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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: March 21, 2018

One In-Person Meeting in New York and E-mail and Phone Communications Sufficient Basis for Personal Jurisdiction

On February 28, 2018, Justice Ostrager of the New York County Commercial Division issued a decision in Awasthi v. Dillon, 2018 NY Slip Op. 30366(U), holding that one in-person meeting in New York, along with e-mail and phone communications, was a sufficient basis for asserting personal jurisdiction over a defendant, explaining:

Plaintiffs . . . argue that the Court has jurisdiction under CPLR 302(a)(1), which applies to any non-domiciliary who transacts any business within the state or contracts anywhere to supply good or services in the state. As plaintiffs correctly assert, a single act is enough, even if the defendant never enters New York, so long as the defendant’s activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted. Further, the courts have repeatedly sustained long-arm jurisdiction over commercial actors using electronic and telephonic means to project themselves into New York to conduct business transactions.

To establish the factual basis for its jurisdictional claim, plaintiffs point to the May 9, 2017 affidavit by defendant Tsamutalis submitted in opposition to plaintiffs’ motion to amend. There defendant acknowledged that he met with one of the plaintiffs, in person in New York, for business purposes and that the New-York based plaintiffs “were parties to group e-mails or conference calls with me [Tsamutalis] on more than one occasion.” Plaintiffs also attach the transcript of the February 8, 2017 deposition taken of Tsamutalis as a then non-party to this action. Although the complete transcript was not provided, the Index confirms that the transcript consists of at least 211 pages of testimony during which 43 Exhibits were discussed. Those Exhibits included various company ledgers and tax returns for the various New York-based Blackbridge entities, as well as multiple e-mails directed to the New York based individual defendants. During the deposition, Tsamutalis confirmed his attendance at a meeting in New York to discuss the structuring of the company. Plaintiffs’ investment in the company was also discussed at the meeting).

. . .

The Court finds that plaintiffs have established a basis for jurisdiction over the Accounting Defendants pursuant to CPLR 302(a)(1). The above-referenced facts set forth in the Tsamutalis affidavit and deposition establish regular contact between the Accounting Defendants and their New York based co-defendants by e-mail and telephone and by participation in a structuring meeting in New York. Whether plaintiffs’ contribution should be treated as an investment or a loan was admittedly discussed by Tsamutalis with co-defendant Dillon on various occasions. These activities were sufficiently purposeful, and there is a substantial relationship between those activities and the claims in this case, so as to provide a basis for jurisdiction. The Court therefore denies dismissal for lack of personal jurisdiction.

(Internal quotations and citations omitted).

This decision illustrates an issue that often arises in commercial litigation in New York. Whether the defendant is located on the other side of the world or across the Hudson in New Jersey, a New York court cannot assert jurisdiction over the defendant (that is, hear a case against it) unless there is a proper connection between the defendant and New York. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure whether there is jurisdiction over you, or over a party with which you are having a dispute, in New York.

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