Virtual Chip Exch. USA, Inc. v Siemens, PLC
Annotate this CaseDecided on November 7, 2012
Supreme Court, Suffolk County
Virtual Chip Exchange USA, Inc., Plaintiff,
against
Siemens, PLC, Defendant.
10275-2012
Attorney for Plaintiff
Vandenberg & Feliu, LLP
Bby: John C. Ohman, Esq.
60 East 42nd Street, 51st Floor
New York, New York 10165
Attorney for Defendant
Littleton Joyce Ughetta & Kelly LLP
By: Bryon L. Friedman, Esq.
4 Manhattanville Road, Suite 202
Purchase, New York 10507
Emily Pines, J.
In this action to recover damages for, inter alia, breach of contract, the defendant, Siemens, plc ("Siemens") moves to dismiss the complaint pursuant to CPLR 3211(a)(8) on the ground that the court lacks personal jurisdiction over it. The plaintiff opposes the motion.
Factual and Procedural Background
The plaintiff Virtual Chip Exchange USA, Inc. ("VCE") alleges, among other things, that Siemens failed and refused to pay VCE's invoices totaling more than $300,000 for certain computer chips delivered to Siemens by VCE in fulfillment of a purchase order VCE received from Siemens dated November 22, 2011. VCE is a Delaware corporation registered to do business in New York. Its principal place of business is in Hauppauge, New York. VCE alleges that it provides an on-line trading hub to buyers and sellers of computer chips and semiconductor parts for its members, who consist of national and international technology and other companies. Siemens is an English company organized under the laws of England, with its principal place of business in Frimley, England, United Kingdom. VCE alleges, upon information and belief, that Siemens is a subsidiary of the multi-national concern Siemens Aktiengesellschaft.
According to VCE's complaint, in or around June 2010, Siemens became a member of VCE and thus agreed to the terms and conditions of the "Legal Agreement" describing the terms and conditions of membership and use of VCE's website, as either a buyer or seller. Paragraph 16 of the Legal Agreement states, in relevant part: [t]his agreement shall in all respects be governed by and construed in accordance with the laws of the State of New York." On March 22, 2011, Siemens signed a "Supplemental Purchasing Agreement for parts from the Open Market" addressing prospective sales by VCE of obsolete and hard-to-find components.
On or about November 22, 2011, Siemens issued a Purchase Order to VCE for approximately 60,000 computer chips. According to VCE it was agreed that VCE would seek to procure these chips from the open market because they were "hard-to-find components." Later that day, before accepting the order, VCE's President and CEO, Michael Wood, sent an e-mail to Siemens' Purchasing Manager, John Farrall, seeking to confirm the applicability of the Supplemental Purchasing Agreement for parts from the Open Market to the order and seeking Siemens' agreement to several additional terms. In response, Farrall sent an e-mail instructing Wood to "go ahead as per below" (referring to the Wood e-mail).
On or about November 30, 2011, VCE began shipping chips to Siemens. The shipments were FOB New York. The first shipment was received by Siemens on December 1, 2011. Siemens received five subsequent shipments, the last of which was received on December 9, 2011. VCE sent invoices with each shipment. According to VCE, Siemens accepted all of the parts shipped in fulfillment of the Purchase Order and never provided any test results regarding functionality of the parts or otherwise attempted to timely return the products. VCE alleges that Siemens has failed and refused to pay the invoices, except for one, leaving an unpaid balance of $301,275.00. In its Complaint, VCE asserts causes of action against Siemens for breach of contract, an account stated, [*2]and unjust enrichment. VCE alleges that this Court has jurisdiction over Siemens pursuant to CPLR 302.
In support of its motion to dismiss, Siemens submits, among other things, an affidavit from John Matthews, the Country Sector Lead Lawyer, Industry Sector, of Siemens. Matthews states, among other things, that Siemens negotiated the "underlying transaction" with VCE exclusively by telephone and e-mail, and that no officer, employee, or agent of Siemens traveled to the United States to negotiate or enter into the underlying transaction. Further, Matthews states that Siemens does not have operations, offices, employees, a telephone number or bank accounts in New York, does not conduct any manufacturing or marketing activities in New York, does not sell products to New York residents, does not solicit business in New York, does not own or lease property in New York, and is not licensed, authorized or registered to do business in New York. Accordingly, Siemens argues, among other things, that there is no basis for jurisdiction over it pursuant to CPLR 302(a)(1) because VCE's claims do not arise from a New York transaction as Siemens was the foreign buyer and VCE the New York seller of goods delivered outside of New York. Siemens contends that a non-domiciliary does not subject itself to jurisdiction under CPLR 302(a)(1) merely by buying goods from a New York seller. Siemens emphasizes that the sale at issue was accomplished through telephone and e-mail communications only, without any Siemens representative traveling to New York.
In opposition to Siemens' motion, VCE submits, among other things, an affidavit from its CEO, Michael Wood. Wood states, among other things, that VCE operates an online trading hub for members to buy and/or sell computer chips and semiconductor parts exclusively from other member's excess stock. It also offers to help members gain access to the open market. Members gain access to potential deals with thousands of other members in more than 50 countries. VCE's website is for use by its members. According to Wood, Siemens became a member of VCE on March 2, 1999, by requesting membership. Siemens agreed to the terms of the Legal Agreement on VCE's website in June 15, 2010. Thereafter, Siemens logged in to VCE's website on three different occasions and performed "ten different activities" through June 28, 2010. With regard to the Purchase Order dated November 22, 2011, Wood states that the chips were sold to Siemens "FOB New York" and Siemens provided VCE with a DHL account number to accept the shipment of the chips in Hauppauge, New York. Siemens made partial payment for the chips to VCE's bank account in New York. Wood further states that there have been at least 65 emails between VCE and Siemens' Purchasing Manager, John Farrall, as well as undocumented phone calls with Farrall and other employees of Siemens. Additionally, Wood states that there was an earlier transaction in March 2011 between the parties at which time Siemens purchased other computer chips from VCE.
VCE argues that the evidence demonstrates that Siemens transacted business in New York and is thus subject to this Court's jurisdiction pursuant to CPLR 302 with regard to the claims asserted in the Complaint. VCE characterizes this case as being about "multiple transactions involving hundreds of thousands of dollars in computer chips solicited by Siemens, an affiliate of a multi-billion dollar multi-national concern." According to VCE the evidence shows that Siemens (1) communicated with it on multiple occasions by fax, email, and telephone, (2) agreed that VCE [*3]would purchase chips on the open market for Siemens, (3) received at least seven separate shipments of chips FOB New York, and (4) paid for chips in U.S. dollars to VCE's New York bank account on more than one occasion. VCE contends that Siemens breached its contract with it after having affirmatively sought — and enjoyed the fruits of — membership in VCE and a business relationship governed by New York law.
Discussion
"Under New York's long-arm jurisdiction statute, a court may exercise jurisdiction over a nondomiciliary who, in person or through an agent, transacts any business within the state or contracts anywhere to supply goods or services in the state'" (Grimaldi v Guinn, 72 AD3d 37, 43 [2d Dept 2010] quoting CPLR 302[a][1]). "CPLR 302(a) is a single act statute [and] proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted'" (Kimco Exch. Place Corp. v. Thomas Benz, Inc., 34 AD3d 433, 434 [2d Dept 2006] quoting Deutsche Bank Sec., Inc. v Montana Bd. of Invs., 7 NY3d 65, 71 [2006] cert denied 549 US 1095 [2006]). The Court of Appeals has held that " [s]o long as a party avails itself of the benefits of the forum, has sufficient minimum contacts with it, and should reasonably expect to defend its actions there, due process is not offended if that party is subjected to jurisdiction even if not "present" in that State'" (Deutsche Bank Sec., Inc. v Montana Bd. of Invs., supra at 71, quoting Kreutter v McFadden Oil Corp, 71 NY2d 460, 466 [1988]).
" Although it is impossible to precisely fix those acts that constitute a transaction of business, [the Court of Appeals'] precedents establish that it is the quality of the defendants' New York contacts that is the primary consideration' (Fischbarg v Doucet, 9 NY3d 375, 380 [2007]). The purposeful creation of a continuing relationship has been a contributing factor in finding sufficient contacts to justify the exercise of long-arm jurisdiction (id. at 381; George Reiner & Co. v Schwatrz, 41 NY2d 648, 653 [1977]). Whether a non-domiciliary has engaged in sufficient purposeful activity to confer jurisdiction in New York requires an examination of the totality of the circumstances' (Farkas v Farkas, 36 AD3d 852, 853 2d Dept 2007])."
(Grimaldi v Guinn, supra at 44-45).
"While the ultimate burden of proof rests with the party asserting jurisdiction (see Brandt v Toraby, 273 AD2d 429, 430 [2d Dept 2000]), the plaintiffs, in opposition to a motion to dismiss pursuant to CPLR 3211(a)(8), need only make a prima facie showing that the defendant was subject to the personal jurisdiction of the Supreme Court" (Cornely v Dynamic HVAC Supply, LLC, 44 AD3d 986 [2d Dept 2007]).
Here, in opposition to Siemens' motion, VCE has made a prima facie showing that Siemens, an English company, transacted business in the state of New York in connection with the purchase of computer chips pursuant to the Purchase Order dated November 22, 2011. Based on the totality of the circumstances, in light of the number, nature, and timing of all of the contacts between the parties, including Siemens' use of VCE's website for its members, multiple e-mails, faxes and [*4]telephone calls with VCE in New York, a prior sale of goods by VCE to Siemens in March 2011, as well as Siemens's agreement to the terms and conditions of VCE's Legal Agreement, which includes a provision that New York law is be applied in governing and construing the Legal Agreement, Siemens is deemed to have sufficient contacts with New York and the exercise of jurisdiction over it with regard to the claims asserted in the Complaint does not offend due process (see Grimaldi v. Guinn, supra at 51). Moreover, Siemens activities were clearly purposeful and there is undeniably a substantial relationship between the transaction and the claims asserted. Siemens requested membership with VCE in 1999 and became a member at that time. Thus, it is clear that Siemens engaged in the purposeful creation of a continuing relationship with VCE (id. at 51). Accordingly it is
ORDERED that the motion by Siemens (Mot. Seq. No. 001) pursuant to CPLR 3211(a)(8) to dismiss the complaint for lack of personal jurisdiction is denied; and it is further
ORDERED that counsel for the parties shall appear before the Court for a preliminary conference on December 10, 2012, at 10:00 a.m.
This constitutes the DECISION and ORDER of the Court.
Dated: November 7, 2012
Riverhead, New York
EMILY PINES
J. S. C.
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