900 F. Supp. 2d 305
E.D.N.Y.2012Background
- Diversity action for breach of contract, fiduciary duty, and promissory estoppel; defendant moved to dismiss under Rule 12(b)(2), (3), (6).
- Court grants 12(b)(2) dismissal for lack of personal jurisdiction; action dismissed without prejudice.
- Escrow agreement arose from May 2007 settlement between Mirman and Feiner’s clients (Comeau and Gayed); Feiner acted as escrow agent to hold shares and a general release.
- Mirman delivered 100,000 Charys shares and a general release to Feiner; Feiner never delivered releases.
- Charys filed for bankruptcy in 2008, allegedly rendering escrowed shares worthless; Florida lawsuit followed by Mirman’s demand for value or releases.
- Plaintiff contends Feiner acted as escrow fiduciary in New York through communications; Feiner contends he was Connecticut counsel for Comeau and Gayed with no New York activity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Feiner is subject to New York long-arm jurisdiction under CPLR 302(a)(1). | Mirman argues Feiner transacted New York business as escrow agent. | Feiner contends no New York acts; no sustained, substantial NY presence. | No jurisdiction under 302(a)(1); insufficient NY contacts. |
| Whether Feiner is subject to NY long-arm jurisdiction under CPLR 302(a)(3). | Mirman contends tortious acts outside NY caused injury in NY. | Feiner asserts no injury occurring in NY from outside acts; no substantial nexus. | No jurisdiction under 302(a)(3); injury not shown in New York. |
Key Cases Cited
- Grand River Enters. Six Nations, Ltd. v. Pryor, 425 F.3d 158 (2d Cir. 2005) (requires substantial nexus; single act may suffice for 302(a)(1))
- Fischbarg v. Doucet, 9 N.Y.3d 375 (N.Y. 2007) (focuses on quality of NY contacts for 302(a)(1))
- Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779 (2d Cir. 1999) (contacts must project defendant into NY; not just out-of-state services)
- Executive Life Ltd. v. Silverman, 68 A.D.3d 715 (2d Dep’t 2009) (contract negotiations conducted from out-of-state; no NY jurisdiction under 302(a)(1))
- Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460 (1988) (expanded view of activities constituting transaction of business)
- Catsimatidis v. Innovative Travel Group, Inc., 650 F. Supp. 748 (S.D.N.Y. 1986) (denied 12(b)(2) where substantial NY interactions alleged)