Fischbarg v. Doucet

• Citation: 880 N.E.2d 22,849 N.Y.S.2d 501,9 N.Y.3d 375
• Decision Date: 20 December 2007
• Docket Number: 175.
• Parties: Gabriel FISCHBARG, Respondent, v. Suzanne DOUCET, Also Known as Suzanne Bell-Doucet, et al., Appellants.
• Court: New York Court of Appeals Court of Appeals

880 N.E.2d 22

9 N.Y.3d 375

849 N.Y.S.2d 501

Gabriel FISCHBARG, Respondent, v. Suzanne DOUCET, Also Known as Suzanne Bell-Doucet, et al., Appellants.

175.

Court of Appeals of New York.

December 20, 2007.

Samuel E. Kramer, New York City, for appellants.

Gabriel Fischbarg, New York City, respondent pro se.

[849 N.Y.S.2d 377]

OPINION OF THE COURT

CIPARICK, J.

In this appeal, we are asked to determine whether Supreme Court properly exercised personal jurisdiction over defendants, an individual and corporation, both residents of California, who retained a New York attorney to represent the corporation in an action brought in an Oregon federal court. Because we conclude that defendants' retention and subsequent communications with plaintiff in New York established a continuing attorney-client relationship in this state and thereby constitute the transaction of business under CPLR 302(a)(1), we hold that the exercise of jurisdiction was proper.

I.

In February 2001, defendant Suzanne Bell-Doucet, a California resident and president of defendant Only New Age Music, Inc. (ONAM), a California corporation, placed a telephone call to plaintiff, attorney Gabriel Fischbarg, a member of the New York bar, at his New York office. During the ensuing conversation, the parties discussed plaintiff's potential representation of ONAM in a lawsuit alleging breach of contract, fraud and copyright infringement claims against Allegro Corp., a nonparty Oregon corporation. On February 23, Ms. Bell-Doucet sent a letter to plaintiff's New York office to confirm that he "offered to take this case on [a one-third] contingency" and that she would pay him a $2,000 deposit "against expenses." Enclosed with the February 23 letter were "contracts, copyrighted material, [an] outline of events, and copies of correspondence" for plaintiff's review. According to plaintiff, after receiving these materials, he entered into a retainer agreement with defendants by telephone from his New York office.

[849 N.Y.S.2d 378]

On May 30, 2001, Allegro filed suit against ONAM in the United States District Court for the District of Oregon. Although plaintiff was admitted to that court pro hac vice, during the course of the Oregon action, he was never physically present in Oregon. Nor did he ever meet with plaintiff's in California. Instead, plaintiff conducted his work pertaining to the Oregon action — allegedly 238.4 hours worth — from New York. He appeared at depositions and court conferences, and argued a motion for summary judgment via telephone from New York.

In addition, defendants repeatedly communicated with plaintiff in New York. According to plaintiff, over the course of approximately nine months (May 2001 through January 2002) during his representation of ONAM in the Oregon action, he spoke with defendants by telephone at least twice per week regarding their case.¹ Plaintiff's time records also show that on at least 31 occasions defendants sent e-mails regarding the Oregon case to plaintiff, that on three occasions they faxed materials to him, and that defendants sent plaintiff documents, by either mail or e-mail,² seven times.³

On January 15, 2002, a dispute regarding the terms of plaintiff's retainer agreement arose. That same day, defendants accepted plaintiff's e-mailed resignation as their attorney.⁴ While the Oregon action was still pending, plaintiff moved the Oregon court for an order awarding him $57,906.05 for services rendered prior to his resignation. The court denied plaintiff's motion, concluding that it lacked personal and subject matter jurisdiction over the fee dispute. But the Oregon court held that a series of e-mails between plaintiff and defendant Bell-Doucet prior to his resignation established his contractual right to "a fair legal fee" at the conclusion of the Oregon action.

[849 N.Y.S.2d 379]

On January 10, 2005, defendants entered into a settlement agreement that terminated the Oregon action. On January 31, plaintiff initiated the present lawsuit seeking damages for breach of contract and unjust enrichment. His complaint recited no specific statutory basis for personal jurisdiction over defendants. It simply alleged that defendant Bell-Doucet "is an individual residing in Los Angeles, California" and that defendant ONAM "is a California corporation doing business in this State." Defendants responded with a motion to dismiss for lack of personal jurisdiction under CPLR 3211(a)(8).

Supreme Court denied the motion. It held that it could properly exercise personal jurisdiction over defendants pursuant to CPLR 302(a)(1) because their "activities in retaining plaintiff, . . . a New York attorney[,] situated in New York, to represent them in the Oregon Action w[ere] purposeful and a sufficient nexus exists between that retention . . . and the instant claim regarding allegedly unpaid legal fees" (2005 N.Y. Slip Op. 30141[U], *6, 2005 WL 5989052). The Appellate Division, in a 3-2 decision, agreed.

The majority reasoned that by seeking out plaintiff's representation in New York and "[b]y working with plaintiff on a consistent basis . . . defendants `transacted business' in New York sufficient to subject themselves to this State's jurisdiction" (38 A.D.3d 270, 274, 832 N.Y.S.2d 164 [2007]). But two Justices dissented, finding the defendants' contacts with this state "insufficient" to confer CPLR 302(a)(1) jurisdiction (id. at 276, 832 N.Y.S.2d 164). The dissenters supported their reasoning with our decision in Haar v. Armendaris Corp., 31 N.Y.2d 1040, 342 N.Y.S.2d 70, 294 N.E.2d 855 (1973), which they interpreted as precluding plaintiff from relying upon his "own activities in New York . . . to establish jurisdiction" (38 A.D.3d at 278, 832 N.Y.S.2d 164).

Thereafter, the Appellate Division granted defendants leave to appeal to this Court and certified to us the question whether its "order . . . which affirmed the order of the Supreme Court [was] properly made?" We answer that question in the affirmative.

II.

Defendants argue that they have transacted no business in New York because they have not purposefully availed themselves of the privileges and protections of our state's laws. According to them, their retention of plaintiff and their communications — by telephone, facsimile and e-mail — with him are, as a matter of law, insufficient predicates for long-arm jurisdiction.

[849 N.Y.S.2d 380]

Further, defendants contend that the courts below erroneously relied upon plaintiff's unilateral New York activities to uphold jurisdiction. Plaintiff argues to the contrary. We agree with plaintiff.

CPLR 302(a)(1) jurisdiction is proper "even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted" (Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., 7 N.Y.3d 65, 71, 818 N.Y.S.2d 164, 850 N.E.2d 1140 [2006], quoting Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 522 N.E.2d 40 [1988]). Purposeful activities are those with which a defendant, through volitional acts, "avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws" (McKee Elec. Co. v. Rauland-Borg Corp., 20 N.Y.2d 377, 382, 283 N.Y.S.2d 34, 229 N.E.2d 604 [1967]; see also Ford v. Unity Hosp., 32 N.Y.2d 464, 471, 346 N.Y.S.2d 238, 299 N.E.2d 659 [1973] [holding that third-party defendant did not engage in "purposeful() avail(ment)" because it "purposefully avoided any contacts with New York, limiting its agency agreement . . . to certain States, excluding New York"]).

Not all purposeful activity, however, constitutes a "transaction of business" within the meaning of CPLR 302(a)(1). Thus, we have held that "merely telephon[ing] a single order" to New York requesting a shipment of goods to another state (see Parke-Bernet Galleries v. Franklyn, 26 N.Y.2d 13, 17, 308 N.Y.S.2d 337, 256 N.E.2d 506 [1970], citing M. Katz & Son Billiard Prods. v. Correale & Sons, 20 N.Y.2d 903, 285 N.Y.S.2d 871, 232 N.E.2d 864 [1967]), the transitory presence of a corporate official here (see McKee, 20 N.Y.2d at 382, 283 N.Y.S.2d 34, 229 N.E.2d 604), and communications and shipments sent here by an out-of-state doctor serving as a "consultant" to plaintiff's New York physician (see Etra v. Matta, 61 N.Y.2d 455, 458-459, 474 N.Y.S.2d 687, 463 N.E.2d 3 [1984]) do not support CPLR 302(a)(1) jurisdiction. Here, however, we are not presented with such limited contacts. Instead, the case before us concerns defendants' purposeful attempt to establish an attorney-client relationship here and their direct participation in that relationship via calls, faxes and e-mails that they projected into this state over many months. Although it is impossible to precisely fix those acts that constitute a transaction of business, our precedents establish that it is the quality of the defendants' New York contacts that is the primary consideration (see Siegel, N.Y. Prac. § 86 [4th ed.], citing Longines-Wittnauer Watch Co. v. Barnes & Reinecke, 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68 [1965]).

The quality of defendants' contacts here establishes a transaction of business in New York. Defendants sought out plaintiff

[849 N.Y.S.2d 381]

in New York and established an ongoing attorney-client relationship with him. Plaintiff's time records and affidavit demonstrate that during the course of the representation, defendants communicated regularly with him in this state.⁵ These facts are similar to those in George Reiner & Co. v. Schwartz, 41 N.Y.2d 648, 394 N.Y.S.2d 844, 363 N.E.2d 551 (1977). There, the defendant, a resident of Massachusetts, traveled to New York in response to an advertisement, published in the Boston Globe, seeking salesmen (see id. at 649, 394 N.Y.S.2d 844, 363 N.E.2d 551). While here, he entered into an agreement to work on defendant's behalf in "the New England area," which...