Commercial Division Blog

Posted: February 28, 2024 / Written by: Jeffrey M. Eilender, Samuel L. Butt, Seth D. Allen, Joshua Wurtzel, Channing J. Turner / Categories Commercial, Motion to Dismiss, Jurisdiction

Court Has Jurisdiction Over LLC Based On Alter Ego Allegations

On January 26, 2024, Justice Melissa A. Crane denied defendant’s motion to dismiss for lack or jurisdiction.  The decision in Bochenek v. Ashton, Index No. 654904/2022, concerned defendant Twenty Seven Investment Group, LLC (“TSIG”).  As to jurisdiction over TSIG, the Court explained: 

In sum, the court denies TSIG's motion to dismiss for lack of personal jurisdiction. Plaintiff has sufficiently alleged that TSIG is a sham corporation, that defendant Ashton completely controls TSIG and that he used TSIG to divert Los Angeles business from Grow Events LLC. Because plaintiff has adequate alter ego allegations, there is jurisdiction over TSIG because it is undisputed there is jurisdiction over defendant Ashton (see Clingerman v. Ali, 212 A.D.3d 572 [!81 Dep't 2023][trial court had jurisdiction over corporate defendants based on theory that corporate defendants and individual defendant, over whom trial court found it had personal jurisdiction, were alter egos];Transfield ER Cap Ltd. v. Indus. Carriers. Inc., 571 F.3d 221,224 (2d Cir. 2009) "It is also well established that the exercise of personal jurisdiction over an alter ego corporation does not offend due process" [citations omitted]).

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning the alter ego doctrine or jurisdiction.