Island Wholesale Wood Supplies, Inc. v. Blanchard Industries, Inc.

• Decision Date: 29 May 1984
• Parties: ISLAND WHOLESALE WOOD SUPPLIES, INC., Appellant, v. BLANCHARD INDUSTRIES, INC., et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 192

476 N.Y.S.2d 192

101 A.D.2d 878

ISLAND WHOLESALE WOOD SUPPLIES, INC., Appellant, v. BLANCHARD INDUSTRIES, INC., et al., Respondents.

Supreme Court, Appellate Division,

Second Department.

May 29, 1984.

Flower & Plotka, Bay Shore (Edward Flower and David M. Ardam, Bay Shore, of counsel), for appellant.

Joseph S. Williams, New York City, for respondents.

Before LAZER, J.P., and NIEHOFF, BOYERS and LAWRENCE, JJ.

MEMORANDUM BY THE COURT.

In an action to recover damages for breach of warranty and negligence, plaintiff appeals from an order of the Supreme Court, Suffolk County, dated July 25, 1983, which denied its motion to dismiss the first affirmative defenses of lack of jurisdiction asserted in the answers of both defendants.

Order reversed, with costs, plaintiff's motion granted, and first affirmative defenses in both answers dismissed.

Plaintiff Island Wholesale Wood Supplies, Inc., a domestic corporation engaged in the business of selling firewood, commenced this action to recover damages arising out of the sale of a firewood processor which was manufactured by defendant Blanchard Industries, Inc., and serviced by defendant Abbott Machine Co. Each defendant is a New Hampshire domiciliary and each raised the affirmative defense of lack of jurisdiction in its answer. The terms of sale included the words "F.O.B. Wilton, N.H." and it is undisputed that plaintiff's employees picked up the machine in New Hampshire and brought it back to their place of business in New York. After delivery, one of Blanchard's salesmen came to plaintiff's place of business in New York to set up the machine and to instruct the employees in its use, and its sales manager came to replace certain damaged parts. Blanchard then retained Abbott to service the machine. This service consisted of shipment of parts to the plaintiff on three occasions and of one service visit.

At issue is Special Term's denial of plaintiff's motion to dismiss the affirmative defenses of lack of jurisdiction, in which plaintiff contended that defendants "contractanywhere to supply goods or services in the state" (see CPLR 302, subd. par. 1). Special Term concluded that the "F.O.B. Wilton, N.H." term did not reveal an intent on the part of the seller to avail itself of the privilege of conducting business in this State, even if the seller was aware that the buyer intended to bring the goods into this State.

Under the 1979 amendment to CPLR 302 (subd. par. 1), a nondomiciliary who "contracts anywhere to supply goods or services in the state" is subject to jurisdiction in New York (L.1979, ch. 252). The amendment was intended to abrogate the "mere shipment" rule established by prior case law (see, e.g.,Kramer v. Vogel, 17 N.Y.2d 27, 267 N.Y.S.2d 900, 215 N.E.2d 159) and was proposed to extend New York long-arm jurisdiction to its constitutional limits (Recommendation of the Law Rev Comm to the 1979 Legislature, 1979 McKinney's Session Laws of NY, pp 1450-1453; see West Mountain Corp. v. Seasons of Leisure Int., 82 A.D.2d 931, 440 N.Y.S.2d 729). To meet the demands of due process, the defendant's contacts with the forum state must be such that maintenance of the suit "does not offend 'traditional notions of fair play and substantial justice' " (International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, quoting from Milliken v. Meyer, 311 US 457, 458, 61 S.Ct. 339, 340, 85 L.Ed. 278). When a foreign corporation " 'purposefully avails itself of the privilege of conducting activities within the forum State' ", it can reasonably anticipate being subject to suit there (World-Wide Volkswagen Corp. v. Woodson, 444 US 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490, quoting from Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283). As intended by its drafters, the amendment deems the shipment of goods into the State or the performance of services in the State to be an act by which a nondomiciliary avails itself of the privilege of conducting activities in the State (Recommendation of the Law Rev Comm to the 1979 Legislature, 1979 McKinney's Session Laws of NY, p. 1453; see Farrell, Civil Practice, 31 Syr L Rev 15, 25-26).

Defendants argue, however, that they did not ship goods into this state because the invoice provided for shipment "F.O.B. Wilton, N.H.", and the plaintiff picked up the machine there. Plaintiff responds that the F.O.B. term is irrelevant since it relates solely to the transfer of title and assumption of risk of loss (see Uniform Commercial Code, § 2-319). The jurisdictional significance of delivery...