Johnson v. Ward

• Decision Date: 05 May 2005
• Citation: 829 N.E.2d 1201,4 N.Y.3d 516
• Parties: Roger JOHNSON et al., Respondents, v. Daniel A. WARD, Appellant.
• Court: New York Court of Appeals Court of Appeals

829 N.E.2d 1201

4 N.Y.3d 516

Roger JOHNSON et al., Respondents, v. Daniel A. WARD, Appellant.

Court of Appeals of New York.

May 5, 2005.

Stockschlaeder, McDonald & Sules, P.C., New York City (Richard T. Sules and Gail S. Karan of counsel), for appellant.

Pops & Associates, New York City (Daniel W. Coffey and Paul R. Pops of counsel), for respondents.

OPINION OF THE COURT

GRAFFEO, J.

In this case, we are asked whether long-arm jurisdiction exists over a nonresident holding a New York driver's license and car registration for a tort claim arising from an out-of-state motor vehicle accident. We conclude that personal jurisdiction does not lie under CPLR 302(a)(1) because there is an insufficient nexus between plaintiffs' personal injury action and any New York transactions.

On October 12, 1997, plaintiffs Roger Johnson and Monique White allegedly sustained injuries when their vehicle was struck from behind by a car driven by defendant Daniel Ward. Although the accident occurred in New Jersey, all three individuals were New York residents. At that time, defendant possessed a New York driver's license and had registered his vehicle in New York. In December 1997, defendant moved to New Jersey and in 1998 he surrendered his New York license in favor of a New Jersey license.

After these events, plaintiffs commenced this negligence action against defendant in Supreme Court, New York County, in October 2000. Defendant moved to dismiss the complaint for lack of personal jurisdiction pursuant to CPLR 3211(a)(8). Supreme Court granted the motion and dismissed the complaint, finding no basis for long-arm jurisdiction. Upon reargument, the court adhered to its original determination.

The Appellate Division, with one Justice dissenting, reversed and reinstated the complaint. The majority reasoned that defendant's New York license and vehicle registration satisfied the "transacting business" requirement of CPLR 302(a)(1) and that a substantial nexus existed between the cause of action and defendant's New York activities inasmuch as plaintiffs' claim "arose over the operation by a driver licensed in New York of a vehicle registered in New York" (6 A.D.3d 286, 287, 775 N.Y.S.2d 297 [1st Dept.2004]). In contrast, the dissent determined that defendant's possession of a New York license and vehicle registration did not constitute a transaction of business within the meaning of CPLR 302(a)(1) because the statute contemplates only commercial or financial activities. Alternatively, the dissent concluded that the New York license and vehicle registration were not "in any way related to this out-of-state accident so as to create the necessary nexus to invoke long-arm jurisdiction" (id. at 292, 775 N.Y.S.2d 297). The Appellate Division granted leave to this Court, certifying the following question: "Was the order of this Court, which reversed the order of the Supreme Court, properly made?" We answer in the negative and therefore reverse.

CPLR 302 provides in part:

"(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any 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."

As relevant in this case, long-arm jurisdiction over a nondomiciliary exists where (i) a defendant transacted business within the state and (ii) the cause of action arose from that transaction of business. If either prong of the statute is not met, jurisdiction cannot be conferred under CPLR 302(a)(1).

We have recognized that a "substantial relationship" must be established between a defendant's transactions in New York and a plaintiff's cause of action in order to satisfy the nexus requirement of the statute (Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 522 N.E.2d 40 [1988]). Consequently, we have upheld long-arm jurisdiction over a nondomiciliary where the claim had the requisite nexus to an in-state transaction (see e.g. George Reiner & Co. v. Schwartz, 41 N.Y.2d 648, 653, 394 N.Y.S.2d 844, 363 N.E.2d 551 [1977] [concluding there was jurisdiction over a Massachusetts resident for breach of an employment contract entered into in New York]; Singer v. Walker, 15 N.Y.2d 443, 467, 261 N.Y.S.2d 8, 209 N.E.2d 68 [1965] [sustaining...