Retail Software Services, Inc. v. Lashlee

Decision Date10 August 1988
Docket NumberD,No. 323,323
PartiesRETAIL SOFTWARE SERVICES, INC., Plaintiff-Appellant, v. Hal LASHLEE, Jill Weissman, as Special Administrator of the Estate of George Tate, Glenn Johnson, William Janeski, Jay Sargeant, Robert Fick, Jamie James, Raphael Cristy and Investment Marketing Associates, Inc., Defendants, William Janeski and Robert Fick, Defendants-Appellees. ocket 87-7524.
CourtU.S. Court of Appeals — Second Circuit

Page 18

854 F.2d 18
RETAIL SOFTWARE SERVICES, INC., Plaintiff-Appellant,
v.
Hal LASHLEE, Jill Weissman, as Special Administrator of the
Estate of George Tate, Glenn Johnson, William Janeski, Jay
Sargeant, Robert Fick, Jamie James, Raphael Cristy and
Investment Marketing Associates, Inc., Defendants,
William Janeski and Robert Fick, Defendants-Appellees.
No. 323, Docket 87-7524.
United States Court of Appeals,
Second Circuit.
Argued Jan. 12, 1988.
Decided Aug. 10, 1988.

Page 19

Andre R. Jaglom, New York City (Stecher Jaglom & Prutzman, Jamie B.W. Stecher, Josiah Greenberg, of counsel), for plaintiff-appellant.

William L. Janeski, Washington, D.C., pro se.

Before KAUFMAN, CARDAMONE and PRATT, Circuit Judges.

GEORGE C. PRATT, Circuit Judge:

This is an appeal from a Fed.R.Civ.P. 54(b) judgment of the United States District Court for the Eastern District of New York, Joseph M. McLaughlin, Judge, granting motions by three of the individual defendants to dismiss for lack of personal jurisdiction. The plaintiff, a New York corporation, had asserted claims of common-law fraud, breach of fiduciary duty, and violations of civil RICO and of New York's Franchise Sales Act, N.Y.Gen.Bus.Law Secs. 680 et seq. (McKinney 1984) ("FSA"). We recite the plaintiff's version of the facts, which we take to be true for the purposes of review.

Plaintiff Retail Software Services ("Retail") is a New York corporation. Softwaire Centre International ("SCI"), now bankrupt, was a California franchisor of retail microcomputer software stores. SCI was formed in 1981 by the late George Tate, who was well known in the computer field and whose estate was one of the moving defendants below, along with two other defendants who were not involved in the proceeding that led to this appeal.

Page 20

SCI transacted business in New York by registering and soliciting franchise sales here and by conducting franchise negotiations with Retail here. In 1984 Retail purchased from SCI in New York seven franchises that were to operate in Manhattan and on Long Island. Retail paid $187,000 in deposits and incurred substantial additional expenses before SCI went bankrupt a few months later, without performing under the agreement.

Retail brought this action in the district court against various individuals and a corporation associated with the bankrupt SCI. The claims that are relevant to this appeal were advanced under the FSA. Retail alleged that it had purchased the franchises in reliance on a series of misrepresentations and omissions that were made in violation of the FSA by SCI and the defendants.

The three individual defendants who moved in the district court to dismiss for lack of personal jurisdiction are: Robert Fick, who was SCI's vice president for finance and chief financial officer and who owned .7% of SCI's stock; William Janeski, who was president and chief executive officer of SCI as well as a director and 4.6% shareholder; and the estate of George Tate, who had been a director, 31.55% shareholder, vice-president, and secretary of SCI. Fick and Janeski are alleged to have made, at a California meeting with Retail, misrepresentations about SCI's financial condition, the nature of Tate's involvement with the venture, and the extent to which SCI would provide training facilities in New York. Janeski is alleged to be responsible for misleading financial statements, for a misleading offering prospectus that was part of the franchise registration that was filed in New York, and for the advertising of franchise sales in New York. In addition, while negotiating by telephone with Retail's president in New York, Janeski made misleading representations and omitted material, negative information about SCI's financial condition. Fick is alleged to have withheld crucial information about SCI's financial condition, while personally misrepresenting material facts in order to persuade Retail to purchase the franchises. Tate is alleged to have allowed the other defendants to misrepresent the extent of his involvement with SCI franchises. Retail also claims that SCI caused its franchisees, including Retail, to purchase obsolete goods from one of Tate's other companies. All of the defendants are alleged to have acted with intent to defraud Retail.

Retail asserts two bases for personal jurisdiction over the moving defendants: New York's Franchise Sales Act itself, and New York's long-arm statute, N.Y.Civ.Prac.Laws & Rules Sec. 302(a)(1), (2) and (3) (McKinney 1972 & Supp. 1988).

Although the FSA provides a method for service of process on nonresident defendants, see N.Y.Gen.Bus.Law Sec. 686, the district court held that the act does not provide a basis for personal jurisdiction over nonresident officers and directors of a corporation that sold franchises in New York. Furthermore, the district court concluded that...

To continue reading

Request your trial
96 cases
  • In re Houbigant, Inc.
    • United States
    • U.S. District Court — Southern District of New York
    • 17 Octubre 1995
    ... ... within the state or contracts anywhere to supply goods or services in the state; or 2. commits a tortious act within the state; or 3. commits ... See, e.g., Retail Software Services, Inc. v. Lashlee, 854 F.2d 18 (2d Cir. 1988) ... ...
  • Wolo Mfg. Corp. v. ABC Corp.
    • United States
    • U.S. District Court — Eastern District of New York
    • 7 Noviembre 2018
    ... ... ) that "Defendants contract to supply goods and/or services, and/or transact business in New York and within this ... against whom it seeks to bring suit." Troma Entm't, Inc. v. Centennial Pictures Inc. , 729 F.3d 215, 217 (2d Cir ... 1988) ] and Retail Software [ Servs., Inc. v. Lashlee , 854 F.2d 18 (2d Cir ... ...
  • City of New York v. Cyco.Net, Inc.
    • United States
    • U.S. District Court — Southern District of New York
    • 27 Enero 2005
    ... ... has offered "premium give-aways" in New York City to promote its services. (Am. RICO Stmt. at 2.) Moreover, Plaintiff asserts that Cyco.net also ... Hemi Group owns or controls the CigaretteSpecials Enterprise, a retail cigarette outlet referred to variously as "Cigarettespecials," ... See Retail Software Services v. Lashlee, 854 F.2d 18, 22 (2d Cir.1988) (citing Kreutter v ... ...
  • Travelars Cas. & Sur. Co. v. Telstar Const. Co.
    • United States
    • U.S. District Court — District of Arizona
    • 5 Marzo 2003
    ... ... TELSTAR CONSTRUCTION COMPNY, INC., a New Mexico Corporation; Skycorp Electrical, Inc., an ... , Inc., 885 F.2d 515, 522 (9th Cir.1989)(citing Retail Software Servs., Inc. v. Lashlee, 854 F.2d 18, 22-3 (2d ... ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT