Melkaz International Inc. v. Flavor Innovation Inc.

167 F.R.D. 634, 1996 WL 189005
CourtDistrict Court, E.D. New York
DecidedApril 29, 1996
DocketNo. 95 CV 3358(JRB)
StatusPublished
Cited by7 cases

This text of 167 F.R.D. 634 (Melkaz International Inc. v. Flavor Innovation Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Melkaz International Inc. v. Flavor Innovation Inc., 167 F.R.D. 634, 1996 WL 189005 (E.D.N.Y. 1996).

Opinion

MEMORANDUM-DECISION AND ORDER

BARTELS, District Judge.

Defendants Flavor Innovation Inc. (“Flavor Innovation”) and Charlene Brach (collectively “Defendants”) move to dismiss Plaintiff Melkaz International Inc.’s (“Melkaz”) complaint in this diversity action under Federal Rule 12(b)(2), (4) and (5) for improper service of process and lack of personal jurisdiction. In the alternative, Defendants move to quash service. For the reasons stated below, the motions are granted in part and denied in part.

Background

The following undisputed facts appear in the parties’ papers.1 Melkaz instituted the [636]*636above-captioned action by complaint dated August 11, 1995. It is a New York corporation which engages in the international trade of certain food products and its principle place of business is at 43-43 Kissena Boulevard in Flushing, New York. Flavor Innovation is a New Jersey corporation which manufactures certain food products and its principle place of business is 220 Saint Nicholas Avenue in South Plainfied, New Jersey. For a period of time Melkaz distributed instant coffee product manufactured by Flavor Innovation.

Service of the summons and complaint was attempted on August 17, 1995. The parties heatedly contested whether service of either defendant was valid.

Much of the business conducted between the parties was conducted by telephone and mail: Melkaz seeking out new buyers of Flavor Innovation’s product and arranging for its production, distribution and sale. "When Melkaz located a potential buyer, it contacted Flavor Innovation with the specifications required and Flavor Innovation manufactured the product. The heart of this action is a contract dispute which need not be addressed for the purposes of the instant motion.

Discussion

Defendants move to dismiss this action or to quash service based on the claim that Melkaz did not effect proper service and for lack of personal jurisdiction based on the claim that they are not subject to suit in New York.

7. Service

This Court referred the case to Magistrate Judge Levy for a hearing on the validity of service as to both the corporate and individual defendants. After conducting the January 16, 1996 hearing, Judge Levy issued a well-reasoned and thorough report on February 14, 1996 recommending that this Court find service valid on the corporate defendant, Flavor Innovation, based on the principle of “redelivery”, and find service invalid on the individual defendant, Charlene Brach, based on the process server’s identification at the hearing of a “clerical” worker as the recipient of process meant for the president of the company. Under the terms of the report and recommendation, the parties were required to file any objections within ten days of receipt of the report. Neither party filed such an objection.

For the reasons set forth in the report and recommendation issued by Magistrate Judge Levy, the findings of said report and recommendation hereby are adopted, and Defendants’ motion to dismiss is hereby granted as to the validity of service of Charlene Brach and denied as to the validity of service of Flavor Innovation. Charlene Brach is therefore dismissed as a defendant in this action.

77. Personal Jurisdiction

Next, Defendants argue that the Court has no personal jurisdiction over Flavor Innovation because it is a New Jersey corporation with insufficient New York contacts to warrant jurisdiction in New York. The Court finds no basis for Flavor Innovation’s contention.

Although Melkaz ultimately bears the burden of establishing that this Court has jurisdiction over Defendants, in defending the present motion they need only make a prima facie showing of jurisdiction. Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.), cert. denied, 498 U.S. 854, 111 S.Ct. 150, 112 L.Ed.2d 116 (1990); Welinsky v. Resort of the World D.N.V., 839 F.2d 928, 930 (2d Cir.1988); CutCo Indus., Inc. v. Naughton, 806 F.2d 361 (2d Cir.1986); Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir.1985). Construing, as it must, all reasonable allegations in Plaintiffs favor, A.I. Trade Finance, Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir.1993), the Court finds that Melkaz has made the requisite showing.

Personal jurisdiction in a diversity action turns upon the law of the forum state. Savin v. Ranier, 898 F.2d 304, 306 (2d Cir. 1990); Hoffritz for Cutlery, 763 F.2d at 57; CutCo, 806 F.2d at 365. Here, jurisdiction is governed by section 302 of the New York Civil Practice Law and Rules (“CPLR”), New York’s long-arm statute. Section 302(a)(1) of the long-arm statute grants the [637]*637court jurisdiction over any nondomiciliary “who in person or through an agent [ ] transacts any business within the state or contracts anywhere to supply goods or services in the state.” CPLR 302(a)(1).

To establish jurisdiction under the “transacting business” prong of this section, Melkaz must demonstrate both that Flavor Innovation “transacted business” within New York and that the subject claim arose from Flavor Innovation’s in-state business activity. CutCo, 806 F.2d at 365.

As to the latter requirement that the subject claim arose from Flavor Innovation’s instate activity, there can be no doubt. The underlying ease concerns the terms of agreements between the parties and the payment of commissions to Melkaz.

For the former requirement, courts generally look to the “totality of the circumstances” surrounding a nondomiciliary’s instate activity to determine whether a party has “transacted business” within the meaning of CPLR 302(a)(1). Sterling Nat’l Bank & Trust Co. v. Fidelity Mortgage Investors, 510 F.2d 870, 873, 874 (2d Cir.1975); First City Fed. Sav. Bank v. Dennis, 680 F.Supp. 579, 583 (S.D.N.Y.1988).

Melkaz alleges that Flavor Innovation used New York as a shipping port, a New York laboratory tested Flavor Innovation’s product’s quality, Flavor Innovation entered a number of agreements with Melkaz as well as sent and received facsimile transmissions and telephone calls with Melkaz in order to conduct their business before the relationship deteriorated. Additionally, Melkaz notes that Flavor Innovation’s product is available at stores in New York.

The October 21, 1993 Contract specifies that New York law governs the agreement (Popik Aff. Ex. A at 2) and indicates execution in New York. (Id.; Popik Aff.

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Bluebook (online)
167 F.R.D. 634, 1996 WL 189005, Counsel Stack Legal Research, https://law.counselstack.com/opinion/melkaz-international-inc-v-flavor-innovation-inc-nyed-1996.