Andrew Greenberg, Inc. v. Sir-Tech Software, Inc.

• Decision Date: 05 September 2002
• Citation: 746 N.Y.S.2d 736,297 A.D.2d 834
• Court: New York Supreme Court — Appellate Division
• Parties: ANDREW GREENBERG, INC., Respondent,<BR>v.<BR>SIR-TECH SOFTWARE, INC., et al., Defendants, and<BR>SIR-TECH CANADA, LTD., et al., Appellants.

297 A.D.2d 834

746 N.Y.S.2d 736

ANDREW GREENBERG, INC., Respondent,

v. SIR-TECH SOFTWARE, INC., et al., Defendants, andSIR-TECH CANADA, LTD., et al., Appellants.

Mercure, J.

Decided September 5, 2002.

Cardona, P.J., Crew III, Spain and Rose, JJ., concur.

Mercure, J.

Plaintiff, a New York corporation, created a computer game known as Wizardry. In 1981, plaintiff granted defendant Sir-Tech Software, Inc. (hereinafter Sir-Tech), another New York corporation, an exclusive license to market and manufacture Wizardry, related products and subsequent Wizardry games. The licensing agreement authorized Sir-Tech to conduct its manufacturing and marketing activities through a subsidiary or related business entities, but it was not permitted "to disclose any WIZARDRY game or WIZARDRY related product, information or source of materials to anyone, other than to * * * [plaintiff] without the prior written permission of * * * [plaintiff]." The agreement also granted plaintiff the right to inspect and audit the books and records of Sir-Tech and each entity utilized in its manufacturing and marketing activity with regard to the sale of Wizardry products.

In April 1992, plaintiff commenced the present action against Sir-Tech and its subsidiary, defendant Svane, Inc., seeking an accounting and other relief as a result of those defendants' alleged manufacture, marketing or sublicensing of Wizardry related products and Wizardry games without providing plaintiff with required information relative to those transactions or paying plaintiff the royalties provided for in the 1981 contract. In 1998, Sir-Tech closed its principal office in New York and sold its Wizardry trademark, certain of its copyright assets and its domain name registration to two Canadian corporations formed by Sir-Tech's principals during the pendency of the action.

Shortly thereafter, plaintiff sought and obtained leave of Supreme Court to join those Canadian corporations, defendant 1259190 Ontario, Inc. and defendant Sir-Tech Canada, Ltd. (hereinafter collectively referred to as defendants). On January 10, 2000, plaintiff filed a supplemental summons and second amended complaint asserting additional causes of action sounding in breach of contract, misappropriation of trade secrets and tortious interference. Service on defendants was effected in August 2000. Shortly thereafter, defendants made a preanswer motion to dismiss the complaint based on plaintiff's failure to serve defendants within the 120-day period provided for in CPLR 306-b and for lack of personal jurisdiction over them. Supreme Court denied the motion and defendants appeal.

As a threshold matter, we reject the contention that CPLR 306-b required plaintiff to serve defendants within 120 days following its filing of the supplemental summons and amended complaint. To the contrary, as correctly contended by plaintiff, because this action was commenced under the commencement-by-service system that was in existence prior to the July 1, 1992 effective date of CPLR 306-b (see L 1992, ch 216, § 27), neither the former nor the present provisions of CPLR 306-b apply (see Westnine Assoc. v West 109th St. Assoc., 247 AD2d 76; Seavey v Korte, 159 Misc 2d 407, 409-410). We nonetheless conclude that the action should have been dismissed against defendants because plaintiff's opposition to defendants' motion failed to make a prima facie showing of personal jurisdiction on any of the bases asserted before Supreme Court (see Brandt v Toraby, 273 AD2d 429).^[*]

Notably, plaintiff's opposition to the motion consists solely of a showing that (1) defendants were incorporated in the Province of Ontario during the pendency of the action and Sir-Tech's principals are also the principals of defendants, (2) Sir-Tech assigned its Wizardry trademark and domain name, www.sir-tech.com, to Sir-Tech Canada, (3) products licensed to or authored by defendants or either of them are marketed in New York by their licensees, TalonSoft, Inc., Take-Two Interactive Software, Inc., Interplay Entertainment or Interplay Productions, and (4) Sir-Tech Canada's Internet Web site, http://www.sir-tech.com, can be accessed by New York residents directly or through a link on Interplay's Web page, http://www.interplay.com/ wizardry. In the absence of any evidence that Sir-Tech was extinguished, plaintiff's evidentiary showing was insufficient to support its theory that defendants or either of them are a "mere continuation" of Sir-Tech (see Schumacher v Richards Shear Co., 59 NY2d 239, 245). We also conclude that neither the speculative averment of plaintiff's counsel that he "knows of no reason" for the transfer of Sir-Tech's assets to defendants other than to undermine plaintiff's ability to satisfy a judgment against Sir-Tech nor the fact that defendants failed to state the amount of fair consideration that they paid for Sir-Tech's assets is sufficient to raise a genuine factual issue as to whether defendants' purchase of Sir-Tech's assets was made with fraudulent intent.

Nor has plaintiff met its burden of demonstrating a basis for long-arm jurisdiction under CPLR 302 (a) (3) (i) or (ii), both of which require the defendant's commission of a tort without New York that causes injury within New York. Of...