ($100,000 per plane times seven planes) less the $80,000 already paid—once the sale of all seven planes to Midwest Express was completed. New York Aviation ("NYA") was also allegedly promised a bonus (sum unspecified), which was to be paid once all 17 Garuda DC-9s were sold.

In that same telephone conversation, Conley allegedly told plaintiffs that, if all 17 Garudas were not sold by February 2004, he personally would pay plaintiffs the balance of their commission ($620,000) pursuant to the terms of the original October 1995 agreement.¹ I assume that the word "he" refers to a personal guarantee by Mr. Conley, since the original contract was between AAS and plaintiff New York Aviation, both of which are alleged to be corporations. It seems obvious that Conley offered this deal in exchange for plaintiffs' forbearance from insisting on immediate payment of commissions as per the parties' original deal. Conley did not put his guarantee in writing.

The revised agreement as pleaded was that plaintiffs would receive the sum of $620,000—the full value of the commissions as arranged back in 1995—when the last of the seven planes was sold to Midwest Express Airlines. Plaintiffs' complaint does not indicate the precise date when that occurred. It avers generally, and on information and belief, that the last plane may have been delivered at some unspecified time in 2003. (Ver Cplt. ¶ 3)² It seems clear from the rest of the allegations of the complaint that, whenever the last plane was delivered to Midwest Express, AAS did not pay NYA the $620,000 commission payment.

Plaintiffs allege that Gentile had a further conversation with Mr. Conley on February 15, 2004. In that conversation, Conley allegedly agreed that his personal guarantee of the $620,000 in commissions had ripened, because some of the Garuda aircraft remained unsold. Plaintiff attaches to his moving papers a fax transmittal of a letter purporting to confirm the contents of that telephone conversation and demanding immediate payment by wire transfer. The letter is signed by Gentile in his capacity as "Chariman, New York Aviation Corporation" and is on the letterhead of New York Aviation Corporation. No writing signed by Conley attests to his personal guarantee.

Further communications between Gentile and Conley did not result in NYA's receipt of payment. Conley died sometime in 2006. Apparently efforts have been made to collect on Conley's personal guarantee from his Estate; they have not been fruitful.

Now, halfway through 2009, some three years after Conley's death, plaintiffs have commenced an action against Conley's Executors and AAS, seeking payment of the missing $620,000 in commissions, plus interest.

Plaintiffs seek an ex parte order of attachment in order to secure their claim.

The Relevant Law

Fed.R.Civ.P. 64 authorizes a federal court to enter an order of attachment "under the circumstances and in the manner provided by the law of the state in which the District Court is located." Under New York's Civil Practice Law and Rules § 6201:

An order of attachment may be granted in any action, except a matrimonial action, where the plaintiff has demanded and would be entitled, in whole or in part, or in the alternative, to a money judgment against one or more of the defendants, when:

(1) the defendant is a nondomiciliary residing without the state, or is a foreign corporation not qualified to do business in the state. . . . .

This is not the only requirement. In order to obtain an order of attachment in New York, the plaintiff must show that he has a cause of action; that it is probable that the plaintiff will succeed on the merits; that the amount demanded from the defendant exceeds all counterclaims known to the plaintiff; and that an attachment is needed to secure payment or obtain jurisdiction. N.Y.C.P.L.R § 6212; Capital Ventures Int'l v. Republic of Argentina, 443 F.3d 214, 222 (2d Cir.2006). The court must give the plaintiff the benefit of all the legitimate inferences that can be drawn from the facts pleaded.

However, even drawing all legitimate inferences in favor of plaintiffs, the court cannot issue an order of attachment against whatever assets of either defendant may be in New York.

(1) Are the Defendants Nondomiciliaries or Corporations Not Qualified?

During his lifetime, Conley resided outside the state of New York. The court does not know where he resides at present, and neither does anyone else. His Executors are located in Australia.

AAS is alleged to be an Australian corporation. Plaintiffs represent that they have searched and have not found any evidence that it is qualified to do business in New York. The court accepts that representation for purposes of this motion.

Plaintiffs have satisfied the requirement of CPLR § 6201(1); I thus turn to the requirements of § 6212.

(2) Does Each Plaintiff "Have" a Cause of Action?

Not a single fact pleaded in the complaint tends to show that Gentile personally has a claim against anyone, All of Gentile's allegations tend to show that he was at all times acting in his capacity as a corporate officer of his co-plaintiff, NYA, or as the agent of NYA (see, e.g., Ver. Cplt. ¶¶ 9, 11, 12), when he dealt with AAS, Conley and Midwest Express concerning the seven planes. Any agreements that were entered into, either with AAS or with Conley personally, were entered into with NYA, though the medium of its agent and President, Gentile. The only party to whom commissions were allegedly owed was NYA. Even the letter confirming the February 15, 2004 telephone conversation between Conley and Gentile is on NYA letterhead and is signed by Gentile in his corporate, not his personal, capacity.

"JACK GENTILE, as President of NEW YORK AVIATION CORPORATION," which appears in the caption as a plaintiff, is not an entity capable of bring suit, because an individual who serves as the president of a corporation does not thereby become entitled to press claims belonging to the corporation. All of the claims that are asserted in this action belong to the corporation; and no legitimate inference can be drawn from the facts asserted in the pleading or in the supporting affidavit that would give Jack Gentile any right of recovery independent of the corporation's rights.

Because it does not appear that Jack Gentile has any cause of action against defendants, no order of attachment can issue in his favor.

NYA, however, "has" three causes of action.

Is Plaintiff NYA Likely to Succeed on the Merits of its Claims?

As to the three claims asserted by NYA, multiple issues are raised by the requirement that it demonstrate that it is likely to succeed on the merits of its claims before an attachment will issue; the principal ones relate to the statute of limitations and the statute of frauds. NYA does not always understand the implications of its own factual pleading, and it frequently makes irrelevant arguments. The court, without benefit of any briefing from the other side, has done its best to figure out whether NYA is likely to succeed on any of its three claims; 1 conclude that, on the facts presently pleaded, it has not...