Natural Traveler, Inc. v Maynard
Annotate this CaseDecided on June 25, 2007
Supreme Court, Nassau County
Natural Traveler, Inc., Plaintiff,
against
Suzanne Maynard, MC, Inc., Maynard Consulting, Inc. and Sean V. Mcgrory, Defendants,
06-016900
COUNSEL FOR PLAINTIFF
Cohen & Kaufman, PLLC
581 Sixth Avenue, Fourth Floor
New York, New York 10011
COUNSEL FOR DEFENDANTS Nixon Peabody, LLP
50 Jericho Quadrangle, Suite 300
Jericho, New York 11753
Leonard B. Austin, J.
Defendants, Suzanne Maynard ("Maynard"), MC, INC. ("MC"), MAYNARD CONSULTING, INC. ("Consulting") and Sean V. McGrory ("McGrory"), move pursuant to CPLR 3211(a)(8) for an order dismissing the complaint on the grounds that the court lacks personal jurisdiction over them.
BACKGROUND
Maynard, a resident of Cincinnati, Ohio is the sole shareholder of MC and Consulting, both of which are incorporated in the State of Ohio.
In May 2006, Maynard was contacted by her neighbor, Marilyn Bauer ("Bauer"), to assist Bauer and Anthony Tedeschi ("Tedeschi"), a New York domiciliary, to create a business strategy for Tedeschi's on-line travel magazine, Plaintiff, Natural Traveler, Inc. ("Traveler"), a domestic corporation.
Maynard solicited the help of McGrory, who is also an Ohio resident, to create a financial plan for the project. Maynard, McGrory and Bauer met in Cincinnati to discuss business ideas over the telephone with Tedeschi.
In late May, 2006 Tedeschi visited Cincinnati to discuss the business strategy for Traveler. The parties also discussed shared ownership of Traveler in lieu of payment for their services. There are no documents confirming this.
In June 2006, Defendants traveled to New York to meet with Tedeschi's daughters, who had experience with web businesses, to assist them with the project.
The complaint seeks a declaratory judgment against Defendants claiming that there was no agreement pertaining to compensation for their work. Plaintiff also seeks [*2]injunctive relief against Defendants to stop them from harassing Plaintiff and asserting any further claims.
Defendants seek to dismiss the complaint for lack of personal jurisdiction pursuant to CPLR 3211(a)(8) claiming that the Court does not have jurisdiction over them in as such they are residents of Ohio.
In opposition to the motion, Plaintiff argues that Defendants are subject to New York's long arm jurisdiction because they transacted business in New York, they solicited work in New York, met with Tedeschi in New York to discuss the business proposal and negotiated to acquire shares of Traveler.
DISCUSSION
The party asserting personal jurisdiction of a defendant bears the burden of proof on this issue, which only requires a showing that facts may exist to exercise personal jurisdiction. Ying Jun Chen v. Lei Shi, 19 AD3d 407 (2nd Dept. 2005). See, Roldan v. Dexter Folder Co., 178 AD2d 589 (2nd Dept. 1991).
New York's long arm statute, CPLR 302(a), provides that, "a court may exercise personal jurisdiction over any non-domiciliary . . . , who in person or through an agent: (1) transacts any business within the state or contracts anywhere to supply goods or services in the state ."
A court has jurisdiction over parties so long as the "defendant's activities [in the state] were purposeful and there is a substantial relationship between the transaction and the claim asserted." Kreutter v. McFadden Oil Corp., 71 NY2d 460 (1988). See, Johnson v. Ward, 4 NY3d 516, 519-20 (2005); and Wright v. 299 Union Ave. Corp., 288 AD2d 382 (2nd Dept. 2001). It is essential that there be some act by which the defendants "purposefully avail" themselves to the privilege of conducting activities in the forum state, thereby benefiting and receiving protection from the laws of that State. Hanson v. Denckla, 357 U.S. 235, 253 (1958). See, Riblet Products Corp. v. Nagy, 191 AD2d 626 (2nd Dept. 1993).
Performing services for a New York corporation is minimal and is insufficient to confer personal jurisdiction without further contact. Bill-Jay Mach. Tool Corp. v. Koster Industries, Inc., 29 AD3d 504 (2nd Dept. 2006). Similarly, a single meeting in New York is not sufficient purposeful activity to warrant jurisdiction over defendants. Brandt v. Toraby, 273 AD2d 429 (2nd Dept. 2000).
In deciding whether a defendant's activities are purposeful, one must decide if it would be reasonable and fair to require them to present their case in New York based on the nature and quality of their activities. International Shoe Co. v. Washington, 326 U.S. 310 (1945). See, Riblet Products Corp. v. Nagy, supra.
"[M]ere solicitation of business within the state does not constitute the transaction of business within the state, unless the solicitation in New York is supplemented by business transactions occurring in the state." Cardone v. Jiminy Peak, Inc., 245 AD2d 1002, 1003 (3rd Dept. 1997). See, O'Brien v. Hackensack Univ. Med. Ctr., 305 AD2d 199 (1st Dept. 2003). Physical presence in the state alone does not transform a business dealing into a business transaction under CPLR 302. Bill-Jay Mach. Tool Corp. v. Koster Industries, Inc., supra.
The trip to New York to meet Tedeschi's daughters, at his request, is not sufficient to confer jurisdiction over the Defendants. Nothing was apparently agreed to [*3]at that meeting. No decisions were made that would have an effect on the business. This meeting could have easily taken place over the telephone like the other teleconference in which Defendants participated from Ohio. Such telephone conferences do not constitute sufficient contact with New York to support jurisdiction. Barington Capital Group, L.P. v. Arsenault, 281 AD2d 166 (1st Dept. 2001). See, L.F. Rothschild, Unterberg Towbin v. McTamney, 89 AD2d 540 (1st Dept. 1982). One trip to New York is not sufficient to establish jurisdiction over Defendants where the meeting is not essential in furthering any business relationship. Posven v. Liberty Mutual Insurance Co., 303 F. Supp. 2d 391 (S.D.NY 2004).
In order for a substantial relationship to exist between the cause of action and the business transaction, Defendants' activities in New York must have been purposeful. Kreutter v. McFadden Oil Corp., supra. See, Abbate v. Abbate, 82 AD2d 368 (2nd Dept. 1981). In the complaint, while the June 2006 meeting in New York was alleged (¶ 12), Plaintiff goes to great lengths to assert that no essential terms of the arrangement were specified (¶ 13), the parties never agreed to terms whereby Defendants would become shareholders of Traveler (¶ 14), no formal agreement was entered into (¶ 15), Plaintiff never hired Defendants (¶ 16) and neither Maynard or McGrory performed any services of any kind or contributed to the benefit of Traveler (¶¶ 17 22). Further, in his affidavit in opposition, Tedeschi confirmed that while Defendants pitched "their skills and expertise in order to induce me to agree on final terms of the venture " (¶ 6), no formal agreement was reached and Defendants were not hired (¶ 8). Thus, no purposeful New York activity on the part of Defendants can be discerned.
Such a circumstance is different than a New York resident being importioned to perform services in this State by an out-of-state party who never came to New York except by telephonic fax and e-mail contact and who utilized and benefited from the New York resident's work, which was performed solely in New York. In that case, New York was found to have long arm jurisdiction over the out-of-state defendant. Fischbarg v. Doucet, 38 AD3d 270 (1st Dept. 2007). See also, Deutsche Bank Securities, Inc. v. Montana Bd. of Investments, 7 NY3d 65 (2006) (instant messaging from out-of-state defendant was sufficient to confer long arm jurisdiction when it caused plaintiff to act to its detriment).
It would not be reasonable or fair to require Defendants to litigate this case in New York when neither individual defendant is a resident of New York and neither defendant corporation is authorized to do business in New York. All of the evidence relating to the creation of a business strategy for Traveler is in Ohio. Defendants could not have foreseen being brought into court in New York when all of their work was done in Ohio at the request of Bauer and Tedeschi. Therefore, they should not be subject to the jurisdiction of New York courts.
Furthermore, in order for the court to have jurisdiction over a foreign corporation pursuant to CPLR 301, the corporation must be "doing business" in New York. A foreign corporation not authorized to do business in New York, "must be engaged in systematic and continuous course of conduct of doing business such that the aggregate of the corporation's activities are not occasional or casual but have a fair measure of permanence." Jurlique, Inc. v. Austral Biolab Pty., Ltd., 187 AD2d 637 (2nd Dept. 1992). See, Cardone v. Jiminy Peak, Inc., supra (granting motion to dismiss for lack of [*4]personal jurisdiction where defendant corporation was not "doing business" in New York where it had no bank account, mailing address, or employees).
Nothing in the complaint supports the claim that Defendant corporations were conducting continuous and permanent activities in New York. The activity that the parties conducted in New York was the incidental, single meeting that would hardly constitute systematic and continuous conduct. Brandt v. Toraby, supra. Thus, pursuant to CPLR 301, Defendant corporations were not doing business in New York and are not subject to the jurisdiction of this Court.
Accordingly, it is,
ORDERED, that the motion of Defendants Suzanne Maynard, MC, Inc., Maynard Consulting, Inc. and Sean V. McGrory, to dismiss this action on the grounds that the court lacks personal jurisdiction over the defendants is granted. The complaint herein is dismissed without prejudice to commencing an action in the proper forum.
This constitutes the decision and order of this Court.
Dated:Mineola, NY
June 25, 2007Hon. LEONARD B. AUSTIN, J.S.C.
XXX
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