Savin v. Ranier, 784

• Citation: 898 F.2d 304
• Decision Date: 06 March 1990
• Docket Number: D,No. 784,784
• Parties: Scott C. SAVIN, Appellee, v. Harry H. RANIER, Appellant. ocket 89-7922.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 304

898 F.2d 304

Scott C. SAVIN, Appellee, v. Harry H. RANIER, Appellant.

No. 784, Docket 89-7922.

United States Court of Appeals Second Circuit.

Argued Jan. 31, 1990.

Decided March 6, 1990.

Tom H. Pierce, Versailles, Ky., for appellant.

Anthony C. DeFilippis, Jr., Cohn & Birnbaum, P.C., Hartford, Conn. (Robert B. Shapiro, of counsel), for appellee.

Before OAKES, Chief Judge, and KEARSE and FLETCHER, ¹ Circuit Judges.

OAKES, Chief Judge:

Harry H. Ranier appeals an August 11, 1989, default judgment entered against him in the United States District Court for the District of Connecticut, Jose A. Cabranes, Judge, on grounds that the district court lacked personal jurisdiction over him. We find that the district court's exercise of jurisdiction over defendant Ranier in this case was without statutory or constitutional basis, and accordingly reverse the judgment below.

FACTS

Scott C. Savin, a resident of Connecticut, initiated this action to recover on a promissory note from Ranier, a resident of Kentucky. The note was executed by Ranier in consideration for his receipt of one share in a syndicate that would purchase from Savin a thoroughbred stallion known as "Bet Big." Ranier allegedly was contacted by Savin's agents in New York soon after Bet Big had won a major race. Stating that Savin would soon retire his horse to "stud," the agents asked Ranier to purchase a share in the syndicate, pursuant to which Ranier, along with other syndicate members, would have the right to breed his own mares to the stallion Bet Big.

Ranier purchased a share in the syndicate by placing $10,000 down and executing a note for $75,000 that was payable at 11% interest to Savin in Farmington, Connecticut, over three years. Ranier also signed a syndicate agreement which provided, among other things, that the stallion would be delivered by Savin to New York, where it would be kept unless otherwise determined by a vote of syndicate members, that a named syndicate manager in New York would have all authority and discretion with respect to managing the syndicate and with respect to the keeping, care, maintenance, management, breeding, and supervision of the stallion, and that New York law would govern the syndicate agreement. Ranier alleges that his communications concerning his share in the syndicate were exclusively with the syndicate manager and with Savin's New York agents, and not with Savin himself.

In addition to executing the note, Ranier had two further business dealings with Savin. In 1985, Savin boarded a mare, Chic Belle, at Ranier's farm in Kentucky. Ranier was to have received a commission from the sale of Chic Belle; however, Savin accepted Ranier's claim for lost commissions as payment of a $15,000 installment due from Ranier to Savin under the $75,000 promissory note. Then, in 1986, when Ranier defaulted on his second installment payment of $20,000 due, Savin arranged to have one of his mares bred to Wild Again, owned by Ranier in Kentucky, in lieu of the payment due by Ranier. Ranier made no further payments fulfilling his remaining $40,000 obligation under the note.

On October 27, 1987, Savin initiated this diversity action in the District of Connecticut to recover from Ranier the $40,000 due on the note, plus attorneys' fees. When the mare that Savin bred to Wild Again failed to produce a live foal, he amended his complaint, claiming that $60,000 was still due under the note, since his acceptance of the breeding season to Wild Again in lieu of the $20,000 installment payment was contingent upon the birth of a live foal. In 1989, Ranier moved the district court to dismiss the action for lack of personal jurisdiction over him. In an oral ruling on May 5, 1989, the district court denied the motion. When Ranier failed to appear for a scheduled settlement conference and for a hearing on Savin's motion for default judgment, the district court entered default judgment for Savin. On appeal, Ranier renews his claim that the District of Connecticut lacked personal jurisdiction over him.

DISCUSSION

In diversity cases, federal courts must look to the forum state's long-arm statute to determine if personal jurisdiction may be obtained over a nonresident defendant. See Arrowsmith v. United Press Int'l, 320 F.2d 219, 222-25 (2d Cir.1963) (en banc). If jurisdiction is appropriate under the relevant statute, the court must then decide whether exercise of jurisdiction comports with due process. See id. at 223. The plaintiff generally has the burden of proof in establishing personal jurisdiction over the defendant. See Volkswagenwerk Aktiengesellschaft v. Beech Aircraft Corp., 751 F.2d 117, 120 (2d Cir.1984).

Here, Savin and the district court relied on Connecticut General Statutes section 52-59b(a)(1) (1989), which permits the exercise of jurisdiction over a nonresident defendant who "[t]ransacts any business within the state." Although no Connecticut case law deals with whether a note payable in Connecticut subjects the non-resident maker to the jurisdiction of its courts, Connecticut courts in similar situations have looked to New York courts for guidance:

The [Connecticut] General Statutes do not define what the phrase "transacts any business" means in the context of Sec. 52-59b. We note, however, that in enacting Sec. 52-59b, the legislature used New York Civil Practice Law Sec. 302 (McKinney 1980-81 Sup. [sic] as a model. We therefore find pertinent the judicial interpretation given to that New York statute.

Zartolas v. Nisenfeld, 184 Conn. 471, 474, 440 A.2d 179, 180-81 (1981) (citations omitted); accord Mozes v. Welch, 638 F.Supp. 215, 223 (D.Conn.1986). New York courts interpreting the comparable provision have declined to exercise jurisdiction where the only contact maintained by the defendant with the forum state was that New York was designated as the site for payment on a promissory note. See Glass v. Harris, 687 F.Supp. 906, 908-09 (S.D.N.Y.1988); Plaza Realty Investors v. Bailey, 484 F.Supp. 335, 346 (S.D.N.Y.1979); Hubbard, Westervelt & Mottelay, Inc. v. Harsh Bldg. Co., 28 A.D.2d 295, 284 N.Y.S.2d 879 (1st Dep't 1967).

In this case, Ranier...