Jimenez v Steinemann Tech. AG

[*1] Jimenez v Steinemann Tech. AG 2017 NY Slip Op 50453(U) Decided on April 11, 2017 Supreme Court, Queens County McDonald, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on April 11, 2017
Supreme Court, Queens County

Pedro Jimenez and ESTELLE JIMENEZ, Plaintiffs,

against

Steinemann Technology AG, STEINEMANN TECHNOLOGY USA, INC., FRANCES ELECTRIC CORP. and CAN-AM PACKAGING EQUIPMENT CORP., Defendants.



9842/2016
Robert J. McDonald, J.

The following papers numbered 1 to 14 read on this motion by defendant STEINEMANN TECHNOLOGY AG for an order pursuant to CPLR 3211(a)(8), dismissing the case on the grounds that personal jurisdiction cannot be maintained over STEINEMANN TECHNOLOGY AG:

Papers/Numbered

Notice of Motion-Affidavits-Exhibits-Memo. of Law 1 - 6

Plaintiff's Aff. in Opposition-Exhibits-Memo. of Law 7 - 10

Can-Am Packaging Equipment Corp.'s Aff. in Opposition 11 - 12

Reply Affirmation 13 - 14

This is an action to recover damages for serious personal injuries allegedly sustained by plaintiff, Pedro Jimenez, on June 9, 2015 when he was injured while laminating book covers with a Steinemann Model Uvimat 102 (hereinafter the subject machine). The subject machine was manufactured by Steinemann Technology AG (Steinemann AG). Dynamic Graphic Finishing (Dynamic) is the parent company of Coral Graphics Services (Coral Graphics), [*2]plaintiff's employer. Dynamic purchased the subject machine from Can-Am Packaging Corp. (Can-Am). On the date of the incident, while working at Coral Graphics, plaintiff attempted to clean the roller on the subject machine. Upon opening the safety guard, the interlock system should have caused the machine to turn off immediately. With the guard cover remaining open, he reached into the machine with his right hand and a towel. When he touched the roller, his hand was pulled into and pinched between the roller and another part in the subject machine. Plaintiff alleges that his injuries were caused by the machine's failure to turn off when the safety guard was lifted as it should have. Plaintiff asserts three causes of action sounding in strict products liability, breach of warranty, and negligence. Plaintiff's wife, Estelle Jimenez, sues for loss of consortium.

Plaintiffs commenced this action by filing a summons and verified complaint on August 23, 2016. Steinemann Technology USA, Inc. (Steinemann USA) served an answer on September 22, 2016. Can-Am served an answer on October 24, 2016. Steinemann AG served an answer on November 4, 2016. Frances Electric Corp. served an answer on January 4, 2017. Steinemann AG now moves to dismiss the complaint as asserted against it on the grounds that this Court lacks personal jurisdiction under New York's long-arm statute.

In support of the motion, Christian Domeisen, the Chief Financial Officer and Member of the Management Board at Steinemann AG, submits an affidavit dated January 3, 2017. Mr. Domeisen affirms that Steinemann AG is a Swiss corporation, headquartered in Switzerland, which distributes machines for the graphic and sanding industries in Switzerland. Steinemann AG was not aware that Coral Graphics had a Uvimat 102 until this action was commenced. Steinemann AG does not have an office for its graphics business in the United States. All graphic machine and spare parts sales and service, including varnishing machines such as the Uvimat 102, are handled out of Switzerland. Steinemann USA is a totally independent subsidiary, which deals with sanding machinery only. Sales for the sanding industry in the United States are handled by Steinemann USA, which has its principal place of business in Charlotte, North Carolina. Steinemann AG has not previously been sued in New York. Steinemann AG does not have any offices, factories, repair companies, employees, bank accounts, agents, subsidiaries or branches in New York. It has no approved vendors for sales of machines or parts in New York. The only approved sales company in the United States is located in Pennsylvania, and it does not represent the Uvimat 102. Steinemann AG never sold any machines to Can-Am. Steinemann AG does not advertise in New York. Only two machines were delivered to New York. Neither were sold to Coral Graphics. Steinemann AG has delivered some after-market parts to the New York companies such as nuts, bolts, washers, and springs.

Based on Mr. Domeisen's affidavit, counsel for Steinemann AG contends that the action must be dismissed as Steinemann AG is a Swiss corporation with its principal place of business in Switzerland; Steinemann AG has not previously been sued in New York; Steinemann AG does not transact business in New York and does not have any offices, factories, repair companies, employees, bank accounts, agents, approved vendors, subsidiaries or branches in New York; Steinemann AG does not have any vendors for sales of machines or parts in New York, the only [*3]approved vendor for Steinemann AG in the United States is located in Pennsylvania and it does not represent the Uvimat 102; Steinemann AG does not advertise in New York; and the sole contact for machinery manufactured by Steinemann AG for the graphics industry is in Switzerland.

Plaintiffs oppose the motion, contending that Steinemann AG sells and markets machinery and parts in New York and derives substantial revenue from these sales. Thus, jurisdiction is proper in New York. Counsel for plaintiffs points to Steinemann AG's website which indicates that Steinemann AG is a leading manufacturer in both the sanding and graphic industry, "offering Swiss precision worldwide." Additionally, the website lists overseas offices, including Charlotte, United States. The website indicates that Steinemann AG makes EUR 40 million per year, with 98% in export. As discovery has not yet commenced, plaintiffs contend that it is impossible to know what percentage of that export income comes from New York. Plaintiffs also point to Steinemann USA's website which indicates that Steinemann USA was established to provide "a direct sales and support facility for Steinemann customers in North America." Regarding Steinemann AG's claim that it does not advertise in New York and that the only approved vendor, Print2Finish, is located in Pennsylvania, counsel contends that the Print2Finish website lists a news story in which the New York Times, a New York Corporation, signed a new order with Print2Finish. Based on such, counsel contends that this approved Steinemann AG vendor does advertise and sell products in New York. Counsel also contends that as Steinemann AG admits to selling parts to New York and that Steinemann AG is aware of five separate Uvimat 102 machines being used in New York, Steinemann AG does conduct business in New York and should expect to be sued in New York. Moreover, Steinemann AG admits that multiple requests were made by a vendor to Steinemann AG to deliver parts to Coral Graphics in Hicksville, New York. While the machine involved in that transaction was not the subject machine, Steinemann AG did deliver the parts to Coral Graphics in New York. The machine which received parts was delivered in 2005 by Steinemann AG to Coral Graphics in Kentucky. Thereafter, Coral Graphics delivered the machine to its New York location. It was in New York where a request for parts was made, and it was in New York where Steinemann AG delivered parts to Coral Graphics. The subject machine was also purchased by Coral Graphics in Kentucky from Steinemann AG, and then, was shipped to Coral Graphics' New York location. Plaintiffs assert that Steinemann AG had significant contacts with New York, subjecting it to personal jurisdiction in New York, because Steinemann AG sold products in New York, sold parts in New York, has a sales and marketing representative in the East Coast which services New York, and has an office located in North Carolina whose purpose is to offer sales and support to Steinemann AG clients in North America.

Can-Am also opposes the motion, contending that at the very least, discovery is necessary to determine Steinemann AG's contacts to New York.

"In deciding whether an action may be maintained in New York against a non-domiciliary defendant, the court must first determine whether jurisdiction exists under New York's long-arm statute (see CPLR 302) based upon the defendant's contacts with this state; and, if it does, the [*4]court then determines 'whether the exercise of jurisdiction comports with due process'" (Darrow v Hetronic Deutschland, 119 AD3d 1142, 1143 [3d Dept. 2014], quoting LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210, 214 [2000]).

CPLR 302(a) provides: "a court may exercise personal jurisdiction over any non-domiciliary . . . who . . . 3. commits a tortious act without the state causing injury to person or property within the state . . . if he . . .(ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce". "The conferral of jurisdiction under this provision rests on five elements: First, that defendant committed a tortious act outside the State; second, that the cause of action arises from that act; third, that the act caused injury to a person or property within the State; fourth, that defendant expected or should reasonably have expected the act to have consequences in the State; and fifth, that defendant derived substantial revenue from interstate or international commerce" (LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210, 214 [2000]).

Here, it is undisputed that the first three elements are met: Steinemann AG committed a tortious action outside New York, specifically the manufacturing of a defective product; the defective product is the basis for plaintiff's claims against Steinemann AG which arise out of the defective condition of the subject product and the negligence and breaches of warranty by Steinemann AG regarding the defective product; and Steinemann AG's tortious act caused plaintiff's injuries in New York.

The fourth element is met when the defendant expects or has reason to expect that its tortious activity will have direct consequences in New York (see Ingraham v Carroll, 90 NY2d 592 [1997]). The defendant need only to reasonably foresee that any defect in its product would have direct consequences within New York (see LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210 [2000]). Here, Steinemann AG admits to sales of products and parts to New York. Steinemann AG is aware of five machines currently being used in New York. Additionally, Steinemann AG, on three occasions, was contacted specifically regarding spare parts for Coral Graphics. Steinemann AG sold and delivered the spare parts, although not for the subject machine, directly to Coral Graphics in New York. Steinemann AG has also delivered parts to other New York companies. Moreover, Steinemann AG has an approved vendor located in Pennsylvania, which sells and services products nationwide, including to New York, and Steinemann AG has an office in North Carolina whose purpose is to offer support to Steinemann AG clients in North America. Based on such, this Court finds that Steinemann AG had reason to expect that any defects in its products would have direct consequences in New York (see Kernan v Kurz-Hastings, Inc., 175 F3d 236 [2d Cir. 1999][finding that a distributor's agreement to sell a manufacturer's products in the United States was sufficient to support personal jurisdiction under New York's long-arm statute based on a tortious act without the State causing injury to person or property within the State, even though the manufacturer claimed it had no idea that machine would end up in New York]; Adams v Bodum, Inc., 208 AD2d 450 [1st Dept. 1994]; Kappas v T.W. Kutter, Inc., 192 AD2d 402 [1st Dept. 1993]).

The last element, requiring the defendant to derive substantial revenue from interstate or international commerce, is designed to preclude the exercise of jurisdiction over non-domiciliaries "whose business operations are of a local character" (Ingraham v Carroll, 90 NY2d 592, 599 [1997][internal quotation marks omitted]). Based on Steinemann AG's website indicating that it makes Eur 40 million per year, with 98% of that being derived from exports, this Court finds that Steinemann AG's business operations are not of a local character.

As this Court finds that personal jurisdiction over Steinemann AG is appropriate pursuant to CPLR 302(a)(3)(ii), a determination as to whether personal jurisdiction pursuant to CPLR 302(a)(1) would be academic in nature and will not be determined herein.

However, the court still needs to determine whether personal jurisdiction over Steinemann AG under New York law comports with federal due process requirements. The Due Process Clause of the 14th Amendment permits a state to exercise personal jurisdiction over a non-domiciliary defendant with whom it has certain minimum contacts (see Kernan v Kurz-Hastings, Inc., 175 F3d 236 [2d Cir. 1999]). These contacts must not offend "traditional notions of fair play and substantial justice" (International Shoe Co. v State of Wash., Office of Unemployment Compensation and Placement, 326 US 310, 316 [1945]). "A non-domiciliary tortfeasor has minimum contacts with the forum State—and may thus reasonably foresee the prospect of defending a suit there—if it 'purposefully avails itself of the privilege of conducting activities within the forum State" (LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210, 216 [2000][internal quotation marks omitted). "[I]f the sale of a product of a manufacturer or distributor . . . is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has been the source of injury to its owner or to others" (LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210, 217 [2000][internal quotation marks omitted]). Here, the agreement with Print2Finish, an authorized vendor of Steinemann AG products in the United States, serves as evidence of Steinemann AG's attempt to serve the New York market, even if indirectly (see Kernan v Kurz-Hastings, Inc., 175 F3d 236 [2d Cir. 1999]). Moreover, Steinemann AG did sell machines and parts directly to New York, and thus, purposefully availed itself of the privilege of conducting business within New York.

Once minimum contacts have been established, "the prospect of defending a suit in the forum State must also comport with traditional notions of fair play and substantial justice" (LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210, 217 [2000][internal quotation marks omitted]). A defendant "who purposefully has directed [its] activities at forum residents . . . must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable" (Burger King Corp. v Rudzewicz, 471 US 462, 477 [1985]). "A court must consider the burden on the defendant, the interests of the forum state, and the plaintiff's interest in obtaining relief" (Asahi Metal Indus. Co., Ltd. v Superior Ct. of Cal., Solano County, 480 US 102 [1987]). Here, any burden on Steinemann AG in defending this lawsuit in New York is lessened by the fact that it purposefully availed itself of the laws of New York. Both its overseas [*5]office services New York and its approved vendor agreement with Print2Finish, who sells in New York, demonstrates its willingness to serve the New York market. Moreover, the subject machine was in New York, the incident occurred in New York, the injury was inflicted upon a New York resident, all of the witnesses are located in New York, and the incident investigation and medical treatment for the resulting injuries were conducted in New York. Thus, New York would be the most efficient venue for obtaining relief.

Accordingly, for the above stated reasons, it is hereby

ORDERED, that defendant STEINEMANN TECHNOLOGY AG's motion to dismiss pursuant to CPLR 3211(a)(8)is denied.

Dated: April 11, 2017

Long Island City, NY

___________________

ROBERT J. MCDONALD

J.S.C.