This court revisits the jurisdictional issue arising in the context of a case concerning a 17th century Italian baroque marble inlaid tabletop (the "Marble Tabletop"), which was sold at auction [*2]by Sotheby's Inc. ("Sotheby's") in New York on November 5, 1998, and is on display at a museum in Madrid. The Marble Tabletop was consigned to Sotheby's by Third-Party Defendants Tempera Trading Corp. and Edric Van Vredenburgh (together "Vredenburgh"), who had purchased it in April 1996 from an employee of a London warehouse, owned by Second Third-Party Defendant Pitt & Scott, Ltd ("Pitt & Scott"). Vredenburgh claims he learned of the Marble Tabletop, from a "contact" with the Antiques Roadshow program (fourth party complaint, para. 21). He understood that it had been placed in storage in 1985 and then abandoned by its owner, and that, in 1995, a Pitt & Scott employee was authorized to remove it by the warehouse manager. After acquiring the Marble Tabletop, Vredenburgh spent 35,000 to restore it to pristine condition, leading Sotheby's to appraise it in the range of $1-1.5 million.

Procedural History

In October 2004, Plaintiff Isabel Marcelle Christine Goldsmith commenced this conversion action against Sotheby's, seeking over $2.7 million and claiming that she obtained title to the Marble Tabletop from her grandfather's estate in January 1985, and transferred title to her co-plaintiff Orpheus Financial Co., Inc, a Panamanian corporation.^[FN1] Sotheby's commenced a third party action for contractual indemnification against Vredenburgh, who in turn commenced the second third-party action against Pitt & Scott "through" its corporate relatives, North American Van Lines, Inc. ("NAVL"), and Sirva U.K. Ltd.

In July, 2005, Second Third-Party Defendants moved to dismiss Vredenburgh's claims on the grounds that (1) the court lacked personal jurisdiction over Sirva U.K. and Pitt & Scott; and (2) no viable cause of action is stated against either Sirva U.K. or NAVL. By decision dated September 8, 2005, this court denied said motion to the extent that in the exercise of discretion, the court concluded that Vredenburgh was entitled to limited jurisdictional discovery as to whether jurisdiction was proper over Sirva U.K. and Pitt & Scott. This court in that Order, granted the motion to dismiss as to Third-Party Defendant NAVL with leave to replead in the event that discovery revealed facts that would provide a good faith basis for asserting a veil piercing claim.^[FN2]

Second Third-Party Defendants Sirva U.K., Ltd. ("Sirva U.K.") and Pitt & Scott, Ltd. ("Pitt & Scott") (collectively, the "U.K. Defendants")^[FN3], now move for an order, pursuant to CPLR 3211(a)(8), dismissing the Second Third-Party Complaint of Second Third-Party Plaintiffs [*3]Tempera Trading Corporation and Edric Van Vredenburgh.

The Parties

Sirva U.K. is a corporation organized and existing under the laws of England and Wales with its head office at Heritage House, 345 Southbury Road, Enfield, Middlesex, United Kingdom. Although the registered office for purposes of filings in the U.K. is Heritage House, the Sirva U.K. business is also conducted from a large number of branch offices across the U.K. For a number of years prior to June of 1999, Sirva U.K. was referred to as Excel Logistics, Ltd. On June 25, 1999, Excel Logistics, Ltd. changed its name to Pickfords, Limited ("Pickfords"). On April 25, 2005, a resolution was adopted by its Board of Directors to change the name of that entity to Sirva U.K. Despite the name change, Sirva U.K. still trades as Pickfords in the U.K. in view of the high profile for this particular brand name. For international moves, Sirva U.K. uses the trading name Allied Pickfords.

Sirva U.K. is the principal U.K. subsidiary company of Sirva Holdings Limited. Sirva U.K. is the sole shareholder for all of the U.K. subsidiary companies. Sirva Holdings Limited is an intermediate holding company for Sirva U.K. (and its subsidiaries). NA (UK) Limited Partnership is a U.K. branch holding company that holds 98.2% of the shares in Sirva Holdings Limited, and North America International Holding Corporation holds the remaining 1.8%.

Sirva U.K. does not maintain and never has maintained an office or any other facility in the State of New York, does not solicit business within the State of New York, does not maintain any bank accounts or property within the State of New York, and does not employ any individuals in the State of New York.

Pitt & Scott is a wholly owned subsidiary of Sirva U.K. and is a corporation organized and existing under the laws of England and Wales with its registered office at Heritage House, 345 Southbury Road, Enfield, Middlesex, United Kingdom. Pitt & Scott inquiries are handled by Sirva U.K.'s London Center. Although Pitt & Scott operates as a separate legal entity, it files dormant accounts inasmuch as it does not trade in its own right. In accordance with an October 1, 1988 agreement between Sirva U.K. and Pitt & Scott, which was in effect in 2004 and remains in effect as of today, Pitt & Scott acts as an agent in providing removal services exclusively for Sirva U.K.

Pitt & Scott does not maintain and never has maintained an office or any other facility in the State of New York, does not solicit business within the State of New York, does not maintain any bank accounts or property within the State of New York, and does not employ any individuals in the State of New York.

NAVL is a Delaware corporation with its principal place of business at 5001 U.S. Highway 30 West, P.O. Box 988, Fort Wayne, Indiana 46801-0988. NAVL is a wholly owned subsidiary of Sirva, Worldwide, Inc., which is a wholly owned subsidiary of Sirva, Inc. - - the ultimate parent of Sirva U.K. and Pitt & Scott. NAVL owns North American International Holding Corporation, which owns NA (UK) GP Corporation. Both North American International Holding Corp. and NA (UK) GP Corporation own NA (UK) Limited Partnership. Sirva U.K. is a wholly owned subsidiary of NA (UK) Limited Partnership.

The U.K. Defendants' Business

For the years 2004 and 2005, 31% and 29% respectively of Sirva U.K.'s revenue were generated by removals within the U.K. For those same years, 23% and 26% of Sirva U.K.'s [*4]revenue were generated from moves within Europe.

Removals to the United States constituted 17% and 16% of Sirva U.K.'s revenue during 2004 and 2005. From May 18, 2004 to May 18, 2005, Sirva U.K. and Pitt & Scott moved approximately 1,245 customers to or from the U.S. and, of those moves, approximately 126 customers or 1.6% of Sirva U.K.'s total business were moves to or from the State of New York.

Sirva U.K. does not own any vans, have any employees, or have any local offices within the U.S. Therefore, more often than not, Sirva U.K. uses a subcontractor appointed by its U.S.-based sister company, Allied International ("Allied"), which is located in Westmont, Illinois, and it is instructed as to the services required by Sirva U.K. in the U.S. On most occasions Allied will subcontract out the move in the U.S. On some occasions, Sirva U.K. will directly instruct independent U.S.-based contractors. The decision is based on the particular client requirements as well as considerations of service and cost.

Once a customer has accepted a quote, Sirva U.K. will book the move and a moving team will pack the containers within the U.K. and arrange for these to be shipped to the U.S.

Once the move is complete, Sirva U.K. will send an invoice either to the customer or to the employer for the total cost of the entire door-to-door removal. The invoice amount includes the cost of the U.S. portion of the move. The Allied subcontractor generally invoices Allied and Allied then invoices Sirva U.K. directly for its services. These would include the services provided by the subcontractor - - though not separately broken down - - in the invoice sent to the customer. Allied is then paid directly by Sirva U.K. for the destination services.

Sirva U.K. performs work as a subcontractor for U.S. entities for customers who wish to move from the U.S. to the U.K. In those circumstances, Sirva U.K. may be contacted by the international department of Allied in Illinois. Usually, Sirva U.K. would be required to provide destination services, which would consist of, but are not limited to, assistance with customs clearance, collection of a customer's goods at the U.K. port, and delivery to the customer's address.

Neither Sirva U.K.'s work with Allied to or from the U.S. is reduced to a formal contract.

The U.K. Defendants' Contentions

Sirva U.K. and Pitt & Scott are financially independent of NAVL; NAVL does not provide loans, extend credit, or maintain insurance for either of the U.K. Defendants. Sirva U.K. files its own financial statements in which it reports its profits, assets and liabilities in accordance with U.K. law. These filings are separate from those of any affiliated company.

According to Pitt & Scott's annual reports for 2004 and 2005, it was dormant for tax purposes at the time the Second Third-Party Complaint was filed and is required to file only dormant accounts. To the extent Pitt & Scott has any assets or liabilities, in accordance with the agency agreement between the two U.K. Defendants, Sirva U.K. and not NAVL provides capital and assumes Pitt & Scott's liabilities.

Sirva U.K. recruits, hires, promotes, determines salaries and maintains personnel files of its employees within its local branch facilities, including those individuals employed by Pitt & Scott. No other affiliated company provides, instructs, or is otherwise involved with these matters. Sirva U.K. maintains its own books, records, and financial accounts separate and apart from any affiliated company, including NAVL. The U.K. Defendants are governed by their own Memorandum of Association and Articles of Association, which set out details about each [*5]company, their business activities, and the rules for running their internal affairs.

Sirva U.K. owns and operates its own buildings, equipment and trucks.

From 1999 to date, Ralph Ford joined Sirva, Inc., and has served as Senior Vice President, General Counsel and Secretary. In 2004, he was a non-executive member of the Boards of Directors of Sirva U.K. and Pitt & Scott, and generally did not attend the meetings conducted by the Board of either company.

Kevin Pickford is a member of the Boards of Directors of Sirva U.K. and Pitt & Scott, and is employed directly by Sirva U.K. as President of Sirva Relocation Services Europe. Although Mr. Pickford is described as an executive officer of Sirva, Inc., the only reason he is considered an executive of Sirva, Inc., is his seniority within the Sirva organization.

Second Third-Party Plaintiffs' Contentions

As articulated in the Second Third-Party Complaint, jurisdiction is proper in this case over the U.K. Defendants by virtue of the activities of their parent, NAVL. The relationship between the U.K. Defendants and NAVL gives rise to a valid inference of an agency relationship, and/or the day-to-day control by NAVL over the U.K. Defendants is so complete that the U.K. Defendants are merely departments, branches and/or brands of NAVL.

The Sirva group of companies, of which Sirva U.K. and Pitt & Scott are a part, is a close-knit grouping of interdependent and specialized entities that are considerably dependent upon the common American parent-corporations, Sirva, Inc., Sirva Worldwide, Inc., and NAVL, through which Vredenburgh claims jurisdiction over the U.K. Defendants.

Discovery has shown that the U.K. Defendants are not only indirectly wholly owned by NAVL and its own parent corporation - Sirva, Inc., and Sirva Worldwide, Inc. - but are financially dependent on these entities. They are predominately managed by Sirva, Inc., principally through its agent Kevin Pickford, who is obliged to report directly to the President and CEO of Sirva, Inc., and they are otherwise dominated by the Sirva parent companies, including NAVL, in terms of their marketing and operational policies.

Based on Sirva's own filings and deposition testimony of Susan Hobson Kus, Esq., the two depositions of Mr. Peter Gower and the deposition of Mr. Kevin Pickford, Sirva, Inc. and the myriad of related companies, views itself not as a haphazard collection of corporations, but as a cohesive global corporation with interacting segments, each segment functioning as part of a united endeavor. Through these dependent, integrated networks, the units operate as mere departments of Sirva, Inc., and the other Sirva parent companies, including NAVL. In short, the Sirva parent companies are alter egos of one another, so that Sirva, Inc., domination and control over Sirva U.K. can likewise be attributed to NAVL.

Further, the Sirva parent companies are also wholly financially integrated with one another. For example, after December 2003, NAVL stopped making filings with the authorities in favor of having its financial information consolidated with the other Sirva entities and presented by Sirva, Inc.

Pressures brought by an impending financial crisis compelled Sirva, Inc. to ignore the corporate boundaries and to install a director (Pickford) with authority to impose Sirva, Inc., policies on a regional basis (i.e., to all subsidiaries in the European segment).

The U.K. Defendants concede that there is no issue here concerning common ownership. The British companies are subsidiaries of NAVL and all three share common ownership. And,[*6]Vredenburgh adds, NAVL functions simply as the operating arm of Sirva, Inc. which otherwise exercises complete authority and control over NAVL on the basis of a common directorship, being subsumed within Sirva, Inc.'s consolidated financial filings, and a high degree of financial interdependency with other Sirva entities.

The financial dependence of Sirva U.K. on the Sirva parent companies is demonstrated by the fact that Sirva U.K. could not liquidate its records management assets without the approval of Sirva Credit Facility.

The U.K. Defendants' Reply

Although Vredenburgh points out the commonality of Board members, they fail to establish or credibly argue that the commonality of these Board members affects the day-to-day operations of NAVL. Nor is the fact that Sirva, Worldwide, Inc. entered into a Credit Agreement with "a consortium of banks administered by J.P. Morgan," to which NAVL is also a signatory, any evidence that Sirva, Inc. and Sirva Worldwide, Inc. have "complete domination and control" over NAVL.

On the issue of financial dependency, the factors considered by most courts are not the factors relied upon by Vredenburgh.

Analysis

Sirva U.K. argues that there is no personal jurisdiction pursuant to either CPLR 301 or New York's long-arm statute.

The general standard for personal jurisdiction over a foreign corporation, like Sirva U.K., requires "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice" (International Shoe Co. v State of Washington, Office of Unemployment Compensation and Placement, 326 U.S. 310, 316 [1945] [parenthetical supplied]; World-Wide Volkswagen Corp. v Woodson, 444 U.S. 286, 291-292 [1980]). A foreign corporation is "present" within this state, for the purpose of jurisdiction pursuant to CPLR 301, "if it is engaged in such a continuous and systematic course of doing business' here that a finding of its presence' in this jurisdiction is warranted" (Landoil Resources Corp. v Alexander & Alexander Servs. Corp., 77 NY2d 28, 33 [1980]; see also Bryant v Finnish Natl. Airline, 15 NY2d 426, 430 [1965]).

In order to establish long-arm jurisdiction pursuant to CPLR 302(a)(1), plaintiff must set forth a sufficient nexus between the claims asserted in the complaint and a contract which was negotiated in New York or a transaction which occurred in this State (see Holness v Maritime Overseas Corp., 251 AD2d 220, 224 [1st Dept 1998]). The courts look to the "totality of circumstances" to determine whether a party has "transacted business" in this state, within the meaning of CPLR 302(a)(1), considering factors including:

"(1) whether the defendant has an ongoing contractual relationship with a New York corporation; (2) whether the contract was negotiated or executed in New York; (3) what the choice of law clause is in the contract; and (4) whether the contract requires notices and payments to be sent into the forum state or requires supervision by the corporation in the forum state."

As this court noted in its September 8, 2005 decision, as a general rule, the presence of a local corporation does not create jurisdiction over a related, but independently managed, foreign corporation (Delagi v Volkswagenwerk AG, 29 NY2d 426 [1972]). And, mere ownership by a foreign corporation of the stock of a subsidiary doing business in New York still does not subject the foreign corporation to the jurisdiction of New York (See Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333, 45 S.Ct. 250, 69 L.Ed. 634 [1925]).

However, it is well-established that the relationship between a foreign corporation and an affiliated domestic corporation may provide a basis for exercise of jurisdiction over the foreign corporation under two theories: (1) if the domestic corporation acts as an "agent" on behalf of the foreign corporation (Frummer v Hilton Hotels Int'l. Inc., 19 NY2d 533, 537, cert.denied, 389 U.S. 923 [1967]), or (2) if the two companies are so closely related that one is a "mere department" of the other, so that they may be treated as one for jurisdictional purposes (Taca International Airlines, SA v Rolls-Royce of England, Ltd., 15 NY2d 97 [1965] ["[i]n determining whether a corporation has engaged in activities in the state, it is immaterial whether these are conducted through a branch or through a subsidiary corporation, even though the latter's formal independence has been scrupulously preserved"]).

In all cases, the exercise of jurisdiction must also be consistent with the constitutional due process requirements of "fair play and substantial justice" (International Shoe v Washington, 326 U.S. 310, 316 [1945]).

The Beech Aircraft Corp. Four-Part Test

In determining whether a foreign entity is a mere department of another entity doing business in New York, the courts look to the case of Volkswagenwerk Aktiengesellschaft v Beech Aircraft Corp. (751 F.2d 117, 120-22 [2d Cir. 1984]) for guidance. New York courts regard one factor as essential to the assertion of jurisdiction over a foreign related corporation and three others as important.

Factor One:Common Ownership

The essential factor is common ownership (E.g., Delagi v Volkswagenwerk AG, 29 NY2d at 432, 328 NYS2d at 657, 278 NE2d at 897; Andrulonis v United States, 526 F.Supp. 183, 186-87 [N.D.NY 1981]). While jurisdiction has been found in cases other than a classic parent-subsidiary relationship, nearly identical ownership interests must exist before one corporation can be considered a department of another corporation for jurisdictional purposes. The U.K. Defendants concede that there is no issue here concerning common ownership. The British companies are subsidiaries of NAVL and all three share common ownership.

Factor Two:Financial Dependence

The second factor is financial dependency of the subsidiary on the parent corporation [*8](see, e.g., Boryk v deHavilland Aircraft Co., 341 F.2d 666, 668 [2d Cir. 1965]). In Boryk, Inc., wholly owned by Ltd. and having several of the same directors, was created in 1954. Pursuant to a 1956 service agreement under which Ltd. paid Inc. $70,000 (later $85,000) per year, Inc. substantially took over the activities Ltd. had been carrying on; Inc. had already been carrying on some of the operations. However, Inc. did not and apparently could not perform many of the services specified; rather, they were performed by Ltd. employees. The service agreement was formally terminated in 1961, although Ltd. still provided employees for certain servicing. While Inc. had a few years earlier taken over performance of a lease on space at the La Guardia Airport the lease was not actually transferred to Inc. until 1956. Ltd. made no-interest loans to Inc. on terms that would be unusual between independent entities, and Inc. paid substantial portions of its income out in dividends' to Ltd. Substantially all of Inc. s income derived from the sale and servicing of products manufactured by Ltd. or other Ltd. subsidiaries. In Boryk, financial dependence was found.

In Public Administrator v Royal Bank (19 NY2d at 131-32, 278 NYS2d at 381-82, 224 NE2d at 879), jurisdiction was acquired over the French branch of the Royal Bank, notwithstanding that the French branch is separately incorporated in France. In Public Administrator, the defendant Royal Bank of Canada conceded that it was doing business in New York. The record also established that the Royal Bank of Canada (France) was nothing more than the name under which the defendant Royal Bank of Canada did business in France. Therefore, by proceeding against the Royal Bank of Canada and the Royal Bank of Canada (France), the plaintiff simply sued the same defendant twice-once in the name by which it was generally known and, again, under the name by which it was known in France. Since this defendant was doing business in New York, it was amenable to suit here (under either or both of its names) and service of process here and in Paris operated to give the Supreme Court inpersonam jurisdiction over it.

The French branch was separately incorporated in France, apparently because France in the past had taxed foreign banks on their entire capitalization. However, all of the stock in the French corporation was owned by the Royal Bank of Canada, none of the other 1,145 branches of the bank in some 22 countries were separately incorporated and the bank made no effort to distinguish or treat its French branch as a separate entity. The assets and liabilities of the French branch, like the assets and liabilities of all other branches, were carried on the books of the Royal Bank of Canada as part of its own assets and liabilities. In its general advertising, as well as on its letterheads, the bank declares that France was one of many countries in which it has "branches" and, in point of fact, the bank's annual report to its stockholders recited that the French branch was established "to conduct the business of the Bank in Paris." (Emphasis in original). The deposit slips, checks, passbooks and other bank documents of the French branch were printed and standardized in Canada by the Royal Bank. Moreover, the staff of the French branch was not only recruited and trained by the bank in Montreal but the principal personnel were apparently and with frequency shifted about from Paris to the bank's home office and other branches. Finally, the French branch was merely notified and not consulted on accounts which were transferred to it from other Royal Bank branches, and the moneys in those accounts were reflected only in bookkeeping entries rather than by an actual transfer of the funds to France.

In the instant case, the U.K. Defendants point out the following: [*9]

NAVL does not provide loans, extend credit, or maintain insurance for either of the two U.K. Defendants;

Sirva U.K. files its own financial statements in which it reports its profits, assets and liabilities in accordance with U.K. law. These filings are separate from those of any affiliated company;

Sirva U.K. recruits, hires and promotes, determines salaries, and maintains personnel files of its employees within its local facilities, including those individuals employed by Pitt & Scott. No other affiliated company provides, instructs, or is otherwise involved with these matters;

Sirva U.K. and not NAVL, paid all employee wages and salaries, as well as social security and pension costs for each employee;

Sirva U.K. maintains its own books, records, and financial accounts separate and apart from any affiliated company, including NAVL;

Sirva U.K. has its own registered headquarters and a network of branch offices; and

With respect to the credit agreement with JPMorgan Chase Bank, and a consortium of other lenders, Sirva Worldwide or Sirva, Inc. is not responsible for guaranteeing Sirva U.K.'s borrowings in the event that Sirva U.K.'s assets do not cover its borrowings.

Vredenburgh points out that the SEC filings history of NAVL shows that after December 2003, NAVL stopped making filings with the authorities in favor of having its financial information consolidated with the other Sirva entities and presented by Sirva, Inc. And, Sirva, Inc., NAVL and other subsidiaries (including Sirva U.K.) are, as the result of their commitments under the Credit Facility, bound up together in a complex array of mutual guarantees and asset pledges (see also, Taca International Airlines, 15 NY2d at 101-02, 256 NYS2d at 131-32, 204 NE2d at 330 [inventory financed by parent]; Rabinowitz v Kaiser-Frazer Corp., 198 Misc. 707, 710-11, 96 NYS2d 642, 644 [1950] [parent made no-interest loans and guaranteed third party [*10]credit]).

The court finds that the Beech Aircraft Corp. second factor weighs in favor of the U.K. Defendants. The fact that Sirva U.K. is a signatory to the Credit Agreement does not trump the indicia of financial independence established by the U.K. Defendants.

Factor Three: Parental Interference

The third factor is the degree to which the parent corporation interferes in the selection and assignment of the subsidiary's executive personnel and fails to observe corporate formalities (see, e.g., Public Administrator v Royal Bank, 19 NY2d at 132, 278 NYS2d at 381-82, 224 NE2d at 879 [as discussed above, staff of subsidiary assigned and shifted among subsidiaries by parent]; Taca International Airlines, 15 NY2d at 101, 256 NYS2d at 131, 204 NE2d at 331 [some common officers and directors; officers transferred between parent and subsidiary]; Rabinowitz, 198 Misc. at 711, 96 NYS2d at 645 [parent paid salaries of some common officers]). As explained in Beech Aircraft Corp., the officers of a parent normally control the board of directors of a subsidiary in their capacity as representatives of the controlling stockholder. However, when the parent officers extend their control beyond that normally exercised by boards of directors, their behavior supports an inference that the subsidiary is not an independent entity.

The U.K. Defendants point out that according to the testimony of Peter Gower, Group Legal Services Manager of Sirva U.K., the company recruits and hires its own employees through its Human Resources Department without the involvement of Sirva, Inc., NAVL, or any other U.S. affiliated company. And, Vredenburgh does not contest that Sirva U.K. negotiates and executes all employment contracts on behalf of its employees, determines and pays its employees' salaries and pensions costs, and maintains personnel files of its employees within its local branch facilities without any assistance or input from NAVL or its U.S. counterparts. And, members of the Boards of Directors of both U.K. entities are paid directly by Sirva U.K. and not NAVL and that both Boards hold their own meetings where directors vote on resolutions relating solely to the business of that particular U.K. entity.

While two individuals on the U.K. Defendants' Boards of Directors, Ralph A. Ford and Kevin Pickford, were also considered executives of Sirva, Inc. during 2004 and 2005, their mere presence would not amount to control over the U.K. Defendants.

The U.K. Defendants are not managed by Sirva, Inc., or NAVL; rather, they are independently managed and operated by their own directors, executives, and employees.

Vredenburgh asserts that the appointment by Sirva, Inc., of Kevin Pickfords in November 2004 to head Sirva U.K. as President of Sirva Relocation Services, Europe exemplifies not only the American parent's stake in the management of Sirva U.K., but also revealed a breakdown in corporate formalities insofar as Sirva U.K. did not own or otherwise control any of Sirva, Inc.'s continental Europe subsidiaries over which Pickford mysteriously became responsible for no additional compensation. Further, there is testimony strongly suggesting not only that Pickford managed Sirva U.K. at the behest of Sirva, Inc. and NAVL, but, indeed, was subject to frequent consultation with and direction from Sirva, Inc.'s head, Brian Kelley, who strongly advocated cost-cutting measures, including lay offs, with the hope of resuscitating Sirva U.K.'s finances.

In response, Sirva U.K. argues that Sirva U.K. entered into an employment agreement with Mr. Pickford whereby Sirva U.K. is responsible for paying his salary. The mere fact that Todd Schorr, the most senior human resources executive within the Sirva Group, who "has an [*11]interest in the most senior appointments," may have signed Mr. Pickford's employment contract does not demonstrate the level of control necessary to eliminate the distinction between Sirva, Inc. and the U.K. entities.

Although the involvement of Pickford in both Sirva U.K. and Sirva, Inc. raises the spectre of questionable cross fertilization, it does not rise to the level of being violative of the third factor in the Beech Aircraft Corp. test. In Beech, East's five member board was comprised of the president, treasurer, and a vice-president of Beech and two officers of East. However, the president, treasurer, and a vice-president of Beech occupied the same positions at East. Beech paid the entire salaries of the three officers who serve in those positions for Beech and East. The highest ranking officer of East who was not also an officer of Beech was the vice-president and general manager. An officer of Beech stated that it was Beech policy to give the managing officer of all of Beech's marketing subsidiaries the rank of vice-president. He asserted that the fact that Beech's president was the president of East was a mere formality. This explanation at least indicated that Beech and not East decided which officers of East were to be figureheads. Moreover, Beech claimed that its policy of making the general managers of its subsidiaries vice-presidents allowed Beech to transfer executives among its subsidiaries with ease. This explanation hardly supported the argument that Beech subsidiaries were independently managed corporations. In one instance, Beech transferred a Beech officer to handle a difficult real estate transaction for East, an act evidencing the limited scope of authority Beech accorded to officers of East. Finally, while Beech argued that the independence of its subsidiaries was important, it appeared that holding directors meetings for these subsidiaries was not. The general managers of the marketing subsidiaries reported quarterly as a group to a marketing vice-president at Beech, with the president of Beech in attendance as an observer. While a Beech officer stated that minutes of the meetings could be taken if someone at the meeting so requested, no such minutes were in evidence. There was in fact no evidence to show that East ever held formal directors meetings, apart from these marketing meetings.

Here, the third factor weighs in favor of the U.K. Defendants. Factor Four: Parental Control

The fourth factor is the degree of control over the marketing and operational policies of the subsidiary exercised by the parent (see, e.g., Boryk, 341 F.2d at 668 [parent's letterhead listed subsidiary as a branch]; Public Administrator v Royal Bank, 19 NY2d at 131-32, 278 NYS2d at 381-82, 224 NE2d at 879 [parent's letterhead, general advertising, and reports to stockholders identified subsidiary as branch; subsidiary's documents were standard forms prepared by parent]; Taca International Airlines, 15 NY2d at 101, 256 NYS2d 131-32, 204 NE2d at 330-31 [parent trained subsidiary's personnel, determined policy, prepared marketing material, set prices, and issued warranties]).

The U.K. Defendants point out that there is no support for the idea that NAVL exercises control over the marketing and operational policies of the U.K. Defendants. Sirva U.K. has its own marketing department, which produces materials in the form of brochures and advertisements that are distributed throughout the United Kingdom only. The marketing department is funded by Sirva U.K., and its employees make marketing decisions without consulting with any individuals from NAVL.

Sirva U.K. has its own letterhead, which does not mention any affiliation with NAVL. [*12]Similarly, NAVL's letterhead neither refers to the U.K. Defendants as "branches" nor states that the two U.K. entities are in any way affiliated with NAVL. Indeed, NAVL's letterhead does not refer to the U.K. Defendants in any manner.

Sirva U.K. also maintains its own websites that advertise its removal business. By virtue of the agency agreement, Sirva U.K., not NAVL, controls the marketing and operational policies of Pitt & Scott.

Further, any suggestions in Sirva, Inc.'s SEC filings and press releases that the Sirva group of companies is a "unified persona" have no bearing on control over marketing and operational policies. Statements projecting unity, whether in public filings, in press releases, or on corporate websites, in and of themselves are insufficient to show control.

Vredenburgh concedes that it has been stressed by some courts that the presentation of a "unified public persona" does not in and of itself establish a "mere department." Vredenburgh argues that such presentation in combination with other points of inter-relatedness can tip the balance in favor of treating a global company as a single enterprise for jurisdictional purposes. For example, Sirva, Inc.'s SEC filings are clearly intended to convey the impression of a unified company that operates virtually seamlessly across the Globe.

With respect to the fourth factor, the instant case is greatly unlike Beech, where Beech tightly controlled the operations of its marketing corporations, whether wholly owned or independently owned. The contracts Beech signed with its distributors controlled virtually every aspect of their marketing efforts, down to the location of Beech's signs. Beech prescribed, inter alia, the distributor's minimum inventory levels, accounting systems, insurance policies, and advertising campaigns.

And, in light of the fact that the other factors of inter-relatedness do not weigh in favor of finding jurisdiction, the presentation of Sirva, Inc. as a unified persona, in combination with the other factors of inter-relatedness do no tip the balance in favor of treating Sirva, Inc. as a single enterprise for jurisdictional purposes.

After weighing these four factors, this court finds that in personam jurisdiction over Second Third-Party Defendants Sirva U.K. Ltd. and Pitt & Scott, Ltd., does not exist under New York law.

Agency

In Frummer v Hilton Hotels Int'l, the New York Court of Appeals held that an agency relationship existed for jurisdictional purposes where one corporation "does all the business which [the other corporation] could do were it here by its own officials" (Frummer, 19 NY2d 533, 537, 227 NE2d 851, 854, 281 NYS2d 41, 44, cert. denied, 389 U.S. 923, 88 S.Ct. 241, 19 L.Ed.2d 266 [1967]). In Gelfand v Tanner Motor Tours, Ltd., the Second Circuit interpreted the Frummer test to mean that a foreign corporation is doing business in New York "in the traditional sense" when its New York representative provides services beyond "mere solicitation" and these services are sufficiently important to the foreign corporation that if it did not have a representative to perform them, the corporation's own officials would undertake to perform substantially similar services.

The common ownership of two corporations may "give rise to a valid inference as to the broad scope of the agency" (Frummer, 19 NY2d at 538, 227 NE2d at 854, 281 NYS2d at 45). [*13]The interrelatedness of the corporations is the factor on which the courts have focused, rather than on the "control" of one by the other. In the context of related corporate entities, the Frummer standard remains the "decisive test" for agency, and the courts have not required that control be proven as an element for an agency relationship to obtain jurisdiction (Gelfand, 385 F.2d at 120). In Bialek v Racal-Milgo, Inc. (545 F.Supp. 25, 32 [S.D.NY 1982]), for example, the court found that a New York subsidiary served as the agent of the foreign parent corporation, as both were "components of a tightly-knit commercial organization of common-owned entities, and that [the subsidiary] performs all the business services in New York that [the parent] could perform there by its own officials ��� precisely the facts that the courts look for in applying Frummer's agency test."

Moreover, the courts have found that a "parent" can serve as the agent of its subsidiary: The relationship of parent and subsidiary, though not by itself jurisdiction-conferring, gives rise to an inference of a broad agency relationship between the two, even when, as here, it is the parent that is within the jurisdiction and not the subsidiary (Jayne v Royal Jordanian Airlines Corp., 502 F.Supp. 848, 856 [S.D.NY 1980]; see also Freeman v Gordon & Breach, Science Publishers, Inc., 398 F.Supp. 519, 521 [S.D.NY 1975] [rules developed by New York courts for obtaining jurisdiction over foreign parent through presence of New York subsidiary apply equally to converse situation of foreign subsidiary and New York parent]; Saraceno v S.C. Johnson & Son, Inc., 83 F.R.D. 65, 67 n. 5 [S.D.NY 1979] [immaterial whether jurisdiction sought over foreign subsidiary or parent]; Titu-Serban Ionescu v E.F. Hutton & Co., 434 F.Supp. at 83 [similarly]; Gelfand, 385 F.2d 116, 121 [2d Cir. 1967], cert. denied, 390 U.S. 996, 88 S.Ct. 1198, 20 L.Ed.2d 95 [1968]).

This court does not find an agency relationship between NAVL and the U.K. Defendants. NAVL and its U.S. affiliates do not do all of the business that the U.K. Defendants could do if they had an office in New York. Neither NAVL nor any of its affiliated companies solicits or accepts work in New York on behalf of the U.K. Defendants. As attested to in deposition, while on most occasions the U.K. Defendants use U.S. affiliated subcontractors to perform the New York leg of a move, they have also hired independent subcontractors outside of the Sirva, Inc. Network. Too, Vredenburgh concedes that Sirva U.K. is not contractually obligated to use the services and subcontractors of Allied International. And, the international relocations to New York constitute only a small percentage of Sirva U.K.'s business. This fails to meet the standard of systematic and continuous activity.

Since this court has determined that Vredenburgh has not demonstrated a prima facie case for jurisdiction under the "mere department" or "agency" tests, this court does not reach the issue of whether the U.K. Defendants have "minimal contacts" with New York.

Conclusion

Second Third-Party Plaintiffs Vredenburgh have failed to demonstrate that the U.K. Defendants lack an independent corporate existence from that of its parent corporation, NAVL, which concededly is doing business in this State, so as to subject the U.K. Defendants to the exercise of jurisdiction (Delagi v Volkswagenwerk AG., 29 NY2d 426; see also, Landoil Resources Corp. v Alexander & Alexander Servs., 77 NY2d 28, 34; Volkswagenwerk AG. v Beech Aircraft Corp., 751 F2d 117 [2d Cir 1984]). Nor has Vredenburgh established an [*14]"agency" relationship between NAVL and the U.K. Defendants sufficient to warrant hauling the U.K. Defendants into the New York courts. Based on the foregoing, it is hereby

ORDERED that the motion of Second Third-Party Defendants Sirva U.K., Ltd. and Pitt & Scott, Ltd., for an order, pursuant to CPLR 3211(a)(8), dismissing the Second Third-Party Complaint of Second Third-Party Plaintiffs Tempera Trading Corporation and Edric Van Vredenburgh, is granted. It is further

ORDERED that counsel for Sirva, U.K. shall serve a copy of this order with notice of entry within twenty days of entry on counsel for all parties.

This constitutes the decision and order of the Court.

New York, New York

_____________________________

Hon. Carol Robinson Edmead, J.S.C.

Dated: January 2, 2007