Opinion
12-10-2015
COTIA (USA) LTD., Plaintiff–Appellant, v. LYNN STEEL CORP., et al., Defendants–Respondents.
Law Offices of Jared M. Lefkowitz, New York (Jared M. Lefkowitz of counsel), for appellant. Fox Rothschild LLP, New York (John A. Wait of counsel), for respondents.
Law Offices of Jared M. Lefkowitz, New York (Jared M. Lefkowitz of counsel), for appellant.
Fox Rothschild LLP, New York (John A. Wait of counsel), for respondents.
MAZZARELLI, J.P., RICHTER, MANZANET–DANIELS, KAPNICK, JJ.
Order, Supreme Court, New York County (Cynthia S. Kern, J.), entered February 17, 2015, which granted defendants' motion to dismiss the complaint for lack of personal jurisdiction, unanimously affirmed, without costs.
Plaintiff, a New York company, sold and delivered four orders of steel to defendants Lynn Steel Corp. (Lynn) and Hudd Steel Corp. (Hudd), both New Jersey corporations. The president of both Lynn and Hudd was defendant William Lynch. Lynn and Hudd failed to fully pay for these deliveries, and then sold substantially all of their assets to defendant UER Metals Incorporated, a European company. Plaintiff brought claims for breach of contract and fraudulent conveyance, as well as seeking a declaration that Lynn, Hudd, UER and Lynch are all alter egos of each other, permitting plaintiff to pierce the corporate veil. The motion court properly granted defendants' motion to dismiss the complaint on jurisdictional grounds.
First, the purchase and sale transaction, whereby this in-state plaintiff shipped goods to the out-of-state defendants, who then failed to fully pay for the goods, is "[t]he classic instance in which personal jurisdiction is found not to exist" (Spencer Laminating Corp. v. Denby, 5 Misc.3d 200, 202, 783 N.Y.S.2d 220 [Sup.Ct., N.Y. County 2004, Engoron, J.], citing M. Katz & Son Billiard Prods. v. G. Correale & Sons, 26 A.D.2d 52, 270 N.Y.S.2d 672 [1st Dept.1966], affd. 20 N.Y.2d 903, 285 N.Y.S.2d 871, 232 N.E.2d 864 [1967] ; see also Glassman v. Hyder, 23 N.Y.2d 354, 362–363, 296 N.Y.S.2d 783, 244 N.E.2d 259 [1968] ). Plaintiff has offered nothing but conclusory assertions to support long-arm jurisdiction under CPLR 302(a)(1). Plaintiff argues that there is no evidence in the record "or even a suggestion that the four contracts were the result of the mere placement of an order and delivery of goods." However, as the party seeking to assert jurisdiction, the burden belongs to plaintiff to present sufficient facts to demonstrate jurisdiction. Moreover, as a party to these transactions, plaintiff would necessarily have first-hand knowledge of any contacts between it and defendants regarding negotiations or execution of the agreements. Thus, it cannot claim that these facts are exclusively within the knowledge of defendants. Given that this is a motion to dismiss under CPLR 3211, plaintiff contends "the correct inference to be drawn by the trial court ... would be that [defendants] would have engaged in multiple and purposeful contacts in the State of New York." That would not, however, be an inference drawn from the facts alleged, but pure speculation, based on nothing in the record.
The court also properly rejected plaintiff's assertion of jurisdiction under CPLR 302(a)(3)(ii), for an alleged tort committed without the state causing injury within the state. As to the tort committed without the state, plaintiff points to the alleged fraudulent conveyance of Lynn's and Hudd's assets to UER. This fails, however, because the "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" (Barricade Books, Inc. v. Langberg, 2000 WL 1863764, *4, 2000 U.S. Dist. LEXIS 18279, *13 [S.D.N.Y.2000] [internal quotations omitted], quoting Carte v. Parkoff, 152 A.D.2d 615, 616, 543 N.Y.S.2d 718 [2d Dept.1989] ); see also Mareno v. Rowe, 910 F.2d 1043, 1046 [2d Cir.1990], cert. denied 498 U.S. 1028, 111 S.Ct. 681, 112 L.Ed.2d 673 [1991] ; Magwitch, L.L.C. v. Pusser's Inc., 84 A.D.3d 529, 532, 923 N.Y.S.2d 455 [1st Dept.2011], lv. denied 18 N.Y.3d 803, 2012 WL 16428 [2012] ). Thus, this alleged tortious act did not cause injury within New York, but in New Jersey. Plaintiff has also offered nothing but conclusory allegations that any defendant "derives substantial revenue from interstate or international commerce," as required for jurisdiction under CPLR 302(a)(3)(ii).
Plaintiff's argument that even if it has failed to demonstrate jurisdiction, the court should have granted it jurisdictional discovery, is unpreserved and we decline to address it in the interest of justice. As an alternative holding, we reject it on the merits, as plaintiff has not made a "sufficient start" to warrant such discovery (see Peterson v. Spartan Indus., 33 N.Y.2d 463, 467, 354 N.Y.S.2d 905, 310 N.E.2d 513 [1974] ; SNS Bank v. Citibank, 7 A.D.3d 352, 353, 777 N.Y.S.2d 62 [1st Dept.2004] ).