Johnson v. Ward

Full title: ROGER JOHNSON et al., Respondents, v. DANIEL A. WARD, Appellant

Court: Court of Appeals of the State of New York

Date published: May 5, 2005

4 N.Y.3d 516 (N.Y. 2005)

797 N.Y.S.2d 33

829 N.E.2d 1201

Opinion

59.

Argued March 29, 2005.

Decided May 5, 2005.

APPEAL, by permission of the Appellate Division of the Supreme Court in the First Judicial Department, from an order of that Court, entered April 22, 2004. The Appellate Division (1) reversed, on the law, an order of the Supreme Court, New York County (Milton A. Tingling, J.), which had granted plaintiffs' motion for reargument and, upon reargument, had adhered to a previous order of that Supreme Court granting defendant's motion to dismiss the complaint for lack of personal jurisdiction over him, (2) denied the motion to dismiss, and (3) reinstated the complaint. The following question was certified by the Appellate Division: "Was the order of this Court, which reversed the order of the Supreme Court, properly made?"

Johnson v. Ward, 6 AD3d 286, reversed.

Stockschlaeder, McDonald Sules, P.C., New York City ( Richard T. Sules and Gail S. Karan of counsel), for appellant.

Pops Associates, New York City ( Daniel W. Coffey and Paul R. Pops of counsel), for respondents.

Before: Chief Judge KAYE and Judges G.B. SMITH, CIPARICK, ROSENBLATT, READ and R.S. SMITH concur.

OPINION OF THE COURT

GRAFFEO, J.

In this case, we are asked whether long-arm jurisdiction exists over a nonresident holding a New York driver's license and car registration for a tort claim arising from an out-of-state motor vehicle accident. We conclude that personal jurisdiction does not lie under CPLR 302 (a) (1) because there is an insufficient nexus between plaintiffs' personal injury action and any New York transactions.

On October 12, 1997, plaintiffs Roger Johnson and Monique White allegedly sustained injuries when their vehicle was struck from behind by a car driven by defendant Daniel Ward. Although the accident occurred in New Jersey, all three individuals were New York residents. At that time, defendant possessed a New York driver's license and had registered his vehicle in New York. In December 1997, defendant moved to New Jersey and in 1998 he surrendered his New York license in favor of a New Jersey license.

After these events, plaintiffs commenced this negligence action against defendant in Supreme Court, New York County, in October 2000. Defendant moved to dismiss the complaint for lack of personal jurisdiction pursuant to CPLR 3211 (a) (8). Supreme Court granted the motion and dismissed the complaint, finding no basis for long-arm jurisdiction. Upon reargument, the court adhered to its original determination.

The Appellate Division, with one Justice dissenting, reversed and reinstated the complaint. The majority reasoned that defendant's New York license and vehicle registration satisfied the "transacting business" requirement of CPLR 302 (a) (1) and that a substantial nexus existed between the cause of action and defendant's New York activities inasmuch as plaintiffs' claim "arose over the operation by a driver licensed in New York of a vehicle registered in New York" ( 6 AD3d 286, 287 [1st Dept 2004]). In contrast, the dissent determined that defendant's possession of a New York license and vehicle registration did not constitute a transaction of business within the meaning of CPLR 302 (a) (1) because the statute contemplates only commercial or financial activities. Alternatively, the dissent concluded that the New York license and vehicle registration were not "in any way related to this out-of-state accident so as to create the necessary nexus to invoke long-arm jurisdiction" ( id. at 292). The Appellate Division granted leave to this Court, certifying the following question: "Was the order of this Court, which reversed the order of the Supreme Court, properly made?" We answer in the negative and therefore reverse.

CPLR 302 provides in part:

"(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent:

"1. transacts any business within the state or contracts anywhere to supply goods or services in the state."

As relevant in this case, long-arm jurisdiction over a nondomiciliary exists where (i) a defendant transacted business within the state and (ii) the cause of action arose from that transaction of business. If either prong of the statute is not met, jurisdiction cannot be conferred under CPLR 302 (a) (1).

We have recognized that a "substantial relationship" must be established between a defendant's transactions in New York and a plaintiff's cause of action in order to satisfy the nexus requirement of the statute ( Kreutter v. McFadden Oil Corp., 71 NY2d 460, 467). Consequently, we have upheld long-arm jurisdiction over a nondomiciliary where the claim had the requisite nexus to an in-state transaction ( see e.g. George Reiner Co. v. Schwartz, 41 NY2d 648, 653 [concluding there was jurisdiction over a Massachusetts resident for breach of an employment contract entered into in New York]; Singer v. Walker, 15 NY2d 443, 467 [sustaining jurisdiction because plaintiff's personal injury claim resulting from the use of a defective hammer arose from "the purposeful activities engaged in by [defendant] in this State in connection with the sale of its products in the New York market"], cert denied sub nom. Estwing Mfg. Co. v. Singer, 382 US 905). On the other hand, we have ruled that jurisdiction is not justified where the relationship between the claim and transaction is too attenuated ( see e.g. Talbot v. Johnson Newspaper Corp., 71 NY2d 827, 829 [holding that the nexus between a coach's defamation action and a former student's pursuit of a college degree in New York was insufficient to support jurisdiction]).

Here, we conclude that plaintiffs have failed to establish a sufficient nexus between the purported transactions of business in New York and the negligence claim.^_ Plaintiffs' cause of action arose out of defendant's allegedly negligent driving in New Jersey, not from the issuance of a New York driver's license or vehicle registration. The relationship between the negligence claim and defendant's possession of a New York license and registration at the time of the accident is too insubstantial to warrant a New York court's exercise of personal jurisdiction over defendant. The negligent driver could have had a license from any state, or no license — that defendant had a New York license and registration is merely coincidental. As such, plaintiffs cannot rely on CPLR 302 (a) (1) to establish long-arm jurisdiction based on the facts of this case.

_ In light of this determination, it is unnecessary for us to decide whether defendant's possession of a New York driver's license and vehicle registration qualifies as a transaction of "business" within the meaning of CPLR 302 (a) (1).

Accordingly, the order of the Appellate Division should be reversed, with costs, defendant's motion to dismiss the complaint granted and the certified question answered in the negative.

Order reversed, etc.