913 N.Y.S.2d 808 | N.Y. App. Div. | 2010
Appeal from an order of the Supreme Court (Ledina, J.), entered January 21, 2010 in Sullivan County, which denied defendant Frederick Sirotek’s motion for summary judgment dismissing the complaint against him.
The underlying facts are more fully set forth in the various prior decisions of this Court and the Court of Appeals in these two consolidated actions for breach of contract, an accounting, trade secret misappropriation and tortious interference (see Andrew Greenberg, Inc. v Svane, Inc., 36 AD3d 1094 [2007]; Andrew Greenberg, Inc. v Sir-Tech Software, 2 AD3d 1042 [2003], revd 4 NY3d 185 [2005]; Andrew Greenberg, Inc. v Sir-Tech Software, 297 AD2d 834 [2002]; Andrew Greenberg, Inc. v Sir-Tech Software, 245 AD2d 1004 [1997]). This appeal involves the denial of a motion by defendant Frederick Sirotek (hereinafter Sirotek) for summary judgment dismissing the sole remaining claim against him — sounding in trade secret misappropriation — on the ground that Supreme Court lacks personal jurisdiction over him.
As relevant here, plaintiff entered into a 1981 agreement with Sir-Tech Software, Inc. granting Sir-Tech the exclusive right to manufacture and market a computer game created by plaintiff and known as “Wizardry.” The agreement, which was signed by
Following joinder of issue, Sirotek’s original 2003 motion to dismiss the complaint against him for lack of personal jurisdiction was continued by Supreme Court, pending additional discovery. Extensive motion practice, discovery and several appeals ensued, resulting in a decision by the Court of Appeals holding that the motion of the Canadian corporate defendants to dismiss for lack of personal jurisdiction must be denied under CPLR 302 (a) (1) (Andrew Greenberg, Inc. v Sir-Tech Software, 4 NY3d at 191). In addition, this Court rejected the individual defendants’ assertion that plaintiffs claim for trade secret misappropriation was either settled and released pursuant to a settlement agreement entered in the chapter 11 bankruptcy proceeding of Sir-Tech, or barred by the statute of limitations (Andrew Greenberg, Inc. v Svane, Inc., 36 AD3d at 1096-1098). In 2009, Sirotek, who lives in Canada, sought summary judgment dismissing the remaining trade secret misappropriation claim on the ground that Supreme Court lacks personal jurisdiction over him. Supreme Court denied the motion, prompting this appeal.
We affirm. In determining whether the New York courts have personal jurisdiction over a non-domiciliary, such as Sirotek, a two-part analysis must be employed. First, it must be “determine[d] whether our long-arm statute (CPLR 302) confers jurisdiction over [him] in light of [his] contacts with this State” (LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210, 214 [2000]). If so, it must then be “determined] whether the exercise of jurisdiction comports with due process” (id. at 214). We are mindful that CPLR 302 “ ‘does not confer jurisdiction in every case where it is constitutionally permissible’ ” (Ehrenfeld v Bin Mahfouz, 9 NY3d 501, 512 [2007], quoting Kreutter v McFadden Oil Corp., 71 NY2d 460, 471 [1988]), and the ultimate burden is upon plaintiff, as the party seeking to assert jurisdiction, to show that a proper basis for long-arm jurisdiction exists (see
As relevant here, long-arm jurisdiction under CPLR 302 (a) (1) for tort and contract claims may be predicated on a showing that “(i) a defendant transacted business within the state and (ii) the cause of action arose from that transaction of business” (Johnson v Ward, 4 NY3d 516, 519 [2005]; accord SPCA of Upstate N.Y., Inc. v American Working Collie Assn., 74 AD3d at 1465). The Court of Appeals has held that “[t]he overriding criterion necessary to establish a transaction of business is some act by which the defendant purposefully avails itself of the privilege of conducting activities within [New York]” and thereby “invok[es] the benefits and protections of [our] laws” (Ehrenfeld v Bin Mahfouz, 9 NY3d at 508 [internal quotation marks and citations omitted]). Furthermore, there must be a “substantial relationship” between defendant’s purposeful activities and the cause of action asserted (Kreutter v McFadden Oil Corp., 71 NY2d at 467). Once the plaintiff establishes purposeful activities in the state that bear a substantial relationship to the claim asserted, “CPLR 302 (a) (1) jurisdiction is proper even [if] the defendant never enters New York” (Fischbarg v Doucet, 9 NY3d 375, 380 [2007] [internal quotation marks omitted]).
Here, Sirotek acknowledges that he signed the 1981 agreement in his capacity as president of Sir-Tech, which was a New York corporation, and that he remained president during much of the 1980s. He argues, however, that there is no substantial relationship between his conduct in New York and plaintiff’s remaining claim inasmuch as he retired from Sir-Tech in 1989, moved to Canada shortly thereafter, and — he avers — had no knowledge of the 1998 sale of Sir-Tech’s assets to the defendant Canadian successor corporations. While this evidence established Sirotek’s prima facie entitlement to summary judgment, we conclude that plaintiff raised triable issues of fact in opposition, warranting the denial of Sirotek’s motion.
Plaintiff presented evidence that Sirotek remained on the board of directors of Sir-Tech until 1997. In 1996, Sirotek gave deposition testimony in the first of these actions stating that it was his own “mistake” that plaintiff was “overpaid” pursuant to the 1981 agreement and that plaintiff, whose principal he characterized as “greedy,” was not entitled to additional royalties. Sirotek’s son Robert indicated that an independent marketing firm spent “a number of years” prior to the 1998 sale — i.e., while Sirotek remained on the board of directors — seeking a buyer for Sir-Tech’s assets, which it sold to raise money for its
Sirotek’s remaining arguments are either rendered academic or, upon consideration, have been found to be lacking in merit.
Cardona, EJ., Lahtinen, Stein and Garry, JJ., concur. Ordered that the order is affirmed, with costs.
The 2002 settlement agreement resolved Sir-Tech’s claims against Sirotek, his sons, Ontario 1259190 and Sirtech Canada for fraudulent conveyance. A trustee determined that the fraudulent conveyance claim, which was initially asserted by plaintiff in the first action, was the property of the bankruptcy estate (Andrew Greenberg, Inc. v Svane, Inc., 36 AD3d at 1096). Sirtech Canada continued to market Wizardry products in New York (see Andrew Greenberg, Inc. v Sir-Tech Software, 4 NY3d at 190).