Call Center Technologies, Inc. v. Grand Adventures Tour & Travel Publishing Corp.
635 F.3d 48
| 2d Cir. | 2011Background
- Call Center, a Delaware corporation, sold and installed an Aspect Call Center system for Grand Adventures Tour & Travel Publishing Corp. (GATT) and was not fully paid.
- GATT encountered financial difficulties after 2001, with loans and lines of credit secured by its assets; Boyd and Fleischman were involved as unpaid consultants and lenders.
- In October 2001, Interline Travel & Tour, Inc. was formed and purchased GATT's assets at foreclosure, with Boyd and Fleischman guiding Interline's formation and purchase.
- Interline acquired GATT's assets at a foreclosure sale for $340,000; Wells Fargo's secured debt was subsequently transferred to Boyd.
- In 2002-2003, Call Center sued GATT (in default) and later added Interline as a defendant, asserting a successor liability claim against Interline in a federal diversity action.
- The district court granted summary judgment for Interline on successor liability and dismissed Call Center's claims; later, the court vacated a default judgment against GATT and remanded the breach claim to state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraud exception to successor liability | Call Center argues fraud in obtaining GATT's assets supports liability. | Interline contends no admissible fraud proof exists to trigger the exception. | Fraud theory failed; no genuine issue of material fact; summary judgment affirmed for Interline on fraud. |
| Mere continuation / continuity of enterprise | Call Center contends Interline was a continuation of GATT, sharing management, employees, location, assets, and operations. | Interline argues no sufficient continuity to pierce the separate corporate entity. | Summary judgment on mere continuation reversed; existence of continuity of enterprise fact questions precluded summary judgment. |
| Impact of diversity and jurisdiction (Rule 21/indispensable party) | Call Center challenged dismissal as improper given diversity; GATT’s status would affect jurisdiction. | Interline and district court maintained proper jurisdiction; nondiverse party not indispensable here. | Court vacated the portion of judgment related to mere continuation and remanded; jurisdictional issue remains for further proceedings. |
Key Cases Cited
- CP Solutions PTE, Ltd. v. Gen. Elec. Co., 553 F.3d 156 (2d Cir. 2009) (Rule 21 can drop nondiverse party to preserve jurisdiction)
- Ricciardello v. J.W. Gant & Co., 717 F. Supp. 56 (D. Conn. 1989) (fraud exception to successor liability context)
- Chamlink Corp. v. Merritt Extruder Corp., 96 Conn. App. 183, 899 A.2d 90 (Conn. App. Ct. 2006) (continuity of enterprise theory recognized in Connecticut)
- Kendall v. Amster, 108 Conn. App. 319, 948 A.2d 1041 (Conn. App. Ct. 2008) (continuity of enterprise as a preferred theory)