Opinion
No. 12929/09.
2010-07-6
Albert RABIZZADEH, Plaintiff, v. NAGEL AUKTIONEN GMBH & CO. KG and Estate of J.J. Ludwig, Defendants.
Daniel R. Wotman & Assoc., PLLC, Daniel R. Wotman, Esq., Great Neck, for the Plaintiff. Crowell & Moring, LLP, Birgit Kurtz, Esq., New York, for the Defendant.
Daniel R. Wotman & Assoc., PLLC, Daniel R. Wotman, Esq., Great Neck, for the Plaintiff. Crowell & Moring, LLP, Birgit Kurtz, Esq., New York, for the Defendant.
RANDY SUE MARBER, J.
The Defendant, NAGEL AUKTIONEN GmbH & Co. KG (“NAGEL”) moves for an order, pursuant to CPLR § 3211(a)(1) & (8), to dismiss the Plaintiff's complaint for lack of jurisdiction, or in the alternative, to enforce the parties' forum selection clause. The Defendant's motion is decided as provided for herein.
The Plaintiff, ALBERT RABIZZADEH commenced this action seeking to recover monetary damages for the alleged breach of express warranty, breach of implied warranty, breach of contract, fraud, negligent misrepresentation and rescission of the auction.
The Plaintiff is an individual residing in New Hyde Park, New York. The Plaintiff is also the Chairman or CEO of “Global Arts & Antiques Corp”.
The Defendant, NAGEL, is an auction company organized and existing under the laws of Germany. The Defendant, ESTATE of J.J. LUDWIG (“LUDWIG”) is the consignor of the item at issue in this case
It appears from the documentation presented that the Defendant, LUDWIG, was never served with the Summons and Complaint in this action. The Defendant, LUDWIG did not answer or otherwise appear in this action.
In February, 2008, the Defendant, NAGEL, listed in its online auction catalogue the following item: “A significant Russian gilded silver and cloisonné enamel goblet and cover by Fedor Ruckert, Moscow, dated 1906. A present to Tsar Nicholas II and Tsarina Alexandra Feodorovna to her brother the Grand Duke of Hesse” (the “Goblet”).
On February 27, 2008, the Plaintiff participated at the auction of the Goblet which was held at the Defendant, NAGEL's headquarters in Stuttgart, Germany. The Plaintiff was the highest bidder at 545,300 Euro or $845,215 which included the Defendant's commission.
Over the next several months, the Plaintiff and representatives from the Defendant, NAGEL exchanged e-mails concerning the VAT tax, insurance, shipping arrangements and final payment for the Goblet. On or about May 15, 2008, the Plaintiff paid the balance of 495,029 Euros or $767,250 by wire transfer from New York to Germany and then hired an international shipping company to pick up the Goblet in Stuttgart, Germany and deliver it to New York.
Thereafter, the Plaintiff allegedly discovered that the Goblet was not an Imperial presentation piece.
On or about January 25, 2009, the Plaintiff sent an e-mail to Mr. Heilig, a representative of the Defendant, informing him that based upon the opinions of several internationally recognized experts, the Goblet was not an Imperial presentation piece from Russian Tsar Nicholas II and his wife, Alexandra. In response, the Defendant, NAGEL requested that the Plaintiff send the written opinion of the internationally recognized expert.On March 11, 2009, the Plaintiff sent another e-mail to Mr. Heilig attaching a written signed opinion letter of Dr. Géza von Habsburg, wherein Mr. von Habsburg concluded that the Goblet is not an Imperial presentation piece from Tsar Nicholas II and Tsarina Alexandra Feodorovna to her brother, the Grand Duke of Hesse. In addition, Mr. von Habsburg opined that the Goblet was not by Fedor Ruckert of Moscow, that it was not crafted in 1906 and that the inscription on the Goblet was of a much later date than 1906.
On March 27, 2009, Mr. Heilig and the Plaintiff had a telephone conference wherein Mr. Heilig informed the Plaintiff that he had to consult with the ten heirs of the Defendant, LUDWIG, the consignor, relative to the findings of Mr. von Habsburg.
On April 6, 2009, the Defendant, NAGEL formally rejected the Plaintiff's demand to refund his monies.
In July 2009, the Plaintiff commenced the within action asserting, inter alia, that the Defendants are subject to the long-arm jurisdiction of this Court pursuant to CPLR § 302(a)(1)(2) & (3).
In September, 2009 the Defendant, NAGEL, served a motion to dismiss the complaint pursuant to CPLR § 3211(a)(1) & (8), for lack of personal jurisdiction, or, in the alternative, to enforce the parties' forum selection clause.
By a “So Ordered” Stipulation dated April 14, 2010, the portion of the Defendant, NAGEL's motion to dismiss the complaint on the grounds of insufficiency of service of process under the Hague Service Convention was withdrawn.
In support of its motion to dismiss the complaint for lack of personal jurisdiction, the Defendant, NAGEL, submits, inter alia, an affidavit of Andreas Heilig, a Publicly Appointed and Certified Auctioneer under German Law. Mr. Heilig has been employed by the Defendant, NAGEL, an auction company established under the laws of Germany.
Mr. Heilig affirms the following:
“Nagel's principal office and registered place of business in is Stuttgart, Germany; Nagel is not licensed to do business in New York; Nagel has no registered agent for service of process in the State of New York; Nagel does not have any office or other permanent facility of any kind in the State of New York; Nagel does not maintain a telephone or telefax number in the State of New York; Nagel does not have a bank or brokerage account in the State of New York; and Nagel is not engaged in any significant or continuous or systematic activity in the State of New York and does not sell goods or render services in that State.”
Overall, Mr. Heilig confirms that the Defendant, NAGEL, held an auction at its headquarters in Stuttgart, Germany on February 27, 2008. The Plaintiff participated in this auction via telephone and was the winning bidder for the Goblet. Thereafter, the Plaintiff hired Malco–Amil, an international shipping company to pick up the Goblet from Art Logistik (a company that had packed the Goblet securely for shipping) and deliver it to New York.
In opposition to the motion, the Plaintiff argues that the court has jurisdiction pursuant to CPLR § 302(a)(1) based upon extensive e-mails, faxes, telephone calls and purposeful negotiations conducted in New York. Specifically, the Plaintiff asserts that the Defendant transacted business in New York by selling the Goblet to a New York resident via an interactive internet catalog, multiple faxes, e-mails and telephone calls. In sum, the Plaintiff submits that there was an ongoing relationship between the parties concerning the initial bid and acceptance process followed by purposeful negotiations in an attempt to resolve the Plaintiff's claim over the authenticity of the Goblet.
CPLR § 302(a)(1) provides as follows:
“a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent: transacts any business within the state or contracts anywhere to supply goods or services in the state”
By this “single act statute”, 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. Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., 7 N.Y.3d 65, 818 N.Y.S.2d 164, 850 N.E.2d 1140 (2006), cert den.549 U.S. 1095, 127 S.Ct. 832, 166 L.Ed.2d 665 (U.S.N.Y.2006); Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 527 N.Y.S.2d 195, 522 N.E.2d 40 (1988). Hence, to avail itself of this statute, the plaintiff must not only establish that the defendant purposefully transacted business within the State of New York, but must also show a substantial relationship, which may pertain to a single act, between the transaction and the claim asserted. Zottolo v. AGI, Group, Inc. ., 63 A.D.3d 1052, 882 N.Y.S.2d 445 (2nd Dept.2009); see, Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., supra; Bogal v. Finger, 59 A.D.3d 653, 874 N.Y.S.2d 217 (2nd Dept.2009); Kreutter v. McFadden Oil Corp., supra; Krobath v. The Tractor Barn, September 29, 2009, NYLJ at p. 31, col.1, 2009 WL 3240381 (Sup.Ct., Nassau County, LaMarca, J.).
The totality of the nonresident defendant's activities within the forum state are considered in order to determine whether its contacts satisfy the “transacting business” requirement. See Longines–Wittnauer Watch Co. v. Barnes & Reinecke, 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68 (1965). “Purposeful activities are those with which a defendant, through volitional acts, avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.' “ Fischbarg v. Doucet, 9 N.Y.3d 375, 849 N.Y.S.2d 501, 880 N.E.2d 22 (2007), quoting McKee Elec. Co. v. Raulaund–Borg Co., 20 N.Y.2d 377, 283 N.Y.S.2d 34, 229 N.E.2d 604 (1967). Such acts may be contrasted with “random, fortuitous, or attenuated contacts, ... [or] unilateral activity of another party or a third person.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (internal quotations omitted).
The courts have recognized CPLR § 302(a)(1) long-arm jurisdiction over commercial actors and investors using electronic and telephonic means to project themselves into New York to conduct business transactions. See e.g. Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., supra; Parke–Bernet Galleries v. Franklyn, 26 N.Y.2d (1970); Ehrlich–Bober & Co. v. University of Houston, 49 N.Y.2d 574, 427 N.Y.S.2d 604, 404 N.E.2d 726 (1980). Cases that arise from a defendant's internet activity often present perplexing questions of personal jurisdiction. However, it is “now established that one does not subject himself to the jurisdiction of the courts in another state simply because he maintains a website which residents of that state visit”. National Football League v. Miller, No. 99 Civ. 11846(JSM), 2000 WL 335566 (U.S. District Ct., S.D.NY March 30, 2000), citing Bensusan Restaurant Corp. v. King, 126 F.3d 25 (2nd Cir.1997). In fashioning a functional test to determine when a non-domiciliary's online activity constitutes the transaction of business in a particular forum, courts often attempt to locate the internet activity at issue on a “sliding scale of interactivity” between “passive” websites that merely make information available to interested visitors and “interactive” websites through which a defendant clearly “does business over the internet”. Best Van Lines, Inc. v. Walker, 490 F.3d 239 (2nd Cir.2007). Although this analytical framework “may be useful for analyzing personal jurisdiction under section CPLR § 302(a)(1)” it “does not amount to a separate framework for analyzing internet-based jurisdiction.” Id. quoting Best Van Lines v. Walker, 2004 WL 964009 (S.D.N.Y. May 4, 2004), aff'd. 490 F.3d 239 (2nd Cir.2007). E-mail communications to New York may be of sufficient “quality” to establish a transaction of business in a suit based upon a professional services contract. Fischbarg v. Doucet, supra; JSO Associates, Inc. v. Price, April 15, 2008 NYLJ at p. 27, col. 3, (Supreme Nassau Co., Bucaria, J.).
In a recent decision, the Second Department in Grimaldi v. Guinn, 72 A.D.3d 37, 895 N.Y.S.2d 156 (2nd Dept.2010), discussed the difference between actual and passive websites and those falling in the middle ground between the two ends. In that regard, the court stated:
“At one end of the spectrum are situations where a defendant clearly does business over the internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the internet, personal jurisdiction is proper. At the opposite end are situations where a defendant has simply posted information on a internet website which is accessible to users in a foreign jurisdiction. A passive website that does little more than make information available to those who are interested in it is not grounds for the exercise [of] personal jurisdiction. The middle ground is occupied by interactive websites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information on the website.”
The court further held that “[i]f the foreign company maintains an informational website accessible to the general public which cannot be used for purchasing services or goods, then most courts would find it unreasonable to assert personal jurisdiction over that company. However, passive websites when combined with other business activity, may provide information, permits access to e-mail communication, describes the goods or services offered, downloads a printed order form, or allows online sales with the use of a credit card, and sales are, in fact, made in this manner in the forum state, particularly by the injured consumer, then the assertion of personal jurisdiction may be reasonable.” Id. (internal citations omitted); see LB International Inc. v. Rainmaker, May 4, 2010 NYLJ at p. 28, 895 N.Y.S.2d 156 col. 1 (Sup.Ct. Suffolk County, Pines, J.).
In Zottola v. AGI, supra, the Second Department held that an out-of-state seller of a boat on the internet “transacted business” with the intended buyer in New York and had a substantial relationship with New York, so as to warrant the exercise of in personam jurisdiction over the seller under New York's long-arm statute in compliance with due process. The court found that the seller agreed to deliver the boat in New York, the money for the purchase of the boat was paid to seller by wire transfer to a New York bank branch, not a Florida branch, and the boat in question was transferred to the seller, and then later transferred by the seller to the buyer at his New York address.
In Krobath v. The Tractor Barn, supra, the Court held that an out-of-state seller (Tennessee) of a tractor on the internet “transacted business” with the intended buyer in New York so as to warrant the exercise of in personam jurisdiction over the seller under New York's long-arm statute in compliance with due process. In so holding, the Court noted that plaintiff asserted the following: (1) defendants made nineteen contacts with the buyer in New York via the e-Bay website, e-mail, and telephone; (2) the seller arranged for the delivery of the tractor in New York and accepted a check drawn from a New York bank account; and (3) defendant “purport[ed] in his e-Bay advertisements to be a major player in the sale of tractors and farm equipment in the United States, counting recent sales to purchasers in Missouri, Georgia, Tennessee, California, Illinois, Texas and even internationally to purchases in Canada.”
Upon examination of the totality of the circumstances herein, the Court finds that the quality of the Defendant, NAGEL's contacts are insufficient to warrant the exercise of long-arm jurisdiction over the Defendant. Unlike Zottola and Krobath, the Plaintiff's purchase was not made through the Defendant, NAGEL's website. The Defendant, NAGEL neither made arrangements for, nor shipped the Goblet to New York, and, the monies were not deposited to a New York bank account. As to the e-mails and telephone calls, such acts do not necessarily constitute purposeful availment of the New York forum. See, Kimco Exchange Place Corp. v. Thomas Benz, Inc., 34 A.D.3d 433, 824 N.Y.S.2d 353 (2nd Dept.2006); Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., 21 A.D.3d 90, 94, 797 N.Y.S.2d 439 (1st Dept.2005); Farkas v. Farkas, 36 A.D.3d 852, 830 N.Y.S.2d 220 (2nd Dept.2007). In order for such activities to amount to a valid basis for jurisdiction, they must have been used “deliberately to project [defendant] into business transactions occurring within New York State.” Id.
In sum, the Plaintiff has not established that the Defendant, NAGEL, transacted business under CPLR § 302(a)(1) so as to warrant the exercise of in personam jurisdiction over a non-domiciliary (Germany) under New York's long-arm statute in compliance with due process.
Next, the Plaintiff argues that this Court can exercise jurisdiction over the Defendant, NAGEL, under CPLR § 302(a)(3). CPLR § 302(a)(3) authorizes New York courts to exercise jurisdiction over a non-person or through an agent who “commits a tortious act without the state causing injury to person or property within the state ...” if defendant expects or should have reasonably foreseen the act to have consequences in New York and defendant derives substantial revenue from interstate or international commerce (CPLR § 302(a)(3)(ii); Fantis Foods, Inc. v. Standard Importing Co., Inc., 49 N.Y.2d 317, 425 N.Y.S.2d 783, 402 N.E.2d 122 (1980); Cooperstein v. Pan–Oceanic Marine, Inc., 124 A.D.2d 632, 507 N.Y.S.2d 893 (2nd Dept.1986). In order for jurisdiction to be conferred under this section, the plaintiff is required to establish, inter alia, that the cause of action is predicated upon the defendant's tortious acts undertaken outside the state and that such tortious conduct caused the plaintiff to sustain injury within the state. LaMarca v. Pak–Mor Manufacturing Co., 95 N.Y.2d 210, 713 N.Y.S.2d 304, 735 N.E.2d 883 (2000). Within the context of this statutory provision, “the situs of the injury is the location of the original event which caused the injury, not the location where the resultant damages are subsequently felt by the plaintiff.” Vaichuns v. Tonyes, 61 A.D.3d 850, 877 N.Y.S.2d 204 (2nd Dept.2009), quoting Hermann v. Sharon Hosp., 135 A.D.2d 682, 683, 522 N.Y.S.2d 581 (1987); see, McGowan v. Smith, 52 N.Y.2d 268, 273–274, 437 N.Y.S.2d 643, 419 N.E.2d 321 (1981); see also, Lang v. Wycoff Hgts. Med. Ctr., 55 A.D.3d 793, 866 N.Y.S.2d 313 (2nd Dept.2008).
Here, the situs of the Plaintiff's injury was Germany. Given that the injury occurred in Germany, and involved a non-domiciliary, it is not necessary to consider where the additional aspects of CPLR § 302(a)(3)(ii) are satisfied Vaichuns v. Tonyes, supra.
Furthermore, “a cause of action alleging fraud does not lie where the only fraud claim relates to a breach of contract.” Tiffany at Westbury Condo. by Its Bd. of Managers v. Marelli Development Corp., 40 A.D.3d 1073, 840 N.Y.S.2d 74 (2nd Dept.2007); Reade v. SL Green Operating Partnership, LP, 30 A.D.3d 189, 817 N.Y.S.2d 230 (1st Dept.2006); Ross v. DeLorenzo, 28 A.D.3d 631, 813 N.Y.S.2d 756 (2nd Dept.2006). Here, the Plaintiff's claim sounding in fraud and negligent misrepresentation are duplicative of his breach of contract claims and seek identical damages. Consequently, the Plaintiff's causes of action sounding in tort should be dismissed as duplicative of his breach of contract. Tiffany at Westbury Condo by Its Bd. of Managers v. Marelli Development Corp., supra.
The Plaintiff's request for jurisdictional discovery is DENIED. The Plaintiff has not come forward with “some tangible evidence which would constitute a sufficient start' in showing that jurisdiction could exist, thereby demonstrating [his] assertion that a jurisdictional predicate exists is not frivolous.” SNS Bank v. Citibank, 7 A.D.3d 352, 777 N.Y.S.2d 62 (1st Dept.2004); Mandel v. Busch Entertainment Corp., 215 A.D.2d 455, 626 N.Y.S.2d 270 (2nd Dept.1995).
In light of our determination that jurisdiction is lacking, we do not reach the question concerning the effect of the forum selection clause. See, Fantis Foods, Inc. v. Standard Importing Co., Inc., supra.
Accordingly, the Defendant, NAGEL's motion to dismiss the complaint pursuant to CPLR 3211 § (a)(8) is GRANTED.
This constitutes the order and judgment of this Court.