Opinion
No. 18565–2010.
2010-10-12
UFC AEROSPACE CORP., Plaintiff, v. Duncan BARNES, Defendant.
Schultz & Associates, PC, Melville, for plaintiff. Marshall, Dennehey, Warner, Coleman & Goggin, Roseland, for defendant.
Schultz & Associates, PC, Melville, for plaintiff. Marshall, Dennehey, Warner, Coleman & Goggin, Roseland, for defendant.
EMILY PINES, J.
ORDERED, that defendant's motion (motion sequence number 001) to dismiss the Complaint pursuant to CPLR Rule 3211(a)(8) based on lack of personal jurisdiction and pursuant to CPLR Rule 327(a) on the ground of forum non conveniens, is denied in its entirety; and it is further
ORDERED, that a preliminary conference is scheduled for December 7, 2010 at 9:30 a.m. before the undersigned.
Plaintiff, a New York corporation, commenced this action against defendant, a resident of Texas, by the filing of a Summons and Verified Complaint dated May 11, 2010. The submissions reflect that plaintiff is a provider of aerospace goods and services and defendant was employed by plaintiff commencing March 4, 2009 and ending on or about March 23, 2010. Verified Complaint at ¶ 5, 6. The gravamen of the Complaint is that defendant breached a Confidentiality and Non–Solicitation Agreement (the “Agreement”), he signed as a condition of his employment with plaintiff. The Complaint sets forth causes of action for breach of contract, unfair competition, defamation, tortious interference with business relations, accounting and injunctive relief.
Defendant now moves to dismiss the Complaint pursuant to CPLR Rule 3211(a)(8) on the grounds that the Court lacks personal jurisdiction, and pursuant to CPLR Rule 327(a) on the grounds of forum non conveniens. Defendant states in his affidavit in support of the motion that he is a resident of Texas and was hired by plaintiff to work in its Fort Worth, Texas sales department in March of 2009. Defendant's affidavit at ¶ 3. He signed all employment documents, including the Agreement, in Texas. Defendant's affidavit at ¶ 4. Although he admits that he serviced a New York clients for two months prior to the termination of his employment, defendant states he performed no other work in New York. Defendant's affidavit at ¶ 's 5, 6. Defendant claims the only time he has ever been to New York was “to meet and greet the New York staff members of UFC Aerospace Corporation soon after I began my employment in March 2009 .” Defendant's affidavit at ¶ 7.
Defendant argues that the New York Courts do not have personal jurisdiction over him pursuant to CPLR § 302, and thus, the Complaint must be dismissed. First, with regard to the breach of contract cause of action, defendant claims that he solicited business solely in Texas from Texas corporations, distributed his goods and services in Texas and had limited contact with New York. Moreover, plaintiff's claims involve defendant's breach of the Agreement in Texas thus, it cannot be held that he transacted business in New York such that New York could exercise personal jurisdiction pursuant to CPLR § 302(a)(1). Likewise, defendant argues that the unfair competition and tortious interference claims must be dismissed as plaintiff cannot establish personal jurisdiction pursuant to CPLR §§ 302(a)(2) or 302(a)(3) because all activities occurred in Texas and there was no injury in New York. Defendant asserts that the same arguments apply with regard to the defamation claim, and as such, the Complaint must be dismissed for lack of personal jurisdiction.
Alternatively, if the Court finds that it may exercise personal jurisdiction over defendant, he claims that the action must be dismissed pursuant to CPLR Rule 327(a), forum non conveniens. Here, defendant argues that since he resides, was hired and worked in Texas, all witnesses are located in Texas and the transactions occurred in Texas, this action has no connection to New York except that plaintiff is located in New York, that the proper venue for this action is Texas and the complaint must be dismissed on forum non conveniens grounds.
Plaintiff opposes the motion and submits an affidavit by Kenneth G. Donahue (“Donahue”), its Chief Financial Officer. Donahue states that when plaintiff hired defendant, he was aware he was being hired by a New York company, the Texas office was only a branch facility, his paycheck and bonuses were prepared in New York and his personnel file was maintained in New York. Donohue affidavit at ¶ 4. Further, and contrary to plaintiff's assertions, Donohue states that the goods sold were shipped out of New York, not Texas. Donohue affidavit at ¶ 4. The Texas office did not have its own letterhead, and all correspondence contained the New York address. Donohue affidavit at ¶ 4. Regarding the “meet and greet” plaintiff described in his affidavit, Donohue explains this was actually a “quarterly management meeting at which sensitive financial issues were discussed and confidential information was disclosed.” Donohue affidavit at ¶ 5. Donohue also emphasizes that the Agreement that is the subject of this action was prepared in New York by plaintiff's New York attorneys, and, by its terms, is governed by New York law. Donohue affidavit at ¶ 6. Additionally, Donohue states that defendant communicated with plaintiff's New York office on a “regular, if not daily, basis”. Donohue affidavit at ¶ 8. Finally, the contract with the client who defendant allegedly improperly solicited in violation of the Agreement, was prepared in New York. Based on the foregoing, plaintiff urges the Court to recognize that it has made a prima facie showing of jurisdiction pursuant to CPLR Rule 302(a)(1) and the motion to dismiss must be denied.
Next, plaintiff asserts that the forum non conveniens argument must also be rejected by the Court. Plaintiff notes that defendant has not submitted any affidavit by any other potential witness who would suffer inconvenience by adjudication in New York. Moreover, plaintiff claims that all of the operative facts arise out of New York, where the contracts are drafted and signed by plaintiff, all the client information is maintained, where the orders are received and goods are shipped. Additionally, the New York choice of law provision is compelling as to the maintenance of the lawsuit in New York. Therefore, the motion to dismiss based on forum non conveniens must also be denied.
In reply, defendant claims that he was not privy to a quarterly management meeting but rather was excluded therefrom and reiterates that his contacts were limited to Texas. He does not address the allegations in Donohue's affidavit regarding his frequent, if not daily contact with the New York office. But, he claims that all agreements with the client at issue were drafted in the Texas office. Additionally, defendant notes that plaintiff has not addressed the dismissal of the tort claims. With regard to the forum non conveniens argument, plaintiff asserts that he may rely on nine (9) witnesses at trial, six (6) of whom are employed in plaintiff's Texas office and reside in Texas. Thus, defendant urges the Court to grant the motion to dismiss in its entirety.
On a motion to dismiss for lack of jurisdiction pursuant to CPLR 3211(a)(8), while the ultimate burden of proof rests with the party asserting jurisdiction, the plaintiff need only make a prima facie showing that the defendant was subject to personal jurisdiction. Cornely v. Dynamic HVAC Supply, LLC, 44 AD3d 986, 845 N.Y.S.2d 797 (2d Dept.2007). See also, Crystal Cove Seafood Corp. v. Chelsea Harbor, LLC, 47 AD3d 670, 850 N.Y.S.2d 171 (2d Dept.2008). On a motion to dismiss based upon forum non conveniens, the Second Department has recently held that:
... the burden is on a defendant challenging the forum to demonstrate relevant private or public interest factors which militate against accepting the litigation. The motion is addressed to the sound discretion of the court, and its determination will not be disturbed on appeal unless the court has failed to properly consider and balance all the relevant factors. Among the factors the court must weigh are the residency of the parties, the potential hardship to proposed witnesses, the availability of an alternative forum, the situs of the underlying action, and the burden which will be imposed upon the New York courts, with no single factor controlling.
Salzstein v. Salzstein, 70 AD3d 806, 894 N.Y.S.2d 510 (2d Dept.2010)(internal citations and quotations omitted).
According to the Court of Appeals, to “determine whether a non-domiciliary may be sued in New York, we first determine whether our long-arm statute (CPLR 302) confers jurisdiction over it in light of its contacts with this State. If the defendant's relationship with New York falls within the terms of CPLR 302, we determine whether the exercise of jurisdiction comports with due process.” LaMarca v. Pak–Mor Manufacturing Co., 95 N.Y.2d 210, 713 N.Y.S.2d 304, 735 N.E.2d 883 (2000). To exercise personal jurisdiction, the Court must find that the defendant had minimum contacts with New York such that the maintenance of the action does not “offend traditional notions of fair play and substantial justice.” City Federal Savings Bank v. Reckmeyer, 178 A.D.2d 503, 577 N.Y.S.2d 430 (2d Dept.1991); citing International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 150, 90 L.Ed 95. The Court must consider whether defendant's conduct and connection with New York were such that he should reasonably have anticipated being sued here. Id., citing, Worldwide Volkswagon Corp. v. Woodson, 444 U .S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490.
CPLR § 302(a)(1) provides that a court may exercise personal jurisdiction over any non-domiciliary who “transacts any business within the state or contracts anywhere to supply goods or services in the state”. The Courts have held that generally, “a nondomiciliary is subject to the jurisdiction of a New York court if it has engaged in some purposeful activity within the State and there is a substantial relationship between this activity and the plaintiff's cause of action.” Armouth International, Inc., v. Haband Co., 277 A.D.2d 189, 715 N.Y.S.2d 438 (2d Dept.2000). Moreover, “CPLR 302(a)(1) is a single act statute and proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted.” Zottola v. AGI Group, Inc., 63 AD3d 1052, 882 N.Y.S.2d 445 (2d Dept.2009)(internal quotations omitted). See also, Kaprall v. WE: Women's Entertainment, LLC, 74 AD3d 1151, 904 N.Y.S.2d 721 (2d Dept.2010).
Turning to the tort claims, CPLR 302(a)(3) provides for the exercise of personal jurisdiction over a defendant who commits a tortious act outside the state which causes injury within the state, where the defendant regularly does or solicits business or engages in “any other persistent course of conduct” in the state; or expects or reasonably expects the act to have consequences in the state.
The Second Department has permitted the exercise of personal jurisdiction over non-domiciliary employees of New York corporations in Smartpros, Ltd., v. Straub, 24 AD3d 653, 808 N.Y.S.2d 369 (2d Dept.2005). In Smartpros, the Appellate Division reversed the Supreme Court's dismissal of the action for lack of personal jurisdiction where the non-domiciliary defendant, employed as a sales person in Texas allegedly breached a non-disclosure and/or nonsolicitation agreement. There, the Court held that the defendant's “systematic, ongoing relationship with a New York company, with which he was in daily contact due to his employment, just as if his office were physically located in New York, is transacting business in New York sufficient to confer personal jurisdiction.” Id. Like the case at bar, the Court in Smartpros noted that defendant was in daily contact by telephone and email with the New York office, the products were shipped from New York, defendant was paid from the plaintiff's New York accounts and the sales contracts were prepared in the New York office. Thus, the defendant's activities affected New York commerce such as to warrant a finding that he transacted business in New York. Id.
Here, the Court finds that under the reasoning of Smartpros, supra, plaintiff has made a prima facie showing that defendant transacted business in New York such as to permit the Court to exercise personal jurisdiction. Defendant knowingly entered into the Agreement with a New York company, traveled to New York for a meeting with company representatives, had regular, if not daily contact with the New York office, sold products which were shipped from the plaintiff's New York office, and was paid salary and bonuses from the New York office. These “systematic, ongoing relationships with a New York company” affected local commerce and warrants the exercise of personal jurisdiction over defendant pursuant to CPLR 302(a)(1). See, Opticare Acquisition Corp., v. Castillo, 25 AD3d 238, 806 N.Y.S.2d 84 (2d Dept.2005). Likewise, plaintiff has demonstrated prima facie that defendant's actions in Texas caused an injury in New York, sufficient to permit the exercise of personal jurisdiction pursuant to CPLR 302(a)(3).
Here, defendant has failed to demonstrate that New York is an inconvenient forum for the adjudication of this dispute which arises out of a New York contract governed by New York law. Thus, in the exercise of the Court's discretion, the motion to dismiss based on forum non conveniens is also denied.
Based on the foregoing, defendant's motion to dismiss is denied in its entirety. A preliminary conference is scheduled for December 7, 2010 at 9:30 a.m. before the undersigned.
This constitutes the DECISION and ORDER of the Court.