D&R GLOBAL SELECTIONS, S.L., Appellant, v BODEGA OLEGARIO FALCON PINEIRO, Respondent.
Court of Appeals of New York
Argued May 2, 2017; decided June 8, 2017
[78 NE3d 1172, 56 NYS3d 488]
Zara Law Offices, New York City (Robert M. Zara of counsel), for appellant.
Chief Judge DIFIORE.
The issue on appeal is whether there is personal jurisdiction over defendant, a Spanish winery, under New York‘s long-arm jurisdiction statute, and consequently subject matter jurisdiction over the parties’ dispute under
I.
Defendant Bodega Olegario Falcon Pineiro is a winery located in Pontevedra, Spain. In March 2005, defendant entered into an oral agreement there with plaintiff D&R Global Selections, S.L., a Spanish limited liability company also based in Pontevedra. Neither plaintiff nor defendant has offices or a permanent presence in New York. Pursuant to their oral agreement, plaintiff agreed to locate a distributor to import defendant‘s wine into the United States; in return, defendant agreed to pay commissions to plaintiff at a specified rate on wine sales made to that distributor.
Following the agreement, defendant accompanied plaintiff to New York several times to meet potential distributors and
In November 2007, plaintiff sued defendant in Supreme Court for unpaid commissions. The complaint asserted causes of action for breach of contract, quantum meruit, unjust enrichment, and an accounting. Plaintiff alleged that defendant‘s obligation to pay commissions on wine sold to Kobrand did not terminate after a year but rather continued as long as defendant sold wine to Kobrand. Defendant did not answer the complaint or otherwise appear and, in June 2008, plaintiff obtained a default judgment.
Defendant subsequently moved to vacate the default judgment and dismiss the action for lack of personal and subject matter jurisdiction. Supreme Court denied the motion to vacate and therefore did not consider the motion to dismiss. The Appellate Division reversed, vacated the default judgment, and held that whether the court had personal jurisdiction over defendant under
On remand, defendant moved for summary judgment based on lack of personal and subject matter jurisdiction. Supreme Court denied the motion, citing the Appellate Division order. Defendant again appealed and the Appellate Division reversed. This time the Appellate Division held that defendant was not subject to personal jurisdiction under
II.
“As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent . . .
“transacts any business within the state or contracts anywhere to supply goods or services in the state.”
This rule provides two distinct grounds for long-arm jurisdiction: where a defendant “transacts any business” in the state and where a defendant “contracts anywhere to supply goods or services” in the state. Under either ground, we conduct a twofold jurisdictional inquiry (see Rushaid v Pictet & Cie, 28 NY3d 316, 323 [2016]). First, the defendant must have purposefully availed itself of “the privilege of conducting activities within the forum State” by either transacting business in New York or contracting to supply goods or services in New York (id.). Second, the claim must arise from that business transaction or from the contract to supply goods or services (id.).
We conclude that Supreme Court has personal jurisdiction over defendant under
A.
The Appellate Division properly determined that defendant transacted business in New York. The oral agreement between the parties required plaintiff to locate a United States distributor to import defendant‘s wine. In furtherance of their agreement, defendant accompanied plaintiff to New York several times between May 2005 and January 2006 to attend wine industry events. Plaintiff introduced defendant to Kobrand, a New York-based distributor, at the Great Match event in New York, and defendant returned to New York at least twice to promote its wine alongside plaintiff and Kobrand. Defendant eventually entered into an exclusive distribution agreement with Kobrand for the importation of its wine into the United States.
Thus, not only was defendant physically present in New York on several occasions, but its activities here resulted in “‘the purposeful creation of a continuing relationship with a New York corporation‘” (Fischbarg, 9 NY3d at 381, quoting George Reiner & Co. v Schwartz, 41 NY2d 648, 653 [1977]). Defendant‘s contacts with New York establish that defendant purposefully availed itself of “the privilege of conducting activities within [New York], thus invoking the benefits and protections of its laws” (Rushaid, 28 NY3d at 323 [citation and internal quotation marks omitted]; see also Longines-Wittnauer Watch Co. v Barnes & Reinecke, 15 NY2d 443, 457-458 [1965]).
B.
It is not enough that a non-domiciliary defendant transact business in New York to confer long-arm jurisdiction. In addition, the plaintiff‘s cause of action must have an “articulable nexus” or “substantial relationship” with the defendant‘s trans-
Plaintiff asserts that defendant breached the parties’ oral agreement by not paying commissions on wine sales to Kobrand. To prevail on this claim, plaintiff must show that defendant failed to pay commissions due on sales to a distributor that plaintiff identified and solicited for defendant. Plaintiff‘s claim has a substantial relationship to defendant‘s business activities in New York. Defendant traveled to New York to attend the Great Match event where plaintiff introduced defendant to Kobrand. Defendant then joined plaintiff in attending two promotional events hosted by Kobrand in New York, which resulted in Kobrand purchasing defendant‘s wine and, eventually, entering an exclusive distribution agreement for defendant‘s wine in the United States. Those sales to Kobrand—and the unpaid commissions thereon—are at the heart of plaintiff‘s claim.
Indeed, contrary to the Appellate Division‘s holding, the parties’ oral agreement was not performed “wholly in Spain” (128 AD3d at 487). Rather, as set forth above, both sides engaged in activities in New York in furtherance of their agreement. There is an articulable nexus or substantial relationship between defendant‘s New York activities and the parties’ contract, defendant‘s alleged breach thereof, and potential damages. Accordingly, we hold that plaintiff‘s claim arises from defendant‘s transaction of business in New York.
III.
Exercise of personal jurisdiction under
Federal due process requires first that a defendant have “minimum contacts” with the forum state such that the defendant “‘should reasonably anticipate being haled into court there‘” (LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210, 216 [2000], quoting World-Wide Volkswagen Corp. v Woodson, 444 US 286, 297 [1980]), and second, that the prospect of having to defend a suit in New York comports with “‘traditional notions of fair play and substantial justice‘” (LaMarca, 95 NY2d at 216, quoting International Shoe Co. v Washington, 326 US 310, 316 [1945]).
Under the first element, defendant has established minimum contacts with New York by visiting the state on multiple occasions to promote its wine with the purpose of finding a United States distributor and thereafter selling wine to a New York-based distributor. As in LaMarca, defendant availed itself of the privilege of doing business in New York by taking “purposeful action, motivated by the entirely understandable wish to sell its products here” (95 NY2d at 217). Having done so, defendant could reasonably foresee having to defend a lawsuit in New York.
The second element, in essence, asks whether personal jurisdiction “is reasonable under the circumstances of the particular case” (Bank Brussels Lambert v Fiddler Gonzalez & Rodriguez, 305 F3d 120, 129 [2d Cir 2002] [citations and internal quotation marks omitted]; see also LaMarca, 95 NY2d at 217). Where minimum contacts exist, the defendant has the burden to “present a compelling case that the presence of some other considerations would render jurisdiction unreasonable” (LaMarca, 95 NY2d at 217-218 [citation and internal quotation marks omitted]). On appeal, defendant has not presented any compelling reason why the exercise of jurisdiction is unreasonable (cf. id. at 218 [listing five reasonableness factors]). Rather, defendant availed itself of the privilege of conducting business in New York by promoting its wine here, soliciting a distributor here, and selling wine to that New York-based distributor. Therefore, the exercise of long-arm jurisdiction over defendant comports with federal due process.
Accordingly, the order of the Appellate Division should be reversed, with costs, and defendant‘s motion for summary judgment denied.
Order reversed, with costs, and defendant‘s motion for summary judgment dismissing the complaint denied.