Welinsky v. Resort of World D.N.V., 277

• Decision Date: 18 February 1988
• Docket Number: No. 277,D,277
• Citation: 839 F.2d 928
• Parties: Steven WELINSKY and Eileen Welinsky, Appellants, v. RESORT OF THE WORLD D.N.V. d/b/a Maho Beach Hotel & Casino, Appellee. ocket 87-7521.
• Court: U.S. Court of Appeals — Second Circuit

Page 928

839 F.2d 928

Steven WELINSKY and Eileen Welinsky, Appellants, v. RESORT OF THE WORLD D.N.V. d/b/a Maho Beach Hotel & Casino, Appellee.

No. 277, Docket 87-7521.

United States Court of Appeals Second Circuit.

Argued Dec. 9, 1987.

Decided Feb. 18, 1988.

David L. Ganz, New York City (Sheryl Zuckerman, Ganz, Hollinger & Towe, P.C., New York City, of counsel), for appellants.

Aita Jogi, New York City (Joseph W. Conklin, New York City, of counsel), for appellee.

Before FEINBERG, Chief Judge, OAKES, and PRATT, Circuit Judges.

OAKES, Circuit Judge:

This appeal is from a judgment by the United States District Court for the Southern District of New York, Louis L. Stanton, Judge, dismissing this action for lack of in personam jurisdiction over the defendant, a Netherlands Antilles hotel. Because on the thin record before us we think that the plaintiffs have made a prima facie showing that the hotel was doing business in New York through its local booking agent, Sea & Sun Resorts, Ltd. (an agent wholly owned by several St. Maarten hotels including the defendant, with the ability to confirm reservations instantaneously), we believe the defendant was amenable to service of process under N.Y.Civ.Prac. L. & R. Sec. 301. Accordingly, we reverse. ¹

Steven and Eileen Welinsky were vacationing at the Maho Beach Hotel & Casino in St. Maarten during August 1984, while awaiting the birth of their first child. On August 20 a fire occurred at the hotel, which the Welinskys claim caused them physical and psychological injuries and caused a birth defect in their child. The Welinskys, New Jersey residents, had arranged their vacation through Ferrante Travel, in Palisades Park, New Jersey, and claim that Ferrante, rather than dealing directly with the defendant hotel, arranged their stay through Sea & Sun Resorts, Ltd., located at 630 Fifth Avenue, New York, New York. It appears from the record that Sea & Sun Resorts, to quote its manager, "is a marketing name for a group of individual hotels which are owned by separate independent companies which have combined for promotional and advertising purposes, sharing the costs." Resort of the World, N.V., doing business as Maho Beach Hotel & Casino, is one of the several independent hotels. Sea & Sun markets space at the various hotels, including the Maho Beach, and takes requests for space. The affidavit of Steven Welinsky was to the effect that Sea & Sun confirmed their

reservations without first conferring with the hotel. An affidavit obtained from a licensed travel agent, the owner-operator of First Call Travel in New York City, indicates that she has obtained reservations at Maho Beach from Sea & Sun with immediate confirmation over the telephone and with prompt confirmation by mail; reservations are not made on "a request basis," which would have indicated to the independent travel agent that confirmation from the hotel was required. The written confirmation, on a Sea & Sun Resorts, Ltd., form, indicates the name of the hotel, the arrival and departure dates, the airline and flight number, the names of the clients, the accommodations and rates, and the deposit amount and due date.

DISCUSSION

There is no doubt that a nonresident is subject to jurisdiction in New York, pursuant to N.Y.Civ.Prac. L. & R. Sec. 301, if it is " 'engaged in such a continuous and systematic course of "doing business" [in the state] as to warrant a finding of ... "presence" in this jurisdiction.' " Beacon Enter. v. Menzies, 715 F.2d 757, 762 (2d Cir.1983) (quoting Simonson v. International Bank, 14 N.Y.2d 281, 285, 251 N.Y.S.2d 433, 436, 200 N.E.2d 427, 429 (1964)). The leading New York case ² dealing with hotels is Frummer v. Hilton Hotels International, Inc., 19 N.Y.2d 533, 281 N.Y.S.2d 41, 227 N.E.2d 851, cert. denied, 389 U.S. 923, 88 S.Ct. 241, 19 L.Ed.2d 266 (1967). There the New York state court exercised jurisdiction over the Hilton Hotel in London, in a case arising out of the plaintiff's fall in a hotel bathtub. The hotel, a British corporation, was owned by Hilton Hotels International, Inc., a Delaware corporation, which in turn was owned by Hilton Hotels Corp., another Delaware corporation. Both of the Delaware corporations did business in New York and jointly owned another affiliate, Hilton Credit Corp., which, like Sea & Sun, Ltd., made hotel reservations and could confirm them on behalf of the London hotel. The New York Court of Appeals held that Hilton Credit Corp. was doing business in New York, attributing the activities of Hilton Credit Corp. to the London hotel. ³ By listing the business activities of Hilton Credit Corp. on behalf of the London hotel, including solicitation, public information, and booking reservations, the court concluded that the credit corporation did all the business which the London hotel could have done if it sent its own officials into the state, distinguishing the case from Miller v. Surf Properties, Inc., 4 N.Y.2d 475, 176 N.Y.S.2d 318, 151 N.E.2d 874 (1958). In Miller a Florida hotel was found not to be doing business in New York because, among other things, its reservations were subject to confirmation in Florida. Noting Hilton's more extensive contacts with New York, the Frummer court held, "[w]hen [a foreign corporation's] activities abroad, either directly or through an agent, become as widespread and energetic as the activities in New York conducted by Hilton (U.K.), [the foreign corporation] receive[s] considerable benefits from such foreign business and may not be heard to complain about the burdens." 19 N.Y.2d at 538, 281 N.Y.S.2d at 45, 227 N.E.2d at 854.

In following Frummer this court went a step further in Gelfand v. Tanner Motor Tours, Ltd., 385 F.2d 116 (2d Cir.1967), cert. denied, 390 U.S. 996, 88 S.Ct. 1198, 20 L.Ed.2d 95 (1968). Judge Lumbard's opinion for the court read Frummer to mean "that a foreign corporation is doing business in New York ... when its New York representative provides services beyond 'mere solicitation' and these services are sufficiently important to the foreign corporation that if it did not have a representative to perform them, the corporation's own officials would undertake to perform substantially similar services." Id. at 121. An independent local travel agent who had the power to make and confirm reservations for a Grand Canyon bus tour was held to be performing sufficient agency functions for the defendant bus line...