Mayes v. Leipziger

• Decision Date: 17 March 1982
• Docket Number: D,No. 488,488
• Citation: 674 F.2d 178
• Parties: Raisa R. MAYES, Plaintiff-Appellant, v. David A. LEIPZIGER and Levy, Leipziger and Normington, a Professional Law Corporation, Defendants-Appellees. ocket 81-7688.
• Court: U.S. Court of Appeals — Second Circuit

Page 178

674 F.2d 178

Raisa R. MAYES, Plaintiff-Appellant, v. David A. LEIPZIGER and Levy, Leipziger and Normington, a Professional Law Corporation, Defendants-Appellees.

No. 488, Docket 81-7688.

United States Court of Appeals, Second Circuit.

Argued Dec. 16, 1981.

Decided March 17, 1982.

Eleanor J. Piel, New York City (Sidney S. Bobbe, New York City, on the brief), for plaintiff-appellant.

Richard G. McGahren, New York City (Monte E. Sokol, D'Amato & Lynch, New York City, on the brief), for defendants-appellees.

Before TIMBERS and KEARSE, Circuit Judges, and METZNER, District Judge. ^*

KEARSE, Circuit Judge:

Plaintiff Raisa R. Mayes appeals from a final judgment of the United States District Court for the Southern District of New York, Vincent L. Broderick, Judge, dismissing her legal malpractice suit for lack of personal jurisdiction over the defendants, David A. Leipziger and Levy, Leipziger and Normington ("Levy, Leipziger"). The appeal raises the question whether New York's long-arm jurisdiction statute, New York Civil Practice Law and Rules ("CPLR") § 302(a)(1), subjects to the jurisdiction of the New York courts a California attorney and his California law firm who never entered New York but who undertook in letters and telephone calls from California to New York the representation of a New York resident in litigation in California. We agree with the district court that the defendants did not "transact business" in New York within the meaning of CPLR § 302(a)(1), and we affirm the judgment of the district court.

I. FACTS

In 1976, Mayes, a New York resident, brought an action in federal court in California ("California action") against two California corporations and two California residents. She was then represented in the litigation by one Gustave L. Goldstein, a California attorney. The trial of the California action ended in 1979 with directed verdicts in favor of three of the defendants and a small jury verdict against the fourth. Mayes was dissatisfied with this result and decided to replace trial counsel with other California counsel. Goldstein "solicited" Leipziger to represent Mayes in the further proceedings-a motion for a new trial, inter alia-that were contemplated (Leipziger Affidavit dated April 23, 1981, P 13.) Leipziger, a California attorney, was then a member of the firm of Levy, Leipziger, which was also located in California. Thereafter Leipziger conversed by long-distance telephone with Sidney Bobbe, Raisa Mayes's New York attorney, on October 18, 1979. In a letter of the same date, Leipziger wrote Bobbe confirming the understanding reached by telephone that Levy, Leipziger would be substituted as local counsel for Mayes in the California action and would review and argue a motion for a new trial which was to be prepared by Bobbe. The letter stated in addition that "if the motion for a new trial is unsuccessful and you determine to prosecute an appeal, we reserve the right to decide whether we wish to continue representation in connection with the appeal." Bobbe responded in a letter dated October 25, 1979, stating that the terms of Leipziger's October 18 letter were agreeable except as to Levy, Leipziger's reservation of the right not to handle the appeal, but stating that that reservation would be acceptable if Levy, Leipziger "would ... be willing to give us the reciprocal right to engage other counsel or to act ourselves." In a letter to Leipziger dated October 19, 1979, Bobbe had spelled out all of the financial terms of Mayes's representation: "You will be entitled to receive for your fee 20% of whatever may be recovered (in excess of the amount of the 1979 verdict). Gus and I will receive each (sic) 15% of any recovery. All expenses will be met by us."

During Leipziger's representation of Mayes, Leipziger and Bobbe corresponded several times on matters related to the handling of the case: Bobbe sent Leipziger drafts of motion papers Bobbe had prepared; Leipziger mailed to Bobbe copies of the revised motion papers submitted to the court; Leipziger wrote Bobbe requesting authority to order a portion of the trial transcript and asking for instructions with respect to a check from the California defendant against whom the verdict had been obtained, tendered in satisfaction of the judgment in the California action; Bobbe wrote back authorizing the purchase of the transcript and instructing Leipziger to return the check.

Eventually, on January 7, 1980, the motions for a new trial, inter alia, were argued and were denied from the bench, and Leipziger so informed Bobbe by telephone. Leipziger evidently agreed during the same telephone conversation to handle the case on appeal. On the following day Bobbe wrote Leipziger, stating the minimum amount Mayes would be willing to accept in settlement and forwarding the filing fees necessary to institute the appeal. Written orders embodying the California district court's oral denial of the motions apparently were to be entered on or about February 29, 1980, which Leipziger reported to Bobbe on February 29; Leipziger promised to prepare a notice of appeal the following week.

During the next several weeks Bobbe repeatedly wrote Leipziger asking whether the notice of appeal had been filed. Notwithstanding his inquiries, Bobbe heard no more from Leipziger on the subject of the appeal for nearly three months. Leipziger finally wrote Bobbe on May 15 informing him that the notice of appeal had not been timely filed. Leipziger also stated that his motion to permit a late filing nunc pro tunc had been denied.

Mayes subsequently brought the present action in New York Supreme Court against Leipziger and his firm seeking $500,000 in damages for legal malpractice on account of their failure to file a timely notice of appeal in the California action. Defendants removed the action to federal court pursuant to 28 U.S.C. § 1441(a) (1976), alleging that the court had jurisdiction of the subject matter of the action on the basis of diversity of citizenship. Following removal, defendants moved, pursuant to Fed.R.Civ.P. 12(b)(2) for dismissal of the action for lack of personal jurisdiction over them. ¹

In response to the defendants' motion, Mayes contended that the court had jurisdiction pursuant to New York CPLR § 302(a)(1) which gives the New York courts jurisdiction over a nondomiciliary "who in person or through an agent ... transacts any business within the state," as to any cause of action arising from such transaction. Mayes claimed that Bobbe had acted as the defendants' agent in connection with defendants' representation of Mayes in the California action, and that defendants had therefore transacted business in New York, within the meaning of § 302(a)(1), through Bobbe.

In a memorandum order dated August 31, 1981, the district court granted defendants' motion to dismiss, ruling that Bobbe plainly had acted only as the agent of Mayes and that the defendants therefore had not transacted business in New York through an agent within the meaning of § 302(a):

It is patent that plaintiff's counsel functioned as agent for plaintiff throughout the continuing course of defendants' relationship with plaintiff. He retained defendants on behalf of plaintiff; he supervised, or attempted to supervise, their work product on behalf of plaintiff; now he is attempting to sue them on behalf of plaintiff. He was never agent of defendants, and jurisdiction over defendants cannot be predicated upon his activities.

This appeal followed.

II. DISCUSSION

CPLR § 302(a)(1) provides as follows:

(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nondomiciliary, or his executor or administrator, who in person or through an agent:

1. transacts any business within the state or contracts anywhere to supply goods or services in the state; ....

On appeal Mayes argues that § 302(a)(1) gives the court jurisdiction because the defendants transacted business in New York in person as well as through an agent. We find neither contention meritorious.

A. The Contention that Bobbe Was Defendants' Agent

In the district court Mayes appears to have argued solely that § 302(a)(1) applied because Bobbe was the agent of the defendants. Like the district court, we find this contention to be totally lacking in factual merit.

The term "through an agent" as used in § 302(a)(1) has not yet been definitively interpreted by New York's highest court. Two of the leading cases, Parke-Bernet Galleries, Inc. v. Franklyn, 26 N.Y.2d 13, 308 N.Y.S.2d 337, 256 N.E.2d 506 (1970), and Glassman v. Hyder, 23 N.Y.2d 354, 296 N.Y.S.2d 783, 244 N.E.2d 259 (1968), when read together, may suggest that § 302(a)(1) envisions application of the traditional common-law concept of agency. In Parke-Bernet Galleries, the defendant Franklyn had arranged with the plaintiff art auctioneer ("Parke-Bernet") to establish a telephone link between himself in California and Parke-Bernet's New York auction room for a particular auction. A Parke-Bernet employee-one Nash-was assigned to assist Franklyn, and during the auction Nash relayed to Franklyn the bids being made in the auction room, and in turn relayed Franklyn's bids to the auctioneer. Upon receiving Franklyn's bids the auctioneer would announce them to the other bidders. Franklyn was successful in outbidding the others on two paintings; but later he refused to pay for these paintings. Parke-Bernet brought suit in New York, predicating jurisdiction on § 302(a)(1). The New York Court of Appeals ruled that Franklyn had transacted business within New York within the meaning of § 302(a)(1) both directly (see part B below) and through Nash as his agent. The court went to some lengths to invoke traditional agency notions, observing that " '(a) servant in the general employment of one person, who is temporarily loaned to another person to do...