LaCORTE ELEC. CONST. v. Centron Sec. Systems, Inc.
| Decision Date | 14 August 1995 |
| Docket Number | No. 95-CV-363.,95-CV-363. |
| Citation | 894 F. Supp. 80 |
| Parties | LaCORTE ELECTRICAL CONSTRUCTION & MAINTENANCE, INC., Plaintiff, v. CENTRON SECURITY SYSTEMS, INC., Defendant. |
| Court | U.S. District Court — Northern District of New York |
Hiscock & Barclay, L.L.P., Albany, NY (Dena T. Amodio, of counsel), for plaintiff.
McNamee, Lochner, Titus & Williams, P.C., Albany, NY (David J. Wukitsch, of counsel), for defendant.
MEMORANDUM DECISION AND ORDER
This is a contract action carrying diversity of citizenship and involves questions of long-arm jurisdiction. Defendant, Centron Security Systems, Inc. ("Centron"), has moved this court for a transfer to the Western District of Kentucky, pointing to that venue as a more convenient and appropriate forum.
Plaintiff LaCorte Electrical Construction & Maintenance, Inc. ("LaCorte"), a New York corporation with its principal place of business in Troy, New York, allegedly entered into a primary contract in October 1992, with the Regional Airport Authority of Louisville & Jefferson Counties in Kentucky, for the implementation of a card access security system for the airport. LaCorte in turn, subcontracted with Centron in November 1992, for the provision of training, testing, and equipment associated with the card security system. Centron, a New Jersey corporation with its principal place of business in Holiday, Florida, is certified to do business in New York.1 It has no offices, stockholders, officers, directors, employees, agents or representatives in New York, and does not own, use, or possess real property in New York.
It is not clear where the subcontract in question was executed, although negotiations took place in New York in the form of three separate meetings attended by Centron's president, Karen King. The contract's performance, however, played out completely within Louisville, Kentucky.
The subcontract contains a choice of law clause naming New York as its choice. However, the primary contract names Kentucky as the law of choice. Apparently a choice of forum clause was not agreed to by the parties to either contract. An action on a bond brought by Centron in Kentucky contains a choice of forum clause naming the state courts of Kentucky as the forum.2
Plaintiff originally commenced this action in New York State Supreme Court, County of Rensselaer, on February 21, 1995, alleging breach of subcontract, breach of warranty, and negligence in failing to perform. On March 17, 1995, pursuant to 28 U.S.C. 1441 and 1446, Centron served and filed a notice of removal to this court on the basis that complete diversity of citizenship exists between plaintiff (a New York corporation) and itself, and that the amount in controversy exceeds $50,000. The filing and service of an amended complaint was made by LaCorte on May 15, 1995, and an answer by Centron on May 24, 1995.
On June 14, 1995, Centron itself brought action on a payment bond in the Western District of Kentucky claiming failure on the part of LaCorte to pay for "extra work" required of, and performed by Centron.3 This action is against Insurance Company of North America as the surety on the project. Two days later, on June 16, 1995, Centron moved to transfer this action to the Western District Court of Kentucky pursuant to 28 U.S.C. § 1404(a). It is this motion upon which we now focus.
Centron, as a corporation of New Jersey, may be subjected to the jurisdiction of this court if elements of New York's long-arm statute are met. It is well settled that the District Court borrows the long-arm statute of the forum. Fed.R.Civ.P. 4(e); Mellon Bank (East) PSFS, N.A. v. DiVeronica Bros., Inc., 983 F.2d 551 (3d Cir.1993); Leasco Data Processing Equip. Corp. v. Maxwell, 468 F.2d 1326 (2d Cir.1972). Therefore, when determining the application of a state's long-arm statute in a diversity action, it is the state law on the issues of interpretation that is controlling. In this case, Civ.Pract.L. & R. § 302 is the New York State long-arm statute.
CPLR § 302(a)(1) sets out as one method of obtaining jurisdiction over a nondomiciliary, a "transaction of business" doctrine. This doctrine "authorizes the court to exercise jurisdiction over nondomiciliaries for tort and contract claims arising from a defendant's transaction of business in this State." Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 198, 522 N.E.2d 40, 43 (1988); see also Paribas Corp. v. Shelton Ranch Corp., 742 F.Supp. 86, 91 (S.D.N.Y.1990). Section 302(a)(1) provides in pertinent part:
N.Y.Civ.Pract.L. & R. § 302(a)(1) (McKinney 1990).
The New York Court of Appeals explained the concentration of contacts sought by this statute, stating:
It is a `single act statute' and proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted.
Kreutter, 71 N.Y.2d at 467, 527 N.Y.S.2d at 198, 522 N.E.2d at 43.
In the instant case, Centron, through its president Karen King, has visited Troy, New York, on three occasions to negotiate the very contract at issue in this litigation. While it is not clear that these visits entailed the actual execution of the contract, the contract's formulation was involved. These visits were part of contract negotiations. Bastille Properties, Inc. v. Hometels of America, Inc., 476 F.Supp. 175, 177 (S.D.N.Y.1979); see also Firegreen Ltd. v. Claxton, 160 A.D.2d 409, 411, 553 N.Y.S.2d 765, 767 (1st Dep't 1990) (); see also Leiderman Assoc. v. Robotool Ltd., 154 A.D.2d 515, 546 N.Y.S.2d 137 (2d Dep't 1989) ().
Add to these already sufficient contacts that Centron possesses a certificate of authority to do business in New York State. "Although the mere authorization to do business, even though granted at a corporation's request, may not be conclusive on the issue of jurisdiction under New York Civ.Pract.L. & R. § 301, it is certainly very strong evidence that the corporation is subject to in personam jurisdiction." Beja v. Jahangiri, 453 F.2d 959, 962 (2d Cir.1972); see also Amalgamet, Inc. v. Ledoux & Co., 645 F.Supp. 248, 249 (S.D.N.Y.1986); Augsbury Corp. v. Petrokey Corp., 97 A.D.2d 173, 176, 470 N.Y.S.2d 787, 790 (3d Dep't 1983) ().
Finally, in the subcontract, the defendant has agreed that all terms of the subcontract are subject to interpretation through the laws of New York State. Although a clause agreeing that contract interpretation will be subject to New York law will not grant jurisdiction, per se, "the existence of such a provision ... has been cited by a New York court as one of several factors relevant to the creation of a nexus with New York for purposes of jurisdiction." Chemco Int'l. Leasing, Inc. v. Meridian Engineering, Inc., 590 F.Supp. 539, 543 (S.D.N.Y.1984) (); see also McShan v. Omega Louis Brandt et Frere, S.A., 536 F.2d 516, 518-19 (2d Cir.1976).
Given the defendant's certificate of authorization to do business, the negotiations in New York State, and the defendant's agreement to submit their contract to New York State law, it is clear then that this court has personal jurisdiction over the defendant sufficient to satisfy state law requirements and constitutional due process.
It is likewise clear that the Western District of Kentucky holds personal jurisdiction over these parties. Again looking to the long-arm statute of the state, Kentucky Revised Statute § 454.210 provides the following:
K.R.S. § 454.210(2)(a); see also Commonwealth Dep't of Education v. Gravitt, 673 S.W.2d 428, 431 (Ky.Ct.App.1984) (). LaCorte contracted with the Regional Airport Authority of Louisville & Jefferson Counties in Kentucky and provided them with a security system on site. Centron, while not contracting with a Kentucky domiciliary, also provided services in that forum according to the subcontract with LaCorte.4 Both are clearly subject to the jurisdiction of the Western District of Kentucky.
Jurisdiction thus existing in both New York and Kentucky, the issue of this motion falls not upon whether this forum holds jurisdiction over defendant for the purposes of this case, but rather whether a more convenient forum exists.5 Centron seeks transfer to what they argue is a more convenient...
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