Marcy v. Allegro Resorts Marketing Corporation et al

Filing 34

MEMORANDUM-DECISION and ORDER - That Marcy's cross motion for leave to amend the complaint and add parties (Dkt. No. 29) is GRANTED. That Marcy shall file her amended complaint within seven (7) days of the date of this Memorandum-Decision and O rder. That Marcy's cross motion for jurisdictional discovery (Dkt. No. 10) is GRANTED. That Allegro's 5 Motion to Dismiss is DENIED with leave to renew. That Occidental's 18 Motion to Dismiss is DENIED with leave to renew. That the parties contact Magistrate Judge Christian F. Hummel to schedule further proceedings consistent with this Memorandum-Decision and Order. Signed by Chief Judge Gary L. Sharpe on 2/20/2015. (jel, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
________________________________
SUSAN MARCY, Individually
and as Administratix of the
Estate of JOSEPH A. MARCY,
JR., Deceased.
1:14-cv-398
(GLS/CFH)

Plaintiff,
v.
ALLEGRO RESORTS
MARKETING, INC. et al.,

Defendants.
________________________________
APPEARANCES:
OF COUNSEL:
FOR THE PLAINTIFF:
Anderson, Moschetti Law Firm
26 Century Hill Drive
Suite 206
Latham, NY 12110
FOR THE DEFENDANTS:
Wilson, Elser Law Firm
677 Broadway - 9th Floor
Albany, NY 12207-2996

PETER J. MOSCHETTI, JR.,
ESQ.

THERESA B. MARANGAS, ESQ.

Cremer, Spina Law Firm
One North Frankin Street, 10th Floor
Chicago, IL 60606

JOSHUA D. YEAGER, ESQ.
KATHERINE J. BARBER, ESQ.
WILLIAM J. CREMER, ESQ.

MEMORANDUM-DECISION AND ORDER
I. Introduction

Plaintiff Susan Marcy, individually and as administratrix of the estate
of Joseph A. Marcy, Jr. (hereinafter “Joseph”), deceased, commenced this
diversity action against defendants Allegro Resorts Marketing, Inc. and
Occidental Hotels Management, S.L., alleging state law claims for personal
injury stemming from the death of her husband, Joseph. (Compl., Dkt. No.
1, Attach. 1 at 5-9.) Pending are the motions of Allegro and Occidental,
which seek dismissal of the complaint for lack of personal jurisdiction, (Dkt.
Nos. 5, 18), and Marcy’s cross motions seeking, among other things,
limited jurisdictional discovery, leave to amend the complaint, and to add
parties, (Dkt. Nos. 10, 29). For the reasons that follow, the motions of
Allegro and Occidental are denied with leave to renew, and Marcy’s cross
motions are granted.
II. Background
A.

Facts1
On or about March 18, 2013, the Marcys made travel reservations

through a Liberty Travel agency located in Saratoga Springs, New York, for
a week-long-stay at Occidental Grand Aruba Resort (hereinafter
“Occidental Grand”) in Palm Beach, Aruba, beginning on May 7, 2013.
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The facts relevant to Marcy’s claims are drawn from the complaint.

2

(Compl. ¶ 7.) While on their scheduled trip, Joseph consumed mislabled
salad dressing that caused anaphylatic shock, and, ultimately, his death.
(Id. ¶¶ 11-14.)
The following information pertains only to whether Allegro is subject
to the court’s jurisdiction.
1.

Marcy’s Allegations

In her complaint, Marcy alleges that Allegro and Occidental are
foreign corporations that regularly conduct business, or engage in other
persistent conduct, in New York. (Id. ¶ 4.) Marcy further alleges that
Allegro and Occidental “owned, operated, managed, supervised, controlled
and promoted . . . Occidental Grand,” (id. ¶ 5), and that Liberty Travel “had
tour agreements and/or cooperative marketing agreements with [Allegro
and Occidental] to market, book and reserve hotels in the trade name of
Occidental Hotels and Resorts, including the Occidental Grand,” (id. ¶ 8).
2.

Allegro’s Evidence

In support of its motion, Allegro provided the affidavit of Richard
Rodriguez, who is its vice president of sales and marketing. (Dkt. No. 5,
Attach. 4 ¶ 2.) According to Rodriguez, Allegro is a Florida corporation,
with a principal place of business in Miami, Florida, that is not registered or
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authorized to do business in New York. (Id. ¶¶ 3, 5, 16.) Allegro’s
“business operations are limited . . . to advertising, marketing and
otherwise soliciting business in the United States on behalf of ‘Occidental’
branded hotels and resorts, all of which are located outside of the United
States.” (Id. ¶ 6.) Despite Allegro’s business purpose, Occidental
advertising and marketing materials are devoid of any mention of Allegro.
(Id. ¶ 7.) Allegro has no control over Occidental operations. (Id. ¶¶ 10-12.)
According to Rodriguez, Allegro has virtually no contact with New York
state. (Id. ¶¶ 17-23.)
3.

Occidental’s Evidence

Occidental has offered the declaration of its managing director Jaime
Buxo in support of its motion. (Dkt. No. 18, Attach. 1 at 19-22.) According
to Buxo, Occidental is a Spanish corporation with its principal office in
Madrid, Spain. (Id. ¶¶ 3-4.) Buxo alleges that during the relevant time
period, Occidental did not: (1) “own, occupy, or possess . . . Occidental
Grand”; (2) “operate, manage, maintain, or otherwise control the day-to-day
functions of [Occidental Grand]”; (3) “employ, manage, supervise, or
otherwise control the day-to-day operations of any of the management or
staff of [Occidental Grand]”; (4)“own, occupy or possess, or operate,
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manage, maintain, or otherwise control the day to day functions of, the
restaurants or any of the food services located at [Occidental Grand]”; (5)
“act as an agent for [Occidental Grand]”; and (6) “engage in, or direct,
advertising in New York for [Occidental Grand] or any other Occidental
branded hotel or resort.” (Id. ¶¶ 6-8, 10-13.) Buxo also contends that
Occidental had no contact with the Marcys, had no New York contacts, and
did not derive substantial revenue from within New York. (Id. ¶¶ 14-24.)
B.

Procedural History
This action was removed from New York State Supreme Court in

Washington County on April 8, 2014. (Dkt. No. 1.) Almost immediately
thereafter, Allegro filed the pending pre-answer motion to dismiss for lack
of personal jurisdiction. (Dkt. No. 5.) Following a stipulation to extend
Occidental’s answering time, (Dkt. Nos. 15-17), it made a motion similar to
that of Allegro, (Dkt. No. 18).
III. Standards of Review
A.

Leave to Amend
A party may amend its pleading before trial as a matter of course

under certain circumstances and within a certain time frame. See Fed. R.
Civ. P. 15(a)(1). Even though amendment as of right is unavailable in this
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case in light of the timing of Marcy’s cross motion seeking leave to amend,
which was filed more than twenty-one days after Occidental moved to
dismiss under Rule 12(b), (compare Dkt. No. 18, with Dkt. No. 29), the rule
provides that “[t]he court should freely give leave when justice so requires”
even in those instances where a party may not amend as of right, Fed. R.
Civ. P. 15 (a)(2). Barring “futility, undue delay, bad faith or dilatory motive,
repeated failure to cure deficiencies by amendments previously allowed, or
undue prejudice to the non-moving party,” leave should generally be
granted. Burch v. Pioneer Credit Recovery, Inc., 551 F.3d 122, 126 (2d
Cir. 2008).
B.

Permissive Joinder
As for permissive joinder of parties under Rule 20, defendants may

be joined “if . . . any right to relief is asserted against them jointly, severally,
or in the alternative with respect to or arising out of the same transaction,
occurrence, or series of transactions or occurrences; and . . . any question
of law or fact common to all defendants will arise in the action.” Fed. R.
Civ. P. 20(a)(2). The same liberal standard applicable to a motion for leave
to amend a pleading governs an application for permissive joinder. See
Jones v. Phelps Corp., No. 3:14-cv-84, 2014 WL 2195944, at *3 (N.D.N.Y.
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May 22, 2014).
C.

Motion to Dismiss For Lack of Personal Jurisdiction
When a defendant calls personal jurisdiction into question by

invoking Rule 12(b)(2), the plaintiff bears the burden of satisfying the court
that it has jurisdiction over the moving defendant. See MacDermid, Inc. v.
Deiter, 702 F.3d 725, 727 (2d Cir. 2012). In the absence of an evidentiary
hearing, the plaintiff’s “allegations in the complaint must be taken as true to
the extent they are uncontroverted by the defendant’s affidavits [and other
written materials].” Id. (quoting Seetransport Wiking Trader
Schiffarhtsgesellschaft MBH & Co., Kommanditgesellschaft v. Navimpex
Centrala Navala, 989 F.2d 572, 580 (2d Cir. 1993)).
As limited by Marcy’s response to the pending motions, 2 the court’s
jurisdiction is premised upon satisfaction of New York’s general jurisdiction
statute, see N.Y. C.P.L.R. 301—in particular, the corporate presence
doctrine or so-called “doing business” test. (Dkt. No. 11 at 7-11; Dkt. No.
30 at 7-11); see Siegel, N.Y. Prac. § 82 at 144 (5th ed. 2011). Aside from
establishing jurisdiction under the forum state’s long arm statute,
2

Notably, in the face of the contentions of Allegro and Occidental that Marcy cannot
demonstrate specific jurisdiction pursuant to N.Y. C.P.L.R. 302, (Dkt. No. 5, Attach. 1 at 9-11;
Dkt. No. 18, Attach. 2 at 10-11), Marcy makes no argument that specific jurisdiction is
established pursuant to that statute.

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jurisdiction of the defendant must not offend the constitutional guarantee to
due process. See Continental Indus. Grp., Inc. v. Equate Petrochemical
Co., 586 F. App’x 768, 770 (2d Cir. 2014).
The doing business test is a flexible rule that “is and should be . . .
simple [and] pragmatic.” Bryant v. Finnish Nat’l Airline, 15 N.Y.2d 426, 432
(1965). To show corporate presence in New York, the facts of a particular
case must demonstrate that the foreign corporation is actually doing
business in the state in such a continuous and systematic way that a
finding of jurisdiction is warranted. See Landoil Res. Corp. v. Alexander &
Alexander Servs. Inc., 77 N.Y.2d 28, 33 (1990).
Notwithstanding the foregoing, the court is empowered with discretion
to permit limited jurisdictional discovery to ferret out information on the
jurisdictional issue. See Jazini v. Nissan Motor Co., 148 F.3d 181, 185-86
(2d Cir. 1998). “[P]rior to discovery, a plaintiff challenged by a jurisdiction
testing motion may defeat the motion by pleading in good faith legally
sufficient allegations of jurisdiction, i.e., by making a prima facie showing of
jurisdiction.” Id. at 184 (internal quotation marks and citations omitted).
IV. Discussion
A.

Amendment and Joinder
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As a threshold matter, the court addresses Marcy’s cross motion
seeking leave to amend and join defendants. (Dkt. No. 29.) Little
discussion is warranted, particularly in light of the absence of any
opposition to Marcy’s request and the liberal standards that govern the
request. As outlined above, see supra Part III.A-B, the applicable
standards of review mandate that Marcy’s cross motion be granted to the
extent it seeks leave to amend and join defendants. Marcy shall file her
amended complaint within seven (7) days of the date of this MemorandumDecision and Order.
B.

Personal Jurisdiction3
Turning to the primary bone of contention, Allegro and Occidental

assert that they are not subject to personal jurisdiction. (Dkt. No. 5, Attach.
1 at 8-17; Dkt. No. 18, Attach. 2 at 9-18.) In response, Marcy argues that
“[t]he only possible way for [her] to adequately respond to [defendants’]
motion is to be able to conduct limited discovery on the issue of personal

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The disposition of Marcy’s cross motion seeking amendment/joinder suggests
mootness of defendants’ motions to dismiss. However, because the only material differences
between the original and proposed amended complaints are the addition of two
parties—Allegro Palm Beach, N.V. and Village Resorts de Mexico, S.A. de C.V.—and some
allegations in support of jurisdiction of those parties, the court deems the motions to dismiss as
assailing the amended complaint and reaches the pertinent issue regarding the
appropriateness of jurisdictional discovery.

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jurisdiction.” (Dkt. No. 11 at 6; Dkt. No. 30 at 6.) As mentioned above,
Marcy cross moved for, among other things, adjournment of defendants’
motions, an enlargement of time to respond, and jurisdictional discovery.
(Dkt. No. 10; Dkt. No. 29.) As to Marcy’s cross motions, defendants, who
both recognize that the court has broad discretion to permit jurisdictional
discovery, argue that such discovery is improper here because Marcy has
not demonstrated a prima facie case of personal jurisdiction. (Dkt. No. 13
at 2-4; Dkt. No. 32 at 2-4.) Because Marcy has alleged a plausible set of
facts that make out a prima facie case of jurisdiction, the court denies
defendants’ motions with leave to renew and grants Marcy’s request for
jurisdictional discovery.
Put in simple terms, Marcy contends that Allegro and Occidental are
alter egos and that they are doing business in New York. (Dkt. No. 11 at 711; Dkt. No. 30 at 7-11.) Marcy’s contention finds support in Conley v.
MLT, Inc., No. 11-11205, 2012 WL 1893509 (E.D. Mich. May 23, 2012), a
case in which an out-of-Circuit district court determined that the same
defendants named herein “exist[ed] as the same entity for purposes of
personal jurisdiction,” and that it had personal jurisdiction of those
defendants. Id. at *4-5. While this court recognizes that Conley is not
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binding precedent and relied upon legal standards that may be distinct from
those applicable here, it nonetheless appreciates Marcy’s argument
regarding the appropriateness of discovery, particularly in light of the fact
that the Second Circuit has specifically endorsed the alter ego theory. See,
e.g., S. New England Tel. Co. v. Global NAPs Inc., 624 F.3d 123, 138 (2d
Cir. 2010). In addition to reliance on Conley, Marcy provides evidence that
tends to support the kinds of arguments that found success there. Indeed,
exhibits to Marcy’s motion papers suggest a close relationship between
defendants and that they do business in New York. (Dkt. No. 29, Attachs.
2-11.)
Occidental’s argument that jurisdictional discovery should be denied
because the owner of the resort itself—Allegro Palm Beach, N.V.
(hereinafter “Allegro Palm Beach”)—has not been named as a defendant
as it was in Conley, (Dkt. No. 32 at 3-4), is of no moment now that Marcy’s
cross motion for joinder of Allegro Palm Beach and Village Resorts de
Mexico, S.A. de C.V. has been granted, see supra Part IV.A. As a final
note, the court is cognizant of the affidavits of high-ranking officials in both
Allegro and Occidental that appear to refute some of the jurisdictional
allegations made by Marcy. (Dkt. No. 5, Attach. 4; Dkt. No. 18, Attach. 1 at
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19-22.) These affidavits are strewn with legal conclusions, however, and
are of limited value. In any event, the court’s discretion to permit discovery
is triggered merely by the plaintiff’s prima facie showing of jurisdiction,
which has been made.
V. Conclusion
WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that Marcy’s cross motion for leave to amend the
complaint and add parties (Dkt. No. 29) is GRANTED; and it is further
ORDERED that Marcy shall file her amended complaint within seven
(7) days of the date of this Memorandum-Decision and Order; and it is
further
ORDERED that Marcy’s cross motion for jurisdictional discovery (Dkt.
No. 10) is GRANTED; and it is further
ORDERED that Allegro’s motion to dismiss (Dkt. No. 5) is DENIED
with leave to renew; and it is further
ORDERED that Occidental’s motion to dismiss (Dkt. No. 18) is
DENIED with leave to renew; and it is further
ORDERED that the parties contact Magistrate Judge Christian F.
Hummel to schedule further proceedings consistent with this
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Memorandum-Decision and Order; and it is further
ORDERED that the Clerk provide a copy of this MemorandumDecision and Order to the parties.
IT IS SO ORDERED.
February 20, 2015
Albany, New York

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