Viewing Dr. Franklyn's direct and personal involvement in the auction, albeit by open telephone line, as "presence", the court found that such "presence", in combination with active participation in the bidding, amounted to the sustained and substantial transaction of business here. More recently, in Hi Fashion Wigs v Hammond Adv. ( 32 N.Y.2d 583), this court acknowledged jurisdiction over third-party defendant Schuminsky who had traveled from Oklahoma to New York to deliver his personal guarantee on a contract. The court found the delivery of the guarantee to be essential to the existence of the contract, reasoning that such delivery constituted acceptance of the offer.
The ultimate question is whether, on the facts of each case, the totality of the defendant's New York connections evidence purposeful activity by which the defendant could be deemed to have invoked the benefits and protection of New York law in satisfaction of the dictates of due process. Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); Hi Fashion Wigs, Inc. v. Peter Hammond Advertising, Inc., 32 N.Y. 583, 588, 347 N.Y.S.2d 47, 50, 300 N.E.2d 421 (1973). In construing New York law in this area, federal courts have not recognized the mere formal execution of a contract in New York as the linchpin of 302(a)(1) jurisdiction.
Just as it is unnecessary for the acts constituting the breach of contract to take place in New York in order for a New York court to sustain personal jurisdiction, it is unnecessary that final negotiations or indeed execution of the contract take place in New York. E.g., Hi Fashion Wigs, Inc. v. Peter Hammond Advertising, Inc., 32 N.Y.2d 583, 587, 347 N.Y.S.2d 47, 50, 300 N.E.2d 421, 423 (1973) (court would sustain jurisdiction even if it "were to assume that the contract . . . was not made in New York"); Longines-Wittnauer Watch Co. v. Barnes Reinecke, Inc., 15 N.Y.2d 443, 456-57, 261 N.Y.S.2d 8, 18, 209 N.E.2d 68, 75 ("[T]he statutory test [of CPLR section 302(a)(1)] may be satisfied by a showing of other purposeful acts performed by the appellant in this State in relation to the contract, albeit preliminary or subsequent to its execution.")
The New York Court of Appeals has noted that a defendant's physical presence at the time of the negotiation, making, and/or execution of a contract justifies a finding of purposeful availment. See George Reiner Co. v. Schwartz, 41 N.Y.2d 648, 653, 394 N.Y.S.2d 844, 847, 363 N.E.2d 551, 554 (1977) (finding jurisdiction on the basis that defendant "was physically present in New York at the time the contract . . . was negotiated and made and the contract . . . was the transaction out of which the cause of action arose"); Hi Fashion Wigs v. Peter Hammond Adver., 32 N.Y.2d 583, 586, 347 N.Y.S.2d 47, 50, 300 N.E.2d 421, 423 (1973) (holding that a third-party defendant's voluntary presence in the forum in order to deliver a guarantee was "so essential . . . to its validity and existence as a contract" that the defendant could be deemed to have purposefully availed himself of the forum); Parke-Bernet Galleries, Inc. v. Franklyn, 26 N.Y.2d 13, 17, 308 N.Y.S.2d 337, 340, 256 N.E.2d 506, 508 (1970) (observing that "where a defendant was physically present at the time the contract was made" presents "the clearest sort of case in which our courts would have 302 jurisdiction"). As to the requirement of relatedness, "[a] cause of action arises out of a defendant's New York transaction when it is 'sufficiently related to the business transacted that it would not be unfair to deem it to arise out of the transacted business.'"
First, because the defendants were not physically present within the state at the time the contract was made, this is not the "clearest sort of case in which our courts would have 302 jurisdiction." George Reiner Co., Inc. v. Schwartz, 41 N Y2d 648, 652, 394 N.Y.S.2d 844, 847, 363 N.E.2d 551, 553-54 (1977) (quoting Hi Fashion Wigs, Inc. v. Peter Hammond Advertising, Inc., 32 N.Y.2d 583, 586, 347 N.Y.S.2d 47, 49, 300 N.E.2d 421, 422 (1973); Parke-Bernet Galleries, Inc. v. Franklyn, 26 N.Y.2d 13, 17, 308 N.Y.S.2d 337, 340, 256 N.E.2d 506, 508 (1970)). Not only were defendants physically absent from New York during the formation of the contract, but the parties indicate that defendants' communications with plaintiff during the duration of their relationship were limited to telex and telephone.
It follows that jurisdiction may not be had over him on the basis of his contacts as an individual. Contrast Hi Fashion Wigs, Inc. v. Peter Hammond Adv., Inc. (1973) 32 N.Y.2d 583 [ 347 N.Y.2d 47, 300 N.E.2d 421] where it was found that the forum state was entitled to exercise personal jurisdiction over the president of a corporation which had allegedly defaulted on agreed payments, not because he was a corporate officer, but because he had guaranteed payment in his individual capacity. ( Id. at pp. 421, 423; see, also, Mr. Steak, Inc. v. Dist. Court, etc. (1978) 574 P.2d 95 [ 574 P.2d 95] where the defendant, Warren Wilson, had agreed both as president of Steak and Onions, Inc., and as an individual, to pay certain sums of money to the plaintiff.
Here, piercing the corporate veil through application of the "alter ego" doctrine is unavailable since the corporation obviously has an existence independent from that of Ruger. (Cf. Harris v. Arlen Properties, Inc. (1969) 256 Md. 185 [ 260 A.2d 22, 29-30]; see also generally Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825, 836-837 [ 26 Cal.Rptr. 806].) Compare Hi Fashion Wigs, Inc. v. Peter Hammond Ad., Inc. (1973) 32 N.Y.2d 583 [347 N.Y.S.2d 47, 50-51, 300 N.E.2d 421] [personal jurisdiction where president and half-owner of corporation personally guaranteed payment of the contract obligation of the corporation and personally delivered the guarantee while in forum state]; Mr. Steak, Inc. v. Dist. Court, etc. (1978) 194 Colo. 519 [ 574 P.2d 95] [jurisdiction similarly where president of corporation executed agreement in forum state and signed it as individual guarantor]; McGuire v. Brightman (1978) 79 Cal.App.3d 776, 779, 789 [ 145 Cal.Rptr. 256] [personal jurisdiction over president and employee of a corporation who gathered information while within the forum state and used this information to write a libelous article for the corporation's newspaper]; State v. Advance Marketing Consultants, Inc. (1975) 66 Wis.2d 706 [ 225 N.W.2d 887] [in action for misleading advertising, personal jurisdiction over corporate officer who placed advertisements and contacted persons regarding those advertisements in the forum st
That case states that our statute does not define the term "transacts any business" but notes that in enacting § 52-59b "the legislature used New York Civil Practice Law § 302 . . . as a model." The court found the interpretation given by the New York cases "pertinent" and cited several New York cases for guidance. George Reiner Co. v. Schwartz, 363 N.E.2d 551 (1977); Hi-Fashion Wigs, Inc. v. Peter Hammond Advertising, Inc., 300 N.E.2d 421 (1973); Parke-Bernet Galleries, Inc. v. Franklyn, 256 N.E.2d 506 (1970); Longines-Wittnauer Watch Co. v. Barnes Reinecke, Inc. 209 N.E.2d 68 (1965). The court generally speaking accepted New York's definition of the phrase and said it would "construe the term `transacts any business' to embrace a single purposeful business transaction."
ase such as this one. See George Reiner & Co. v. Schwartz, 41 N.Y.2d 648, 394 N.Y.S.2d 844, 363 N.E.2d 551, 554 (1977) (finding jurisdiction on the basis that defendant “was physically present in New York at the time the contract ... was negotiated and made and the contract ... was the transaction out of which the cause of action arose”); see also Chang v. Gordon, No. 96 Civ. 0152, 1997 WL 563288, at *5, 1997 U.S. Dist. LEXIS 13570, at *14 (S.D.N.Y. Sept. 8, 1997) (a meeting in New York where parties agreed to exchange stock “is a sufficient contact to satisfy Plaintiffs' prima facie showing of jurisdiction”); Panaria Int'l, Inc. v. Hwan Chang Choi, No. 88 Civ. 8313, 1989 WL 39695, at *1–2, *2, 1989 U.S. Dist. LEXIS 4398, at *3, *5 (S.D.N.Y. Apr. 17, 1989) (holding that plaintiff's averment that he agreed, during a meeting in New York, to let defendant use his letter of credit to buy goods from another company “easily makes out a prima facie claim” for jurisdiction under CPLR § 302 ); Hi Fashion Wigs, Inc. v. Hammond Adver., Inc., 32 N.Y.2d 583, 347 N.Y.S.2d 47, 300 N.E.2d 421, 423 (1973) (holding that a third-party defendant's voluntary presence in the forum in order to deliver a guarantee was “[s]o essential ... to its validity and existence as a contract” that the defendant could be deemed to have purposefully availed himself of the forum); Parke–Bernet Galleries, Inc. v. Franklyn, 26 N.Y.2d 13, 308 N.Y.S.2d 337, 256 N.E.2d 506, 508 (1970) (observing that “where a defendant was physically present at the time the contract was made” presents “the clearest sort of case in which our courts would have 302 jurisdiction”). As a preliminary matter, the court must determine whether the parties agreed to arbitrate this dispute under the “laws of India.” The third factor of the Second Circuit's test “transaction of business” in New York test looks at whether the contract includes a “choice-of-law clause.”
See Parke-Bernet, 26 N.Y.2d at 17 ("It is important to emphasize that one need not be physically present in order to be subject to the jurisdiction of our courts under CPLR 302 for, particularly in this day of instant long-range communications, one can engage in extensive purposeful activity here without ever actually setting foot in the State."). In High Fashion Wigs, Inc. v. Peter Hammond Adver., Inc., 32 N.Y.2d 583 (1973), the Court of Appeals stated that, although defendant had travelled to New York to accept the contract, personal jurisdiction over the defendant would still have been appropriate absent that presence in New York because "looking at the transaction as a whole, [defendant] engaged in that kind of purposeful activity which . . . renders it reasonable that he should answer in New York." Id. at 587 (internal alterations, citations, and quotation marks omitted).