South Seas Holding Corp. v Starvest Group, Inc NY Slip Op 30314(U) February 26, 2015 Supreme Court, Suffolk County Docket Number:
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1 South Seas Holding Corp. v Starvest Group, Inc NY Slip Op 30314(U) February 26, 2015 Supreme Court, Suffolk County Docket Number: Judge: Emily Pines Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication.
2 [* 1] SHORT FORM ORDER INDEX NUMBER: SUPREME COURT- STATE OF NEW YORK COMMERCIAL DIVISION, PART 46, SUFFOLK COUNTY Present: HON. EMILY PINES J. S. C. Original Motion Date: Motion Submit Date: Motion Sequence No.: OO 1 MG [ ] Final [ x ] Non Final SOUTH SEAS HOLDING CORP., - against - Plaintiff, Attorney for Plaintiff Joseph C. Vozza, Esq. 135 Pinelawn Road, Suite 125N Melville, New York Attorney for Defendant Bongiovanni Richard L. Farley, Esq. Farley & Kessler, PC 55 Jericho Turnpike, Suite 204 STARVEST GROUP, INC., BONGIOVANNI & ASSOCIATES, PA, LARRY O'DONNELL, CPA, P.C., RON MOSCHETTA and ROBERT H. COLE, Defendants. In this action to recover damages for, inter alia, fraud and negligent misrepresentation, defendant Bongiovanni & Associates, PA ("Bongiovanni") moves to dismiss the complaint as asserted against it pursuant to CPLR 321 l(a)(8) on the ground that the court lacks personal jurisdiction over it. The plaintiff opposes the motion. ORDERED that the motion (Mot. Seq. 001) is granted and the Verified Complaint is dismissed as asserted against Bongiovanni; and it is further
3 [* 2] ORDERED that counsel for the remaining parties shall appear for a preliminary conference on March 23, 2015, at 10 a.m. Factual and Procedural Background In its Verified Complaint, the plaintiff, South Seas Holding Corp. ("Plaintiff') alleges, among other things, that Bongiovanni is a professional association organized and existing under the laws of Florida with a principle place of business in Florida. It is further alleged that Bongiovanni performed professional services for defendant Starinvest Group, Inc. ("Starinvest"), a Nevada corporation, including preparing filings with the Securities and Exchange Commission and auditing services. rn June 2010, Plaintiff and Starin vest entered into a purchase and sale agreement pursuant to which Plaintiff agreed to sell real property located in Patchogue, New York to Starinvest in exchange for, among other consideration, a $500,000 promissory note from Starinvest. Plaintiff claims that it relied on information provided to it regarding the financial viability of Starinvest prior to entering into the purchase and sale agreement. Plaintiff alleges that Starinvest subsequently defaulted on its payment obligations under the promissory note. Plaintiff claims that into order to induce Plaintiff to enter into the transaction, Bongiovanni conspired with other defendants in intentionally providing misleading information in the form of filings and reports as to the financial capabilities, assets and liabilities of Starinvest, despite having knowledge that the information was inaccurate. Discussion To defeat a CPLR 321 l(a)(8) motion to dismiss, a plaintiff must establish, prima facie, that the defendant was subject to the personal jurisdiction of the Supreme Court (Carrs v Avco Corp., - AD3d -, 2015 NY Slip Op [2d Dept 2015]). Page 2 of 7
4 [* 3] As recently set forth by the Appellate Division, Second Department in Mejia-Haffner v Killington. Ltd., (119 AD3d 912, [2d Dept 2014]): " 'A foreign corporation is amenable to suit in New York courts under CPLR 301 if it has engaged in such a continuous and systematic course of "doing business" here that a finding of its "presence" in this jurisdiction is warranted' (Landoil Resources Corp v Alexander & Alexander Servs., 77 NY2d 28, 33 [1990], quoting Laufer v Ostrow, 55 NY2d 305, [1982]; see Cardone v Jiminy Peak, 245 AD2d 1002, 1003 [ 1997]; Se dig v Okemo Mtn., 204 AD2d 709, 710 (1994]). Mere solicitation of business within New York will not subject a defendant to New York's jurisdiction (see Cardone vjiminy Peak, 245 AD2d at 1003; Sedigv OkemoMtn., 204 AD2d at 710. Instead, a plaintiff asserting jurisdiction under CPLR 301 must satisfy the standard of 'solicitation plus,' which requires a showing of ' "activities of substance in addition to solicitation" ' (Arroyo v Mounbtain School, 68 AD3d 603, 604 (2009], quoting Laufer v Ostrow, 55 NY2d at 31 O; see Cardpone v Jiminy Peak, 245 AD2d at 1003; Sedig v Okemo Mtn., 204 AD2d at 710). Here, even assuming that Bongiovanni solicited business in New York, Plaintiff has not demonstrated that Bongiovanni also engaged in substantial activity within New York sufficient to satisfy the solicitation-plus standard. Contrary to Plaintiffs contention, Bongiovanni's operation of an interactive website accessible in New York, without more, does not subject it to suit in New York for all purposes (Id.). Plaintiffs reliance on Thomas Pub Co. v Indus. Quick Search, Inc. (237 FSupp2d 489 [SDNY 2002]), is misplaced as in that case the plaintiffs made specific factual allegations concerning defendant's substantial solicitation activities in New York and additional commercial activity in New York. No such allegations are made by Plaintiff in this case. Therefore, jurisdiction is lacking under CPLR 301. "Under New York's long-arm jurisdiction statute, a court may exercise jurisdiction over a nondomiciliary who, in person or through an agent, 'transacts any business within the state or Page 3 of 7
5 [* 4] contracts anywhere to supply goods or services in the state'" (Grimaldi v Guinn, 72 AD3d 37 at 43, quoting CPLR 302[a][l]). "CPLR 302(a) is a 'single act statute [and] proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so Jong as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted"' (Kimco Exch. Place Corp. v. Thomas Benz, Inc., 34 AD3d 433, 43412d Dept 2006] quoting Deutsche Bank Sec., Inc. v Montana Ed. oflnvs., 7 NY3d 65, 71 [2006] cert denied 549 US 1095 [2006]). The Court of Appeals has held that'" [ s Jo long as a party avails itself of the benefits of the forum, has sufficient minimum contacts with it, and should reasonably expect to defend its actions there, due process is not offended if that party is subjected to jurisdiction even if not "present" in that State'" (Deutsche Bank Sec., Inc. v Montana Ed. of Invs., supra at 71, quoting Kreutter v McFadden Oil Corp, 71NY2d460, 466 [1988]). '"Although it is impossible to precisely fix those acts that constitute a transaction of business, [the Court of Appeals'] precedents establish that it is the quality of the defendants' New York contacts that is the primary consideration' (Fischbarg v Doucet, 9 NY3d 375, 380 [2007]). The purposeful creation of a continuing relationship has been a contributing factor in finding sufficient contacts to justify the exercise oflong-armjurisdiction (id. at 381; George Reiner & Co. v Schwatrz, 41 NY2d 648, 653 [1977]). 'Whether a non-domiciliary has engaged in sufficient purposeful activity to confer jurisdiction in New York requires an examination of the totality of the circumstances' (Farkas v Farkas, 36 AD3d 852, 853 2d Dept 2007])." (Grimaldi v Guinn, supra at 44-45). Here, Plaintiff alleges that Bongiovanni conspired to commit fraud upon Plaintiff by intentionally providing misleading information in the form of filings and reports as to the financial capabilities, assets and liabilities of Starinvest, despite having knowledge that the information was Page 4 of 7
6 [* 5] inaccurate. Plaintiff claims that Bongiovanni transacts business within New York through operation of a website that is accessible by New York entities and offers financial services throughout the United States. A business's interactive website may support specific jurisdiction in New York where the claim asserted has some relationship to the business transacted via the website (lvfejia-haffner v Killington. Ltd., 119 AD3d 912 [2d Dept 2014]; Grimaldi v Gunn, 72 AD3d 37, [2d Dept 2010]). Here, there is no allegation or evidence that the claims asserted against Bongiovanni have any relationship whatsoever to business transacted via Bongiovanni's website. The affidavit from Plaintiff's President in opposition to the instant motion states that it was defendants Ron Moschetta and Robert Cole who provided Plaintiff with financial information in the form of corporate filings with the SEC, corporate asset sheets and reports prepared by Bongiovanni. There is no evidence of any relationship between Bongiovanni' s preparation of financial documents for Starin vest and its website. The allegations in the complaint and the affidavit of Plaintiffs President do not demonstrate any relationship between Bongiovanni's maintenance of a website through which a person in New York could purchase services and the alleged fraudulent conduct. Thus, Bongiovanni is not subject to long-arm jurisdiction under CPLR 302(a)( 1) (see Mejia-Haffner v Killington, Ltd., (119 AD3d 912 [2d Dept 2014]). CPLR 302(a)(3) provides that New York courts have personal jurisdiction over a nondomiciliary who "commits a tortious act without the state causing injury to person or property within the state... if he (i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state. or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce" (CPLR 302[a][3]). Page 5 of 7
7 [* 6] Here, neither the Verified Complaint nor the affidavit of Plaintiff's President in opposition to Bongiovanni' s motion specifically allege that Bongiovanni committed a tortious act outside of New York, nor is there any detailed description of Bongiovanni' s precise role in providing financial information to Plaintiff. It is unclear whether Bongiovanni provided financial information directly to Plaintiff or whether the co-defendants provided financial information about Starinvest that had been previously prepared for the co-defendants by Bongiovanni. In any event, even assuming that Bongiovanni alleged tortious acts occurred outside New York and caused injury within New York, the Plaintiff has failed to demonstrate that Bongiovanni (i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in New York, or (ii) expects or should reasonably expect the act to have consequences in New York and derives substantial revenue from interstate or international commerce (see CPLR 302[a][3]). The Plaintiff's contention that through its interactive website Bongiovanni regularly does or solicits business in New York is conclusory and unsupported by any facts or legal authority. Similarly, Plaintiff's contention that by drafting financial statements for Starinvest directed toward investors, Bongiovanni should have reasonably expected same to have consequences throughout the United States, is also conclusory and unsupported by any facts or legal authority. The affidavit of Plaintiff's President in opposition to Bongiovanni's motion does not set forth any facts regarding whether Bongiovanni meets the criteria set forth in CPLR 302(a)(3). "If the defendant moves to dismiss due to the absence of a basis of personal jurisdiction, the plaintiff must come forward with sufficient evidence, through affidavits and relevant documents, to prove the existence of jurisdiction" (see Vincent C. Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 302:5; see Fischbarg v Doucet, 9 NY3d 375, 381 n.5 [2007]). Thus, Page 6 of 7
8 [* 7] 111 opposition to Bongiovanni' s motion, the Plaintiff has not established, pnma facie, that Bongiovanni is subject to the personal jurisdiction of the court. Finally, Plaintiff has not made a sufficient start to warrant holding the motion in abeyance \,vhile discovery is conducted on the issue of jurisdiction as Plaintiff has not alleged facts which \vould support jurisdiction under either CPLR 301, CPLR 302(a)(l) or CPLR 302(a)(3), and has failed to indicate how further discovery might lead to evidence showing that personal jurisdiction exists here (Mejia-Haffner v Killington, Ltd., 119 AD3d 912 [2d Dept 2014]). In light of the foregoing the Court need not reach the parties' remaining contentions. This constitutes the DECISION and ORDER of the Court. Dated: February 26, 2015 Riverhead, New York MILYPINES J. s. c. Page 7 of 7
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