Opinion
113469/09.
Decided August 20, 2010.
Cox Padmore Skolnik Shakarchy LLP, By: Melissa Longo Munster Esq., New York, NY, for Plaintiff.
Anil K. Arora Esq., New York, NY, for Defendants.
I. BACKGROUND
Plaintiff sues for the outstanding balance of attorney's fees and expenses incurred by defendants during plaintiff's prior representation of defendants. Defendants now move to dismiss the complaint based on lack of personal jurisdiction. C.P.L.R. §§ 302, 3211(a)(8). For the reasons explained below, the court denies defendants' motion to dismiss this action.
II. PLAINTIFF'S ALLEGATIONS
Plaintiff's complaint and an affirmation by a firm attorney allege as follows, most of which is undisputed. Plaintiff is a New York based law firm which, when it was retained by and represented defendants, had no New Jersey office and no attorney admitted in New Jersey. Defendant Colonia Natural Pharmacy, Inc., is a New Jersey corporation that ordinarily does not transact business in New York. Defendant Milic, the president and sole shareholder of Colonia Natural Pharmacy, has resided in New Jersey since defendants retained plaintiff, holds no property in New York, and ordinarily does not transact business in New York.
Defendants solicited plaintiff's services to represent defendants in litigation and arbitration in New Jersey, relating to their business in New Jersey. Defendants initially contacted plaintiff by telephone at plaintiff's office in New York. Plaintiff subsequently mailed a retainer to defendants in New Jersey, which defendants signed there and mailed back to plaintiff in New York. Similarly, plaintiff mailed invoices to defendant in New Jersey, which defendants paid by mailing checks back to plaintiff in New York.
Steven Skolnik, whose professional corporation is a member of plaintiff firm, obtained pro hac vice admission in New Jersey and traveled to New Jersey for court and arbitration appearances. As a condition of pro hac vice admission, Skolnik agreed to abide by New Jersey Court Rules, including all disciplinary rules, and to the appointment of the New Jersey Secretary of State as an agent for service of process. Nonetheless, plaintiff performed most of its services for defendants in New York; they regularly contacted plaintiff in New York by telephone and email; and Milic, as Colonia Natural Pharmacy's president and sole shareholder, visited plaintiff's office in New York to discuss the representation and to deliver documents for purposes of that representation.
III. JURISDICTION
Defendants insist that the order admitting Skolnik pro hac vice conferred New Jersey with exclusive jurisdiction over this dispute. The order's plain terms, however, enumerate five specific conditions, none of which mentions jurisdiction. The order does provide that New Jersey Court Rules will apply to attorney-client disputes and designates the New Jersey Secretary of State as plaintiff's and Skolnick's agent for service of process, but New York courts can and do apply New Jersey law when it governs. E.g., Dabrowski v. Abax Inc. , 64 AD3d 426 , 427 (1st Dep't 2009); Travelers Cas. and Sur. Co. v. Honeywell Intern., Inc. , 63 AD3d 451 , 452 (1st Dep't 2009); All Terrain Properties, Inc. v. Hoy, 265 AD2d 87, 91-92, 95 (1st Dep't 2000). "Choice of law and choice of forum are altogether separate matters." Bank of Tokyo-Mitsubishi, Ltd., New York Branch v. Kvaerner a.s., 243 AD2d 1, 5 (1st Dep't 1998). New Jersey's potential jurisdiction over the dispute against defendants does not affect whether New York similarly has personal jurisdiction; New York's jurisdictional test does not involve comparing the number or nature of defendants' contacts with each jurisdiction. C.P.L.R. § 302.
This court has personal jurisdiction over defendants because they purposely transacted business with plaintiff in New York, where this fee dispute arose. C.P.L.R. § 302(a)(1). Defendants solicited a New York attorney via telephone to New York; mailed a retainer agreement and checks for plaintiff's services to its New York office; reached into New York by telephone calls, facsimile transmissions, and emails to plaintiff; and visited its offices in New York to discuss its representation of defendants, who brought and reviewed voluminous documents there. All these activities were both purposeful and critical to the parties' business together. Fischbarg v. Doucet , 9 NY3d 375 , 380, 384 (2007); Kaczorowski v. Black Adams, 293 AD2d 358 (1st Dep't 2002); Colucci Umans v. 1 Mark, Inc., 224 AD2d 243 (1st Dep't 1996); Otterbourg, Steindler, Houston Rosen, P.C. v. Shreve City Apts., Ltd., 147 AD2d 327, 332 (1st Dep't 1989).
Defendants thus sought out a New York attorney, purposely projected themselves into New York to solicit plaintiff's services, purposely availed themselves of plaintiff's services in New York, and consulted about the litigation, formulating and executing a litigation strategy in New York. The New Jersey location of the litigation itself, for which plaintiff provided defendants services, does not diminish, let alone supersede, the direct connection between defendants' transaction of business with a New York attorney, in New York, where the attorney performed most of its services, and the litigation here arising from their attorney-client relationship and business here.
This transaction of business as described above gave defendants sufficient contacts with New York to reasonably expect to defend an action in a New York court arising from those contacts. LaMarca v. Pak-Mor Mfg. Co., 95 NY2d 210, 216-17 (2000). Insofar as any hardship to defendants entailed in that defense is a consideration, their prior litigation activities here belie such hardship or prejudice, and balancing it against the hardship or prejudice to plaintiff in suing in a New Jersey court is not a test for exercising jurisdiction. C.P.L.R. §§ 301, 302. E.g., LaMarca v. Pak-Mor Mfg. Co., 95 NY2d at 218; Opticare Acquisition Corp. v. Castillo , 25 AD3d 238 , 248-49 (2d Dep't 2005). See Copp v. Ramirez , 62 AD3d 23 , 30-31 (1st Dep't 2009). Therefore this court's exercise of personal jurisdiction over defendants complies with due process as well as C.P.L.R. § 302(a). Fischbarg v. Doucet, 9 NY3d at 384-85; LaMarca v. Pak-Mor Mfg. Co., 95 NY2d at 218. See C.P.L.R. § 301.
IV. ARBITRATION
Finally, plaintiff has complied with its obligations under New Jersey Court Rule 1:20A-6 to offer defendants fee arbitration in New Jersey before proceeding with litigation. After plaintiff's offer, the New Jersey Fee Arbitration Committee declined to arbitrate the fee dispute, leaving plaintiff free to litigate the dispute in any forum with jurisdiction.
Having emphasized that New Jersey rather than New York court rules apply, defendants for the first time in their reply raise an issue that plaintiff failed to offer arbitration in New York as required by 22 N.Y.C.R.R. § 137.6, without any indication that defendants were unaware of this failure before moving to dismiss. Schultz v. Gershman , 68 AD3d 426 (1st Dep't 2009); McNair v. Lee , 24 AD3d 159 , 160 (1st Dep't 2005); Morris v. Solow Mgt. Corp. , 8 AD3d 126 , 127 (1st Dep't 2004); Jackson v. Bronx Lebanon Hosp. Ctr. , 7 AD3d 356 , 357 (1st Dep't 2004). See Jain v. New York City Tr. Auth. , 27 AD3d 273 (1st Dep't 2006). Although the New York rules, significantly, do dictate arbitration where a majority of the legal services were performed, 22 N.Y.C.R.R. § 137.5, the rules apply only to claims between $1,000.00 and $50,000.00, far less than the $255,086.71 sought by plaintiff. 22 N.Y.C.R.R. § 137.1(b)(2).
V. CONCLUSION
For the foregoing reasons, the court denies defendants' motion to dismiss the complaint.C.P.L.R. §§ 302(a)(1), 3211(a)(8).