Fanelli v. Latman

202 A.D.3d 758

162 N.Y.S.3d 140

Jodie FANELLI, et al., respondents,

v.Richard K. LATMAN, et al., appellants, et al., defendants.

2019–08280

Index No. 152210/18

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

Argued—November 4, 2021

February 9, 2022

Holland & Knight LLP, New York, NY (Benjamin R. Wilson and Jennifer Lada of counsel), for appellants.

Windels Marx Lane & Mittendorf, LLP, New York, NY (Ryan W. Federer and Amanda A. Meehan of counsel), for respondents.

VALERIE BRATHWAITE NELSON, J.P., REINALDO E. RIVERA, LINDA CHRISTOPHER, LARA J. GENOVESI, JJ.

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract and fraud, the defendants Richard K. Latman and CRMSuite Corporation appeal from an order of the Supreme Court, Richmond County (Orlando Marrazzo, Jr., J.), dated May 22, 2019. The order, insofar as appealed from, denied those defendants’ separate motions pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against each of them.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the separate motions of the defendant Richard K. Latman and the defendant CRMSuite Corporation pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against each of them are granted.

The plaintiffs, domiciled in New York, allege that, through a series of emails in November 2014, they entered into a contract with the defendants, domiciled in Florida, wherein the defendants would develop and deliver software and related applications for the creation of a "Dating App," in exchange for $100,000. The plaintiffs allege that they paid $100,000, but the defendants never delivered the Dating App. The plaintiffs commenced this action in the Supreme Court, Richmond County, inter alia, to recover damages for breach of contract and fraud. The defendant CRMSuite Corporation (hereinafter CRM) and the defendant Richard K. Latman separately moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against each of them, on the ground, among others, that the New York court lacked personal jurisdiction over each of them. The Supreme Court, inter alia, denied the motions. CRM and Latman together appeal.

The ultimate burden of proving a basis for personal jurisdiction rests with the party asserting jurisdiction (see Fischbarg v. Doucet, 9 N.Y.3d 375, 381 n. 5, 849 N.Y.S.2d 501, 880 N.E.2d 22 ; Aybar v. Aybar, 169 A.D.3d 137, 142, 93 N.Y.S.3d 159, affd 37 N.Y.3d 274, 156 N.Y.S.3d 104, 177 N.E.3d 1257 ). When opposing a motion to dismiss the complaint pursuant to CPLR 3211(a)(8) on the ground of lack of jurisdiction, a plaintiff "need only make a prima facie showing" that personal jurisdiction over the moving defendant exists ( Opticare Acquisition Corp. v. Castillo, 25 A.D.3d 238, 243, 806 N.Y.S.2d 84 ; see Lowy v. Chalkable, LLC, 186 A.D.3d 590, 591, 129 N.Y.S.3d 517 ). "The facts alleged in the complaint and affidavits in opposition to such a motion to dismiss are deemed true and construed in the light most favorable to the plaintiff, and all doubts are to be resolved in favor of the plaintiff" ( Nick v. Schneider, 150 A.D.3d 1250, 1251, 56 N.Y.S.3d 210 ; see Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511 ).

In opposing the separate motions of Latman and CRM, the plaintiffs asserted that jurisdiction over both defendants was proper pursuant to CPLR 301 and 302(a)(1) and (3). "Under modern jurisprudence, a court may assert general all-purpose jurisdiction or specific conduct-linked jurisdiction over a particular defendant" ( Aybar v. Aybar, 169 A.D.3d at 142–143, 93 N.Y.S.3d 159 ; see Daimler AG v. Bauman, 571 U.S. 117, 122, 134 S.Ct. 746, 187 L.Ed.2d 624 ). Contrary to the plaintiffs’ contention, they did not make a prima facie showing of personal jurisdiction over Latman or CRM. The complaint itself establishes that Latman is domiciled in Florida and that CRM was incorporated in and has its principal place of business in Florida (see Daimler AG v. Bauman, 571 U.S. at 137, 134 S.Ct. 746 ; Aybar v. Aybar, 169 A.D.3d at 144, 93 N.Y.S.3d 159 ). Further, the facts alleged, even if established, do not support a conclusion that CRM's contacts with New York were so "continuous and systematic" ( Daimler AG v. Bauman, 571 U.S. at 137, 134 S.Ct. 746 [internal quotation marks omitted]) as to render it "essentially at home" in New York ( id. [internal quotation marks omitted]). Thus, the plaintiffs failed to demonstrate personal jurisdiction over Latman or CRM under New York's general jurisdiction statute, CPLR 301.

Specific jurisdiction over a defendant is obtained through New York's long-arm statute, CPLR 302. It provides, in relevant part, that New York courts may exercise personal jurisdiction over any nondomiciliary who "commits a tortious act without the state causing injury to person or property within the state" ( id. § 302[a][3] ), or "transacts any business within the state or contracts anywhere to supply goods or services in the state" ( id. § 302[a][1] ).

Under CPLR 302(a)(3), "[t]he 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" ( Hermann v. Sharon Hosp., 135 A.D.2d 682, 683, 522 N.Y.S.2d 581 ; see Paterno v. Laser Spine Inst., 24 N.Y.3d 370, 381, 998 N.Y.S.2d 720, 23 N.E.3d 988 ; McGowan v. Smith, 52 N.Y.2d 268, 274–275, 437 N.Y.S.2d 643, 419 N.E.2d 321 ). Here, the plaintiffs allege that Latman and CRM defrauded them by accepting payment for the Dating App when they knew it was not completed and did not plan to complete it. The location of the original event which caused the injury was Florida, not New York. That the plaintiffs felt economic injury in New York, alone, is an insufficient basis to confer jurisdiction under CPLR 302(a)(3) (see Greenbacker Residential Solar LLC. v. OneRoof Energy, Inc., 174 A.D.3d 437, 438, 102 N.Y.S.3d 428 ; Deutsche Bank AG v. Vik, 163 A.D.3d 414, 415, 81 N.Y.S.3d 18 ; see also Qudsi v. Larios, 173 A.D.3d 920, 922, 103 N.Y.S.3d 492 ).

"The CPLR 302(a)(1) jurisdictional inquiry is twofold: under the first prong the defendant must have conducted sufficient activities to have transacted business in the state, and under the second prong, the claims must arise from the transactions" ( Rushaid v. Pictet & Cie, 28 N.Y.3d 316, 323, 45 N.Y.S.3d 276, 68 N.E.3d 1 ; see D & R Global Selections, S.L. v. Bodega Olegario Falcon Pineiro, 29 N.Y.3d 292, 297, 56 N.Y.S.3d 488, 78 N.E.3d 1172 ). The sufficient activities prong is met "even though the defendant never enters New York, so long as the defendant's activities here were purposeful" ( Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 522 N.E.2d 40 ; see Rushaid v. Pictet & Cie, 28 N.Y.3d at 323, 45 N.Y.S.3d 276, 68 N.E.3d 1 ). "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 at 380, 849 N.Y.S.2d 501, 880 N.E.2d 22, quoting McKee Elec. Co. v. Rauland–Borg Corp., 20 N.Y.2d 377, 382, 283 N.Y.S.2d 34, 229 N.E.2d 604 ; see Rushaid v. Pictet & Cie, 28 N.Y.3d at 323, 45 N.Y.S.3d 276, 68 N.E.3d 1 ).

Here, the totality of the circumstances does not provide the plaintiffs with a basis for imposing long-arm jurisdiction over...