Manufacturers Hanover Leasing v. Ace Drilling Co., No. 86 Civ. 9347(MP).

• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Writing for the Court: Simpson Thacher & Bartlett, New York City by Joseph Tringali, for plaintiff
• Citation: 720 F. Supp. 48
• Parties: MANUFACTURERS HANOVER LEASING CORPORATION, Plaintiff, v. ACE DRILLING COMPANY, Kenneth G. Adams, Stephen S. Adams, Mark N. Shoup and Gary C. Adams, individually and as Trustee for the Gary Clark Adams Trust, the Kimberly Clark Adams Trust, and the Jamey Lea Adams Trust, Defendants.
• Docket Number: No. 86 Civ. 9347(MP).
• Decision Date: 20 September 1989

720 F. Supp. 48

MANUFACTURERS HANOVER LEASING CORPORATION, Plaintiff,
v.
ACE DRILLING COMPANY, Kenneth G. Adams, Stephen S. Adams, Mark N. Shoup and Gary C. Adams, individually and as Trustee for the Gary Clark Adams Trust, the Kimberly Clark Adams Trust, and the Jamey Lea Adams Trust, Defendants.

No. 86 Civ. 9347(MP).

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

September 20, 1989.

Simpson Thacher & Bartlett, New York City by Joseph Tringali, for plaintiff.

Jack David, New York City, for defendant Gary Adams.

MEMORANDUM

MILTON POLLACK, Senior District Judge.

Defendant Gary Adams moves to dismiss this action based on the lack of personal jurisdiction, or, in the alternative, defendant seeks transfer of this action to the United States District Court for the Northern District of Oklahoma. For the reasons

720 F. Supp. 49

outlined below, both of Defendant's motions are denied

Facts

In 1978, Ace Drilling Company ("Ace"), an Oklahoma General Partnership, and Manufacturers Hanover Leasing Corporation ("MHLC"), a New York Corporation licensed to do business in Texas, entered into negotiations for the lease of a drilling rig to Ace. These discussions were carried out between Ace's offices in Oklahoma and MHLC's branch office in Houston, Texas. The documents were signed in Texas and subsequent negotiations were carried out in Texas and in Oklahoma. The agreements stated that New York law governed and that payments would be made to MHLC in New York or anywhere else MHLC requested.

As an express condition precedent to the lease, personal guarantees were signed by several of Ace's partners, including Gary Adams, to guarantee the lease. These guarantees were signed in Oklahoma.

Discussion

1. Jurisdiction

Personal jurisdiction in a diversity action is determined by the law of the forum. United States v. First National City Bank, 379 U.S. 378, 381-82, 85 S.Ct. 528, 530, 13 L.Ed.2d 365 (1965); Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir.1985).

Section 302(a)(1) of the New York Civil Practice Law and Rules (McKinney's 1972 & Supp.1989) provides:

As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nondomicilliary ... who in person or through an agent:

1. transacts any business within the state or contracts to supply goods or services in the state ...

The courts have held that making a guarantee of payment to New York is "supplying goods or services" in the state. Gaines Service Leasing Corp. v. Ashkenazy, 635 F.Supp. 805 (E.D.N.Y.1986); Chemco International Leasing, Inc. v. Meridian Engineering, Inc., 590 F.Supp. 539 (S.D.N.Y.1984); Fashion Tanning Co. v. Shutzer Indus., Inc., 108 A.D.2d 485, 489 N.Y.S.2d 791 (3d Dept.1985). Defendant argues that his guarantee was not directed toward New York. However, the first paragraph of the "Guarantee" binds the guarantor to "full and punctual payment and performance" of the underlying leases to MHLC. The underlying leases specifically provided that payments were to be made to MHLC at 30 Rockefeller Plaza in New York, or any other place MHLC would designate. See also Gaines Service, supra, 635 F.Supp. at 807 (location of payments due under lease are "by extension" same location as where payments are...