Diraimondo v Calhoun

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Diraimondo v Calhoun 2013 NY Slip Op 34009(U) January 14, 2013 Supreme Court, Nassau County Docket Number: 9378/12 Judge: Jeffrey S. Brown Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] SHORT FORM ORDER SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU P RES E NT : HON. JEFFREYS. BROWN JUSTICE -------------------------------------------------------------------------------)( TRIAL/IAS PART 17 MICHAEL P. DIRAIMONDO, WILLIAM CHILDS, ROBERT PETERS and CHARLENE VAUGHAN, individually and derivatively on behalf of AMERICAN VIRGIN ENTERPRISES, LTD., INDE)( # 9378/12 Motion Seq. 1 Motion Date 10.12.12 Submit Date 10.26.12 Plaintiff(s), -againstRORY CALHOUN, THEODORE E. STAIR, AMERICAN VIRGIN ENTERPRISES, LTD., SIRIUS DEVELOPMENT, LLC and T-RE)( ST. JOHN LLC., Defendant(s). --------------------~----------------------------------------------------------)( The following papers were read on this motion: Papers Numbered Notice of Motion, Affidavits (Affirmations), Exhibits Annexed.......................... Answering Affidavit .................................................................. ...................... ..... Reply Affidavit....................................................................................................... Memorandum of Law............................................................................................ 1 2 3 4 ==================--=============================== Defendants move for an order dismissing the plaintiffs' causes of action against defendant T-Rex St. John, LLC {T-Rex) based on lack of personal jurisdiction. American Virgin Enterprises, Ltd. ("AVE 1987") was a New York corporation formed in 1987 for the purpose of developing a marina in the U.S. Virgin Islands on land leased from the Virgin Islands Port Authority. Defendant Stair was the president and a shareholder of AVE 1987. Defendant Calhoun was the treasurer and a shareholder of A VE 1987. Plaintiff Childs was the vice president and a shareholder of A VE 1987. Plaintiff DiRaimondo was the secretary and a shareholder of A VE 1987. -1- [* 2] l I hise taxes. In 1994, the . . ved for failure to pay franc. t AVE l 987 and the Vugm 1993 AVE 1987 was d1ss~l in the Virgin Islands. agaAmVs E 1987 had intended to In ' ed an action which Moravian Church c~mme11;c . g it owned the property on I l nds Port Authonty' cla1mm ~e~elop the marina. . rises Ltd. (AVE 200 l) was . ed American Virgm Enterp . ~iffs were shareholders of In 200 l, another entity nam . .ts stead. None of the plam d defendant Stair was .d t and a shareholder an d AVE 1987 and act ml formed to succee C lhoun was its pres1 en AVE 2001, but defendant :a shareholder. vice president, treasurer an . d d . .ts favor, when the court Ch h was deci e m i . The In 2004 the action by the Moravian ur~ had leased for development of the marma. found that it o~ed the property which AVE l:~alf of AVE 1987, mutually released each other . Church and defendant Calhoun, on e . Morav1an .. f ro m all claims asserted in the action. LLC (Sirius) a Virgin Islands limited liability In 2005, defendant Sirius Development, . · ' mber In 2006 defendant . ' d .th d £ ndant Calhoun as its managmg me ee . M vian Church for the purpose of developing a company, was .forme wi Sirius entered mto a 99 year lease w~t~ the 1 ora .th T-Rex Member St. John LLC, a Delaware . . . T project on its property. Defendant Sums, a ong wi limited liability company, formed defendant T-Rex, a Virgin Islands limited habi ity company, and defendant Sirius assigned the lease to defendant T-Rex. . · The plaintiffs commenced this action against the defendants ~lleging that they breached their fiduciary duties and usurped and diverted a corporate opporturuty from AVE 1987 through the fraudulent misrepresentations and omissions of defendant Calhoun. While defendants Calhoun, A VE and Sirius have answered the complaint, the defendants move to dismiss the complaint as against defendant T-Rex for lack of personal jurisdiction.· The burden of proving personal jurisdiction rests with the party asserting it. In deciding whether the plaintiffs have met their burden of proof and made out a prima facie case of personal jurisdiction, the court must construe the pleadings and the affidavits in the light most favorable to the plaintiffs and resolve all doubts in the plaintiffs' favor (Brandt v Toraby, 273 AD2d 429 [2d Dept 2000]). In their complaint, the plaintiffs allege that defendant T-Rex is a foreign limited liability company, which fact the defendants confirm. Service of process alone is insufficient to obtain personal jurisdiction over a non-domiciliary defendant. In order to obtain personal jurisdiction over a non-domiciliary, there must be a jurisdictional predicate, as well as proper service. -2- [* 3] CPLR 302, the long arm statute, 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 goods or services in the state; or commits a tortious act within the state; or commits a tortious act without the state causing injury within the state, if the non-domiciliary regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in the state, or expects or should reasonably expect the act to have · consequences in the state and derives substantial revenue from interstate or international commerce; or owns, uses or possesses any real property situated within the state. Plaintiffs fail to allege that defendant T-Rex has transacted or done any business in New York or committed any tortious act within New York. Defendant T-Rex was formed in the Virgin Islands, holds a lease on property in the Virgin Islands and appears to have conducted any and all of its business in the Virgin Islands and Florida. The only contact that T-Rex might possibly have with New York is that defendant Calhoun is the managing member of defendant Sirius, and defendant Sirius is a member ofT-Rex, which assigned the subject lease in the Virgin Islands to T-Rex. While personal jurisdiction under CPLR 302 may be obtained if a non-domiciliary acts through an agent, to sustain this burden, the plaintiffs must establish that the agent engaged in purposeful activities in New York for the benefit of T-Rex and that T-Rex exercised sufficient control over such agent. Conclusory allegations of agency, with no supporting evidentiary facts establishing control, are insufficient to establish personal jurisdiction (Polansky v Gelrod, 20 AD3d 663 [3d Dept 2005]) .. While the plaintiffs argue that defendant T-Rex is chargeable with defendant Calhoun's alleged fraudulent intent, plaintiffs fail to allege any of the elements necessary to establish an agency relationship between defendant Calhoun and defendant T-Rex. There is no indication that defendant Calhoun's alleged representations to the plaintiffs about the status of the development in the Virgin Islands were made on behalf of defendant T-Rex. Neither the plaintiffs' complaint, nor the attorney's affirmation offered in opposition to the defendants' motion to dismiss, even when construed in the light most favorable to the plaintiffs, allege a sufficient basis to afford this court jurisdiction over non-domiciliary defendant T-Rex. Accordingly, the defendants' motion to dismiss the plaintiffs' complaint as against defendant T-Rex is GRANTED. -3- [* 4] i I This constitutes the decision and order of this Court. All applications not specifically addressed herein are denied. Dated: Mineola, New York Janaury 14, 2013 EN J FFREY S. BROWN J.S.C. Attorney for Plaintiff Steven G. Legum, Esq. 170 Old Country Road Mineola, NY 11501-4307 eNTEREl· JAN 18 2013 Attorney for Defendant Parola & Gross, LLP 77 5 W antagh A venue Wantagh, NY 11793 516-579-3700 , W'~St'~E~~'r~~ICi~ ·,_;OU -4-

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