Commercial Division Blog
Posted: June 12, 2017 / Categories Commercial, Jurisdiction
Spanish Defendant's Travel to, and Failure to Pay Commissions in, New York Creates Jurisdiction
On June 8, 2017, the Court of Appeals issued a decision in D&R Global Selections, S.L. v. Bodega Olegario Falcon Pineiro, 2017 NY Slip Op. 04494, holding that a defendant's travel to, and failure to pay commissions in, New York was sufficient to create personal jurisdiction in New York, explaining:
CPLR 302 (a) (1) requires us to first determine if defendant purposefully availed itself of the privilege of conducting activities in the State by transacting business in New York. A non-domiciliary defendant transacts business in New York when on his or her own initiative, the non-domiciliary projects himself or herself into this state to engage in a sustained and substantial transaction of business. The primary consideration is the quality of the non-domiciliary's New York contacts. As relevant here, purposeful availment occurs when the non-domiciliary seeks out and initiates contact with New York, solicits business in New York, and establishes a continuing relationship.
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. 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.
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 transaction of business here. At the very least, there must be a relatedness between the transaction and the legal claim such that the latter is not completely unmoored from the former, regardless of the ultimate merits of the claim. This inquiry is relatively permissive and an articulable nexus or substantial relationship exists where at least one element arises from the New York contacts rather than every element of the cause of action pleaded. The nexus is insufficient where the relationship between the claim and transaction is too attenuated or merely coincidental.
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.
(Internal quotations and citations omitted).