First Nat. Bank and Trust Co. v. Wilson

• Decision Date: 28 March 1991
• Citation: 171 A.D.2d 616,567 N.Y.S.2d 468
• Parties: FIRST NATIONAL BANK AND TRUST COMPANY, Plaintiff-Respondent, v. Charles J. WILSON, Defendant-Appellant, and Country Brook Village Joint Venture, Defendant.
• Court: New York Supreme Court — Appellate Division

Page 468

567 N.Y.S.2d 468

171 A.D.2d 616

FIRST NATIONAL BANK AND TRUST COMPANY, Plaintiff-Respondent, v. Charles J. WILSON, Defendant-Appellant and Country Brook Village Joint Venture, Defendant.

Supreme Court, Appellate Division First Department.

March 28, 1991.

Before SULLIVAN, J.P., and MILONAS, ROSENBERGER, ROSS and SMITH, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County (Carol Huff, J.), entered June 26, 1989, which denied defendant Charles J. Wilson's motion for summary judgment dismissing the complaint for lack of personal jurisdiction and for amending the complaint and adding new parties without leave of court, unanimously reversed, on the law, and the motion to dismiss is granted, with costs. The Clerk is directed to enter judgment in favor of appellant severing and dismissing the complaint as to him, with costs.

In September of 1988, plaintiff commenced an action against Country Brook Village, Ltd., a Texas limited partnership, to recover under a limited guarantee collateral agreement. In January of 1989, plaintiff commenced the instant action, serving a new summons and complaint upon different defendants, including the joint venturers and defendant Wilson in his individual capacity. Defendant Wilson moved for summary judgment dismissing the complaint for lack of personal jurisdiction, or alternatively, for amending the complaint and adding new parties without leave of court. The Supreme Court denied both branches of defendant's motion.

We agree with defendant that the Supreme Court erred in denying his motion to dismiss for lack of personal jurisdiction. CPLR 302(a)(1) provides for a court to "exercise personal jurisdiction over a non-domiciliary ... 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;

The purpose of the long-arm statute is to extend the jurisdiction of New York courts to nonresidents who have "engaged in some purposeful activity [here] ... in connection with the matter in suit" (Longines-Wittnauer Watch Co. v. Barnes & Reinecke, 15 N.Y.2d 443, 457, 261 N.Y.S.2d 8, 209 N.E.2d 68, cert. denied sub nom. Estwing Mfg. Co., Inc. v. Singer, 382 U.S. 905, 86 S.Ct. 241, 15 L.Ed.2d 158; Parke-Bernet Galleries v. Franklyn, 26 N.Y.2d 13, 16, 308 N.Y.S.2d 337, 256 N.E.2d 506). Proof of a single transaction albeit a "purposeful" transaction, in New York, satisfies the statutory requirement (Id.).

The record reveals that Wilson was served with the summons and complaint in Texas, his residence, and executed the Limited Guarantees which form the basis of this lawsuit in that state as well. The underlying negotiable investor promissory notes, which were guaranteed by the Limited Guaranties, were executed in Texas, California and Missouri. Wilson has never maintained offices in New York, was never licensed to do business here nor did he have an agent in New York to receive service of process or to conduct business matters connected with this litigation. In addition, Wilson never owned real or personal property in New York, never employed a New York resident and never had a bank account, telephone listing or postal box here. More importantly, Wilson never came to New York to conduct any business with regard to the Limited Guarantees and never communicated by phone or in person with representatives of plaintiff in New York.

Plaintiff argues, and the Supreme Court agreed, that Wilson's visit to New York in 1988, to restructure certain loan agreements, even though they were unrelated to the guaranty at issue, signified a continuing relationship Wilson had with plaintiff after signing the guaranty in 1986, thereby satisfying the statutory requirement of a "purposeful transaction" in New York. This relationship, maintains plaintiff, includes using a New York corporation, National Capital Corp., as an agent to arrange for loans to invest in the partnership. Plaintiff also cites to the choice of law provision in the Limited Guaranty, selecting the application of New York law to resolve disputes, as further evidence of defendant's contact with the state.

Generally, an out-of-state note made payable in New York does not, in and of itself, confer personal jurisdiction over the non-domiciliary (American Recreation Group, Inc. v. Woznicki, 87 A.D.2d 600, 448 N.Y.S.2d 51; Hubbard,...