Aybar v. US Tires & Wheels of Queens, LLC

211 A.D.3d 40

178 N.Y.S.3d 73

Jose AYBAR, etc., et al., plaintiffs,

v.US TIRES AND WHEELS OF QUEENS, LLC, defendant third-party plaintiff-respondent;

Goodyear Tire & Rubber Company, et al., third-party defendants-appellants, et al., third-party defendant.

2019–12110

Index No. 703632/17

Supreme Court, Appellate Division, Second Department, New York.

Argued—April 18, 2022

November 2, 2022

DLA Piper, LLP (US), New York, NY (Jayne Anderson Risk and Neal F. Kronley of counsel) for third-party defendant-appellant Goodyear Tire & Rubber Company, and Aaronson, Rappaport Feinstein & Deutsch, LLP, New York, NY (Elliot J. Zucker, Peter J. Fazio, and Hogan Lovells US, LLP [Sean Marotta and Michael West, pro hac vice], of counsel), for third-party defendant-appellant Ford Motor Company (one brief filed).

Farber Brocks & Zane, LLP, Garden City, NY (Lester Chanin of counsel), for defendant third-party plaintiff-respondent.

Omrani & Taub, P.C. (Parker Waichman, LLP, Port Washington, NY [Jay L.T. Breakstone ], of counsel), for plaintiffs Orlando Gonzales, Jesenia Aybar, as administrator of the estate of Nelia Oliveras, as legal guardian on behalf of K.C., a minor, and as administrator of the estate of T.C., and Anna Aybar.

FRANCESCA E. CONNOLLY, J.P., LINDA CHRISTOPHER, LARA J. GENOVESI, DEBORAH A. DOWLING, JJ.

OPINION & ORDER

GENOVESI, J.

This appeal presents the question of whether specific personal jurisdiction exists over the third-party defendants, two out-of-state corporations, pursuant to New York State's long-arm statute, CPLR 302(a)(1). Specifically, this case presents an opportunity to discuss the second prong of the long-arm statute, whether there is an articulable nexus or substantial relationship between the cause of action sued upon, or an element thereof, and those third-party defendants’ business transactions in New York. We conclude that here, there is specific jurisdiction over the out-of-state corporations.

I. Factual and Procedural History

A. Facts

In 2002, the third-party defendant Ford Motor Company (hereinafter Ford) manufactured a Ford Explorer in Missouri and sold the vehicle to an independently-owned Ford dealership in Ohio. In 2009, the vehicle entered New York when it was sold and registered to a New York resident by the name of Jose Velez. In 2011, Jose Aybar, Jr., a New York resident, purchased the vehicle from Velez in New York.

On or about June 17, 2012, Aybar brought the vehicle to the defendant, U.S. Tires and Wheels of Queens, LLC (hereinafter U.S. Tires), in New York, for service to its tires, at Aybar's request. US Tires inspected the tires and then installed them.

Two weeks later, on July 1, 2012, Aybar was driving on an interstate highway in Virginia as part of a return trip from Disney World with members of his family as passengers when one of the tires allegedly failed. Aybar lost control of the vehicle and it overturned several times. There were six passengers in the vehicle. Three, including a child, died and three were seriously injured. The tire was manufactured by the third-party defendant Goodyear Tire & Rubber Company (hereinafter Goodyear).

The accident gave rise to three lawsuits, including this one, all involving direct or third-party claims against Ford and Goodyear. Goodyear is incorporated and has its principal place of business in Ohio. Ford is incorporated in Delaware and has its principal place of business in Michigan.

B. Procedural History

1. Aybar v. Aybar ( Aybar I )

In ( Aybar v. Aybar 169 A.D.3d 137, 93 N.Y.S.3d 159, affd 37 N.Y.3d 274, 156 N.Y.S.3d 104, 177 N.E.3d 1257 ), the injured passengers and the representatives of the estates of the passengers who died asserted negligence claims against the owner and driver, Aybar, as well as products liability and negligence claims against Ford and Goodyear. In that action, Ford and Goodyear separately moved pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against each of them on the ground of lack of personal jurisdiction (see id. at 140, 93 N.Y.S.3d 159 ). Goodyear demonstrated that the tire was designed in Ohio and manufactured in Tennessee. Ford demonstrated that the vehicle was manufactured in Missouri and sold in Ohio. Ford further demonstrated that it did not have manufacturing plants in New York and did not directly engage in the servicing of Ford vehicles in New York (see id. ). In opposing the motions to dismiss, the plaintiffs argued that Ford and Goodyear were subject to general jurisdiction in New York (see id. ).

In two orders dated May 31, 2016, the Supreme Court denied the motions to dismiss, finding that while there was no specific jurisdiction under New York's long-arm statute, CPLR 302, there was general jurisdiction under CPLR 301 (see Aybar v. Aybar, 2016 N.Y. Slip Op. 31138[U], 2016 WL 3389889 [Sup. Ct., Queens County 2016, Raffaele, J.], revd 169 A.D.3d 137, 93 N.Y.S.3d 159, affd 37 N.Y.3d 274, 156 N.Y.S.3d 104, 177 N.E.3d 1257 ; Aybar v. Aybar, 2016 N.Y. Slip Op. 31139[U], 2016 WL 3389890 [Sup. Ct., Queens County 2016, Raffaele, J.], revd 169 A.D.3d 137, 93 N.Y.S.3d 159, affd 37 N.Y.3d 274, 156 N.Y.S.3d 104, 177 N.E.3d 1257 ).

Ford and Goodyear appealed. On appeal, Ford and Goodyear argued that the Supreme Court erred in finding general jurisdiction. In their briefs on appeal, the plaintiffs did not argue that New York also had specific jurisdiction or long-arm jurisdiction. However, U.S. Tires, which was not a party to the action, submitted a brief arguing that there was both general and specific jurisdiction or long-arm jurisdiction over Ford and Goodyear.

In an opinion by Justice Brathwaite Nelson, this Court first noted that the issue of whether New York could exercise specific or long-arm jurisdiction had not been raised by the plaintiffs in opposition to the motions to dismiss and that therefore, it would not consider it (see Aybar v. Aybar, 169 A.D.3d at 143, 93 N.Y.S.3d 159 ). This Court then reversed the orders appealed from, holding that Goodyear's and Ford's contacts with New York did not support a finding of general jurisdiction under due process principles because, despite their extensive commercial activities in New York, they were not "at home" in New York ( id. at 146, 93 N.Y.S.3d 159 ). In addition, this Court held that neither Goodyear nor Ford consented to New York's general jurisdiction by registering to do business in New York and appointing an agent for service of process (see id. at 152, 93 N.Y.S.3d 159 ).

The plaintiffs appealed. On appeal, the Court of Appeals affirmed, but only on the issue before it, which was whether Ford and Goodyear consented to New York's general jurisdiction (see Aybar v. Aybar, 37 N.Y.3d 274, 156 N.Y.S.3d 104, 177 N.E.3d 1257 [2021] ). The Court of Appeals declined to address the issue of specific or long-arm jurisdiction as that issue was not properly before it (see id. at 282, 156 N.Y.S.3d 104, 177 N.E.3d 1257 ). In addition, the Court of Appeals noted that "the plaintiffs have abandoned any argument that Ford and Goodyear are essentially at home in New York such that general jurisdiction exists" ( id. ). Accordingly, the Court of Appeals concluded that the only issue before it was whether Ford and Goodyear consented to general jurisdiction in New York by registering to do business and designating a local agent for service of process in compliance with the Business Corporation Law (see id. ). The Court of Appeals held that Ford and Goodyear did not so consent (see id. ).

2. Aybar v. Goodyear ( Aybar II )

The second action, ( Aybar v. Goodyear Tire & Rubber Co. 175 A.D.3d 1373, 106 N.Y.S.3d 361 ), was commenced by Aybar, the owner and driver, against Goodyear, among others, alleging strict products liability, negligence, and breach of warranty claims. In that action, Goodyear also moved pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against it for lack of personal jurisdiction.

In an order dated May 31, 2016, the Supreme Court denied the motion (see Aybar v. Goodyear Tire & Rubber Co., 2016 N.Y. Slip Op. 33056[U], 2016 WL 11660767 [Sup. Ct., Queens County 2016, Raffaele, J.], revd 175 A.D.3d 1373, 106 N.Y.S.3d 361 ). The Supreme Court found that there was no specific or long-arm jurisdiction over Goodyear under CPLR 302(a)(1) because the strict products liability, negligence, and breach of warranty claims did not arise out of Goodyear's activities in New York (see Aybar v. Goodyear Tire & Rubber Co., 2016 N.Y. Slip Op. 33056[U] ).

However, the Supreme Court found that Goodyear was subject to general jurisdiction under CPLR 301 because (1) its activities in New York were so continuous and systematic that it was essentially "at home" in New York, and (2) Goodyear consented to general jurisdiction by registering to do business in New York (see Aybar v. Goodyear Tire & Rubber Co., 2016 N.Y. Slip Op. 33056[U], * *5 ).

Goodyear appealed and on appeal, neither Goodyear nor the plaintiffs raised the issue of specific or long-arm jurisdiction. Though not a party to that action, it was only U.S. Tires who submitted a brief, arguing that Goodyear was subject to specific or long-arm jurisdiction. US Tires maintained that because Goodyear marketed its tires in New York and there was a connection between Goodyear's marketing its tires in New York and the accident, and since Goodyear sold the exact same model tire in New York with the same design flaws and manufacturing defects as the tire involved in the accident, Goodyear was subject to long-arm jurisdiction in New York. However, this Court, again, did not consider the issue of specific jurisdiction or long-arm jurisdiction, as it was not raised before the Supreme Court and therefore not properly before this Court. As to general jurisdiction, citing our prior decision in Aybar I, this Court reversed the order appealed from (see Aybar v. Goodyear Tire & Rubber Co., 175 A.D.3d at 1373–1374, 106 N.Y.S.3d 361 ). This Court again found that there was no general jurisdiction over Goodyear...