Opinion
11154 Index 159222/18
04-30-2020
U.S. IMMIGRATION FUND LLC, et al., Plaintiffs–Appellants, v. Douglas LITOWITZ, Esq., et al., Defendants–Respondents, Reviv–East Legal Consultants (HK) Ltd. also known as Hong Kong Zhendong Legal Services Consulting Co., Ltd., Defendant.
Otterbourg P.C., New York (Richard G. Haddad of counsel), for appellants. Douglas Litowitz, respondent pro se.
Otterbourg P.C., New York (Richard G. Haddad of counsel), for appellants.
Douglas Litowitz, respondent pro se.
Manzanet–Daniels, J.P., Kapnick, Gesmer, Oing, JJ.
Order, Supreme Court, New York County (Melissa A. Crane, J.), entered April 5, 2019, which, to the extent appealed from as limited by the briefs, granted defendants Douglas Litowitz, Esq.'s and Xuejun Makhsous a/k/a Ma Xuejun a/k/a Zoe Ma's motions to dismiss the complaint as against them for lack of personal jurisdiction, unanimously modified, on the law, to extent of reinstating the third cause of action for breach of the Confidentiality Agreement as against defendant Litowitz, and otherwise affirmed, without costs.
Plaintiffs assert two bases for jurisdiction over defendants: the Confidentiality Agreement and long-arm jurisdiction.
The Confidentiality Agreement, which defendant Litowitz signed, provides that he consents to personal jurisdiction in New York to any "suit, action, or proceeding arising out of" it. Because the third cause of action alleges that he breached the Confidentiality Agreement, his motion to dismiss that cause of action based only on CPLR 3211(a)(8) for lack of personal jurisdiction should have been denied.
The Confidentiality Agreement, however, does not otherwise confer personal jurisdiction over Litowitz on the remaining claims. The crux of the complaint—which alleges fraud and defamation against defendants—fails to plead a sufficient nexus with the alleged breach of the Confidentiality Agreement (see Schmelkin v. Garfield, 85 A.D.3d 755, 925 N.Y.S.2d 139 [2d Dept. 2011] ). Moreover, the Confidentiality Agreement cannot provide a basis for asserting jurisdiction over defendant Ma because she did not sign it, and was not named as a party to it.
As to the remaining claims, New York's long-arm jurisdiction statute ( CPLR 302[a][3] ) does not serve as a basis for jurisdiction. In the context of commercial torts, where the damages are purely economic, "the situs of the injury is the location where the event giving rise to the injury occurred, and not where the resultant damages occurred" ( O'Brien v. Hackensack Univ. Med. Ctr., 305 A.D.2d 199, 201–202, 760 N.Y.S.2d 425 [1st Dept. 2003] ; see McBride v. KPMG Intl., 135 A.D.3d 576, 577, 24 N.Y.S.3d 257 [1st Dept. 2016] ). The motion court correctly found that the critical events associated with the return of the investments occurred in Florida, where the plaintiffs' corporate offices are located, and not in New York, where the construction projects took place and where one of the plaintiffs was domiciled. Plaintiffs contend that the court erred in relying upon "two accountant malpractice cases" in support of this legal principle. However, the rule extends beyond accounting cases (see e.g. O'Brien, 305 A.D.2d at 199–200, 760 N.Y.S.2d 425 ), and is applicable here. Defendants have no New York office, no New York mailing address, no New York bank accounts, and no employees working in New York, and they have virtually no other contacts with New York. These factors militate against a finding of personal jurisdiction ( id. at 201, 760 N.Y.S.2d 425 ).
We have considered plaintiffs' remaining contentions and find them unavailing.