Aybar v. Aybar, 2016–06194

• Court: New York Supreme Court Appellate Division
• Writing for the Court: BRATHWAITE NELSON, J.
• Citation: 169 A.D.3d 137,93 N.Y.S.3d 159
• Parties: Anna AYBAR, et al., Plaintiffs-Respondents, v. Jose A. AYBAR, Jr., et al., Defendants, Ford Motor Company, et al., Appellants; U.S. Tires and Wheels of Queens, LLC, Nonparty-Respondent.
• Decision Date: 23 January 2019
• Docket Number: 2016–07397,Index No. 706909/15,2016–06194

169 A.D.3d 137
93 N.Y.S.3d 159

Anna AYBAR, et al., Plaintiffs-Respondents,
v.
Jose A. AYBAR, Jr., et al., Defendants,

Ford Motor Company, et al., Appellants;

U.S. Tires and Wheels of Queens, LLC, Nonparty-Respondent.

2016–06194
2016–07397
Index No. 706909/15

Supreme Court, Appellate Division, Second Department, New York.

Argued - March 26, 2018
January 23, 2019

Aaronson Rappaport Feinstein & Deutsch, LLP (Eliot J. Zucker, Peter J. Fazio, and Hogan Lovells U.S. LLP, New York, N.Y. [Sean Marotta ], of counsel), for appellant Ford Motor Company, and DLA Piper LLP, New York, N.Y. (Jayne Y. Risk and Justin E. Kerner of counsel), for appellant Goodyear Tire & Rubber Co. (one brief filed).

Omrani & Taub, P.C. (Parker Waichman, LLP, Port Washington, N.Y. [Jay L.T. Breakstone and Jessica L. Richman ], of counsel), for plaintiffs-respondents.

Marshall Dennehey Warner Coleman & Goggin, P.C., New York, N.Y. (Adam C. Calvert of counsel), for nonparty-respondent.

JOHN M. LEVENTHAL, J.P., SANDRA L. SGROI, HECTOR D. LASALLE, VALERIE BRATHWAITE NELSON, JJ.

OPINION & ORDER

BRATHWAITE NELSON, J.

169 A.D.3d 139

We consider on these appeals whether, following the United States Supreme Court decision in Daimler AG v. Bauman, 571 U.S. 117, 134 S.Ct. 746, 187 L.Ed.2d 624, a foreign corporation may still be deemed to have consented to the general jurisdiction of New York courts by virtue of having registered to do business in New York and appointed a local agent for the service of process. We conclude that it may not.

I.

This action arises from a July 1, 2012, automobile accident that occurred on an interstate highway in Virginia. The defendant

93 N.Y.S.3d 161

Jose A. Aybar, Jr., a New York resident, was operating a 2002 Ford Explorer that was registered in New York when one of its tires allegedly failed, causing the vehicle to become unstable and overturn and roll multiple times. Three of the six passengers died as a result of the accident and the other three were injured. The plaintiffs are the surviving passengers and the representatives of the deceased passengers' estates. They allege, among other things, that the defendant Ford Motor Company (hereinafter Ford) negligently manufactured and designed the Ford Explorer, and that the defendant Goodyear Tire & Rubber Co. (hereinafter Goodyear) negligently manufactured and designed the faulty tire.

Ford is incorporated in Delaware, with its principal place of business in Michigan, and Goodyear is incorporated in, and has its principal place of business in, Ohio. The complaint alleges that at all relevant times both corporations were

169 A.D.3d 140

registered to do business in New York, and that each, in fact, conducted business in New York and derived substantial revenue from such business.

Ford moved pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against it on the ground that the Supreme Court lacked personal jurisdiction over it. In support of its motion, Ford submitted evidence that the subject vehicle was manufactured in Missouri and sold to a dealership in Ohio in March 2002, from where it was sold to an individual not involved in this lawsuit, and that the vehicle was not designed in New York. Ford also submitted evidence that it did not have any Ford Explorer manufacturing plants in New York, and it did not directly engage in the servicing of Ford vehicles in New York, which is done exclusively by independent dealers. Aybar purchased the subject vehicle and tire in 2011 from a third party in New York.

In opposition to the motion, the plaintiffs argued that Ford was subject to general jurisdiction in New York because Ford maintained a substantial and continuous presence in New York. To support this proposition, the plaintiffs pointed to "hundreds" of Ford dealerships employing numerous New York residents, and they submitted evidence that Ford operated a stamping (manufacturing) plant in Hamburg, New York, which employed approximately 600 people and for which Ford had received incentive packages and tax credits from New York State. In reply, Ford submitted evidence that it had 62 plants and franchise agreements with 11,980 dealerships worldwide, and argued that its economic contacts with New York were not so substantial as compared to its contacts elsewhere so as to render Ford "at home" in New York.

Goodyear also moved pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against it on the ground of lack of personal jurisdiction. In support of its motion, Goodyear submitted evidence that the subject tire was designed in Ohio, manufactured in Tennessee in 2002, and tested and inspected outside of New York. Goodyear asserted that it had no way of tracking the sale or ownership of a given tire over its service life, but could identify that the subject class of tire was sold as original equipment for certain Isuzu and Ford vehicles, and as a replacement tire. Goodyear additionally submitted evidence that it operated a chemical plant in New York and that it was a member of a limited liability company which owned and operated a tire manufacturing plant in New York, but that

169 A.D.3d 141

neither plant manufactured the subject tire, and that Goodyear did not specifically direct advertising of the subject tire at New York residents.

93 N.Y.S.3d 162

In opposition to Goodyear's motion, the plaintiffs argued that Goodyear was subject to general jurisdiction in New York because its business affiliations within New York were so pervasive or continuous and systematic as to render it essentially "at home" in New York State. The plaintiffs submitted evidence that Goodyear had numerous tire and auto service center storefront locations in New York, from which the plaintiffs argued it could be inferred that Goodyear employed hundreds, possibly thousands, of New York residents. In reply, Goodyear submitted evidence that it had plants, service centers, and other properties worldwide. It argued that it employed "a tremendous number of people" worldwide, and that its economic contacts with New York were not so substantial as compared with its contacts elsewhere so as to render Goodyear "at home" in New York.

Nonparty U.S. Tires and Wheels of Queens, LLC (hereinafter U.S. Tires), was a defendant in a separate action brought by the plaintiffs arising from the same accident. At the time of the motions to dismiss of Ford and Goodyear, there was a pending motion to consolidate the two actions. U.S. Tires submitted opposition papers to the subject motions, and argued that both Ford and Goodyear had consented to general jurisdiction in New York by registering to do business with the New York Secretary of State and designating an agent for service of process in New York. U.S. Tires noted that it was a New York corporation with its principal place of business in New York, and, thus, if Ford and Goodyear were to succeed on their motions, the result would be three separate lawsuits, all involving the same accident, which, U.S. Tires contended, would likely result in inconsistent verdicts, duplication of discovery, and waste of judicial resources.

In response to U.S. Tires's opposition, Ford argued that the opposition was untimely, U.S. Tires lacked standing to oppose the motion, and, on the merits, Ford's compulsory registration to do business in New York and appointment of the Secretary of State as its agent for service of process did not constitute consent to general jurisdiction in New York. Goodyear advanced similar arguments in response to U.S. Tires's opposition.

In separate orders, each entered May 31, 2016, the Supreme Court, Queens County (hereinafter the motion court), denied

169 A.D.3d 142

the motions, concluding that Ford and Goodyear were each subject to general jurisdiction in New York. The motion court found that the activities of both Ford and Goodyear in New York were so continuous and systematic that both Ford and Goodyear are essentially at home here. The motion court also found that both Ford and Goodyear had otherwise consented to general jurisdiction in New York by each registering to do business in New York as a foreign corporation and designating a local agent for service of process. With regard to Ford's activities in New York, the motion court pointed to the facts that Aybar purchased the vehicle in New York and primarily used it in New York, Ford has an organization of facilities in New York engaged in day-to-day activities, and Ford has many franchises across New York. With regard to Goodyear, the motion court relied upon the facts that Goodyear had operated numerous stores in New York since approximately 1924 and had employed thousands of workers in those stores, and it has an organization of facilities in New York engaged in day-to-day activities. Ford and Goodyear appeal.¹

II.

93 N.Y.S.3d 163

It is fundamental that a court must acquire personal jurisdiction over a defendant before it can render a judgment against that defendant (see Burnham v....