Murphy v Cirrus Design Corp.
Annotate this CaseDecided on February 8, 2013
Supreme Court, Erie County
Christopher M. Murphy, as Executor of the Estate of Michael H. Doran, and on behalf of all lawful beneficiaries of the Estate of Michael H. Doran, deceased. KEVIN SCHNIREL, as Administrator of the Estate of Matthew Schnirel, in his own right, and on behalf of all lawful beneficiaries of the Estate of Matthew Schnirel, deceased, Plaintiffs, .
against
Cirrus Design Corporation, et al., Defendants.
2011-1824
Co-Counsel for Plaintiffs (appearing for all plaintiffs):
Jared L. Watkins, Esq.
Kreindler & Kreindler, LLP
750 Third Avenue
New York, NY 10017
Hugh M. Russ, Esq.
Hodgson Russ, LLP
The Guaranty Building 140 Pearl Street, Suite 100
Buffalo, NY 14202
Counsel for Defendant UND Aerospace Foundation:
Christopher Bopst, Esq.
Goldberg Segalla, LLP
665 Main Street, Suite 400
Buffalo, NY 14202
Timothy J. Walker, J.
DECISION AND ORDER
This action arises out of the crash of an aircraft on April 28, 2009 in Mayfield Village, Ohio, that resulted in the deaths of Plaintiffs' decedents, Michael Doran and Matthew Schnirel, both of whom were residents of Erie County, New York. At the time of the crash, Doran was piloting an aircraft known as a 2007 Cirrus SR-22 and Schnirel was his passenger. The crash occurred shortly after takeoff as the two men were returning to Western New York after a work meeting in Cleveland. [*2]
Pending before the court is Defendant UND Aerospace Foundation's (the "Foundation") motion, pursuant to CPLR §3211(a)(8), to dismiss the Complaint as against it, for lack of personal jurisdiction.
Plaintiffs have asserted negligence and breach of contract claims against the Foundation and other defendants that arise out of their alleged failure to provide bargained for pre-flight and flight training to Doran on the dangerous propensities of certain SR-22 systems and avionics, which breaches caused or contributed to the subject crash. Plaintiffs claim that certain transactions occurred in New York directly between the Foundation and Doran and indirectly through Defendants Cirrus Design Corporation ("Cirrus") Stephen Kaplan [FN1] ("Kaplan"), which are sufficient to confer personal jurisdiction over the Foundation.
In seeking dismissal, the Foundation discounts these transactions and asserts that Plaintiffs cannot satisfy the requirements to assert personal jurisdiction over the Foundation pursuant to CPLR §302, because any alleged wrongdoing by the Foundation occurred in Minnesota, not New York, and the evidence otherwise shows that the Foundation cannot be deemed to be "doing business" in New York, as that term is used to confer jurisdiction pursuant to CPLR §301.
Doran was an experienced pilot who previously owned several other aircraft before purchasing the Cirrus SR-22 aircraft from Cirrus in October of 2008 in White Plains, New York. As part of the purchase price of the aircraft, Cirrus and the Foundation provided Doran with "transition training." Transition training is specific and specialized training to familiarize owners, such as Doran, with the systems and characteristics of their new Cirrus aircraft. In other words, said training "transitions" pilots from other aircraft they may be familiar with, to their new Cirrus aircraft.
The Foundation is a not-for-profit corporation that operates exclusively for charitable, scientific and educational purposes. The Foundation was formed in 1985 under the laws of the State of North Dakota, with its principal place of business located in Grand Forks, North Dakota. The Foundation operates satellite campuses in the states of Arizona, Minnesota and Washington, but has never operated a satellite campus in New York State.
In opposition to the Foundation's motion to dismiss, Plaintiffs rely on CPLR §302(a)(1), which provides in relevant part that "a court may exercise personal jurisdiction over any non-domiciliary ... who in person or through an agent ... transacts any business within the state or contracts anywhere to supply good or services in the state," and/or CPLR §301, which provides in relevant part that "[a] court may exercise such jurisdiction over persons, property, or status as might have been exercised heretofore."
With respect to CPLR §302(a)(1), Plaintiffs need only show that facts "may exist" to exercise personal jurisdiction over the Foundation [Tucker v. Sanders, 75 AD3d 1096 (4th Dept. 2010)], and in evaluating Plaintiff's showing, "the court must construe the pleadings and affidavits in the light most favorable to them and resolve all doubts in their favor" [Brandt v. Toraby, 273 AD2d 429, 430 (2d Dept. 2000)]. Moreover, "[t]here is no fixed standard to measure the minimum contacts required to sustain jurisdiction" [Alan Lupton Associates, Inc. v. [*3]Northeast Plastcis, Inc., 105 AD2d 3 (4th Dept. 1984)], and a single purposeful transaction alone may confer personal jurisdiction under CPLR §302 [Parke-Bernet Galleries v. Franklyn, 26 NY2d 13 (1970)].
It is undisputed that the Foundation provided Doran with flight training on the Cirrus SR-22 aircraft at the Foundation's flight training center in Deluth, Minnesota. Plaintiffs assert, however, that the Foundation, through its own conduct with Doran, engaged in certain activities in New York as a prerequisite to allowing Doran to participate in flight training in Minnesota. These activities include Doran's required use of Foundation-developed training materials, including online software known as "Cirrus Aircraft Training Software" (the "CATS"). The Foundation required Doran to register the CATS online, accept an "End User License Agreement" with the Foundation, and complete training modules and quizzes on the software, all as a prerequisite to permitting Doran to undergo actual flight training. The CATS' training modules and quizzes included a variety of topics, including the Avidyne Entegra avionics system, which is an advanced system that was installed in the subject aircraft and manufactured by Defendant Avidyne Corporation. Plaintiffs claim, inter alia, that the design, operation, warnings and training associated with the Avidyne Entegra avionics system caused or contributed to the crash. The Foundation developed, and holds the sole and exclusive ownership rights for the CATS and Cirrus paid it a separate, additional fee for the software Doran registered to his New York office address and telephone number on September 29, 2008. Doran's acceptance of the Foundation's End User License Agreement during his registration of the Foundation's software created an enforceable contract [Moore v. Microsoft Corp., 293 AD2d 587 (2d Dept. 2002)].
The CATS' importance as a prerequisite to Doran's later flight training in Minnesota is demonstrated by the Foundation's September 26, 2008 email to Doran, which stated, inter alia, that, prior to being permitted to be flight trained, Doran "must ... complete the training modules and quizzes ... [and] [p]rint your certificate of completion ..." [Emphasis in original]. The email also directed Doran to bring the certificate of completion with him to the flight training and to call the Foundation at a designated telephone number if he "experience[d] difficulties loading and installing this software" [Emphasis in original].
The Foundation had indirect business contact with Doran in New York by providing flight training and certification to Kaplan, who is a Cirrus Standardized Instructor Pilot ("CSIP"), a flight instructor who undergoes a specific training course provided by the Foundation to be qualified to train pilots in Cirrus aircraft. It is undisputed that Kaplan received CSIP training from the Foundation, and that on at least two (2) occasions, Kaplan provided flight training to Doran in New York using training materials developed by the Foundation.
Plaintiffs also contend that the Foundation engaged in purposeful business activities with Doran in New York through Cirrus. Starting in 2002, and through approximately January 2009, the Foundation and Cirrus entered into six (6) training agreements, pursuant to which the Foundation provided training and related services to Cirrus owner-pilots, like Doran. The Foundation knew that Cirrus sold aircraft to New York residents, and Cirrus' Northeast Regional Sales Director, who was based in White Plains, New York, directed Doran to the Foundation for training. Moreover, between 2004 and 2009, Foundation instructors traveled to New York on at least 32 occasions to provide training to New York customers, including to Defendant Kaplan. From 2006 through 2008, the Foundation's instructors were present in New York for at least 89 [*4]days, for 30 separate training events.
Plaintiffs further contend that the Foundation engaged in purposeful activities with Doran in New York through Cirrus, via Cirrus' provision to Doran of important training materials prepared by the Foundation. On or about September 17, 2008, Cirrus mailed a training kit to Doran, consisting of an SR-22 Training Guide, a Transition Training Syllabus, and the CATS. The Foundation solely developed the CATS and jointly developed with Cirrus the Training Guide and Training Syllabus. The Training Guide encouraged Doran to access and use online training resources available through the Foundation's website.
Cirrus' New York activities are attributable to the Foundation for purposes of personal jurisdiction pursuant to CPLR §302, because "[t]he activities of a representative of a nondomiciliary in New York may be attributed to it ... if it requested the performance of those activities and the activities benefit it, regardless of whether the representative acted as an agent or an independent contractor" [Alan Lupton Associates, Inc., 105 AD2d at 7]. The Foundation discredits the Lupton agency test as inapplicable to this action, because the agreements between the Foundation and Cirrus were not New York contracts, and it asserts that Cirrus, not the Foundation, derived the benefit of the contracts; i.e., for Cirrus to sell more airplanes. This argument is misplaced, because the Lupton agency test does not require that the Foundation-Cirrus training agreements be New York contracts and the Foundation - as well as Cirrus (not to the exclusion of Cirrus) - benefitted financially from these agreements.
Moreover, the Foundation was well aware of Cirrus' substantial presence in New York via the location of Cirrus' Northeast Regional Sales Office in White Plains, New York and because the FAA's aircraft registry shows that 105 Cirrus aircraft are registered to New York addresses, and 79 of those aircraft are model SR-22. Accordingly, this court rejects the Foundation's argument that it had no way of knowing that Cirrus would ship Foundation-developed training kits to New York residents like Doran.
Plaintiffs also contend that the Foundation's website was sufficiently interactive so as to consist of purposeful activity in New York within the meaning of CPLR §302(a)(1). While New York State law analyzing the issue of a defendant's internet activity is sparse, the Second Department has adopted a sliding-scale test, whereby websites allowing customers to do business over the internet occupy one end of the spectrum; interactive websites that allow the exchange of information occupy the middle; and passive websites that merely post information lie on the other end [Grimaldi v. Guinn, 72 AD3d 37 (2d Dept. 2008) (in personam jurisdiction did not lie over the defendant because the defendant's website was passive)].
As it existed from fiscal year 2005, through fiscal year 2011, the Foundation's website was interactive and permitted New York residents to transact business with it. The Foundation directed Doran and other New York residents to "HTML.eZ," the Foundation's proprietary web-based resource for training modules, tests and feedback (including a grade). As previously discussed, the Foundation also required Doran to register his Foundation-developed training software (i.e., the CATS) via the internet. The Foundation's website also included an online store, "Aerostop," through which New York residents are able to purchase merchandise and training software that the Foundation ships to them in New York.
Under these circumstances, the Foundation was "transacting business" in New York and is therefore subject to personal jurisdiction [Audiovox Corp. v. South China Enterprise, Inc., [*5]2012 U.S. Dist. LEXIS 104656 (E.D.NY July 26, 2012) (personal jurisdiction existed pursuant to CPLR §302(a)(1), where defendant advertised its products on its website, accessible to customers nationwide, and defendant shipped its products to New York in accordance with orders placed by New York customers through the website)]. Seldon v. Direct Response Techs, Inc. 2004 U.S. Dist. LEXIS 4344 (S.D.NY March 31, 2004), relied upon by the Foundation, is distinguished from the instant matter, because the defendant's website in that case was limited to an interactive message board.
With respect to CPLR §301, the Foundation is subject to in personam jurisdiction because, at all times relevant hereto, it was "doing business" in New York [McGowan v. Smith, 52 NY2d 268, 272 (1981)]. The aggregate and quality of the Foundation's direct and indirect activities with Doran and additional contacts with other New York residents, as described above, are such that the Foundation may be said to have been present in New York "with a fair measure of permanence and continuity" for purposes of in personam jurisdiction pursuant to CPLR §301 [Laufer v. Ostrow, 55 NY2d 305, 310 (1982)].
In light of the foregoing, the court has determined that the Foundation, through its direct contacts with Doran in New York and indirectly through Cirrus and Kaplan, knowingly and purposefully availed itself of the privilege of doing business in New York. This court's exercise of personal jurisdiction pursuant to CPLR §§301 and/or 302 would, therefore, not "offend traditional notions of fair play and substantial justice'" [International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), quoting, Millikin v. Meyer, 311 U.S. 457, 463 (1940)]. The Foundation, through its many contacts with Doran, through, inter alia, the U.S. mail, electronic mail, telephone, and its interactive website, has "purposefully avail[ed] itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws" [Hanson v. Denckla, 357 U.S. 235, 253 (1958)].
Moreover, Plaintiffs' negligence and breach of contract claims against the Foundation are inexorably linked to Plaintiffs' assertion that the Foundation (itself and through Cirrus and Kaplan) failed to properly train Doran on the dangerous propensities of certain Cirrus SR-22 systems and avionics. In the event Plaintiffs are able to substantiate their claims against the Foundation, the Foundation's contacts with Doran will amount to much more than "a link in the chain of events giving rise to the cause of action ..." [Talbot v. Johnson Newspaper Corp., 123 AD2d 147, 149 (3d Dept. 1987), affirmed,71 NY2d 827 (1988)].
Accordingly, it is hereby,
ORDERED, that Defendant UND Aerospace Foundation's motion to dismiss Plaintiff's Complaint is denied.
This constitutes the Decision and Order of this Court. Submission of an order by the parties is not necessary. The mailing of a copy of this Decision and Order by this Court shall not constitute notice of entry.
Dated:February 8, 2013
Buffalo, New York
___________________________________ [*6]
Hon. Timothy J. Walker, J.C.C.
Acting Supreme Court Justice
Footnotes
Footnote 1:The caption to this action incorrectly identifies Defendant Stephen Kaplan's forename as "Steven."
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