Crone Law Group, P.C. v Futuris Co.
Annotate this CaseDecided on December 22, 2022
Supreme Court, New York County
Crone Law Group, P.C., Plaintiff,
against
Futuris Co., Defendant.
Index No. 656402/2022
Law Offices of Matthew H. Herman, Esq., Massapequa Park, NY (Matthew H. Herman of counsel), for plaintiff.
No appearance for defendant.
Gerald Lebovits, J.
This is an attorney-fee collection action, brought by plaintiff, Crone Law Group, P.C. (Crone), against defendant, Futuris Co. Crone Group is a law firm with its principal office in New York. The complaint alleges that Futuris is a Wyoming corporation with a principal place of business in Maryland. (NYSCEF No. 1 at ¶ 2.)
According to plaintiff's affidavit of facts (supported by accompanying correspondence and invoices), Crone was hired by Futuris and performed $26,715 in legal services for which it has not been paid. (NYSCEF No. 13 at ¶¶ 3-4.) Crone, after serving the requisite Part 137 [*2]arbitration notice (see NYSCEF No. 6), brought this action to collect the fees it alleges to be owed. Crone served process on Futuris by delivery of the initiating papers to the Wyoming Secretary of State. (NYSCEF No. 7.) Futuris has not appeared.
Crone now moves without opposition for default judgment under CPLR 3215. The motion is denied without prejudice. Crone has not yet shown that this court has personal jurisdiction over Futuris—as required for Crone's out-of-state service on Futuris to be proper for default-judgment purposes—but might be able to do so on a renewed motion.
DISCUSSION
A plaintiff moving for default judgment must establish proper service, the defendant's default, and the facts constituting plaintiff's claim. (See CPLR 3212 [f].) Crone has not (yet) established proper service. Crone served Futuris in Wyoming via the Wyoming Secretary of State. Futuris did not consent in its engagement agreement to service by that means. (See generally NYSCEF No. 2.) Crone must therefore be relying on CPLR 313, governing out-of-state service. But CPLR 313 permits out-of-state service over a nonresident party only if it is "subject to the jurisdiction of the courts of the state under section 301 or section 302" of the CPLR—that is to say, if this court has general personal jurisdiction or long-arm specific personal jurisdiction.
As noted above, Futuris is not incorporated here or have an office here. The complaint does not identify any facts that might nonetheless give rise to general personal jurisdiction. As for specific jurisdiction, the complaint alleges only that Futuris "regularly enters New York to transact business and deliver its services within this State." (NYSCEF No. 1 at ¶ 2.) But it does not provide any supporting detail about those business services or other New York contacts; nor allege a connection between Futuris's asserted New York contacts and the current action.
That said, Futuris's engagement of Crone to perform legal services (and Crone's performance of those services) could conceivably qualify as Futuris's transacting of business in New York under CPLR 302 (a) (1). A nondomiciliary's engagement of a New York attorney, undertaken from another state, may count as transacting business for long-arm purposes if the client's New York-related activity, communications, and other contacts are sufficiently extensive. (Fischbarg v Doucet, 9 NY3d 375, 380-383 [2007]; cf. Gottlieb v Merrigan, 170 AD3d 1316, 1318 [3d Dept 2019] [holding under Fischbarg that nondomiciliary law firm's contacts with New York did not render firm subject to long-arm personal jurisdiction here].)
Crone has not, however, provided enough information about its representation of Futuris to enable this court to determine whether long-arm jurisdiction exists. The record does not reflect, for example, how Futuris came to engage Crone—whether Futuris reached out to Crone in New York to seek its legal representation, or Crone pitched its services to Futuris in Maryland, or through some other chain of events. (See Fischbarg, 9 NY3d at 380-381 [treating this factor as relevant].) The engagement agreement does not identify where it was executed. (See NYSCEF No. 2 at 2.) And the invoices submitted by Crone do not state whether billed-for attorney/client communications resulted from telephone calls, letters, or emails from Futuris to [*3]Crone in New York, or otherwise.
For that matter, it is unclear that Crone even performed legal services in New York on Futuris's behalf. Although Crone's principal office is here (see NYSCEF No. 1 at ¶ 1), the attorney affidavit submitted on the current motion does not say where Crone did its work for Futuris. The engagement agreement lists a California office for Crone in addition to its New York office (see NYSCEF No. 2 at 1); provides that the agreement is governed by California law (id. at 4); states that the firm will comply in its representation "with the duties of attorneys set forth in the California Business & Professions Code and the Rules of Professional Conduct of the State Bar of California" (id. at 1); and calls for binding arbitration of fee disputes before the Los Angeles County Bar Association or the California State Bar Association" (id. at 4).[FN1] And Crone's invoices direct Futuris to make payments to an account in a California branch of a national bank. (See NYSCEF No. 3 at 6.)
To be sure, these facts are not definitive. Crone might well be able to provide evidence (affidavits, documents, and so on) establishing that, notwithstanding the questions raised above, the quality of Futuris's contacts with New York in the course of its retention of Crone give rise to personal jurisdiction under the Fischbarg inquiry. But the current record leaves that question open. It is Crone's burden at the outset on this motion to establish general or specific personal jurisdiction, in order to demonstrate that its out-of-state service on Futuris was valid. The presence of an open jurisdictional question thus requires denial of the motion.
Given this court's conclusion on the personal-jurisdiction issue, the court need not now resolve whether Crone has proven the facts constituting its claim. The court notes for the parties' reference, though, that a tension exists between the provision of the engagement agreement providing that Crone will charge a flat monthly fee for SEC-related services described in a schedule to the agreement (see NYSCEF No. 2 at 2-3, 6), and line items on the invoices sent to Futuris reflecting hourly billing for work, described as "SEC Reporting," that at least appears to come within the agreement's definition of SEC-related services.[FN2] (See NYSCEF No. 3 at 1-2 [bills]; id. at 5-6, 8 [invoices].)
Accordingly, it is
ORDERED that Crone's motion for default judgment under CPLR 3215 is denied without prejudice; and it is further
ORDERED that if Crone does not file a renewed default-judgment motion within 30 days of entry of this order, the action will be dismissed; and it is further
ORDERED that Crone shall serve a copy of this order with notice of its entry on Futuris by certified mail, return receipt requested, directed to Futuris's last-known principal place of business.
12/22/2022 Footnotes
Footnote 1:Although the court does not reach the issue, this provision of the engagement agreement would appear to bar Crone from seeking its fees here, rather than through a California bar arbitration.
Footnote 2:This court is also troubled that Crone's counsel has publicly filed as a complaint exhibit a letter from Crone to Futuris that reveals sensitive and potentially detrimental client information that is unnecessary for, and unrelated to Crone's fee claim in this action, in violation of Attorney Rules of Professional Conduct 1.6 [a] and 1.9 (c). (See NYSCEF No. 4; see also NYSCEF No. 13 at ¶ 4 [Crone attorney affidavit of facts, incorporating that letter by reference].) Counsel is directed to remove or redact the letter forthwith.
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