Unicon Management Corp. v. Koppers Co.

38 F.R.D. 474, 1965 U.S. Dist. LEXIS 10035
CourtDistrict Court, S.D. New York
DecidedDecember 7, 1965
StatusPublished
Cited by6 cases

This text of 38 F.R.D. 474 (Unicon Management Corp. v. Koppers Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Unicon Management Corp. v. Koppers Co., 38 F.R.D. 474, 1965 U.S. Dist. LEXIS 10035 (S.D.N.Y. 1965).

Opinion

HERLANDS, District Judge:

This motion poses a question of adjective law: What procedure should be followed in resolving a preliminary issue of fact where the defendants’ challenge to personal jurisdiction is predicated on their assertion that they did not commit a tortious act within the State of New York?

In this case, the disputed factual issue — whether the defendants committed a tortious act within the State of New York — is not only determinative of the jurisdictional question raised by the motion at bar but also constitutes the ultimate question decisive of the litigation in chief.

We precede the analysis with an express recognition of the guiding principle that the rules of civil procedure shall be construed to secure “the just, speedy, and inexpensive determination of every action.” Fed.R.Civ.P. 1.

Defendants Fletcher L. Byrom, Walter P. Arnold, H. A. Denny, R. G. Wilson and Paul H. Titus [hereinafter “the individual defendants”] have moved, pursuant to Fed.R.Civ.P. 12(b), for an order dismissing the action against them or, in lieu thereof, for an order quashing the return of service of summons. The asserted ground for the motion is that the individual defendants have not been properly served with process and, therefore, this court does not have personal jurisdiction over them.

On June 29, 1965, plaintiff, Unicon Management Corp. [hereinafter “Uni-eon”], served a summons and complaint upon Hoppers Company, Inc. [hereinafter “Hoppers”]. On July 12, 1965, a copy of the summons and complaint was served [475]*475upun each of the individual defendants in Pittsburgh, Pennsylvania.

The individual defendants contend that such service of process in Pennsylvania was ineffectual and did not confer personal jurisdiction over them upon this court.

Unicon, on the other hand, argues that service of process in Pennsylvania was authorized by the Federal Rules of Civil Procedure, and that this court does have personal jurisdiction over the individual •defendants. Unicon relies on Fed.R. •Civ.P. 4(e), which relevantly provides:

“Whenever a statute or rule of court of the state in which the district court is held provides (1) for service of summons * * * upon a party not an inhabitant of or found within the state, * * * service may * * * be made under the circumstances and in the manner prescribed in the statute or rule.”

The individual defendants do not dispute that Fed.R.Civ.P. 4(e), in effect, incorporates by reference the following provisions of § 302 and § 313 of the New York Civil Practice Law and Rules:

“A court may exercise personal jurisdiction over any non-domieiliary * * * as to a cause of action arising from any of the acts enumerated in this section, in the same manner as if he were a domiciliary of the state, if, in person or through an agent, he: * * *
2. commits a tortious act within the state * * * ” [§ 302(a)]
“A person * * * subject to the jurisdiction of the courts of the state under section * * * 302 * * * may be served with the summons without the state, in the same manner as service is made within the state * * * ” [§ 313]

The basic issue is whether the individual defendants have committed a “tortious act” in New York State within the meaning of CPLR § 302(a) (2). Only if such a tortious act was committed within New York State does service of process in Pennsylvania confer personal jurisdiction over the individual defendants on this court. See Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 15 N.Y.2d 443, 460-464, 261 N.Y.S.2d 82, 21-24, 209 N.E.2d 68, 77-79 (1965).

The individual defendants are executives of Koppers. Koppers and Unicon entered into an agreement on January 28, 1964 which provided that Unicon would supply various managerial services and assist Koppers in the active management and operation of Koppers’ Malan Construction Department. Unieon was to be compensated by the payment of a fixed sum plus a percentage of the pretax profits of said Malan Construction Department.

Unicon’s complaint alleges that Koppers breached this “management contract” by wrongfully interfering with Unieon’s management of Malan. That part of Unicon’s complaint is not relevant to the motion presently before this court.

However, the complaint claims that, “between January 28, 1964 and the present, the Individual Defendants jointly and severally agreed that their individual personal economic advantage and personal beliefs and ambitions would be served by causing or precipitating a termination of the contractual relationship existing between plaintiff and Koppers.” The complaint further asserts that the decision of the individual defendants to cause Koppers to terminate the contract was made, not as a part of their duties to Koppers or for the benefit of Koppers, but rather for their own private gain and contrary to the best interest of Koppers. The complaint also alleges that, subsequent to the time that the decision was made, the individual defendants by "actions, words and deeds” attempted to induce Koppers to “wrongfully breach” its contractual agreement with Unicon.

The individual defendants take the position that, although the complaint al[476]*476leges “a vague ‘conspiracy’ to induce Koppers’ management to breach a contract with plaintiff * * * no allegations of acts committed within the state [of New York] have been * * * alleged * * * ”; and that, absent the commission of a tortious act in New York, the service of process on them in Pennsylvania does not confer personal jurisdiction over them upon this court.

The only allegations made by Unicon that the individual defendants have committed tortious acts within New York appear in the opposing affidavit of Thomas R. Farrell, Unicon’s attorney.

Unicon’s theory appears to be that the individual defendants, acting in their private capacity and not as Koppers’ executives, sent “agents” into New York who performed certain unspecified acts there which were “in furtherance of a plan conceived by the individual defendants to advance their own personal interests by impeding and hindering plaintiff [Unicon] in the performance of the agreement with Koppers and thus bringing about the eventual breach of the agreement.”

It is not controverted that these alleged “agents” were, in fact, employees of Koppers who were sent to Koppers’ Malan Construction Department in New York, at least ostensibly, to “administer and coordinate” the work of that department — a function consistent with the positions they held in the Koppers hierarchy. It is also true that the individual defendants could have been acting within the scope of their authority as Koppers’ executives when they sent these employee-agents to New York, unless they lost that right under the terms of the management contract of January 28, 1964 — a point which is in controversy.

The individual defendants articulate their position only in their reply memorandum in support of this motion.

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Cite This Page — Counsel Stack

Bluebook (online)
38 F.R.D. 474, 1965 U.S. Dist. LEXIS 10035, Counsel Stack Legal Research, https://law.counselstack.com/opinion/unicon-management-corp-v-koppers-co-nysd-1965.