Bross Utilities Service Corp. v. Aboubshait

489 F. Supp. 1366, 1980 U.S. Dist. LEXIS 13102
CourtDistrict Court, D. Connecticut
DecidedMay 22, 1980
DocketCiv. H 78-582
StatusPublished
Cited by43 cases

This text of 489 F. Supp. 1366 (Bross Utilities Service Corp. v. Aboubshait) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bross Utilities Service Corp. v. Aboubshait, 489 F. Supp. 1366, 1980 U.S. Dist. LEXIS 13102 (D. Conn. 1980).

Opinion

MEMORANDUM AND ORDER

JOSÉ A. CABRANES, District Judge:

Introduction

This action arises out of a joint venture for the construction of high voltage electrical lines in Saudi Arabia. Plaintiff Bross Utilities Service Corporation (“Bross”), a Connecticut corporation headquartered in this state, alleges various breaches of contract and of fiduciary duties, as well as tortious conduct, by the defendants, two Saudi corporations, a Lebanese corporation, two individual citizens of Saudi Arabia and one citizen of Lebanon. According to Bross, the defendants’ wrongful acts deprived it of over $20,000,000, which represented Bross’ share of the past and anticipated future profits of the joint venture.

Bross claims that the defendants are subject to the jurisdiction of this court through the application of the Connecticut “long-arm” statutes governing in personam jurisdiction over foreign corporations, Conn. Gen.Stat. § 33-411, and nonresident individuals, Conn.Gen.Stat. § 52-59b. Bross served process on the Secretary of State of Connecticut in the manner provided by Conn.Gen.Stat. §§ 33-411(d) and 52-59b(c) in November 1978. 1 None of the defend *1368 ants answered or appeared, and default was entered, pursuant to Rule 55(a), Fed.R.Civ.P., on December 28, 1979. On February 15, 1980, the court granted the plaintiff’s motion for default judgment, under Rule 55(b), Fed.R.Civ.P., and ordered that a hearing be held to determine the damages which Bross might recover. 2 At that hearing, which was held on March 10-11, 1980, the court raised questions concerning its jurisdiction over the defendants and reserved the right not to enter any judgment in favor of the plaintiff if it found that such jurisdiction was lacking. 3 The plaintiff presented the testimony of its senior vice president, Peter G. Olson, 4 as well as documentary evidence, concerning the questions of jurisdiction and damages.

After examination and analysis of the plaintiff’s complaint, the evidence presented at the hearing, and Bross’ post-hearing submissions, the court concludes that the applicable Connecticut statutes do not authorize in personam jurisdiction over the defendants. Accordingly, the plaintiff’s motion for default judgment is, upon reconsideration, denied, the action is dismissed and judgment shall enter for the defendants.

I. FACTUAL BACKGROUND

A. Bross

Bross is incorporated in the State of Connecticut, with its principal place of business in Bloomfield, Connecticut. 5 It was founded in 1924, 6 and its shares have been publicly held and traded on the over-the-counter market since 1969. 7 Its primary business is the construction of electrical high voltage transmission lines, associated substations and lines and facilities for the distribution of electricity to populated areas. 8 Bross has approximately 100 employees, 9 and conducts its business wherever in the country or world it obtains contracts to perform work; very little of its business is conducted in Connecticut and the northeastern United States. 10

B. The Defendants

The three corporate defendants are Abdulla Fouad A. Aboubshait Establishment (“Establishment”), Fouad Abdulla Fouad Corporation (“FAFC”) and Electrical Mechanical Engineering Contractors (“Emeco”); Establishment and FAFC are organized under the laws of Saudi Arabia, while Emeco is a Lebanese corporation. 11 The individual defendants are Abdulla Fouad A. Aboubshait and Fouad Abdulla Fouad, two *1369 Saudi citizens, and Shamil Sami Ayntrazi, a citizen of Lebanon; 12 the individual defendants control, respectively, Establishment, PAFC and Emeco. 13

C. The Joint Venture

In December 1974, Bross officers met with defendant Fouad Abdulla Fouad and discussed the possibility that the plaintiff might enter into a joint venture to construct electrical transmission and distribution systems in Saudi Arabia. 14 In April 1975, a joint venture, known as “Fouad Bross Emeco-Electrical Engineers,” was formed by the plaintiff (through a wholly-owned subsidiary which was registered in the Grand Cayman Islands), Establishment and Emeco. 15 The joint venture apparently was designed to take advantage of Bross’ technical expertise and ability to procure skilled workers and specialized equipment from the United States, as well as its coventurers’ capital and their capacity to oversee the enterprise locally. 16 Bross owned 31.5% of the joint venture and was entitled to a proportionate share of its profits. 17

The joint venture obtained contracts to construct electrical transmission lines and substations in Saudi Arabia for the Arabian American Oil Company (“Aramco”), and apparently performed those contracts. 18 In addition, the joint venture was awarded several contracts for electrical distribution work in Saudi Arabia, for which it was to be paid on a “cost plus” basis. 19 However, the plaintiff never received any profits earned by the joint venture on these contracts. 20 Bross alleges that it- was victimized by the defendants’ wrongful appropriation of Bross’ skilled American workers, the specialized equipment which Bross imported from the United States for the joint venture’s use and business opportunities which rightfully belonged to the joint venture. 21

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Bluebook (online)
489 F. Supp. 1366, 1980 U.S. Dist. LEXIS 13102, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bross-utilities-service-corp-v-aboubshait-ctd-1980.