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stating that plaintiff had a strong interest in litigating action in New York because it is a New York corporation with its principal place of business in New York
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03 Civ. 917(SAS)
October 20, 2003
Steven Shiffman, Esq Justin M. Garbaccio, Esq. Katten Muchin Zavis Rosenman, New York, NY, for Plaintiff
Thomas E. Engel, Esq. Engel McCarney, New York, NY, for Defendants
OPINION AND ORDER
Afloat in France, Inc. ("AIFI") brings this diversity action against Bancroft Cruises, Ltd. ("BCL"), Paul Bancroft, III ("Bancroft"), Cruising France, L.L.C. ("CFL"), Jeremy William Ross Dike ("Dike"), Maureen Maguire ("Maguire"), and Joseph Souccar ("Souccar"), (collectively, "defendants"), alleging causes of action for an accounting, breach of fiduciary duty, fraud and negligent misrepresentation. Defendants now move to dismiss the complaint for lack of personal jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2).
Initially, defendants also sought to dismiss the complaint for improper venue pursuant to 28 U.S.C. § 1391. However, defendants subsequently withdrew that motion, noting that in Polizzi v. Cowles Magazines, Inc., 345 U.S. 6163 (1953), the Supreme Court held that in actions removed from state court to federal court pursuant to 28 U.S.C. § 1441, 1446, section 1391 is inapplicable. See also PT United Can Co. Ltd. v crown Cork Seal Co., Inc., 138 F.3d 65, 72 (2d Cir. 1998). Defendants thus apparently concede that if the New York Supreme Court, the state court from which this action was removed, had personal jurisdiction over the defendants, then venue is proper in this district. See id. at 72-73.
For the reasons set forth below, defendants' motion is granted in part and denied in part.
I. FACTS
AIFI is a New York corporation with its principal place of business in New York. See Complaint ("Compl.") ¶ 1. BCL is a Colorado corporation with its principal place of business in Colorado.See Compl. ¶ 2. CFL is a South Carolina corporation with its principal place of business in South Carolina. See Memorandum in Support of Defendants' Motion to Dismiss ("Def. Mem.") at 4. Maguire and Souccar are residents of South Carolina. See Compl. ¶ 5. Bancroft is a resident of Colorado. See Def. Mem. at 4. Dike is a British subject, domiciled in France. See Declaration of Jeremy William Ross Dike dated May 27, 2003 ("Dike Decl.") ¶ 2.
A. BACKGROUND
In 1985, Maguire met Susan Knafel ("Knafel"), the now — deceased principal of AIFI, during a barge cruise vacation in France.See Declaration of Maureen Maguire dated May 28, 2003 ("Maguire Decl.") ¶ 4. The barge was captained by Dike, who mentioned during the cruise that he wished to start his own barge business, but lacked the necessary funding. See id.
In January 1986, after Maguire and Knafel had returned from their cruise, they met in Toronto and entered into an agreement to form the barge business that is the subject of this action.See id. Maguire and Knafel agreed to form a partnership, Afloat in France Co. ("AIFC"), and to arrange for funding to renovate their first barge, the Alouette. See id. AIFC was to handle the marketing, financing and booking for the cruises and barges owned and operated by LFA. See Knafel Aff. ¶ 2; Plaintiff's Memorandum of Law in Opposition to Defendants' Motion to Dismiss ("Pl. Mem.") at 3.
The Alouette, and the barges subsequently purchased, are owned by La Fluviale Auxerroise ("LFA"), a French corporation formed by Maguire, Knafel and Dike for that purpose. See Maguire Decl. ¶ 4. LFA is funded by AIFC, and although there is overlap between the individuals and entities that have interests in LFA and AIFC, at the time LFA and AIFC were formed, Maguire and Knafel contemplated that the profits of the business would flow to them through AIFC, not LFA.See Affidavit of Sidney R. Knafel, executor of Susan Knafel's estate, dated June 19, 2003 ("Knafel Aff.") ¶ 3. AIFI, BCL, Dike, Maguire and Souccar were all shareholders in LFA, at least until the summer of 2002. See Compl. ¶¶ 1, 2, 4, 5.
Initially, AIFI, controlled by Knafel, and Maguire had equal ownership interests in AIFC. See Partnership Agreement § 2.01, Ex. A to the Affidavit of Steven Shiffman, plaintiff's counsel, dated June 24, 2003 ("Shiffman Aff."). As of April 1, 1995, defendant CFL, a limited liability company controlled by Maguire and Souccar, became a partner in AIFC, replacing Maguire. At the same time, BCL, which is controlled by Bancroft, became a partner in AIFC. See Knafel Aff. ¶ 14; Amendment to Partnership Agreement, Ex. B to the Shiffman Aff. Notably, though Dike is referenced in the partnership agreement and has received a share of the partnership's profits since its inception, he has never been a partner in AIFC. See Partnership Agreement § 5.03; Pl. Mem. at 4.
Because AIFI has not averred sufficient facts which, if true, establish that Dike is, or was, an AIFC partner, see infra Part III.D, I refer to all of the defendants collectively as "defendants," and the defendants other than Dike as the "partner defendants."
On May 25, 1995, Knafel was involved in a serious accident that left her incapacitated. See Knafel Aff. ¶ 4. During the ensuing years, Knafel was unable to participate in the affairs of AIFC, but she retained her partnership interest. See id. ¶¶ 15, 16; Pl. Mem. at 8-9. On June 7, 1998, as a result of the injuries sustained in the 1995 accident, Knafel died. See Knafel Aff. ¶ 15.
Pursuant to the partnership agreement, Knafel's death dissolved the partnership. See Partnership Agreement at § 10. AIFI alleges that following the dissolution, defendants failed to wind up and liquidate the partnership and compensate AIFI for its interest. AIFI further alleges that Maguire and Souccar have improperly diverted AIFC partnership funds to themselves, and have wrongfully distributed profits from LFA to shareholders other than AIFI. AIFI also alleges that the defendants formed a new, competing business to divert profits from LFA that otherwise would have inured to AIFI as a shareholder of LFA. Finally, AIFI alleges that defendants concealed these activities and made assorted misrepresentations related to purported misdeeds. See generally Compl.
B. Jurisdictional Allegations
1. AIFC'S Inception Through Knafel's Accident
The original business certificate for AIFC, signed by Knafel and Maguire, was filed in the Westchester County Clerk's office and stated that the partnership's business was conducted from Ardsley-on-Hudson, New York. See Partnership Agreement § 1.03. When the agreement was amended in April, 1995, the head office remained in New York, but was moved to Manhattan. See Amendment to Partnership Agreement § 1.03. The partnership agreement is governed by the laws of the State of New York. See Partnership Agreement § 12.03.
From its inception, much of the work associated with AIFC was done by Knafel in New York. Initially, Knafel worked on the partnership business from her home in Ardsley-on-Hudson, and after she and her husband moved to Manhattan, an entire room in their home was designated for partnership business. From her New York office, Knafel supervised restoration of the barges, arranged for marketing of barge tours, and booked tour customers.See Knafel Aff. ¶¶ 4, 5.
AIFC hired Abercrombie Kent, an Oak Brook, Illinois-based luxury travel company, to assist in marketing the barge tours. Knafel supervised Abercrombie Kent's work from her home in New York, and frequently met with Abercrombie Kent representatives in New York. Maguire attended some of those meetings. See id. ¶¶ 6, 7.
Until early 1996, AIFC's bank accounts were maintained with banks located in New York. Moreover, Knafel opened post office boxes for AIFC in Ardsley-on-Hudson, and later in Manhattan. She also established telephone and fax lines for AIFC with New York telephone numbers, and communicated with clients and potential clients via those lines. AIFC's stationery identified the New York post office box, telephone number and fax line, and was used by all of the partners.See id. ¶¶ 8-11.
Up until Knafel's accident, Maguire and Souccar regularly communicated with Knafel, via telephone and written correspondence, about partnership business. Maguire and Souccar also visited New York regularly to discuss partnership business, including issues ranging from the purchase of an additional barge to amendments to the partnership agreement. See id. ¶ 13. On multiple occasions, Maguire traveled to New York, and together with Knafel, met with various travel agents in New York regarding AIFC. See 9/16/03 Maureen Maguire Deposition Transcript ("Maguire Tr.") at 13, 15-16.
2. After Knafel's Accident
After the accident, Knafel was no longer able to actively participate in AIFC's affairs. However, for some time after Knafel's incapacitation, Gaudiosa Flores, a household worker employed by the Knafels, assisted in AIFC's affairs from their home in New York. See Knafel Aff. ¶ 15. Moreover, AIFC continued to use the New York post office box as its business address through 1996, see id. ¶¶ 8, 9, and the New York telephone lines were maintained until 1998, see Maguire Tr. at 29. Additionally, the AIFC stationery bearing a New York address and telephone number was used until Knafel's death in mid-1998.See id. at 30-31; 9/16/03 Joseph Souccar Deposition Transcript ("Souccar Tr.") at 35-40.
Since Knafel's accident, Maguire and Souccar have continued to make regular, annual trips to New York for both social and business engagements. Thus, in 1998, Maguire made a presentation in New York to a group of approximately twelve travel agents. See Maguire Tr. at 13-15. Maguire and Souccar also maintained contact with Pisa Brothers, a New York travel agent, and E-Waterways, a New York tour operator,see Souccar Tr. at 11, and met with a woman in New York who was selling her "opera charter" business, see Maguire Tr. at 17-18.
Approximately 80 percent of AIFC's tours are booked through Abercrombie Kent. See Maguire Decl. ¶ 4. Abercrombie Kent distributes brochures throughout the country, including in New York. See Knafel Aff. ¶ 7. Furthermore, in the last five years, New York tour operators and agents have booked seven charters for AIFC, and several clients have been from New York. See Supplemental Memorandum in Support of Defendants' Motion to Dismiss at 4.
According to AIFC's website, as of October, 2003, the regular cost (as opposed to sale price) for chartering an AIFC barge ranges from $24,300 to $55,000. Although several of the barges can be booked on a "per cabin" basis, most are available only for full charter service.See www.bargeaif.com.
Finally, AIFC advertises in New York, both in print and on — line. On September 10, 2000, AIFC placed an ad in the New York Times travel section. See Pl. Mem. at 8. AIFC's website, which is available to New York users, provides information about AIFC, its barges, pricing, and availability, among other things. See www.bargeaif.com. Although the website does not allow viewers to actually book trips online, it provides telephone, fax and mail contact information, and users can request an AIFC catalog via the website. Furthermore, the website is somewhat interactive because it allows viewers to email AIFC. See id.
II. APPLICABLE LAW
A. Legal Standard
Upon motion, a court is obligated to dismiss an action against a defendant over which it has no personal jurisdiction. See Fed.R.Civ.P. 12(b)(2); see also In re Ski Train Fire in Kaprun, Austria on November 11, 2000, 230 F. Supp.2d 403, 406 (S.D.N.Y. 2002).
Prior to discovery, a plaintiff may defeat a motion to dismiss based on legally sufficient allegations of jurisdiction. . . . In the instant case — where the parties have conducted extensive discovery regarding the defendant's contacts with the forum state, but no evidentiary hearing has been held — the plaintiff's prima facie showing, necessary to defeat a jurisdiction testing motion, must include an averment of facts that, if credited by the ultimate trier of fact, would suffice to establish jurisdiction over the defendant.Metropolitan Life Insur. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566-67 (2d Cir. 1995) (quoting Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990)) (citations omitted). Thus, in considering a motion to dismiss pursuant to Rule 12(b) (2), the court may consider materials outside of the pleadings, see Whitaker v. Am. Telecasting. Inc., 261 F.3d 196, 208 (2d Cir. 1985);Hsin Ten Enter. USA, Inc. v. Clark Enters., 138 F. Supp.2d 449, 452 (S.D.N.Y. 2000), but must credit the plaintiff's averments of jurisdictional facts as true, see Met Life, 84 F.3d at 567.
B. Personal Jurisdiction
The determination of whether a federal court has personal jurisdiction over a defendant is a two step process. First, the court must determine whether the plaintiff has shown that the defendant is subject to personal jurisdiction under the forum state's laws. See Bensusan Restaurant Corp. v. King. 126 F.3d 25, 27 (2d Cir. 1997); Met Life, 84 F.3d at 567.Second, the court must assess whether its assertion of jurisdiction pursuant to the forum state's laws comports with the requirements of due process. See Bensusan, 126 F.3d at 27;Met Life, 84 F.3d at 567.
1. New York Law
Under New York's long-arm statute, a court may exercise personal jurisdiction over a non-resident if "the nondomiciliary transact [s] business within the state, [and] the claim against the nondomiciliary arise [s] out of that business activity." CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986). A nondomiciliary "transacts business" in New York if he "purposefully avails himself of the privilege of conducting activities within New York, thus invoking the benefits and protections of its laws." Id. (quoting McKee Electric Co. v. Rauland-Borg Corp., 20 N.Y.2d 377, 382 (1967)). A court's determination of whether a defendant "transacts business" in New York is based on an assessment of the sum of the defendant's activities. See Sterling Nat'l Bank Trust Co. of New York v. Fidelity Mortgage Inves., 510 F.2d 870, 873 (2d Cir. 1975). In some circumstances, a single business transaction may satisfy this provision, even when the defendant never enters the state. See Hsin Ten Enter., 138 F. Supp.2d at 455. However, "[n]o single event or contact connecting defendant to the forum state need be demonstrated/ rather, the totality of all defendant's contacts with the forum state must indicate that the exercise of jurisdiction would be proper." CutCo Indus., 806 F.2d at 365. Notably, "[t]he showing necessary for a finding that defendant transacted business and is suable on a cause of action arising from that transaction is considerably less than that needed to establish defendant's 'doing business,' which renders the defendant subject to suit on even an unrelated cause of action."Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 59 (2d Cir. 1985).
AIFI contends that this Court has jurisdiction over defendants pursuant to N.Y. C.P.L.R. §§ 301, 302(a)(1), 302(a)(2) and 302(a) (3). Section 302 is the long-arm statute. Because I conclude that jurisdiction is appropriate under section 302(a)(1), I need not address sections 301, 302(a)(2) and 302(a)(3).
C.P.L.R. § 302(a)(1) states: "a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent, transacts any business within the state or contracts anywhere to supply goods or services in the state."
Where a court has personal jurisdiction over a partnership, either because of the partnership's activities as a whole or the actions of a single partner acting on behalf of the partnership, the court has personal jurisdiction over all of the general partners. See Wichita Fed. Sav. and Loan Assoc. v. Comark, 586 F. Supp. 940, 943 (S.D.N.Y. 1984) ("New York case law establishes that non-resident general partners may properly be sued in the courts of this state as a result of forum activities of a partnership."). This is so because under New York law, a partner is an agent of his fellow partners, as well as of the partnership. See Durkin v. Shea, 957 F. Supp. 1360, 1366-67 (S.D.N.Y. 1997) (citingFirst Nat'l Bank of Ann Arbor, Michigan v. Farson, 226 N.Y. 218, 221-22 (1919) and Caplan v. Caplan, 269 N.Y. 445, 450 (1935)).
In an action for an accounting and enforcement of obligations contained in a partnership agreement, all partners must be joined,see Marks v. Zucker, 499 N.Y.S.2d 740, 742 (1st Dep't 1986), but the partnership itself is not a necessary party because the action is not a proceeding by or against the partnership, see Tesco Properties, Inc. v. Troy Rehabilitation and Imp. Project, Inc., 562 N.Y.S.2d 827, 829 (3d Dep't 1990).
2. Due Process
The Second Circuit has summarized the due process requirements for exercising personal jurisdiction over a foreign defendant as follows:
The due process clause of the Fourteenth Amendment permits a state to exercise personal jurisdiction over a non-resident defendant with whom it has certain minimum contacts such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. In determining whether minimum contacts exist, the court considers the relationship among the defendant, the forum, and the litigation. To establish the minimum contacts necessary to justify specific jurisdiction, the plaintiff first must show that his claim arises out of or relates to defendant's contacts with the forum state. The plaintiff must also show that the defendant purposefully availed himself of the privilege of doing business in the
forum state and that the defendant could foresee being haled into court there. If the plaintiff satisfies these requirements, the court also considers whether the assertion of jurisdiction comports with traditional notions of fair play and substantial justice — that is, whether it is reasonable under the circumstances of a particular case.Chew v. Dietrich, 143 F.3d 24, 28 (2d Cir. 1998) (alterations, citations and quotation marks omitted). There are two components to the inquiry: first the court must determine whether the defendant has sufficient contacts with the forum state to justify the court's exercise of personal jurisdiction, andsecond, the court must determine whether the assertion of personal jurisdiction is reasonable under the circumstances of the particular case. See Met Life, 84 F.3d at 567-68 (citing International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). The two prongs of the inquiry are interrelated, such that a weak showing of minimum contacts requires a stronger demonstration of reasonableness. See Met Life, 84 F.3d at 568-69. "On the other hand, where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985).
In their submissions to the Court, the parties devote considerable attention to the issue of the appropriate time period for assessing a defendant's minimum contacts with the state, and whether it is reasonable, under the due process standard, for the Court to consider contacts for a period of six or more years before the complaint was filed. As the Court of Appeals noted in Met Life, courts have not often addressed this question directly. See Met Life. 84 F.3d at 569. However, the Supreme Court has considered contacts with the forum going back as many as seven years, see Helicopteros Nacionales de Colombia. S.A. v. Hall, 466 U.S. 409, 409-11 (1984), and inMet Life, the Second Circuit approved a six-year analysis, though it emphasized that the inquiry is fact-intensive and the appropriate period for evaluating a defendant's contacts with the forum state will vary in individual cases. See Met Life. 84 F.3d at 569.
In any event, I need not reach this issue because an analysis of the appropriate time period for assessing a defendant's contacts with the forum state is only necessary for purposes of establishing general jurisdiction. Because I conclude that the Court has personal jurisdiction over the partner defendants pursuant to New York' long-arm statute, C.P.L.R. § 302(a), not New York's general jurisdiction statute, C.P.L.R. § 301, the time period is irrelevant; so long as defendants transacted business in New York, and plaintiff's claims arise out of that activity, personal jurisdiction is proper. It is worth noting, however, that in specific jurisdiction cases, courts have looked at the defendant's contacts with the forum state for a period extending back as many as ten years. See Hoffritz. 763 F.2d at 59-60.
Once the plaintiff has demonstrated the requisite minimum contacts between the defendant and the forum state, the court must employ a five-factor test to determine whether the assertion of personal jurisdiction is reasonable. See Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 112 (1987); Met Life, 84 F.3d at 573. These factors are: (1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the most efficient resolution of the controversy; and (5) the interests of the state in furthering substantive social policies. See Asahi, 480 U.S. at 112; Burger King, 471 U.S. at 476-77.
III. DISCUSSION
Defendants contend that although AIFC was doing business in New York before Knafel's accident, AIFC was not transacting business in New York after May 25, 1995. See Def. Mem. at 4-8; Reply Memorandum in Support of Defendants' Motion to Dismiss ("Rep. Mem.") at 2-6. Defendants further submit that "the pre-1995 contacts of Mrs. Knafel and others have no relation to these claims," Rep. Mem. at 5, and that even if AIFC transacted business in New York after Knafel's accident, AIFI's claims do not "arise out" of any of AIFC's post-1995 activities in New York.See id. at 5-6.
A. Defendants Transacted Business in New York
There is no doubt that AIFC, and therefore all of its partners, conducted business in New York prior to Knafel's accident. AIFC had a New York address and New York telephone numbers, and Knafel did substantial work on behalf of the partnership from her home office in New York, booking trips, supervising barge renovations, and meeting with various travel companies and agents. See supra Part I.B.I. In fact, defendants apparently concede that AIFC transacted business in New York prior to Knafel's accident. See Rep. Mem. at 1-2.
The factual averments set forth by AIFI indicate that evenafter Knafel's accident, AIFC (through the actions of Maguire and Souccar) continued to transact business in New York. Since 1995, Maguire and Souccar have traveled to New York on multiple occasions. While in New York, Maguire has met with travel agents and done presentations seeking to generate business for AIFC, and Maguire and Souccar have maintained relationships with at least two New York companies that refer clients to AIFC. These business activities in New York have generated substantial revenue for AIFC — New York tour operators have booked seven charters for AIFC in the last several years, each of which generated tens of thousands of dollars for AIFC. Although New York domiciliaries may represent a relatively small percentage of AIFC's clients, this is despite considerable effort by AIFC to attract New York customers through New York travel agents and operators, print advertising and a website. See surpa Part I.B.2.
Under the circumstances, AIFI has sufficiently established a prima facie showing that, based on the totality of all of AIFC's activities in New York, AIFC transacted business in New York, both before and after Knafel's accident. See CutCo Indus., 806 F.2d at 365. At this stage of the proceedings, nothing more is required of plaintiff.See Met Life, 84 F.3d at 566-67.
B. AIFI's Claims Arise Out of AIFC's Transaction of Business in New York
AIFI alleges claims against defendants for an accounting, breach of fiduciary duty, fraud, and negligent misrepresentation. These causes of action are "sufficiently related to the business transacted that it would not be unfair to deem [them] to [have] arise [n] out of the transacted business." Hoffritz, 763 F.2d at 59.
An action for an accounting examines the entire period of the partnership. See Peirez v. Queens P.E.P. Associates, Corp., 539 N.Y.S.2d 61, 63 (2d Dep't 1989). Here, the relevant accounting period begins on or about June 1, 1986, the date the partnership agreement was executed, and continues at least until the partnership dissolved by operation of law on May 25, 1998. Even if AIFI is not entitled to any profits AIFC earned after Knafel's death, it clearly is entitled to a distribution of its share of the profits earned before her death. Because it is indisputable that AIFC was doing business, and in fact located in New York at least until May, 1995, AIFI's accounting claim arises out of AIFC's New York activities.
Because AIFI alleges that the partnership was not wound up and liquidated, the appropriate accounting period may be longer.
Furthermore, because New York's long-arm statute confers personal jurisdiction over AIFC's partners with respect to AIFI's accounting claim, it also confers personal jurisdiction over AIFC's partners with respect to the causes of action for breach of fiduciary duty, fraud and negligent misrepresentation because all of the claims arise out of the same underlying facts. See C.P.L.R. § 302(c). In any event, the tort claims also arise out of AIFC's business transactions in New York. AIFI claims, among other things, that (1) AIFC continued to operate as a partnership after Knafel's death without ever making any distributions to AIFI based on profits received before or after her death, and (2) the partners wrongfully depleted AIFC's assets of profits that should have been distributed to AIFI. Thus, AIFI argues that all of AIFC's partners' activities that affected AIFC's financial condition after Knafel's death constituted breaches of the partners' fiduciary duties to Knafel, and fraud. Because, as discussed above, many of these activities took place in New York, see supra Part III.A, the causes of action arise from business transacted in New York.
C. Due Process
Under the five-factor Asahi test, see 480 U.S. at 107, it is reasonable for this Court to assert jurisdiction over AIFC's partners. First, although there may be some difficulties associated with requiring AIFC's partners to defend this suit in New York, given that none are located in New York, the "conveniences of modern communication and transportation ease what would have been a serious burden only a few decades ago."See Met Life, 84 F.3d at 574; see also Burger King, 471 U.S. at 483 (inconvenience must be "substantial to achieveconstitutional magnitude) (emphasis in original). Thus, this factor cuts only slightly in defendants' favor. See id.
Second, New York has a substantial interest in this litigation because the partnership agreement is governed by New York law,see Partnership Agreement § 12.03, and the plaintiff is a New York corporation with its principal place of business in New York,see Compl. ¶ 1. Thus, this factor favors plaintiff.See Burger King. 471 U.S. at 482-83; Met Life. 84 F.3d at 574.
Third, because AIFI is a New York corporation with its principal place of business in New York, plaintiff has a strong interest in litigating this action in New York. See Asahi, 480 U.S. at 114-15; Met Life. 84 F.3d at 574. This factor also favors plaintiff.
Fourth, in determining whether adjudication in the forum state would promote the efficient administration of justice, courts consider where witnesses and evidence are likely to be located. See Met Life. 84 F.3d at 574 (citing Caruth v. International Psychoanalytical Ass'n, 59 F.3d 126, 129 (9th Cir. 1995)). The potential witnesses here are located in South Carolina, Colorado, France, and New York. Moreover, documentary evidence is likely located in multiple jurisdictions. As such, this factor favors neither plaintiff nor defendants.
Fifth, the parties have not argued, and I cannot discern any substantive social policies that would be furthered by permitting this case to be heard in New York. See Met Life, 84 F.3d at 575. But there are no substantive social policies that would be hindered by allowing adjudication in New York. Therefore, this factor is neutral.See id.
In sum, the "reasonableness" inquiry favors assertion of jurisdiction in New York. Although the partner defendants may be somewhat inconvenienced if forced to litigate this matter in New York, AIFI has a strong interest in prosecuting the action in this forum. Moreover, because New York law governs the dispute and the plaintiff is a New York corporation, New York has considerable interest in adjudication of the action within its borders. The final two factors, efficiency and social policy, do not favor either party. Therefore, AIFI has produced sufficient prima facie evidence that the assertion of personal jurisdiction over the partner defendants would not offend due process.
D. The Court Lacks Jurisdiction Over Defendant Dike
The Court has personal jurisdiction over Maguire and Souccar because of the activities they engaged in as agents of the partnership. Under New York law, partners act as agents for all of the general partners in the partnership; therefore, the Court also has personal jurisdiction over Bancroft, as well as CFL and BCL, the corporate entities through which Bancroft, Maguire and Souccar control their partnership interests in AIFC. See Durkin, 957 F. Supp. at 1366-67; Comark, 586 F. Supp. at 943.
AIFI has failed, however, to aver sufficient facts to establish a prima facie showing that the Court has personal jurisdiction over defendant Dike. Dike does not now, and has never held a partnership interest in AIFC. See Partnership Agreement; Amendment to Partnership Agreement. Nonetheless, AIFI argues that Dike should be "treated as a partner . . . because he received a share in the profits of AIFC." Pl. Mem. at 11, n. 6. In support of this argument, plaintiff cites New York Partnership Law section 11(4) for the proposition that "receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business." Id.
Of course, the fact that Dike's receipt of a share of AIFC's profits is prima facie evidence that he is a partner is irrelevant where the partnership agreement clearly establishes that Dike is not a partner. Moreover, AIFI's reliance on section 11(4), of the New York Partnership Law is misplaced because section 11(4) states: "The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but no such inference shall be drawn if such profits were received in payment . . . as wages of an employee . . ." N.Y. Partnership Law § 11(4)(b) (emphasis added). Pursuant to the terms of the partnership agreement, Dike was employed as a general manager of the partnership's business, and as part of his compensation, he received a share of the partnership profits. See Partnership Agreement § 5.03. Thus, New York Partnership Law section 11(4) is inapplicable.
The partnership agreement states that Dike's receipt of a share of the partnership profits is pursuant to the "terms and conditions of the employment agreement attached hereto as Schedule A." Partnership Agreement § 5.03. "Schedule A" was hot provided to the Court.
Because AIFI has failed to aver any additional facts establishing that Dike was, at any time, a partner in AIFC, the Court's personal jurisdiction over AIFC's partners does not establish personal jurisdiction over Dike. Furthermore, plaintiff has not set forth any other basis pursuant to which this Court may exercise personal jurisdiction over Dike, a British subject who has lived in France for 20 years, and whose only connection to New York appears to be one 1992 visit. See Dike Decl. ¶¶ 2, 3, 4. Accordingly, the complaint against Dike is dismissed.
IV. CONCLUSION
For the foregoing reasons, defendants' motion to dismiss for lack of personal jurisdiction is granted in part and denied in part. The motion is granted with respect to defendant Dike., and denied with respect to all other defendants. Plaintiff's request for costs is denied. The Clerk of the Court is directed to close this motion. A conference is scheduled for November 7, 2003 at 4:00 p.m.