L & M House of Jeans, Inc. v. Communication Control Systems, Inc.
| Decision Date | 29 June 1982 |
| Citation | 88 A.D.2d 884,452 N.Y.S.2d 602 |
| Court | New York Supreme Court — Appellate Division |
| Parties | L & M HOUSE OF JEANS, INC., Plaintiff-Appellant, v. COMMUNICATION CONTROL SYSTEMS, INC., Defendant-Respondent. |
T. M. Wolkof, New York City, for plaintiff-appellant.
P. L. Friedman, New York City, for defendant-respondent.
Before SANDLER, J. P., SULLIVAN, ROSS, SILVERMAN, LYNCH, JJ.
Order, Supreme Court, New York County, entered November 4, 1981, which denied plaintiff's motion to reject the referee's report and its motion for summary judgment, unanimously reversed, on the law, with costs and disbursements, the referee's report rejected, and plaintiff's motion for summary judgment granted.
Plaintiff, L & M House of Jeans (L & M), a Texas corporation, contracted with defendant, Communication Control Systems, Inc. (CCS), a New York corporation, to purchase a piece of equipment known as a Voice Stress Analyzer (VSA). Lawrence Hurwitz, L & M's Chairman of the Board, had seen the ad for the VSA in a magazine in an airplane on a flight originating from Texas, and subsequently also in an ad in the southeast edition of the Wall Street Journal, which is circulated in Texas. Since CCS had no salesmen or offices in Texas, an officer of L & M, Burson, went to New York for a demonstration, and after the demonstration he left a binder drawn on his personal account for the purchase of the VSA. Upon his return to Texas he sent a corporate check for the full purchase amount. The VSA was shipped f.o.b. New York to L & M, but subsequently a two-day training seminar was conducted by CCS in Dallas, Texas, which was attended by representatives of seven companies, including four employees of L & M.
The machine apparently did not meet L & M's expectations, or CCS's representations, and a lawsuit was instituted in the Texas District Court based upon, inter alia, breach of warranty, in violation of the Consumer Protection Provision of the Texas Business Commercial Code. Service was effected under the Texas long arm statute upon the Secretary of State and CCS by certified mail. A default judgment was obtained for $16,500 on November 20, 1979.
Thereafter L & M served a summons on CCS in New York and moved pursuant to CPLR § 3213 for an order directing the entry of judgment based on the Texas default judgment. CCS opposed the motion on the ground that at no time prior to the judgment was it authorized to do business in Texas, nor did it possess any assets, employ any salesmen or solicit business in Texas. It also denied that any contract was entered into in Texas, pointing out that when L & M first contacted it to look at the VSA, it refused to demonstrate the VSA in Texas, and that L & M's officer came to New York, where the order was placed.
L & M replied that Burson had first called CCS on a toll free number listed in one of its advertisements, that as part of the purchase price it was to receive training on the VSA, and that CCS informed Burson that he had just missed a training seminar in Houston. At the time Burson ordered the VSA he was given the names of other Texas companies which had purchased the VSA, and asked whether he preferred Dallas or Houston for the training seminar. Burson claimed that 30 people were present at the seminar which was directed at a promotion of CCS.
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