Propulsion Systems, Inc. v. Avondale Shipyards, Inc.

77 Misc. 2d 259, 352 N.Y.S.2d 749, 1973 N.Y. Misc. LEXIS 1217
CourtNew York Supreme Court
DecidedAugust 3, 1973
StatusPublished
Cited by7 cases

This text of 77 Misc. 2d 259 (Propulsion Systems, Inc. v. Avondale Shipyards, Inc.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Propulsion Systems, Inc. v. Avondale Shipyards, Inc., 77 Misc. 2d 259, 352 N.Y.S.2d 749, 1973 N.Y. Misc. LEXIS 1217 (N.Y. Super. Ct. 1973).

Opinion

Martin B. Stecher, J.

The plaintiff, a New York corporation, brought two actions against the defendant, a Louisiana corporation, for alleged breaches of contracts between the parties made in 1961 and 1965 respectively. On March 18, 1971, the Appellate Division reversed a prior Special Term order dismissing both actions for lack of jurisdiction over the defendant and referred the matter to a Special Beferee to hear and report whether or not the defendant was subject to the court’s jurisdiction under either CPLB 301 (engaged in a continuous and systematic course of doing business in this State to warrant finding the defendant’s “ presence ” here) or under CPLB 302 (subd. [a], par. 1) (the long arm ” statute). The defendant has moved to confirm the report. The plaintiff has cross-moved to confirm certain factual findings of the Beferee and for an order rejecting other findings and the Beferee’s recommendations.

The finding of fact upon which there is apparently no dispute is that there was ample proof that the Standard Paint Division of defendant did business in this State not occasionally or casually but with a fair measure of permanence and continuity from February 1969 until May 1970. As (to) such division of defendant, it must be held that the defendant was doing business.”

I confirm this finding. It is undisputed that both actions were started during this period between February, 1969 and May, 1970. Accordingly, this court has had and does have jurisdiction over the defendant despite the fact that the various causes of action are unrelated to the business the defendant was conducting in New York (Public Administrator of County of N. Y. v. Royal Bank of Canada, 19 N Y 2d 127; [261]*261Frummer v. Hilton Hotels Int., 19 N Y 2d 533). . It is thus unnecessary to deal with the Referee’s finding, disputed by the plaintiff, that no jurisdiction was created under the “ long arm” statute (CPLR 302, subd. [a], par. 1).

Had the parties proceeded promptly to trial of the jurisdictional issues, there is little doubt that the finding under CPLR 301 would have been the end of the matter. For under the law, as it existed in 1971, so long as either party was a resident in the State of New York and the court had jurisdiction over both, the retention of jurisdiction was mandatory (de la Bouillerie v. de Vienne, 300 N. Y. 60, 62; Silver v. Great Amer. Ins. Co., 29 N Y 2d 356, 358). But because of the parties’ delay in presenting evidence, responding to subpoenas, taking out-of-town depositions and the like, two years elapsed before the Referee was enabled to report and in the interim, not only has the defendant pressed an action against the plaintiff in Louisiana, but the law has changed (Silver v. Great Amer. Ins. Co., supra; CPLR 327). Now, mere residence of a party no longer mandates the retention of jurisdiction once acquired but “ substantial justice ” becomes the test of retention or rejection under the doctrine of forum non conveniens (CPLR 327).

The Referee has made no mention of this doctrine in his report and indeed it would appear, on the surface, to be beyond the scope of the reference which seeks only what is (jurisdiction) and not what ought to be (forum non conveniens) ; but underlying his recommendation is CPLR 327 and, in my opinion, the issue was properly considered.

In his report, the Referee emphasizes that only a miniscule portion of the defendant’s 218 million dollars of annual sales involved doing business in New York and none of the New York based business involves a division in which dealings were had with the defendant. He says ‘ ‘ to require defendant to defend these actions in New York, when the vast amount of its business is conducted in Louisiana, when it maintained an office for only a short time in New York and the business done in New York was de minimis in comparison to its overall business and where it now no longer maintains an office would offend the notions of fair play and substantial justice. I, therefore, find that defendant was not doing business in New York .sufficient to be amenable to jurisdiction here. Accordingly, I recommend that the motions to dismiss the complaints on jurisdictional grounds, determination of which were held in abeyance, be granted.”

[262]*262The threshold question is whether or not Silver v. Great Amer. Ins. Co. (supra) and CPLR 327 apply to cases commenced prior to the Silver decision. The change has been determined to be a “ procedural matter ” only (Silver v. Great Amer. Insur. Co., supra, p. 363) and accordingly the doctrine will be applied to cases previously commenced (Heller v. National Gen. Corp., 39 A D 2d 688).

The burden of rejecting jurisdiction is not to be lightly assumed. The application of forum non conveniens is usually to be found in cases which may be described as f1 imported litigation ” (Taurus, Inc. v. Boeck Fuel Co., 38 A D 2d 702); or where the relationship of the litigation to New York is “patently tenuous ” (Heller v. National Gen. Corp., supra); or where the contract and the real parties in interest have no relationship to New York, the negotiation and performance of the contract occurred elsewhere and the contract was to be, by its terms, interpreted by the laws of the State to which it had a more intimate relationship (Heller v. National Gen. Corp., supra); or where the plaintiff is a nonresident shopping for a more benign jurisdiction (Matter of Hubbell v. Insurance Co. of North Amer., 40 A D 2d 696; Silver v. Great Amer. Insur. Co., 29 N Y 2d 356, 38 A D 2d 932; Wachsman v. Craftool Co., 77 Misc 2d 360). The reason underlying the development of the rule was stated by the Court of Appeals in Silver v. Great Amer. Ins. Co. (supra, p. 360): “As a general rule, a plaintiff with a transitory cause of action has a wide choice of forums in which to sue. iSuch forums often bear little relation either to the cause of action or to the parties and are selected by the plaintiff with the purpose of unduly burdening or harassing a defendant. * * * The doctrine of forum non conveniens was developed by the courts to counter such a step, ‘ to justify ’, it has been noted * * * ‘ stay or dismissal in situations in which it was found that, on balancing the interests and conveniences of the parties and the court, the action could better be adjudicated in another forum’.”

Despite the language of the codifications of the Silver rule (CPLR 327) providing that the “ domicile or residence in this state of any party to the action shall not preclude the court from staying or dismissing the action”, no case reported in this jurisdiction since Silver (supra) has barred access to our courts to a resident plaintiff (cf. Slaughter v. Waters, 41 A D 2d 810; see, also, 48 St. John’s L. Rev. 173-174) who is the original owner of a claim. (Resident assignees of foreign claims have fared less well; Taurus, Inc. v. Boeck Fuel Co., 38 [263]*263A D 2d 702, supra; Heller v. National Gen. Corp., supra.) “ In any situation, the balance must be very strongly in favor of the defendant, before the plaintiff’s choice of forum should be disturbed ” (Olympic Corp. v. Societe Generale, 462 F.

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77 Misc. 2d 259, 352 N.Y.S.2d 749, 1973 N.Y. Misc. LEXIS 1217, Counsel Stack Legal Research, https://law.counselstack.com/opinion/propulsion-systems-inc-v-avondale-shipyards-inc-nysupct-1973.